Company registration number 01089940 (England and Wales)
SOVEREIGN GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
SOVEREIGN GROUP LIMITED
COMPANY INFORMATION
Directors
D J Fitton
Mr G A Weir
Company number
01089940
Registered office
Vale Street Mill
Vale Street
Nelson
Lancashire
BB9 0TA
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Business address
Vale Street Mill
Vale Street
Nelson
Lancashire
BB9 0TA
Bankers
Natwest Bank Plc
2 Howe Walk
Burnley
Lancashire
BB11 1TR
SOVEREIGN GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
SOVEREIGN GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -

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

Strategy, Principal activity and Review of the Business

The company’s strategy remains to provide a premium service to clients, contractors, residents, and their communities. The company strives to ensure that its staff and suppliers are committed to this ethos by investing in its training and development programme.

 

The principal activity of the company during the year continued to be the manufacture and installation of PVCu, composite and aluminium products.

 

Company turnover in 2024 decreased by 5.1% when compared to the previous year, but the gross profit margin increased from 26.31% to 30.21% in the same period, resulting in increased gross profit of £484k, which is pleasing. The increase in gross margin results from internal efficiencies gained in the period, and a settling down of the inflation levels that we have seen over recent years. Looking ahead, we believe that our customer focus, contract management and manufacturing expertise can drive long-term value for both our customers and shareholders.

Staff retention in the year has been good and we have added to our employee numbers. The Group recognises that its people are critical to the ongoing success and development of the business and will continue to invest in them going forward providing development opportunities wherever possible.

 

The company’s operating profit in 2024 was £1.75m, being a £300k increase on the prior year.

 

The key performance indicators that the company regards as important are;

Principal Risks and Uncertainties

Inflationary pressures on raw materials, supply chain disruption and staff retention and recruitment will continue to represent significant uncertainties going forward, albeit the previous significant pressures in this respect have settled down in more recent times. The company will continue to develop its strong relationships with key suppliers to ensure any issues are managed effectively. Where possible, the company will source materials from more than one supplier to ensure continuity of supply.

 

In order to maintain and further improve staff retention and to minimise staff turnover, the company is continually reviewing its pay structures to ensure employees are rewarded appropriately and the company’s pay is competitive locally.

 

Risk and uncertainty are recognised as normal elements of business. The company manages its risk appetite through the application of a risk framework cycle involving;

 

Major risks are managed through the implementation and monitoring of policies and procedures, including;

 

The directors monitor key performance and strategic indicators and agree actions to either mitigate against negative movements or exploit opportunities.

SOVEREIGN GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Future Developments

The directors view the future with optimism, although do recognise that challenges remain within the general economy and the sector.

The order book remains strong and the directors are dedicated to maintaining strong relationships with customers and suppliers to ensure the continued delivery of quality products to the social and new build housing sectors.

 

On behalf of the board

.............................................
Mr G A Weir
Director
Date: .............................................
SOVEREIGN GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -

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

Principal activities

The principal activity of the company continued to be that of the manufacture and installation of PVCu, composite and aluminium products.

Results and dividends

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

Ordinary dividends were paid amounting to £1,250,000. The directors do not recommend payment of a further dividend.

Directors

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

D J Fitton
J Gibson
(Retired 12 January 2025)
Mr G A Weir
Auditor

The auditor, Pierce C A Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

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

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

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

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

Statement of disclosure to auditor

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

Medium-sized companies exemption

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

SOVEREIGN GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
On behalf of the board
Mr G A Weir
Director
25 June 2025
SOVEREIGN GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOVEREIGN GROUP LIMITED
- 5 -
Opinion

We have audited the financial statements of Sovereign Group Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:

We are also required to perform specific procedures to respond to the risk of management override.

As a result of our audit procedures we did not identify a material risk of fraud.

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.

SOVEREIGN GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOVEREIGN GROUP LIMITED
- 7 -

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.

James King (Senior Statutory Auditor)
For and on behalf of Pierce C A Limited
26 June 2025
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
SOVEREIGN GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
19,333,233
20,363,454
Cost of sales
(13,491,774)
(15,006,719)
Gross profit
5,841,459
5,356,735
Distribution costs
(1,019,368)
(1,048,425)
Administrative expenses
(3,063,611)
(2,840,883)
Operating profit
4
1,758,480
1,467,427
Interest receivable and similar income
6
20,437
-
0
Interest payable and similar expenses
7
(33,230)
(45,311)
Profit before taxation
1,745,687
1,422,116
Tax on profit
8
(356,531)
(418,565)
Profit for the financial year
1,389,156
1,003,551

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SOVEREIGN GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
519,474
319,489
Current assets
Stocks
11
1,219,075
1,346,647
Debtors
12
3,160,902
4,088,144
Cash at bank and in hand
3,495,217
1,852,332
7,875,194
7,287,123
Creditors: amounts falling due within one year
13
(3,523,232)
(3,016,170)
Net current assets
4,351,962
4,270,953
Total assets less current liabilities
4,871,436
4,590,442
Creditors: amounts falling due after more than one year
14
(382,673)
(300,567)
Provisions for liabilities
Deferred tax liability
17
93,285
33,553
(93,285)
(33,553)
Net assets
4,395,478
4,256,322
Capital and reserves
Called up share capital
20
30,000
30,000
Profit and loss reserves
4,365,478
4,226,322
Total equity
4,395,478
4,256,322

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

The financial statements were approved by the board of directors and authorised for issue on 25 June 2025 and are signed on its behalf by:
Mr G A Weir
Director
Company registration number 01089940 (England and Wales)
SOVEREIGN GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2023
30,000
4,222,771
4,252,771
Year ended 31 December 2023:
Profit and total comprehensive income
-
1,003,551
1,003,551
Dividends
9
-
(1,000,000)
(1,000,000)
Balance at 31 December 2023
30,000
4,226,322
4,256,322
Year ended 31 December 2024:
Profit and total comprehensive income
-
1,389,156
1,389,156
Dividends
9
-
(1,250,000)
(1,250,000)
Balance at 31 December 2024
30,000
4,365,478
4,395,478
SOVEREIGN GROUP LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
3,230,356
2,927,462
Interest paid
(33,230)
(45,311)
Income taxes paid
(416,445)
(68,284)
Net cash inflow from operating activities
2,780,681
2,813,867
Investing activities
Purchase of tangible fixed assets
(336,401)
(72,017)
Proceeds on disposal of tangible fixed assets
10,392
3,333
Loans made
(270)
-
0
Interest received
20,437
-
0
Net cash used in investing activities
(305,842)
(68,684)
Financing activities
Repayment of bank loans
(99,999)
(100,000)
Payment of finance leases obligations
118,702
(5,120)
Dividends paid
(1,250,000)
(1,000,000)
Net cash used in financing activities
(1,231,297)
(1,105,120)
Net increase in cash and cash equivalents
1,243,542
1,640,063
Cash and cash equivalents at beginning of year
1,632,604
(7,459)
Cash and cash equivalents at end of year
2,876,146
1,632,604
Relating to:
Cash at bank and in hand
3,495,217
1,852,332
Bank overdrafts included in creditors payable within one year
(619,071)
(219,728)
SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
1
Accounting policies
Company information

Sovereign Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Vale Street Mill, Vale Street, Nelson, Lancashire, BB9 0TA.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The financial statements for Sovereign Group Limited are consolidated in the financial statements of Vale Street Holdings Limited. These financial statements are available from its registered office, Vale Street Mill, Vale Street, Nelson, Lancashire, England, BB9 0TA.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and trade discounts. For supply and fit contracts income is recognised in accordance with the terms of the contract and is predominantly on installation. For supply only contracts income is recognised on delivery.

1.4
Tangible fixed assets

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

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

Plant and equipment
10% - 20% per annum on a straight line basis
Fixtures and fittings
15% - 20% per annum on a straight line basis
Motor vehicles
20% - 33% per annum on a straight line basis

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

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

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

1.7
Cash and cash equivalents

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

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.9
Equity instruments

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

1.10
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

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

1.13
Leases
As lessee

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Supply and fit
13,180,316
11,792,722
Supply
6,152,917
8,570,732
19,333,233
20,363,454
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
19,333,233
20,363,454
2024
2023
£
£
Other revenue
Interest income
20,437
-
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
17,425
14,075
Depreciation of owned tangible fixed assets
28,546
22,572
Depreciation of tangible fixed assets held under finance leases
107,870
79,500
Profit on disposal of tangible fixed assets
(10,392)
(3,333)
Operating lease charges
300,000
303,000
5
Employees

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

2024
2023
Number
Number
Production
115
102
Administration
45
45
Total
160
147
SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
5
Employees
(Continued)
- 18 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
4,172,321
4,208,928
Social security costs
387,799
368,152
Pension costs
84,425
79,248
4,644,545
4,656,328
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
20,437
-
0
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
18,521
37,122
Other finance costs:
Interest on finance leases and hire purchase contracts
14,709
8,189
33,230
45,311
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
296,799
416,445
Deferred tax
Origination and reversal of timing differences
59,732
2,120
Total tax charge
356,531
418,565
SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
8
Taxation
(Continued)
- 19 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
1,745,687
1,422,116
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
436,422
334,489
Tax effect of expenses that are not deductible in determining taxable profit
(49,706)
116,944
Group relief
(30,185)
(9,377)
Permanent capital allowances in excess of depreciation
-
0
(23,491)
Taxation charge for the year
356,531
418,565
9
Dividends
2024
2023
£
£
Final paid
1,250,000
1,000,000
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2024
2,327,780
440,072
109,784
2,877,636
Additions
44,842
280,059
11,500
336,401
Disposals
-
0
-
0
(33,768)
(33,768)
At 31 December 2024
2,372,622
720,131
87,516
3,180,269
Depreciation and impairment
At 1 January 2024
2,046,743
401,620
109,784
2,558,147
Depreciation charged in the year
102,586
33,351
479
136,416
Eliminated in respect of disposals
-
0
-
0
(33,768)
(33,768)
At 31 December 2024
2,149,329
434,971
76,495
2,660,795
Carrying amount
At 31 December 2024
223,293
285,160
11,021
519,474
At 31 December 2023
281,037
38,452
-
0
319,489
SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
10
Tangible fixed assets
(Continued)
- 20 -

Tangible fixed assets includes assets held under finance leases or hire purchase contracts, as follows:

2024
2023
£
£
Plant and equipment
148,790
231,738
Fixtures and fittings
188,293
-
0
337,083
231,738
11
Stocks
2024
2023
£
£
Raw materials and consumables
572,241
562,839
Work in progress
373,799
387,738
Finished goods and goods for resale
273,035
396,070
1,219,075
1,346,647
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,172,208
2,614,393
Amounts owed by group undertakings
848,880
1,370,405
Other debtors
270
-
0
Prepayments and accrued income
139,544
103,346
3,160,902
4,088,144
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
719,071
319,728
Obligations under finance leases
16
82,584
45,987
Trade creditors
1,365,385
1,353,380
Amounts owed to group undertakings
-
0
68,164
Corporation tax
296,799
416,445
Other taxation and social security
512,084
234,127
Other creditors
51,945
64,323
Accruals and deferred income
495,364
514,016
3,523,232
3,016,170
SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
83,334
183,333
Obligations under finance leases
16
199,339
117,234
Government grants
18
100,000
-
0
382,673
300,567

Net obligations under finance leases are secured over the assets concerned.

15
Loans and overdrafts
2024
2023
£
£
Bank loans
183,334
283,333
Bank overdrafts
619,071
219,728
802,405
503,061
Payable within one year
719,071
319,728
Payable after one year
83,334
183,333

Bank loans and overdrafts are secured by the lender by way of a debenture and unlimited inter-company guarantee (see financial commitments, guarantees and contingent liabilities note).

16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
82,584
45,987
In two to five years
199,339
117,234
281,923
163,221

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 6 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
93,285
33,553
2024
Movements in the year:
£
Liability at 1 January 2024
33,553
Charge to profit or loss
59,732
Liability at 31 December 2024
93,285

The deferred tax liability set out above relates to accelerated capital allowances and is expected to reverse within the same period as these allowances mature.

18
Government grants
2024
2023
£
£
Arising from government grants
100,000
-
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
84,425
79,248

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

20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
30,000
30,000
30,000
30,000
SOVEREIGN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
21
Financial commitments, guarantees and contingent liabilities

The company and its parent, Austhall Holdings Limited, are parties to an unlimited guarantee given to the company's bankers in respect of bank borrowings. As at 31 December 2024 the total amount outstanding from the parties was £1,707,038 (2023 - £2,189,890).

 

A guarantee in the form of fixed and floating charges have also been provided to R Snape, a shareholder in Vale Street Holdings Limited, in connection to a loan received of £1,000,000 by Vale Street Holdings Limited, over part of the company's assets.

22
Operating lease commitments
As lessee

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

2024
2023
£
£
Within 1 year
142,568
15,322
Years 2-5
224,935
12,026
367,503
27,348
23
Ultimate controlling party

The immediate parent company is Austhall Holdings Limited, a company registered in England and Wales.

The company is ultimately controlled by Vale Street Holdings Limited, a company registered in England and Wales and its directors by virtue of their shareholdings in Vale Street Holdings Limited.

24
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
1,389,156
1,003,551
Adjustments for:
Taxation charged
356,531
418,565
Finance costs
33,230
45,311
Investment income
(20,437)
-
0
Gain on disposal of tangible fixed assets
(10,392)
(3,333)
Depreciation and impairment of tangible fixed assets
136,416
102,072
Movements in working capital:
Decrease in stocks
127,572
371,417
Decrease in debtors
927,512
1,484,713
Increase/(decrease) in creditors
190,768
(494,834)
Increase in deferred income
100,000
-
Cash generated from operations
3,230,356
2,927,462
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