Company registration number 00653930 (England and Wales)
Reynolds and Litchfield Limited
Annual report and financial statements
For the year ended 30 September 2024
Reynolds and Litchfield Limited
Company information
Directors
Mr S Lightfoot
Mr G Bath
Mr P T Shore
(Appointed 23 May 2024)
Secretary
Mr G Bath
Company number
00653930
Registered office
Unit B1 Cinderhill Industrial Estate
Weston Coyney Road
Longton
Stoke on Trent
Staffordshire
ST3 5LB
Auditor
DJH Audit Limited
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
Reynolds and Litchfield Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of income and retained earnings
9
Statement of financial position
10 - 11
Notes to the financial statements
12 - 27
Reynolds and Litchfield Limited
Strategic report
For the year ended 30 September 2024
- 1 -

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

Review of the business

This report aims to provide a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.

 

The principal activity of the company continued to be the design, fabrication and erection of structural steel frame buildings.

 

We consider that our key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover and gross margin.

 

Turnover has increased to £17.284M from £17.217M in the previous year. In turn, the gross profit percentage has also increased to 20.70% from 19.86% in the previous year. The company has maintained control over their costs and the increase in sales has meant that the company has generated a increase in gross profit of £159K to £3.578M (2023: £3.420M).

 

The principal reasons for the increase in turnover are largely due to steel prices reducing from an all time high, so although the purchase price of steel has dropped, the business has been able to maintain a good rate of the sales price that is passed onto customers. However, there has been some slow down in the market, making the larger schemes more difficult to secure. Margins have improved due to a stronger focus on design and build, as well as benefits from earlier planning, strategic procurement, and enhanced buying efficiencies, along with the use of new technology enabling completion of more complex projects.

 

However, Reynolds and Litchfield have also done works outside of the construction industry this year where margins tend to be tighter.

 

We are in the process of replacing all company cars to electric and hybrid and are looking to reduce carbon footprint and increase recycling.

 

Continued investment in technology is key to the improved performance of the company and continued investment in software development has also contributed to this.

 

Reynolds and Litchfield has a long-standing relationship with the supply chain and as a result of those relationships the company has managed customer expectations.

 

The financial position of the company remained strong at the year end, with net current assets increasing by £453K to £2.345M (2023: £1.892M).

 

The business has held a strong cashflow position. Although the cash balance decreased by £227K on the previous year to £2.030M (2023: £2.257M), the cashflow remains strong and cost control is maintained

 

At the balance sheet date, net assets have increased by £318K to £2.221M (2023: £1.903M).

 

The directors are extremely pleased with this year’s results and the financial position at the year end. A comprehensive review of costs, margins and expenses is carried out on a constant basis throughout the year.

Reynolds and Litchfield Limited
Strategic report (continued)
For the year ended 30 September 2024
- 2 -
Principal risks and uncertainties

The business environment remains challenging, with the group continuing to operate in a competitive landscape. In addition, our performance is influenced by consumer spending habits and purchasing policies.

 

As the business undertakes larger contracts, the risk of bad debts may increase, particularly where credit insurance offers limited coverage. This also raises potential exposure to cash flow fluctuations. Nonetheless, the company maintains healthy cash reserves, and the overall risk remains manageable. We look at mitigating risks with better payment terms and upfront payments.

 

Financial instrument risk

 

Credit Risk

There is an increased risk of customer default currently of companies in the construction industry.

 

The company has partially offset its risk with credit insurance in place on a number of customers and closely monitors outstanding debtor amounts against credit ratings. The amounts presented in the balance sheet are net of allowances for doubtful debts. The company's credit risk is spread over a large number of customers and overall the company is not concerned about it’s credit risk exposure.

 

Liquidity risk

The company remains liquid with minimal external finance. There is a low liquidity risk present.

 

With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control.

Development and performance

The group's future outlook remains highly positive, with a strong order book. Ongoing investment in technology is expected to support this growth trajectory and contribute to improvements in group margins.

 

The company will continue to invest in its systems, people and processes to enhance its product and service offer in all areas in which it currently operates and to enter into new sectors where there is high potential for profitable, sustainable growth.

 

Finally, the company will continue to prioritise the quality and sustainability of its products and operations to minimize its environmental impact and increase its social responsibility.

Key performance indicators

Turnover has increased to £17.284M from £17.217M in the previous year.

 

Gross margin percentage has also increased this year to 20.70% from 19.86% in the previous year, resulting in a increase in gross profit of £159K to £3.578M (2023: £3.420M).

 

Administrative expenses were £1.369M as compared to £1.284M the previous year, an increase of £85K (6%).

 

Operating profit for the year was £2.210M (2023: £2.135M).

 

Net Current Assets were £2.345M as at 30th September 2024, an increase over the previous year (2023: £1.892M).

 

Reynolds and Litchfield Limited
Strategic report (continued)
For the year ended 30 September 2024
- 3 -

On behalf of the board

Mr S Lightfoot
Director
24 June 2025
Reynolds and Litchfield Limited
Directors' report
For the year ended 30 September 2024
- 4 -

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

Principal activities

The principal activity of the company continued to be that of the design, fabrication and erection of structural steel.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £1,304,800 (2023 - £1,279,720). The directors do not recommend payment of a final dividend.

Directors

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

Mr S Lightfoot
Mr G Bath
Mr P T Shore
(Appointed 23 May 2024)
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.

Strategic report

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

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.

Reynolds and Litchfield Limited
Directors' report (continued)
For the year ended 30 September 2024
- 5 -
Medium-sized companies exemption

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

On behalf of the board
Mr S Lightfoot
Director
24 June 2025
Reynolds and Litchfield Limited
Independent auditor's report
To the members of Reynolds and Litchfield Limited
- 6 -
Opinion

We have audited the financial statements of Reynolds and Litchfield Limited (the 'company') for the year ended 30 September 2024 which comprise the statement of income and retained earnings, the statement of financial position and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Reynolds and Litchfield Limited
Independent auditor's report (continued)
To the members of Reynolds and Litchfield Limited
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

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.

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 company through discussions with directors and other management;

- 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 company, including legislation such as the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations through making enquiries of management and reviewing legal and professional fee invoices.

Reynolds and Litchfield Limited
Independent auditor's report (continued)
To the members of Reynolds and Litchfield Limited
- 8 -

We assessed the susceptibility of the 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 posted during the year and at the year end to identify unusual transactions;

- investigated the rationale behind significant or unusual transactions;

- performed walkthrough tests on major transaction cycles; and

- performed detailed testing on the significant accounting estimates used by management in evaluating long term contract progress and profitability.

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;

- reviewing correspondence with HMRC; and

- reviewing legal and professional fees incurred during the year to identify any potential indications of non-compliance with laws and regulations.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Use of our report

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

Nicola Johnson (Senior Statutory Auditor)
For and on behalf of DJH Audit Limited, Statutory Auditor
Accountants
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
25 June 2025
Reynolds and Litchfield Limited
Statement of income and retained earnings
For the year ended 30 September 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
17,283,789
17,216,644
Cost of sales
(13,705,421)
(13,797,069)
Gross profit
3,578,368
3,419,575
Administrative expenses
(1,369,290)
(1,284,608)
Other operating income
1,500
500
Operating profit
4
2,210,578
2,135,467
Interest receivable and similar income
7
22,495
13,229
Interest payable and similar expenses
8
(20,785)
(823)
Profit before taxation
2,212,288
2,147,873
Tax on profit
9
(589,650)
(418,091)
Profit for the financial year
1,622,638
1,729,782
Retained earnings brought forward
1,870,300
1,420,238
Dividends
10
(1,304,800)
(1,279,720)
Retained earnings carried forward
2,188,138
1,870,300
Reynolds and Litchfield Limited
Statement of financial position
As at 30 September 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
352,860
319,629
Current assets
Stocks
12
86,154
85,135
Debtors falling due after more than one year
13
279,603
405,760
Debtors falling due within one year
13
4,092,262
3,513,556
Cash at bank and in hand
2,030,280
2,256,632
6,488,299
6,261,083
Creditors: amounts falling due within one year
14
(4,143,220)
(4,369,312)
Net current assets
2,345,079
1,891,771
Total assets less current liabilities
2,697,939
2,211,400
Creditors: amounts falling due after more than one year
15
(7,501)
(17,500)
Provisions for liabilities
Provisions
17
390,100
211,500
Deferred tax liability
18
79,600
79,500
(469,700)
(291,000)
Net assets
2,220,738
1,902,900
Capital and reserves
Called up share capital
20
200
200
Share premium account
21
12,500
12,500
Capital redemption reserve
22
19,900
19,900
Profit and loss reserves
23
2,188,138
1,870,300
Total equity
2,220,738
1,902,900
Reynolds and Litchfield Limited
Statement of financial position (continued)
As at 30 September 2024
- 11 -

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 24 June 2025 and are signed on its behalf by:
Mr S Lightfoot
Director
Company registration number 00653930 (England and Wales)
Reynolds and Litchfield Limited
Notes to the financial statements
For the year ended 30 September 2024
- 12 -
1
Accounting policies
Company information

Reynolds and Litchfield Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit B1 Cinderhill Industrial Estate, Weston Coyney Road, Longton, Stoke on Trent, Staffordshire, ST3 5LB.

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 cover the company as an individual entity and are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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

 

 

The financial statements of the company are consolidated in the financial statements of MRL Group Limited. These consolidated financial statements are available from its registered office, Unit B1 Cinderhill Trading Estate, Weston Coyney Road, Longton, Stoke-On-Trent, Staffordshire, ST3 5LB.

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 and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on despatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
1
Accounting policies
(Continued)
- 13 -

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated on a survey basis by quantity surveyors. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Other income

Amounts recoverable on construction contracts are included in debtors and are valued, inclusive of profit, at work executed at contract prices plus variations. Any work invoiced in advance of the work being completed is recorded in creditors. Contracts are valued based on managements judgement for each individual contract.

 

Turnover and costs on contracts are recognised as activity progresses once the outcome can be assessed with reasonable certainty. Full provision is made for anticipated future losses. Where contract payments received exceed amounts recoverable, these amounts are included in creditors.

1.4
Tangible fixed assets

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

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

Electrical installation
10/20% on reducing balance
Short leasehold improvements
10% on reducing balance
Plant and equipment
10% on reducing balance/25% straight line
Fixtures and fittings
10% on reducing balance/15% straight line
Office equipment
10% on reducing balance/25% straight line
Motor vehicles
25% on reducing balance

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

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use.

 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

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 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 in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
1
Accounting policies
(Continued)
- 14 -
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.

Cost is calculated using the first in first out method.

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 and cash at bank.

1.8
Financial instruments

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

 

Financial instruments are recognised in the company's statement of financial position 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, loans due to fellow group companies and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

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

Impairment of financial assets

Financial assets 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.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
1
Accounting policies
(Continued)
- 15 -
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 and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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

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.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
1
Accounting policies
(Continued)
- 16 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.

 

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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

1.11
Provisions

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

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

 

Included within the year is a contract cost provision of £390,100. The provision is in relation to rectification works in relation to contract liabilities. The directors deem this provision to be a best estimate.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

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

1.13
Retirement benefits

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

1.14
Leases
As lessee

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.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
1
Accounting policies
(Continued)
- 17 -
1.15
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.

 

Critical judgements in applying the Company's accounting policies

 

In the directors' opinion there are no critical judgements, apart from those involving estimations (dealt with separately below), that they have made in applying the company's accounting policies and that had had a significant effect on the amounts recognised in the financial statements.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Valuation of contracts

Management review each construction contract ongoing at the year end in order to obtain an accurate valuation of the work completed to date and therefore any profits or losses on contract to recognise. Management recognise profits on contracts once the outcome can be measured with reasonable certainty. Management will review the level of work completed and the costs incurred on each individual contract at the year end and then estimate the likelihood of recoverability of the applied for balances in excess of the certified amounts (confirmed directly by the customer) with reference to post year end certifications. The contract valuation will be adjusted based on this, with any balances that are unlikely to be recovered being provided against.

 

Any anticipated future losses are provided for in full. Uncertainties in the valuation of individual contracts relate to the actual values recoverable on each contract.

Ageing of retentions

Management have estimated that 50% of the retentions balance on ongoing contracts will not be due within the next 12 months on the basis that half of the retention is released on completion of a contract, whilst the remaining half is released 12 to 24 months after this date.

 

Uncertainties in the ageing of this retention balance relate to the actual timing of the contract completion dates.

Contract cost provision

A contract cost provision has been included, which management has calculated based on actual rectification works after date, along with an estimation of additional costs that they expect to be incurred in the next 12 months.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Construction
16,063,736
14,583,453
Supply only
1,220,053
2,633,191
17,283,789
17,216,644
2024
2023
£
£
Other revenue
Interest income
22,495
13,229
Grants received
1,500
500
Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
- 19 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(1,500)
(500)
Fees payable to the company's auditor for the audit of the company's financial statements
18,500
15,500
Depreciation of owned tangible fixed assets
54,599
31,994
Loss on disposal of tangible fixed assets
1,777
1,193
Operating lease charges
102,492
63,360
5
Employees

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

2024
2023
Number
Number
Directors
2
2
Administration staff
12
13
Direct staff
24
19
Total
38
34

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,395,609
1,171,461
Social security costs
146,713
120,799
Pension costs
163,093
90,407
1,705,415
1,382,667
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
189,908
38,461
Company pension contributions to defined contribution schemes
133,524
61,935
323,432
100,396

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
- 20 -
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
20,594
11,791
Other interest income
1,901
1,438
Total income
22,495
13,229
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
573
823
Other interest
20,212
-
0
20,785
823
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
530,492
378,591
Adjustments in respect of prior periods
59,058
-
0
Total current tax
589,550
378,591
Deferred tax
Origination and reversal of timing differences
100
39,500
Total tax charge
589,650
418,091
Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
9
Taxation
(Continued)
- 21 -

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
2,212,288
2,147,873
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
553,072
536,968
Tax effect of expenses that are not deductible in determining taxable profit
5,628
2,096
Effect of change in corporation tax rate
-
0
(59,540)
Group relief
(27,531)
(2,474)
Depreciation on assets not qualifying for tax allowances
41
47
Under/(over) provided in prior years
59,058
-
0
Deferred tax adjustments in respect of prior years
(618)
(85)
Enhanced Capital Allowances
-
0
(548)
Current year deferred tax over provided
-
0
638
Current year corporation tax under provided
-
0
(59,011)
Taxation charge for the year
589,650
418,091
10
Dividends
2024
2023
£
£
Interim paid
1,304,800
1,279,720
Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
- 22 -
11
Tangible fixed assets
Electrical installation
Short leasehold improvements
Plant and equipment
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 October 2023
1,101
79,491
315,735
34,432
124,418
293,732
848,909
Additions
-
0
-
0
7,333
6,134
5,811
93,995
113,273
Disposals
-
0
-
0
(31,250)
-
0
-
0
(39,009)
(70,259)
At 30 September 2024
1,101
79,491
291,818
40,566
130,229
348,718
891,923
Depreciation and impairment
At 1 October 2023
1,101
39,101
232,670
17,792
60,964
177,652
529,280
Depreciation charged in the year
-
0
4,038
7,195
2,054
6,701
34,611
54,599
Eliminated in respect of disposals
-
0
-
0
(17,798)
-
0
-
0
(27,018)
(44,816)
At 30 September 2024
1,101
43,139
222,067
19,846
67,665
185,245
539,063
Carrying amount
At 30 September 2024
-
0
36,352
69,751
20,720
62,564
163,473
352,860
At 30 September 2023
-
0
40,390
83,065
16,640
63,454
116,080
319,629
Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
- 23 -
12
Stocks
2024
2023
£
£
Raw materials and consumables
86,154
85,135
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,334,537
2,414,951
Gross amounts owed by contract customers
300,166
629,557
Other debtors
403,960
419,462
Prepayments and accrued income
53,599
49,586
4,092,262
3,513,556
2024
2023
Amounts falling due after more than one year:
£
£
Trade debtors
279,603
405,760
Total debtors
4,371,865
3,919,316
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
16
10,000
10,000
Payments received on account
15,700
-
0
Trade creditors
2,842,370
2,707,348
Amounts owed to group undertakings
701,897
1,101,720
Corporation tax
350,704
378,591
Other taxation and social security
49,751
26,043
Other creditors
44,771
12,547
Accruals and deferred income
128,027
133,063
4,143,220
4,369,312

Included within creditors are amounts owed to group undertakings of £585,933 (2023 - £1,093,876), which are secured by fixed and floating charges over all the assets of the company.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
- 24 -
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
7,501
17,500
16
Loans and overdrafts
2024
2023
£
£
Bank loans
17,501
27,500
Payable within one year
10,000
10,000
Payable after one year
7,501
17,500

The bank loans are secured by a fixed and floating charge over the assets of the company.

 

17
Provisions for liabilities
2024
2023
£
£
Contract cost provision
390,100
211,500
Movements on provisions:
Contract cost provision
£
At 1 October 2023
211,500
Additional provisions in the year
178,600
At 30 September 2024
390,100

The contract cost provision is made up of amounts provided for in relation to estimated future costs to be incurred on the completion of contracts, based on the expected profitability of each contract.

Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
- 25 -
18
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
87,859
79,500
Retirement benefit obligations
(8,259)
-
79,600
79,500
2024
Movements in the year:
£
Liability at 1 October 2023
79,500
Charge to profit or loss
100
Liability at 30 September 2024
79,600

 

19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
163,093
90,407

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.

 

At the year-end contributions totalling £36,612 (2023 - £2,512) were payable to the fund and are included in creditors.

20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
100
100
100
100
Ordinary B shares of £1 each
100
100
100
100
200
200
200
200
Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
20
Share capital
(Continued)
- 26 -

Each Ordinary A share carries voting rights, dividend rights and the right to participate in distributions on winding up.

 

Each Ordinary B share carries voting rights, dividend rights and the right to participate in distributions on winding up.

21
Share premium account

Share premium is made up of receipts in excess of the par value of new share capital issued.

22
Capital redemption reserve

Capital redemption reserve is made up of the share capital that has been repurchased by the company.

23
Profit and loss reserves

Profit and loss reserves are made up of accumulated profits less accumulated losses and distributions up to the reporting date. This is a distributable reserve.

24
Financial commitments, guarantees and contingent liabilities

The company has a fixed and floating charge over all property or undertaking of the company with a negative pledge is registered, as security for the borrowings of fellow group undertakings. At 30 September 2024 these borrowings amounted to £362,170 (2023 - £424,814). As at the date of approval of these financial statements the directors do not anticipate that the charges will be called upon.

25
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
56,868
69,669
Years 2-5
84,997
92,417
141,865
162,086
Reynolds and Litchfield Limited
Notes to the financial statements (continued)
For the year ended 30 September 2024
- 27 -
26
Related party transactions

Group transactions and balances

 

During the year the company made sales to a fellow subsidiary of the group of £19,522 (2023: £5,098). The company also purchased materials from this fellow subsidiary amounting to £42,662 (2023: £38,334).

 

Dividends have been paid to the parent company in the year of £1,240,000 (2023: £1,250,000).

 

The company also paid expenses on behalf of the parent company amounting to £774 (2023 - £11,536).

 

Amounts owed to group companies at the year end totalled £701,897 (2023: £1,101,720).

 

Other related party transactions and balances

During the year the company made sales to a company under common control of £835 (2023: £579). The company also purchased goods from a company under common control amounting to £1,374 (2023: £1,980).

 

Amounts owed to companies under common control at the year end totalled £nil (2023: £1,320).

 

Dividends paid to directors in the year totalled £64,800 (2023: £29,720).

 

A company van was sold to the director, Mr Gary Bath during the year for proceeds of £16,667 net of VAT (2023: nil).

 

In the prior year to 30 September 2023, an amount owing to the director, Mr Gary Bath, of £15,000 was written off. No amounts were written off in the current year to 30 September 2024.

27
Ultimate controlling party

The immediate and ultimate parent company at the balance sheet date was MRL Group Limited as a result of its 95% shareholding in the company. Consolidated financial statements as at 30 September 2024 may be obtained from Unit B1 Cinderhill Trading Estate, Weston Coyney Road, Longton, Stoke On Trent, Staffordshire, United Kingdom, ST3 5LB.

 

The ultimate controlling party is Mr S Lightfoot, as a result of his 100% shareholding of the parent company.

 

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