The directors present the strategic report for the year ended 31 December 2024.
The directors present the strategic report and financial statements for the year ended 31 December 2024
This financial year has seen a sixty two percent increase in revenue from the previous financial year. This is a result of continued strong performance in our Customer Support business, good progress on two large Airports projects and the award of four Logistics contract awards in the year with activities starting and progressing well in the year on two of them.
| 2024 | 2023 |
|
| £m | £m |
|
Airports | 12.9 | 11.4 |
|
Logistics Systems | 18.4 | 0.8 |
|
Customer Support | 23.0 | 21.2 |
|
Mineral & Mining | 0.0 | 0.2 |
|
| 54.3 | 33.6 |
|
Airports
The company started the year on a strong footing with the award of the contract for a new baggage system in Terminal 2 at Heathrow in Dec 2023. The design validation works started in early 2024 and have continued throughout the year, with close collaboration with the customer on some large changes to the scope of work. The project remains in a very positive position and is scheduled to complete over a five-year timescale.
The early works contract on the baggage system in Terminal 4 at Heathrow Airport was completed in the early part of the year and the company then entered into a contract for the commencement of the installation and commissioning works. The award for the remainder of the installation and commissioning works has been signed in January 2025 and the completion of the baggage system is expected by the end of 2026.
These two projects are significant and have enabled the company to further enhance its relationship with one of the world's largest and busiest airports. The company has engaged in many strategic initiatives with Heathrow Airport for the baggage systems across the airport and are looking forward to being a partner to the Airport in delivering future world class baggage systems. The completion of the two current contracts will allow for 'Operational and Maintenance' contracts as well as new opportunities at the Airport.
To achieve the Airport activities, the company embarked on a drive to build talented, skilled and experienced teams to deliver the projects. This has seen external resources joining the business in the UK, as well as relocation of employees from the wider BEUMER group to the UK to take up key roles for these projects.
Logistics Systems Projects
The company entered 2024 on the back of a year where Logistic customers were largely re-evaluating their investment strategies, resulting in many pipeline projects being moved out to 2024 and further.
Ongoing negotiations into 2024 resulted in four significant contract awards in this financial year, two projects in CEP and two projects in W&D markets marked a significant achievement for the company. The projects re-enforce strong relationships with our key Logistics customer base, with the awards coming from existing customers. Two of the projects began installation in Q4 2024 and will complete in 2025, the others will begin in Q2/Q3 2025 for completion before the end of 2026. The project opportunities are born from e-commerce, supporting both cross border traffic and domestic last mile solutions.
For existing projects, a W&D project that had been delayed for approximately two years, on the customer's request, was completed and handed over in the last quarter of the year. This was another successful on time delivery. Work continued on the large Midlands project where system extensions were implemented to meet the growing requirements of the customer and this project will be closed out in the early months of 2025. The company also delivered its first line sorter system in the UK and this project was delivered successfully in the last quarter of the year.
The outlook for 2025 is also very encouraging for the Logistics business, with targeted pipeline projects on the radar for the Sales team. The recruitment of a new Sales Manager in late 2024 will strengthen the team and its focus for the upcoming year.
Customer Support
The increase in Customer Support business over the last few years has continued into 2024, with a record level of sales and associated margin in this business segment.
The sales of spare parts rose steeply in the year to record levels, with delivery of two large consolidated spares packages for existing sites and a general increase on spares orders throughout the year. The challenges from the supply chain experienced in the last couple of years have eased and the company has established a stable and skilled spare parts team driving this increase in this business.
The year has seen the continuation of existing Operations and Maintenance service contracts in the Logistics sector, where the company has seen some challenges in retaining skilled employees and hiring adequately skilled replacements where needed. The Operations and Maintenance service contracts have performed well and the company continues to be a valued partner to all our customers.
The main challenge in the year has come from expected modernisation projects in Airports not materialising. Planned projects from the Airport sector are still in discussion and fall into the 2025 pipeline. On the Logistics side, expected expansions for several customers in the CEP market did not materialise, with indications of further growth analysis is needed across the sector being measured prior to CAPEX commitment for volume forecasts.
Overall
Another strong performance in 2024, continuing the trend since 2021. The Logistics business has picked up after a slow 2023 and has boosted the company's financials for the current year. The company has established a very good relationship with Heathrow Airport that has seen the start of two key projects in late 2023 and this has been very positive on the company's results in 2024. The Customer Support business continues to grow, with spare parts business compensating for lower than expected modernisation project activity.
The company has grown in the year with a headcount increasing from 119 at the start of the year and finishing with 147 employees at the end of 2024. This growth in resource will continue over the next number of years with the project pipeline secured and the 'Operations and Maintenance' contracts placed.
Principle Risk
The principal risks facing BEUMER Group UK centre around the ability to retain and recruit skilled labour to deliver the contracts in place and the expected contracts in the next few years.
In 2024 the company experienced the highest rate of employee attrition due to the competitive employment market. However, the company also experienced the highest level of recruitment of new employees to finish the year with a headcount of 147. The company is continuously monitoring the market to ensure that the compensation packages for employees are competitive and able to attract the right calibre of new employees.
The company is a subsidiary of a strong group in its field of expertise and has the ability to utilise resource from around the globe. However, the company has embarked on a drive to recruit the best skilled workers from the local markets to drive the successful delivery of current and future projects.
Future Developments
The company is very optimistic about the Airport business with the relationship with Heathrow Airport and the engagement as a partner going forward. The airport will see significant baggage enhancement projects in the next few years and this gives a fantastic opportunity for long term partnership with Heathrow. Some initial discussions have also commenced with other airports in the UK and these opportunities are also welcome to enable the Airports business to develop and grow.
The Logistics business has a strong pipeline moving into 2025 and 2026 and the company is confident on several contracts where initial discussions have taken place. The CEP and Warehouse and Distribution opportunities continue to grow in the UK. The company will look to further establish its capabilities on delivering such projects by increasing the headcount in 2025.
The Customer Support business continues to go from strength to strength and increasing activities in both Airports and Logistics Systems will see the opportunity to continue this growth. There are significant opportunities in the near future for 'Operational and Maintenance' contracts and this will see a significant growth in revenue opportunity.
The company has been working on a strategy to leverage the large install base in the Products market in the UK and this has resulted in the recruitment of a Product Sales Manager to lead this in early 2025. Opportunities for both new systems and modernisations / upgrades have been identified and the company is confident of building a growing business in this area in 2025 and beyond. The company was successful in securing nine installations over two projects at the latter half of 2024 for delivery throughout 2025.
In the performance of their duties and in regard to promoting the success of the company for the benefit of its members, the Directors hold board meetings when appropriate, seek external professional advice when required, and have an open relationship with employees, customers and suppliers.
Directors and management are regularly engaged with employees through meetings and frequent small group discussions.
Meaningful engagement occurs with both suppliers and customers as follows:
- Regular strategic operating reviews with major suppliers are undertaken to discuss relationship priorities going forward.
- Market research discussions are frequently held with customers in order to ascertain their priority and focus areas as these evolve and develop.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £1,000,000. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 24 day's purchases, based on the average daily amount invoiced by suppliers during the year.
The auditor, B M Howarth Ltd, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Here follows the data prepared for Streamlined Energy and Carbon reporting requirements.
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per Revenue (£'000), the recommended ratio for the sector.
The introduction of the company salary sacrifice Electric Vehicle Scheme has enabled 11 employees to enroll in the year and has contributed towards the decrease in the emissions in the year. In addition, one member of the Senior Leadership Team replaced his company vehicle with an electric vehicle, further reducing the overall emissions.
The company moved to booking all flights through an agency, who were able to provide overall emissions for both domestic and international flights undertaking by the employees. The comparative figure for the previous year is unavailable.
The introduction of new projects led to the company requiring larger offices in the last quarter of the year in London. During the fitout low energy LED panels have been installed throughout the office, controlled by motion sensors to avoid unnecessary energy consumption. The overall emissions from electricity and others, has shown an increase of 7.3% compared to 2023 as the company's activities have increased considerably during the year with new projects, and head count has gone up to 147 (increased by 23%) as compared to 119 (at the end of 2023). This increase in headcount has resulted in increased footfall through the company offices during working hours, consuming more energy. The use of photocoltaic panels contributed to a 40% savings for office in Ashby and an overall 36% saving in the total electricity consumed by the company.
The decrease in the intensity ratio for 2024 has been heavily effected by the increase in revenue for the year.
For 2025 the company will continue its focus on replacing aging motor vehicles in the fleet with either "Hybrid" or "Electric" vehicles. Employees will continued to be encouraged to take advantage of the salary sacrifice scheme for electric vehicles. Electric vehicle chargers are due to be installed at the offices in Heathrow area, further assisting employees within the ULEZ Zone. The company is also fully engaged with customers who have energy savings initiatives and targets to achieve at their sites.
We have audited the financial statements of BEUMER Group UK Limited (the 'company') for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity 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 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and the sector in which it operates, our audit work considers the risk of material misstatement on the financial statements as a result of non-compliance with laws and regulations, this includes fraud. These laws and regulations include, but are not limited to, those that relate to the form and content of the financial statements, such as the Company accounting policies, the financial reporting framework and the UK Companies Act 2006.
We evaluated management incentives and opportunities for manipulation of the financial statements and determined that the principal risks related to management bias in accounting estimates and understatement or overstatement of revenue. Our audit procedures included, but were not limited to:
Agreement of the financial statements disclosures to underlying supporting documentation;
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
Challenging assumptions, accounting estimates and judgements made by Directors;
Identifying and testing journal entries to ensure they are appropriate;
Sample testing of income and expenditure to ensure correct cut-off has been applied.;
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error.
There are inherent limitations in audit procedures, the further removed non compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
The financial statements are prepared in sterling, which is the functional currency of the company.
As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions.
Where required, equivalent disclosures are given in the group accounts of the ultimate parent company.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Contract Assets/ Liabilities
Amounts recoverable on long term contracts, which are included in receivables, are stated at the net sales value of the work done after provisions for contingencies and anticipated future losses on contracts, less amounts received as progress payments on account. Excess progress payments are included in payables as payments received on account.
Depreciation has been computed to write off the cost of tangible fixed assets over their expected useful lives using the following rates:
Fixed asset investments are stated at cost less provision for permanent diminution in value.
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The company is exempt under FRS 101 from the disclosure requirements of IFRS 13. There was no impact on the company from the adoption of IFRS 13.
The company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
The company's revenue all derives from it's principal activities undertaken in the United Kingdom.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The unrecognised deferred tax asset comprises:
Property, plant and equipment includes right-of-use assets, as follows:
Beumer Ltd incorporated in England and Wales. Its principal activity is the provider of materials handing solutions and associated service and maintenance services. 100% of its issued share capital is held by Beumer Group UK Limited.
Beumer UK Material Handling Ltd incorporated in England and Wales. The company has remained dormant throughout the year. 100% of its issued share capital is held by Beumer Group UK Limited.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The fair value of the company's lease obligations is approximately equal to their carrying amount.
The total costs charged to income in respect of defined contribution plans is £1,001,502 (2023 - £874,547).
The company has taken advantage of the exemption available in FRS101 not to disclose transactions with other wholly owned members of the group headed by Beumer Group GmbH & Co. KG.
BEUMER Group UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is BEUMER House, L1/L2 Ivanhoe Business Park, Smisby Road, Ashby de la Zouch, Leicestershire, LE65 2AB. The company's principal activities and nature of its operations are disclosed in the directors' report.