The directors present the strategic report for the period ended 31 March 2025.
INTRODUCTION
WJ North Limited (“the company”) was incorporated in 1994 and is a trading subsidiary of WJ (Group) Limited.
The company is part of the WJ Group, the UK’s leading road marking and highway safety business. It delivers high-performance, award-winning solutions to the strategic road network, local authority and private markets. WJ creates safe, sustainable journeys for everyone.
The company provides temporary and permanent road and off highways markings using a wide range of applications and products. We install road studs, both reflective and active (solar). We provide a range of safety related surface treatments, including retexturing, high friction surfacing and pothole repair systems. Our retexturing fleet is the largest in the UK and we have a high friction surface product that is widely used across the strategic road network.
Our Intelligent Traffic Solutions (ITS) division commissions and installs a variety of safety critical systems aimed at temporary works on the highways, including wireless CCTV, stopped vehicle detection, average speed cameras, automatic number plate recognition (ANPR) cameras and air quality monitoring. This division has been strengthened during the period through the acquisition of Sunstone Systems. Sunstone were providers of the autonomous renewable power generation devices that the ITS business uses to power various IoT devices such as ANPR cameras, Average Speed cameras, and traffic monitoring radar. The acquisition created WJ Sunstone which will work independently of the ITS business to continue to market to a diverse range of sectors which require power for connected devices.
The company supports highways authorities managing their road marking assets by surveying and digitising their road marking networks and then providing consultancy services to help them prioritise appropriate treatments.
The company has a Verified Science Based Target to deliver against the Paris Agreement by 2042, based on lowering embodied carbon in our materials to zero, switching to zero emission vehicles as technology allows and off-setting carbon through the planting of a forest.
The company’s transformation into a data driven business, with THI’s support and investment, is continuing following the go live of the second phase of group wide ERP system in March 2024.
Our employees are our most valuable asset and WJ Group provides a supportive, developmental, and inclusive work environment. This period we launched inclusive talent acquisition initiatives, such as the Forces Covenant Agreement and Disability Confident Employer. We strengthened ties with educational institutions and continued leadership development to ensure a sustainable high performing team for the future.
Safety is core to WJ. Our ‘Safer Together’ Strategy, launched in 2025, strives to achieve zero accidents by creating an environment where every employee is empowered to take ownership of their health and safety and that of those around them. The ‘Safer Together’ Strategy focusses on Health and Safety (H&S) priorities across the WJ Group for the next five years ensuring we deliver our works through safe people, safe places and safe processes supported by a culture that acts safely, without compromise.
SOCIAL VALUE INDICATORS
Community is a WJ Core Value. Social Value is tracked by WJ Group using the National TOMs Framework. We track our performance against the Themes, Outcomes and Measures (TOMs) described in the system. These are: Work, the employment opportunities we provide; Economy, where we spend and how that delivers inclusive growth; Community, how we deliver for the communities where we live and work; Planet, that is environmental stewardship and our contribution to this locally and nationally. The numbers generated are then verified by Planet Mark on behalf of Social Value Portal.
We aim to present a balanced and comprehensive review of the development and performance of our business during the period and its position at the period end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.
The financial statements presented are for a period of 14 months rather than 12 months in order to align the period end more appropriately with internal business processes and external customers fiscal years. The comparative amounts presented in the financial statements (including the related notes) are not entirely comparable as a result.
Turnover for the 14 month period is £68,324,218 and we have achieved a 29.3% gross profit margin on this. Not withstanding the 14 month period vs the prior period of 12 months, turnover increased by over 31% due to a combination of ongoing growth from volume and pricing and expansion into adjacent markets.
The company maintained its focus on working capital management with particular focus on inventory management and debt control.
During the period 1 February 2024 – 31 March 2025 the company has invested £2,434,874 in capital expenditure reflecting an ongoing strategy of maintaining the most modern and technologically advanced plant and machinery, fleet and IT systems in our sector in order to ensure maximum self-delivery and unparalleled customer service. The company invested significantly in IT to allow it to launch a new ERP system which will be key to providing consistent data and driving greater efficiency and operational improvements. Investment decisions are subject to capital appraisal reviews in line with this vision and taking into account the company’s resources and innovation strategy.
Total net assets at the end of the period increased from £24,596,551 to £32,728,572 reflecting the retained profit in the period.
Government Spending Decisions – the Company recognises that the majority of its income derives from government sources and it plays an active role, through a number of trade bodies and associations, in promoting and developing the safety, effectiveness and sustainability of its products and services in line with evolving Department of Transport and Local Authorities priorities. We believe that Government investment in the UK road infrastructure will be maintained.
Competition – the Company differentiates itself from the competition by continued efforts in R&D and Innovation and a strategy of delivering safer and more sustainable products and services. The wider Group has made strategic investments to develop the UK largest nationwide network and has diversified into adjacent markets and geographies to enable it to stay ahead of the evolving competitor base.
Materials Supply – the Company has developed an internal supply chain for the bulk of the products it uses and has developed strong partnerships in areas where internal production is not possible. The Company works closely with its raw materials supply chains and utilises group buying power to ensure that availability of product is robust and that pricing is sustainable.
Fuel and Energy Prices – the Company is not immune to the impact of rising fuel and energy prices but the effect is mitigated through the maintenance and upgrading of a modern fleet of fuel efficient vehicles and an industry leading driver awareness training programme and incentivisation scheme which leads to improved fuel consumption and a reduction in the Company’s carbon footprint. The Company is registered under the Energy Savings Opportunity Scheme (ESOS) and is committed to reducing energy consumption to both combat price fluctuations but also reinforce our commitment to reducing our carbon footprint.
Credit Risk – the Company has a broad range of customers including both private companies and public sector bodies. The risk that the Company will suffer from significant levels of bad debt is managed by the diversified customer portfolio and the well established credit control procedures operated across the Company.
Cash Flow Risk – the Company is funded through a combination of Hire Purchase funding and access to funds in the wider Group through a Term Loan, a Revolving Credit Facility and an Acquisition Facility.
Liquidity Risk – the Company is able to meet short and medium term obligations from operational cash generation and in addition has access to in excess of £14m of undrawn committed facilities through the wider Group.
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross profit margin and operating profit margin before exceptional items. The success of the company will be reflected in the balance sheet net assets and company liquidity.
14 months ended Year ended
31 March 2025 31 January 2024
Turnover 68,324,218 52,107,022
Gross Profit Margin 29.3% 27.8%
Operating Profit Margin
before exceptional items 12.9% 11.0%
Explanation of the key performance indicators detailed above can be found in the review of business section of this report.
The Company places health and safety as a paramount non-financial key performance indicator. Health and safety statistics are reported to the board on a monthly basis. Whilst all reported accidents are fully investigated the overriding indicator is the number of RIDDOR (“Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013”) reports. During the period 1 February 2024 – 31 March 2025 there was 1 RIDDOR report and in the year 1 February 2023 – 31 January 2024 there was 1 RIDDOR report.
The WJ Group Board believe being a responsible business gives us a social licence to operate. We actively engage our stakeholder community including, employees, suppliers, clients, and communities. Endeavouring through our actions to create shared value through positive contribution to economic, social, and environmental value in the communities we work, live, and serve. In this way contributing to the future sustainable development of the nation and aiding the delivery of the Sustainable Development Goals. Set out briefly here under this S172 Statement, taking into account factors (a) to (f):
(a) the likely consequences of any decision in the long term.
The WJ Board manage the risks of the prevailing business environment ‘To Deliver Safe Sustainable Journeys for All’ a vision that embodies the ethos of the organisation. WJ have four core values: Safety, Delivery, Innovation and Community. Through delivery of this vision and these values we aim to enhance our position as the leading UK providers of road markings; safety surfacing and retexturing; road marking products and equipment; Intelligent Traffic Solutions, Off Highway and Maritime Surface Preparation, for the long term. WJ are committed to continually improve economic, environmental, and social value for our staff, clients, supply chain and the communities we serve.
At all Board Meetings the Board consider the present position of the WJ Group Companies and how that impacts our stakeholders. We record, maintain, audit and review in our management systems a documented Group Stakeholders Needs and Expectations Analysis. Board Meetings further review current strategy and actively seek opportunities to improve safety, innovation, delivery, and community to continue our success for the benefit of The Group, its stakeholders and wider social licence.
(b) the interests of the company’s employees.
WJ Board recognise empowered people are fundamental to the success of our business; to delivering successful services meeting the needs our clients; our communities and to the protection and improvement of our environment. To do this we must not only be a responsible employer but a responsive one too; provide industry leading pay and conditions; where our people are safe, treated with fairness, inclusion, and respect; where everyone is valued, invested in, and has an equal opportunity to progress their career.
Safety is imperative to us and WJ. We research and develop equipment and processes that remove and reduce risks, strive to remove vulnerable road workers from the carriageway and introduce further innovative machinery and processes that protect our people and the travelling public alike. We recognise our interdependence with the environment in which we operate, safe systems are the key to preventing harm. Living our values, employing regular structured and interactive training; from onboarding and teaching essential skills through the entire employment lifecycle at whatever level within the organisation. Through The People Team and the WJ Training Academy considering the whole life wellbeing of our people not just the physical but the mental, financial, and social equally. WJ are active participants in local, sectoral, national, and international work on improving safety and the working environment. The interests of our employees are measured through surveys, encouraged at regular meetings and Sharing Knowledge events. Our long established and continually improved Safety Observation System is designed to capture HSEQ near misses; opportunities for improvement in equipment, systems and behaviours whilst also providing the opportunity to highlight good practice. Regular feedback is given to our people through our ‘You Said, We Did,’ system. Our Voices of Women group are supported as allies in our work to improve equity in our industry along with support for Fairness inclusion and Respect in Construction, the Supplier Diversity Forum, the Race at Work and People Matter Charters. We are further looking to the future through pan industry collaboration with BITC’s Green Skills Lab working on a Just Transition to Net Zero.
(c) The need to foster the company’s business relationships with suppliers, customers and others.
Business relationships are fundamental to all businesses and in this complex and fast changing world we all inhabit crucial to our success. We work very closely with customers and suppliers to understand their needs so that we can tailor our products and services to meet or exceed our delivery requirements. We track performance through regular internal and external meetings and discussions up and down our value chain to aid decision making, enhance customer focus and enable our supply chain. This will include formal collaborative agreements (assessed to ISO 44001) and client, customer, and community performance groups. We recently achieved PAS 2080 ‘Carbon Management in Infrastructure and Built Environment’ certification, this is a collaborative standard which necessitates us being active participants in collaborative events where we listen, understand, share knowledge, and contribute creatively to reducing global emissions. Our operations are critical to delivering a safe sustainable highways network, we align with our supply chain to deliver the holistic service the end user, one that delivers safer sustainable journeys for all. Investment and financial security are fundamental to meeting the needs of our clientele. Working openly and closely with our financial stakeholders strengthens WJ and gives confidence to clients and suppliers alike that we are financially secure, pay promptly and enhance supply chain sustainability, innovation, and capacity.
(d) the impact of the company’s operations on the community and the environment.
The WJ Board understand our services have a significant positive impact on the community and our environment. Road markings, high friction surfacing, and our intelligent traffic solutions are all designed to make journeys safer more and efficient. This in and of itself is delivering considerable social and environmental value. Community is a core value for WJ that means delivering great social and environmental value in a well governed structure. We as an organisation play our part in delivering sustainable economic growth; tackling economic inequality; fighting climate change; aiding equal opportunity and supporting wellbeing. WJ have signed up to the Science Based Target Initiative to deliver against the Paris Agreement, based on lowering embodied carbon in our materials to zero, switching to zero emission vehicles as technology allows and insetting carbon through the planting of a forest. In our operations, road users, communities and the environment are considered at all times. To ensure we reduce and mitigate negative impacts of our operations upon them whist creating new jobs, business opportunities and skills. WJ through innovation in the design of materials, plant and machinery strive to increase the lifecycle of our materials. With less interventions we serve our communities and environment through reduced carbon emissions, less waste and improved air quality. WJ through innovative thinking greatly reduced embodied carbon in materials by circa 80% independently verified to ISO 14067 and PAS 2050 through collaborative work with our supply chain and developing the use of biogenic componentry. This aligns WJ with our community and environments needs.
WJ have an active community engagement program ‘Thinking Community.’ We understand that it is difficult to manage what you can’t measure and have built an independently audited and accredited Social Value Calculator. The Board understand that for an organisation that works mostly for public sector organisations whether at Tiers 1, 2 or 3 level creating additional Social Value is critical to us, our clientele and the nation as a whole. This synergises with the ‘Community’ value’ of WJ, our people and our stakeholder communities to make a positive contribution to society.
(e) the desirability of the company maintaining a reputation for high standards of business conduct; and
The Board know that having a strong governance framework that is economically, environmentally, and socially responsible is fundamental to the development of our business. To this end the Board regularly reviews its policies and promotes ethical behaviour, actively encouraging equity, diversity, inclusion, and access and promoting support for disadvantaged groups. WJ is further engaged in promoting better understanding of the abhorrent practice of Modern Slavery. WJ are independently audited by Planet Mark on our carbon reduction targets, local social and economic value and BITC through the ‘Responsible Business Tracker’ on our response to the United Nations Sustainable Development Goals.
(f) the need to act fairly between members of the company.
WJ take the ethos of fairness, inclusion, and respect as pillars of our social contract as an organisation. This is a key part of our induction process and sets of the tenets of the behaviours we expect as an organisation. As a company working primarily for the public sector, we understand that the Public Sector Equality Duty of our clients is fundamental and that these standards are a minimum not an aspiration. It would be short sighted in the extreme for us as a Board not to consider the impacts of all the decisions that we make without considering our people, our wider stakeholders and the environment.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 March 2025.
The results for the period are set out on page 14 onwards.
No ordinary dividends were paid (2024 - £nil). The directors do not recommend payment of a final dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
The company invests heavily in research and development to ensure that they have the most modern fleet available to promote efficiency whilst maintaining a strong health and safety record.
Energy and carbon reporting
At WJ our vision is to ‘Creating safe, sustainable journeys for everyone’, we achieve this by integrating sustainability into the operations of our company.
Organisational info/structure
WJ North Ltd is a trading entity made up of smaller divisions.
Environmental indicators
We use our Environmental Management Systems (EMS) to manage and improve significant environmental impacts. This commitment requires us to maintain and continually improve our environmental management system in accordance with ISO 14001 for the operation of our services and legislation relevant to the SECR environmental impacts. Our carbon emissions monitoring system is audited as part of our EMS and is externally verified by Planet Mark according to the Greenhouse Gas (GHG) Protocol.
Reporting period for energy emissions
From 1 February 2024 to 31 March 2025, with a baseline year of 1 February 2017 – 31 January 2018.
Reporting boundary
The reporting boundary includes all companies of WJ North Ltd. This includes 3 operational depots.
Measurement methodology
WJ North Ltd operational carbon footprint includes Scope 1 and 2 emissions. It is measured according to methods set out by the GHG Protocol with the latest conversion factors from the Department for Business, Energy & Industrial Strategy (BEIS). Our monitoring system has also been externally verified by Planet Mark.
Our Scope 3 emissions are also monitored and verified by Planet Mark. However, due to the large amount of data to analyse, we currently only have 2023’s Scope 3 data. This data is done on a groupwide level so cannot be broken down by WJ North Limited. We have successfully carried out the Lifecycle Assessment (LCA) of our thermoplastic road marking products, our largest source of Scope 3 emissions. This is externally verified by Lucideon to ISO14067 and PAS2050.
Our intensity ratio will be based on our Scope 1 and 2 emissions Tonnes CO2e/£million turnover.
Achievements
Our largest environmental impact and source of emissions is our vehicle and plant fleet. We have invested in a vehicle telematics system and launched a driver behaviour monitoring and award scheme. These have combined to show a 22% increase in MPG and 15.7% reduction in emissions.
Our Scope 3 savings from product reformulation with a switch to biogenic binder systems has seen around 27,762 tCO2e saved emissions across the WJ Group as a whole.
Our Net Zero targets have now been approved by Science-based Targets Initiative (SBTi), with the following targets:
Overall Net-Zero Target: WJ Group commits to reach net-zero greenhouse gas emissions across the value chain by FY2042.
Near-Term Targets:
WJ Group is committed to reduce absolute scope 1 and 2 GHG emissions 90% by FY2032 from a FY2022 base year.*
WJ Group is also committed to reduce absolute scope 3 GHG emissions 32.4% within the same timeframe.
Long-Term Targets:
WJ Group commits to maintain a minimum of 90% absolute scope 1 and 2 GHG emissions reductions from FY2032 through FY2042 from a FY2022 base year.*
WJ Group also commits to reduce absolute scope 3 GHG emissions 90% by FY2042 from a FY2022 base year.*
*The target boundary includes land-related emissions and removals from bioenergy feedstocks.
Future plans and goals
We are currently trialling alternative fuels for our truck fleet.
Sustainable procurement is to become a focus for the business in the near future to aid in Scope 3 emissions reduction.
We are evaluating transferring all of our electricity and natural gas heating to be sourced from renewable sources.
As part of the Responsible Business Tracker by Business in the Community, we are also aligning our operations to the United Nations Sustainable Development Groups.
Company law requires the directors to prepare financial statements for each financial period. 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 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.
Where the financial statements contains forward-looking statements, these are based on current expectations and assumptions and are subject to risk factors and uncertainties which the Directors believe are reasonable. Accordingly, the Company's actual future results may differ materially from the results expressed or implied in these forward-looking statements. We do not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
We have audited the financial statements of WJ North Limited (the 'company') for the period ended 31 March 2025 which comprise the statement of comprehensive income, 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 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (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
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 period 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.
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, and from our commercial knowledge and experience of the company;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators, and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities 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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
WJ North Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 7 Brock Way, Knutton, Newcastle Under Lyme, Staffordshire, ST5 6AZ.
Basis of preparation
The financial statements are prepared on a going concern basis, under the historical cost convention.
The preparation of financial statements in conformity with FRS102 requires the use of certain accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies.
The financial statements presented are for a period of 14 months rather than 12 months in order to align the period end more appropriately with internal business processes. The comparative amounts presented in the financial statements (including the related notes) are not entirely comparable as a result.
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 £.
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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments';
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with other group entities where the relationship is one of being wholly owned.
Freehold land and assets in the course of construction are not depreciated.
On 1 March 2024, the group changed depreciation rates to those noted above. The depreciation rates listed below are those used in the prior period:
Freehold property 2% on a straight line basis
Leasehold improvements In accordance with the lease
Plant and equipment 25% on reducing balance, 20% on reducing balance and 50% on reducing balance
Fixtures and fittings 20% on reducing balance, 50% on reducing balance and 50% on cost
Motor vehicles 25% on reducing balance and 35% 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 recognised in the income statement.
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.
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.
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.
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, including creditors and loans to 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.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
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 statement of financial position 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.
Investments in subsidiaries
Investments in subsidiary undertakings are recognised at cost less any provision for impairment.
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 the directors' opinion there are no critical judgements that they have made in applying the company's accounting policies and that have had a significant effect on the amounts recognised in the financial statements.
Key sources of estimation uncertainty
The directors do not consider there to be any key estimates or assumptions used in preparing the financial statements.
An analysis of the company's turnover is as follows:
The average monthly number of persons (including directors) employed by the company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. These are secured on the assets in which they relate to.
Stock comprises of £1,520,986 (2024 - £1,324,995) in finished goods and £nil (2024 - £956,695) in work in progress.
Amounts owed by group undertakings due after more than one year are due between 1 and 2 years. The amounts are unsecured and interest free (2024 - interest receivable at 2.5%).
Amounts owed to group undertakings due after more than one year are due between 1 and 2 years. Interest is payable at a rate of 2.5%. The amounts are unsecured.
Finance lease payments represent rentals payable by the company for certain items of motor vehicles. 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 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Obligations under finance lease and hire purchase contracts are secured on the assets acquired.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
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.
Contributions totaling £39,658 (2024 - £90,988) were payable to the fund at the balance sheet date and are included in creditors.
There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
Capital redemption reserves represents the nominal value of shares following a company buyback of its own shares.
Profit and loss reserves represents the accumulated profits less accumulated losses and distributions up to the reporting date. This is a distributable reserve.
At the balance sheet date, the company had guaranteed borrowings of a parent company, all charges being managed by a security agent. At 31 March 2025 these borrowings amounted to £63,281,847 (2024 - £59,555,121). As at the date of approval of these financial statements, the directors do not anticipate that the guarantees will be called upon.
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:
During the period rent and fees were paid to a pension scheme in which some of the directors are beneficiaries, amounting to £189,117 (2024 - £122,100). At the current and prior period end, no balances were owed to this entity.
During the period, the company paid rent to entities under the control of some of the directors of the company of £82,600 (2024 - £70,800). At the current and prior period end, no balances were owed to this entity.
Advances or credits have been granted by the company to its directors as follows: