The directors present the strategic report for the year ended 31 December 2024.
Executive Summary
GAP Group Northeast Ltd continues to demonstrate exceptional performance as the UK's premier electrical waste processor, achieving remarkable growth while significantly expanding environmental impact. With turnover increasing 28.6% to £24 million and forthcoming implementation of GAP Alba, the Group as positioned itself as a transformative force in the UK's circular economy, now capable of processing over 40% of the nation's cooling equipment waste streams.
1. Company Overview
GAP Group Northeast Ltd stands as the UK's leading electrical waste processor, headquartered in Tyne and Wear with operations extending across North of England and Scotland. The company operates state-of-the-art facilities for WEEE recycling, resource recovery, and integrated haulage services, underpinned by industry leading technology, robust governance frameworks, and an exceptional senior leadership team recognized nationally for environmental, social, and governance excellence.
The company's market position has been further strengthened by CEO Peter Moody's recognition with The ESG Award as part of The LDC Top 50 Most Ambitious Business Leaders for 2024, acknowledging GAP Group's outstanding commitment to sustainability and environmental responsibility. This prestigious recognition validates the company's role as a pioneer in sustainable business practices within the waste management and recourse recovery sector.
2. Business Model and Strategic Operations
Core Service Portfolio
GAP Group delivers comprehensive WEEE collection, processing, and recycling services—including appliances and specialized streams via 24/7 sites serving national B2B, retail, and public sector clients. Investments in automation, digital stock control, and expanded polymer and appliance lines drive both operational efficiency and market reach.
Operational Excellence and Capacity Enhancement
The Gateshead facility continues to receive over 50,000 tonnes annually, while recent operational enhancements include advanced plant automation, sophisticated stock control systems, and significant investment in processing lines for Small Domestic Appliances and polymer recovery.
The transformational addition of GAP Alba in Scotland represents a substantial long-term investment spanning 20 years, officially opened by First Minister John Swinney in May 2025. This state-of-the-art facility has the capacity to process over 650,000 fridges annually and operates with a 100% net zero carbon footprint, powered entirely by renewable energy, making it one of the most environmentally friendly fridge processing plant in the world.
Once GAP Alba reaches full operational capacity, GAP Group will command over 40% of the UK’s cooling equipment recycling capacity, establishing unprecedented market leadership in this critical waste stream.
3. Financial Performance Review 2024
Revenue Growth and Market Position
FY 2024 delivered exceptional financial performance with turnover increasing 28% year-on-year to £24 million. This performance reflects both substantial volume growth and strategic market share gains across key sectors.
Profitability and Margin Analysis
While gross margin compressed from 40% to 34% due to sector-wide cost pressures including energy inflation, increased wages/NI contribution and commodity price volatility . The margin compression aligns with industry wide pressures.
Operational Achievements and Growth Metrics
Key operational milestones included expanded B2B supply agreements, strong year-on-year growth in processed tonnages, and polymer sales revenues. The directors maintain a prudent dividend policy, recommending no dividend distribution for the year (2023/24: £Nil), prioritising reinvestment in operational capabilities and strategic growth initiatives.
4. Market Dynamics and Sector Analysis
WEEE Market Environment
The UK WEEE sector demonstrated resilience in 2024, with total household WEEE collection targets set at 517,285 tonnes for 2025, representing a 4.24% increase. Due to Government initiatives and regulatory changes, the sector achieved significant milestones, meeting recycling targets for the second consecutive year after historical underperformance, with 496,253 tonnes collected in 2024. Industry projections indicate these figures will continue growing substantially over the next decade.
Commodity Market Challenges and Opportunities
2024 witnessed substantial volatility in ferrous pricing, declining over 45% due to global supply chain disruptions, tariff implementations, and geopolitical tensions. Management believes these tariffs and global supply chain disruptions represent transient market conditions, with ferrous pricing expected to rise significantly over the next 18 months.
Copper markets remained relatively stable, supporting GAP Group's higher-value material recovery strategies.
Future Market Projections
Eurofer forecasts 11% growth in European steel consumption by 2026, with increasing demand for recycled metals driven by sustainability mandates and significant new electric arc furnace investments across the UK, particularly following Tata Steel's Port Talbot and Scunthorpe transformations. The UK's scrap supply deficit is particularly significant as the country does not process sufficient recycled steel to meet electric arc furnace feedstock requirements, necessitating recycled steel imports for the first time in decades. This supply gap presents substantial future growth opportunities for premium recyclers like GAP Group NE.
5. Risk Management and Mitigation Strategies
Principal Risk Factors
GAP Group Northeast operates within a dynamic risk environment characterised by multiple interconnected challenges. Commodity price volatility remains the most significant operational risk, with ferrous metal prices experiencing dramatic fluctuations.
Evolving regulatory landscapes present ongoing compliance challenges, particularly with the introduction of Simpler Recycling Legislation effective March 31, 2025, new WEEE regulations implemented August 12, 2025, and updated waste separation requirements mandating enhanced reporting and classification systems. Something GAP Group Northeast is well prepared for.
Global geopolitical tensions and increased international tariffs have fundamentally altered material flows, creating supply route complexities that affect global WEEE movements and recyclate export opportunities.
Strategic Risk Mitigation Framework
GAP Group NE has implemented a comprehensive multi-layered risk mitigation strategy designed to enhance operational resilience and maintain competitive advantages. Process automation investments reduce labour dependency while improving processing efficiency and quality consistency, positioning the company to respond rapidly to market fluctuations.
Feedstock diversification strategies minimize dependency on single supply sources through expanded B2B partnerships, local authority contracts, and strategic geographic coverage across Northeast England and Scotland. The company's geographic diversification provides operational resilience through risk distribution, regulatory arbitrage opportunities, and enhanced market access flexibility, enabling optimization based on regional demand variations and regulatory differences.
6. Strategic Outlook and Transformational Initiatives
2025 Strategic Priorities
GAP Group's strategic framework for 2025 emphasises maximising existing process profitability through operational optimisation, technology integration, and enhanced material recovery rates. The company prioritises integrating new feedstock supplier partnerships to secure long-term supply stability while expanding processing volumes across all facilities.
Driving efficiency through advanced plant upgrades represents a cornerstone initiative, incorporating hammermill installations for enhanced size reduction capabilities, comprehensive automation systems for improved sorting accuracy, and AI-powered processing technologies for optimal material separation. These investments position GAP Group at the technological forefront of WEEE processing while reducing operational costs and improving output quality.
Scaling high margin B2B operations represents significant untapped market potential, with opportunities to expand direct commercial relationships, develop specialised processing services, and capture premium pricing through value-added recovery services. This strategic focus addresses the growing demand for sustainable supply chain solutions among UK manufacturers and retailers seeking verified recycling partnerships.
The integration of predictive analytics and real-time inventory management systems will enhance decision-making capabilities, enabling strategic purchasing and sales decisions that minimise exposure to commodity price volatility while optimizing working capital utilization
Major Capital Projects and Expansion
Strategic infrastructure developments include:
GAP Alba Integration: Full operational integration of the state-of-the-art fridge processing facility, enhancing group capacity to 1.3 million units annually
Small Domestic Appliance Plant Upgrade: Dramatic processing capacity enhancement while producing superior quality recyclate commanding premium market values
Polymer Line Enhancement: Advanced contaminated plastic processing capabilities expanding material recovery scope
GAP Urban Metals Recovery: Joint venture with DEScycle utilizing revolutionary deep eutectic solvents for rare earth and valuable metal extraction from printed circuit boards
Ministry of Justice Partnership: Innovative workshops at HM Prison Northumberland and additional facilities, utilising inmate labour for WEEE dismantling, harvesting components for reuse and recycling
Automation Infrastructure: Comprehensive AI integration from back-office software to AI-powered hardware for efficient recyclate separation
7. Environmental Impact and Sustainability Leadership
Carbon Emissions Reduction
In 2024, GAP Group NE’s operations achieved independently verified carbon avoidance savings of 47,388 tonnes CO₂e. This is equivalent to planting approximately 1.8 million mature trees per year, representing one of the UK’s most significant private sector contributions to national carbon reduction. The Group’s closed-loop recycling, advanced polymer recovery, and safe hazardous materials handling further reinforce its leadership in circular economy practice.
Circular Economy Leadership
GAP Group's operations exemplify circular economy principles, recovering valuable materials including ferrous metals, copper, aluminium, and high-grade plastics while ensuring safe disposal of hazardous substances including POPs and CFCs refrigerants. The company's advanced polymer processing creates high-quality polymer flake for manufacturing applications, demonstrating complete 360-degree material lifecycle management.
Industry Recognition and Awards
The company's environmental leadership has garnered multiple prestigious awards including:
2022 North East Business Awards: High Growth & Ambition Award Grand Final Winner
2024 LDC Top 50 Most Ambitious Business Leaders: ESG Award recipient
WEEELABEX Certification: GAP ICE facility certification for refrigeration recycling processes
8. Community Engagement and Social Impact
National and Regional Impact
GAP Group maintains extensive community engagement through charity sponsorship programs, Armed Forces Covenant commitments, and innovative employment initiatives.
The company's operations support local economic development while contributing to national environmental targets. GAP Alba's establishment will ultimately create over 50 high-quality green jobs in Perth, Scotland, while maintaining significant employment levels across all Northeast England operations.
9. Leadership Vision and Strategic Direction
CEO Statement on Future Trajectory
Under Peter Moody's visionary leadership, GAP Group Northeast reaffirms its commitment to sector leadership, operational resilience through challenging market conditions, and ambitious sustainable growth objectives benefiting both regional economies and the UK's broader environmental agenda. The company's recognition through national business awards validates its exceptional performance in balancing commercial success with environmental responsibility.
Innovation and Technology Integration
GAP Group continues investing in cutting edge technologies including AI-powered sorting systems, advanced automation, and innovative material recovery processes. The partnership with DEScycle for precious and rare earth metal recovery represents pioneering technology adoption, positioning GAP Group at the forefront of next-generation WEEE processing capabilities.
Conclusion
As we reflect on GAP Group North East's remarkable journey in 2024, I am immensely proud of what we have achieved together as one team. From our humble beginnings in 2005 to becoming the UK's premier electrical waste processor, our story is one of unwavering determination, innovation, hard work and commitment to environmental stewardship.
This year's 27% revenue growth and the successful commissioning of GAP Alba represent not just commercial milestones, but validation of our core mission: creating a circular economy for our children and future generations. The LDC ESG Award recognition humbles me, as it acknowledges not just our collective leadership, but the extraordinary dedication of every team member who shares our vision of environmental transformation whilst delivering commercial success.
Our capacity to now process over 40% of the UK's cooling equipment waste streams positions us uniquely to lead the nation's transition toward true circularity. The 47,388 tonnes of CO2 savings annually demonstrates that profitable business and environmental responsibility are not competing priorities, but complementary forces driving sustainable prosperity.
Looking ahead, our strategic initiatives spanning from AI-powered automation to our various groundbreaking partnerships reflect our commitment to innovation with purpose
The road ahead is filled with extraordinary opportunities, from our expanding into new areas of the UK to to the revolutionary deep eutectic solvent technologies for rare and precious earth recovery.
With our exceptional team, strategic partnerships, and unwavering commitment to our founding principles, GAP Group North East will continue leading the transformation of how our nation views and manages its resources, turning today's waste into tomorrow's prosperity while safeguarding the world we leave for future generations.
Section 172 of the Companies Act 2006 (Section 172) requires a Director of a Company to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole.
Exercising reasonable care, skill and due diligence, the Directors' collectively act to make decisions on behalf of the company. They make the strategic and operational decisions and are responsible for ensuring that the company meets its statutory obligations.
Additionally, the role of the Statutory Directors is to promote the success of the company, giving due regard to:
the likely consequences of any decision in the long term.
the interests of the company's employees;
the need to foster the company's business relationships with suppliers, customers and others;
the impact of the company's operations on the community and the environment;
the desirability of the company maintaining a reputation for high standards of business conduct; and
the need to act fairly between members of the company.
During the year the Directors have sought to improve and strengthen its company practices.
Customers
We focus on providing the best service for our customers, whether for Haulage or WEEE and to keep our customers happy. We empower our people to make the right decisions, not necessarily the easy ones, to deliver for our customers and partners.
Suppliers/ Partnerships
We work closely with a valued group of PCS organisations and a network of suppliers, from small local firms to large international businesses.
Our mission is to be the destination for WEEE recycling for all our trading partners.
We are innovative and forward thinking to look at and come up with improved and new processes to streamline the processing of WEEE to provide the best solution possible.
Shareholders
We aim to provide fair, balanced and understandable information to shareholders and analysts including our strategy, business model, culture, performance, governance.
Climate
The aim for GAP Group North East is to provide a full circular solution to our customers.
Our Corporate culture and strategy is to always do the right thing and be the best at what we do.
We take our customers' concerns about sustainability and changing government regulation, implementing them well in advance which means that sustainability is at the core of our culture.
Through our operations we manage our high-quality recycling plants providing not only excellent sustainable operations for third-party customers, but handle packaging waste, waste electricals {"WEEE") plastics and metals as well as Haulage to incredibly high standards.
Employees
Our dedicated and talented employees are the face of GAP Group North East to our customers, partners and suppliers.
The culture at GAP Group North East’s is how we deliver for our customers and our people have continued to deliver an excellent service. Our people are at the heart of GAP Group North East whether that is in the innovation they develop or the very human way we Interact with our customers, suppliers and each other.
We care deeply about what we do and our people.
At GAP Group North East we create an environment for our people to grow and flourish.
Health and safety
At GAP Group North East we are committed to maintaining a safe working environment for all our employees and customers. We drive a culture aimed at continuous improvement and maintaining consistently high standards. Health, Safety and Well being Is always on the agenda at GAP Group North East and to ensure we have a structured way of communicating health and safety through the entire business.
Outlook
At GAP Group North East, our unwavering commitment to sustainability and excellence is at the forefront of our corporate vision. We are continually challenging the status-quo to improve our recycling processes (efficiency, environmental standards and quality) for white goods and plastics recycling, whilst ensuring we are part of a broader unified GAP Group North East Group service proposition.
Revenue Growth:
During the past fiscal year, we achieved a great deal, representing an impressive year-over-year growth rate of 11.90%. This remarkable achievement can be attributed to our unwavering commitment to innovation, expanding market presence, and the exceptional dedication of our employees.
Market Expansion:
We continued to expand our United Kingdom footprint, entering new markets and strengthening our position in existing ones. Our strategic investments in market research, systems development, and marketing have allowed us to capture additional market share and drive sustainable growth.
Innovation:
Our commitment to innovation remains unwavering and is something which keeps GAP ahead of competitors. There are several projects which have been brought to fruition during the year and several more which are about to come-online further solidifying our reputation as an industry leader. These innovations have allowed us to meet evolving customer demands and stay ahead of competitors.
We are currently involved with several industry disruptive technologies which will come to market over the next 12-18 months. These innovations are dealing with Rare Earth Metals (REMs) which is becoming a major world wide issue.
Sustainability:
Environmental and social responsibility remain integral to our corporate ethos. We continue to make strides in reducing our carbon footprint. Additionally, we continued to support various social initiatives that align with our CSR commitment.
Priorities for the Coming Year:
In the upcoming year, our focus will be on the following key priorities:
Cost-effective, compliant and efficient Recycling Service: We are committed to delivering a cost-effective recycling service to all our businesses and customers, ensuring accessibility and affordability.
Environmental and Safety Standards: We will continue to uphold the highest environmental and safety standards, building on our ISO and WEEELABEX recycling standards, which cover various aspects of our operations.
Operational Development: We will invest in training, process improvements, develop future markets, and the adoption of best available techniques.
SDA/Plastics Recycling Growth: We will work diligently to increase our SDA and ultimately plastics volumes, offering a sustainable supply of high-quality plastics components to our strategic partners.
In conclusion, we are excited about the opportunities and challenges that lie ahead. Our commitment to sustainability, innovation, and excellence will continue to drive us as we work toward a future where recycling is not just a responsibility but a source of pride for all. Thank you for your trust in GAP Group North East Ltd.
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 14.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group finances its activities with a combination of bank loans, finance leases and hire purchase contracts, cash and short term deposits. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the group's operating activities.
Cash flow and liquidity risk is the risk that a group's available cash will not be sufficient to meet its financial obligations. The group actively manages its cash flow position including collection of debts and timely payment of creditors. This, coupled with the strong cash position of the group is deemed sufficient to minimise the group's exposure to cash flow and liquidity risk.
Foreign currency risk refers to the potential for loss from exposure to foreign exchange rate fluctuations. Group policies are aimed at minimising this risk. The group does not consider that it is materially exposed to foreign exchange risk.
Credit risk is the risk that one party of a financial instrument will cause a financial loss for the other party by failing to discharge its obligation. Group policies are aimed at minimising such losses and require customers to satisfy credit worthiness procedures prior to acceptance of contracts. The group also utilises insurance policies to protect against non-payment of debt. The group does not consider that it is materially exposed to credit risk.
Price risk is the risk that changes in raw material prices have a potential to impact on the profitability of the group. The group does not consider that it is materially exposed to price risk.
The group intends to continue operating in the areas of electrical waste recovery and to increase profitability.
See disclosures within the strategic report regarding future developments of the group.
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the group will be put at a General Meeting.
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
During the year, the group breached one of the covenants on its loans with its bankers at the end of quarter one. Whilst the bank has not formally waived the breach it has formally acknowledged it and has stated that it will take no further action in respect of it. The group is achieving the covenant at the end of quarter two and is forecasting to comfortably continue to do so going forward. The group are currently in advanced discussions with the bank to obtain additional credit facilities to fund growth and the directors believe that this illustrates the bank’s continuing support of the group. Accordingly the directors are satisfied that there is no risk to going concern in respect of this issue.
We have audited the financial statements of GAP Group North East Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 group's and parent 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 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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
We identified the following applicable laws and regulations as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive); anti-bribery and corruption; and compliance with the UK Companies Act.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £5,640 (2023 - £3,052 profit).
GAP Group North East Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is GAP House, Nest Road, Gateshead, Tyne & Wear, England, NE10 0ES.
The group consists of GAP Group North East Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.
The consolidated group financial statements consist of the financial statements of the parent company GAP Group North East Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
During the year, the group breached one of the covenants on its loans with its bankers at the end of quarter one. Whilst the bank has not formally waived the breach it has formally acknowledged it and has stated that it will take no further action in respect of it. The group is achieving the covenant at the end of quarter two and is forecasting to comfortably continue to do so going forward. The group are currently in advanced discussions with the bank to obtain additional credit facilities to fund growth and the directors believe that this illustrates the bank’s continuing support of the group. Accordingly the directors are satisfied that there is no risk to going concern in respect of this issue.
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.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, 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.
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the 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. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
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 leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
In the application of the group’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.
No judgements have been considered to have a significant effect on amounts recognised in the financial statements.
No estimates or underlying assumptions have been considered to have a significant effect on amounts recognised in the financial statements.
All turnover is derived from the UK.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).
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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The fair value of the group's land and buildings was revalued on 02 December 2022 by an independent valuer on an open market basis. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Details of the company's subsidiaries at 31 December 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
For the year ending 31 December 2024, the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:
GAP Alba Ltd (company registration number SC764931)
Details of associates at 31 December 2024 are as follows:
NEL CBILS loan is denominated in sterling with a nominal interest rate of 9.00%, and the final instalment is due on 30 June 2025. The carrying amount at year end is £23,419 (2023 - £94,533).
The loan is unsecured. In line with Government support, the first 12 months were interest free.
HSBC Term loan is denominated in sterling with a nominal interest rate of between 3.00% and base rate + 2.35%, and the final instalment is due March 2028. The carrying amount at year end is £6,720,722 (2023 - £4,107,460).
The loan is secured by way of a fixed and floating charge which covers all of the property.
Included in other borrowings is a receivable finance agreement with HSBC which is secured by way of a fixed and floating charge over the assets of the company. The amount outstanding at the period end was £608,527 (2023 - £553,926).
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Leases are secured against the assets to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Included in the statement of financial position are unpaid pension contributions of £22,134 (2023 - £12,968).
Ordinary shares
1. Full voting rights of one vote per share.
2. Dividend rights as set out in the articles of association of the company.
3. Right to return of capital and share in surplus capital on winding up or other repaymetns of capital as set out in the articles of assoication.
4. The shares are not redeemable.
Ordinary 'A' shares
1. Full voting rights of one vote per share.
2. Dividend rights as set out in the articles of association of the company.
3. Right to return of capital and share in surplus capital on winding up or other repaymetns of capital as set out in the articles of assoication.
4. The shares are not redeemable.
Ordinary 'B' shares
1. Full voting rights of one vote per share.
2. Dividend rights as set out in the articles of association of the company.
3. Right to return of capital and share in surplus capital on winding up or other repaymetns of capital as set out in the articles of assoication.
4. The shares are not redeemable.
The reserve relates to the cumulative retained earnings less amounts distributed to shareholders
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
On 14 July 2025, the group cancelled 89 'B' Ordinary Shares.
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date: