The directors present the strategic report for the year ended 31 December 2024.
The company is a holding company. The performance of its subsidiary, Distinction Doors Limited, is set out below.
The group continually strives to be a pioneer in the external door market. It sources and supplies high quality innovative products to its customers based on their bespoke needs, assisting them through the product life cycle by delivering technical and marketing expertise and support.
The group provides an environment which allows engaged employees to share the company values so they can flourish and develop to their full potential. Objectives are constantly reviewed to ensure a thriving and sustainable business for the future.
The workforce is the group's most valuable asset and are supported with employee training and development at all levels. In 2024 the Investors in People accreditation was retained and the company extended its people offering to help create a working environment where all workers can thrive.
The business environment remained a challenge across 2024. The uncertainty of the UK election result then in turn significant tax increases in the Autumn budget meant a stagnant economy with continued high interest rates.
The impact on fenestration was profound with a drop in overall market volume felt across the year, consumer spending continued to fall, and costs rose. Long-standing relationships with customers allowed the business to remain profitable, however rising costs meant a significant drop in profitability year-on-year.
The war in the Middle East continues to impact the supply chain with continuation of longer shipping routes and fluctuating prices, as such the business continues to hold higher levels of stock to buffer customers from any short-term impacts on supply.
The business continues to work with customers to navigate an extremely turbulent market and wider economy. Across the year, the group, maintained volume sales but absorbed significant material, labour and distribution cost increases to provide customers support through an extremely tough economic climate. As such profitability declined from 2023 performance:
Gross Profit % comparison:
FY23: 33.2%
FY24: 27.3%
The group continues to adapt to an ever-changing business environment, harnessing its strengths and capabilities towards achieving targeted development of both new and existing product lines. The experienced, talented, and engaged workforce is in a strong position to steer the business through the current uncertainty.
The group has considerable financial resources together with long term contracts with key suppliers. Consequently, the directors believe it is well placed to manage its business risk successfully despite the ongoing uncertainty.
The directors have considered the impact of inflationary pressures on the group's trade, workforce, and supply chain as well as the wider economy.
Whilst it is not considered practical to accurately assess the duration and extent of the disruption, the directors are confident that they have in place plans to limit any impact on business performance, as reflected in maintaining profitability in 2024 performance in an uncertain business environment.
The directors have undertaken a comprehensive review of the 2025 forecasts including cashflows and are confident, even with conservative estimates, that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.
Engaging with stakeholders
The success of our business is dependent on the support of all our stakeholders. Building positive relationships with stakeholders that share our values is important to us and working together towards shared goals assists us in delivering long-term sustainable success.
Shareholders
We maintain an open dialogue with our shareholders through periodic board meetings and quarterly shareholder meetings. Our shareholders are integral to the success of the business and play a key role in our decision-making process, financial performance, and strategic outlook.
Employees
Distinction maintains a continual open dialogue with all employees on both performance and wider outlook. Managers are provided periodic KPI packs with performance analysis of all areas of the business allowing for open dialogue on the company H&S audits, business financial performance, supplier and customer relationships and operational performance.
Quarterly, a full employee brief is run that provides a top line overview to every employee of the key results reviewed in the periodic KPI’s. Our drive is to maintain an open culture where all employees have a direct dialogue with senior management as we strive to grow the business in our pursuit of perfection.
Customers
Our pursuit of perfection is to delight our customers. We strive to deliver the best product and service to the market. Our customer base is key to the success of our business, as such we invest a large amount of time working with customers to understand their needs and emerging market changes. From order to after-sales care, we provide our customers a dedicated 1-2-1 contact in customer service, a dedicated external sales contact, access to marketing and brochure support and technical representatives to assist with their staff training on our product.
Suppliers
We continue to build strong working relationships with our suppliers to develop long lasting partnerships. Supplier relationships run throughout the business assisted by our procurement team. From the board down our main supplier KPI is to continue to develop and support long-term supplier relationships. Supported through our periodic reviews with key accounts and more informally with open dialogue on a day-to-day basis.
Communities
We are proud to be part of the Barnsley and wider South Yorkshire community. We engage with the local communities on several fronts and aim to give something back to the local communities we work in. We partner with a local charity each year to help raise awareness and funds and organise several fund-raising events throughout the year which are keenly supported by employees.
We maintain a strong working relationship with Barnsley College with our ongoing apprenticeships and Sheffield Hallam University with our undergraduate placement scheme.
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 7.
Ordinary dividends were paid amounting to £1,697,249. 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:
We have audited the financial statements of Distinction Group Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 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.
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 entity through discussions with Directors and other management, and from our knowledge and experience of the industry;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the entity, including health and safety and data protection laws;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
we ensured 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 entity’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;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
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;
reading the minutes of meetings of those charged with governance; and
enquiring of management as to actual and potential litigation and claims.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Distinction Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Wentworth 36, Wentworth Industrial Park, Wentworth Way, Tankersley, Barnsley, South Yorkshire, S75 3DH.
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’ 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.
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, 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.
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.
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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Investment in subsidiaries is held at cost. The directors have assessed the impairment of this investment based on the future cashflows and profitability of the businesses.
The above exceptional item represents the release of a historical trade creditor which management considers to be no longer payable.
The average monthly number of persons (including directors) employed by the company during the year was:
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:
Details of the company's subsidiaries at 31 December 2024 are as follows: