| D A Watts & Sons Limited |
| Strategic Report |
|
| Business Overview |
| D A Watts & Sons Limited is a UK-based manufacturer specialising in premium teak products for the marine industry. Our core product range includes high-quality teak decking, interior flooring, and bespoke furniture for luxury yachts. |
|
| Review of Business Performance |
|
| Summary financial performance for the year: |
|
| Metric |
Amount |
| Revenue |
£4.2 million (2025: £6.8 million) |
| Net Assets |
£4.3 million |
| Cash Position |
£0.9 million |
|
|
| Key Performance Indicators |
|
| Operational KPIs that underpin performance: |
|
| KPI |
Result |
| Gross Margin |
30% |
|
|
| Principal Risks and Uncertainties |
|
| • Supply chain challenges for sustainable teak sourcing |
| • Market fluctuations in yacht-building activity |
| • Regulatory compliance with marine safety and environmental standards |
|
| Mitigation includes long-term supplier agreements, workforce training, and investment in CNC technology. |
|
| Future Outlook |
| Despite the current global market downturn, the company expects resumed growth in 2026 through maintaining and strengthening longstanding relationships with the core customers. |
|
| Environmental, Social, and Governance (ESG) |
| Environmental: certified teak sourcing, waste recycling, and energy-efficient machinery. |
| Social: employee training programs and safe yet efficient working conditions. |
| Governance: transparent reporting and ethical sourcing policies. |
|
| Going Concern |
| The directors have reviewed forecasts and believe the company has adequate resources to continue operations for the foreseeable future. |
|
| Approved by the Board on 22 December 2025 |
|
|
|
| Alan Watts |
| Managing Director |
|
|
| Basis of opinion |
| We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the accounts section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the accounts in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
|
| Conclusions relating to going concern |
| We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: |
| ● |
the directors' use of the going concern basis of accounting in the preparation of the accounts is not appropriate; or |
| ● |
the directors have not disclosed in the accounts any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the accounts are authorised for issue. |
|
| Other information |
| The other information comprises the information included in the report and accounts, other than the accounts and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the accounts does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the accounts or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the accounts or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
| We have nothing to report in this regard. |
|
| Opinions on other matters prescribed by the Companies Act 2006 |
| In our opinion, based on the work undertaken in the course of the audit: |
| ● |
the information given in the directors’ report for the financial year for which the accounts are prepared is consistent with the accounts; and |
| ● |
the directors’ report has been prepared in accordance with applicable legal requirements. |
|
| Matters on which we are required to report by exception |
| Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We identified laws and regulations that have a direct effect on the accounts and considered compliance with those laws.
We made inquiries of management regarding their knowledge of fraud or suspected fraud and their processes for compliance.
We reviewed the design and implementation of controls relevant to the preparation of the accounts and tested selected controls.
We performed journal entry testing and examined significant or unusual transactions outside the normal course of business.
We applied analytical procedures to identify unexpected trends or anomalies that may indicate fraud or non-compliance.
We obtained confirmations from the bank and counterparties to verify balances and transactions.
Throughout the audit, we maintained a questioning mindset and considered the risk of management override of controls. |
| 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. |
| As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: |
|
• 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. 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. |
|
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. |
|
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. |
|
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. |
|
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation (ie. gives a true and fair view). |
| We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit |
| 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. |
|
|
|
| Jonathan Essam ACA |
| (Senior Statutory Auditor) |
23 Cottingham Way |
| for and on behalf of |
Thrapston |
| Jon Essam and Co. Limited |
Kettering |
| Accountants and Statutory Auditors |
Northants |
| 22 December 2025 |
NN14 4PL |
|
| D A Watts & Sons Limited |
| Statement of Cash Flows |
| for the year ended 30 April 2025 |
|
| Notes |
|
2025 |
|
2024 |
| £ |
£ |
| Operating activities |
| (Loss)/profit for the financial year |
(671,961) |
|
642,625 |
|
| Adjustments for: |
| Loss on sale of fixed assets |
3,985 |
|
- |
| Interest receivable |
(16,240) |
|
(11,215) |
| Interest payable |
379 |
|
164 |
| Tax on (loss)/profit on ordinary activities |
(21,392) |
|
222,698 |
| Depreciation |
182,732 |
|
188,566 |
| Decrease/(increase) in stocks |
141,054 |
|
(195,068) |
| Decrease/(increase) in debtors |
709,025 |
|
(688,689) |
| (Decrease)/increase in creditors |
(48,196) |
|
732,456 |
|
|
|
279,386 |
|
891,537 |
|
| Interest received |
16,240 |
|
11,215 |
| Interest paid |
|
|
(379) |
|
(164) |
| Corporation tax paid |
(177,039) |
|
(53,159) |
|
| Cash generated by operating activities |
118,208 |
|
849,429 |
|
|
|
|
|
|
| Investing activities |
| Payments to acquire tangible fixed assets |
(75,680) |
|
(216,707) |
| Proceeds from sale of tangible fixed assets |
2,617 |
|
- |
|
| Cash used in investing activities |
(73,063) |
|
(216,707) |
|
|
|
|
|
|
| Financing activities |
| Equity dividends paid |
(141,960) |
|
(116,960) |
| Capital element of finance lease payments |
- |
|
(5,414) |
|
| Cash used in financing activities |
(141,960) |
|
(122,374) |
|
|
|
|
|
|
| Net cash (used)/generated |
| Cash generated by operating activities |
118,208 |
|
849,429 |
| Cash used in investing activities |
(73,063) |
|
(216,707) |
| Cash used in financing activities |
(141,960) |
|
(122,374) |
|
| Net cash (used)/generated |
(96,815) |
|
510,348 |
|
| Cash and cash equivalents at 1 May |
1,017,726 |
|
507,378 |
| Cash and cash equivalents at 30 April |
920,911 |
|
1,017,726 |
|
|
|
|
|
|
| Cash and cash equivalents comprise: |
| Cash at bank |
920,911 |
|
1,017,726 |
|
|
|
|
|
|
|
| D A Watts & Sons Limited |
| Notes to the Accounts |
| for the year ended 30 April 2025 |
|
|
| 1 |
Accounting policies |
|
|
Basis of preparation |
|
The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. |
|
|
Turnover |
|
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
|
|
Intangible fixed assets |
|
Intangible fixed assets are measured at cost less accumulative amortisation and any accumulative impairment losses. |
|
|
Tangible fixed assets |
|
Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
|
|
Freehold land and buildings |
2% on cost of buildings |
|
Plant and equipment |
15% reducing balance |
|
Fixtures and fittings |
Variable rates reducing balance |
|
Motor vehicles |
25% reducing balance |
|
|
Investments |
|
Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
Provisions |
|
Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
|
| 2 |
Audit information |
|
|
The audit report is unqualified. |
|
|
Senior statutory auditor: |
Jonathan Essam ACA |
|
Firm: |
Jon Essam and Co. Limited |
|
Date of audit report: |
22 December 2025 |
|
|
| 3 |
Employees |
2025 |
|
2024 |
| Number |
Number |
|
|
Average number of persons employed by the company |
58 |
|
73 |
|
|
|
|
|
|
|
|
|
|
| 4 |
Intangible fixed assets |
£ |
|
Goodwill: |
|
|
Cost |
|
At 1 May 2024 |
167,000 |
|
At 30 April 2025 |
167,000 |
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
At 1 May 2024 |
167,000 |
|
At 30 April 2025 |
167,000 |
|
|
|
|
|
|
|
|
|
|
Net book value |
|
At 30 April 2025 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
| 5 |
Tangible fixed assets |
|
|
Land and buildings |
|
Plant, equipment and fixtures |
|
Motor vehicles |
|
Total |
| £ |
£ |
£ |
£ |
|
Cost |
|
At 1 May 2024 |
2,030,880 |
|
1,893,883 |
|
256,581 |
|
4,181,344 |
|
Additions |
- |
|
75,680 |
|
- |
|
75,680 |
|
Disposals |
- |
|
(9,620) |
|
- |
|
(9,620) |
|
At 30 April 2025 |
2,030,880 |
|
1,959,943 |
|
256,581 |
|
4,247,404 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 May 2024 |
323,724 |
|
1,079,191 |
|
130,140 |
|
1,533,055 |
|
Charge for the year |
24,356 |
|
126,776 |
|
31,600 |
|
182,732 |
|
On disposals |
- |
|
(3,018) |
|
- |
|
(3,018) |
|
At 30 April 2025 |
348,080 |
|
1,202,949 |
|
161,740 |
|
1,712,769 |
|
|
|
|
|
|
|
|
|
|
Net book value |
|
At 30 April 2025 |
1,682,800 |
|
756,994 |
|
94,841 |
|
2,534,635 |
|
At 30 April 2024 |
1,707,156 |
|
814,692 |
|
126,441 |
|
2,648,289 |
|
|
| 6 |
Debtors |
2025 |
|
2024 |
| £ |
£ |
|
|
Trade debtors |
1,378,130 |
|
2,058,664 |
|
Other debtors |
173,585 |
|
202,076 |
|
|
|
|
|
|
1,551,715 |
|
2,260,740 |
|
|
|
|
|
|
|
|
|
|
| 7 |
Creditors: amounts falling due within one year |
2025 |
|
2024 |
| £ |
£ |
|
|
Trade creditors |
905,284 |
|
882,079 |
|
Taxation and social security costs |
116,526 |
|
457,121 |
|
Other creditors |
332,661 |
|
240,506 |
|
|
|
|
|
|
1,354,471 |
|
1,579,706 |
|
|
|
|
|
|
|
|
|
|
| 8 |
Events after the reporting date |
|
|
Further to the teak warranty claims included under other creditors, additional customer claims arose after the year end with costs amounting to £218,237. These costs are included under labour and materials on the subsequent accounts. |
|
|
| 9 |
Contingent liabilities |
|
|
The Mere Plantations Limited supplier balance is currently in dispute. Pending the outcome of the legal case, should a credit note be issued by the supplier, an amount of £47,961 input VAT will become payable to HM Revenue and Customs. |
|
|
| 10 |
Other information |
|
|
D A Watts & Sons Limited is a private company limited by shares and incorporated in England. Its registered office is: |
|
Unit 1 |
|
Cottingham Way |
|
Thrapston |
|
Northants |
|
NN14 4PL |