The directors present the strategic report for the year ended 31 March 2025.
The results for the year and the financial position at the end of the year were considered satisfactory by the director.
Sales in the distribution and wholesale of automotive products have decreased in the year by 39% to £8.94 million. This is due to the loss of a customer as well as increased competition in the automotive products sector. Gross profit margin has increased slightly to 1.99% (2024 - 1.91%) as costs have been closely monitored and controlled.
Sales in the manufacture of sewn gauntlet products have decreased by 24.6% in the year to £6.38 million as the impact of increasing inflationary pressures affects the business sector. The gross profit margin has decreased slightly to 26.04% (2024 - 28.69%).
The directors believe that the group and company are well placed in the market and hopes to see growth in the 2025/2026 financial period.
The directors have identified the key risks faced by the group and company and has put systems in place to mitigate these risks.
The group is engaged in the manufacture of sewn gantlet products to the European and World markets and is a distributor and wholesaler of automotive products. The group is therefore exposed to the risk of reduction in economic growth in these markets.
The group and company are subject to a number of laws and regulations including environmental and health and safety, which could result in additional costs related to compliance.
The directors consider that the group and company's exposure to credit, cash flow and liquidity is minimal given the nature of the business and balance sheet position.
The markets in which the group and the company operate in remain competitive with increased energy costs leading to higher costs and sale prices. The group and company have accordingly seen a decrease in turnover and profit margin reflecting reduced market requirements.
2025 2024
£'000's £'000's
Sales 15,327 23,122
Gross Profit 1,841 2,708
Stock 912 840
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2025.
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £543,000. 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 auditor, Chadwick & Company (Manchester) Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Avoca Services Limited. (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the group statement of income and retained earnings, the group balance sheet, the company balance sheet, 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 a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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.
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 considered and updated our knowledge of the group's and company's specific industry and its regulatory environment, and reviewed the company's documentation surrounding the policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities. Based on this understanding, we identified and assessed the risks of material misstatement in the financial statements and designed and performed audit procedures in response to those risks.
We identified the key laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, the most significant of these are the Control of Substances Hazardous to Health Regulations, The Health and Safety at Work etc Act 1974 and the UK Companies Act 2006. We also gained knowledge of the legal and regulatory frameworks which do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.
The audit engagement team were made aware of the potential opportunities and incentives that may exist within the company for fraudulent activity and how and where fraud might occur or be concealed within the financial statements.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other manual adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, we designed procedures which included:
enquiring of management and those charged with governance concerning actual and potential litigation and claims and any known instances of non-compliance with laws and regulations;
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 company through enquiry or inspection;
reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
performing detailed audit work on areas identified as being susceptible to management bias and override of controls, such as provisions, estimates and journal entries, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of bias;
performing analytical procedures to identify any unusual relationships that may indicate a risk of material misstatement due to fraud.
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 loss for the year was £4,061,667 (2024 - £1,058,775 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Avoca Services Limited. (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Parkway 4, Longbridge Road, Trafford Park, Manchester, M17 1SN.
The group consists of Avoca Services Limited. 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Avoca Services Limited. 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 March 2025. 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.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), 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.
Long leasehold land is not depreciated.
The group and company's policy is not to charge depreciation when the residual value of an asset is assessed as being at least equal to its carrying amount. On 23 February 2021, the group and company's long leasehold land and buildings were valued at £1.65 million on a market value basis, by Walker Singleton, Chartered Surveyors, independent valuers not connected with the company. The directors are of the opinion that as there has been no significant change in value of the long leasehold land and buildings since that date and that as the residual value of the building is in excess of its cost, no depreciation be charged for the year.
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 profit and loss account.
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 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 balance sheet 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 profit and loss account 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 profit and loss account, 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 balance sheet 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.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
There have been no material judgements, estimates or assumptions concerning the carrying amount of assets and liabilities in the period.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
As total directors' remuneration was less than £200,000 in the current year and previous year, no disclosure of the highest paid director is provided for either year.
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.
Details of the company's subsidiaries at 31 March 2025 are as follows:
The registered office address of Avoca Motor Products Limited is Unit 1, Parkway 4, Longbridge Road, Trafford Park, Manchester, M17 1SN.
Group and company
Included in bank loans and overdrafts is a mortgage balance of £77,000 (2024 - £77,000) that is secured against the long leasehold land and buildings that it relates to.
Obligations under finance leases are hire purchase contracts amounting to £82,388 (2024 - £114,103) are secured on the assets that they relate to.
Group
Included in other creditors are invoice discounting facilities that are secured on the trade debtors of the group amounting to £1,287,914 (2024 - £2,408,184).
Company
Included in other creditors are invoice discounting facilities that are secured on the trade debtors of the company amounting to £302,219 (2024 - £362,967).
Group and company
Bank loans are a mortgage totalling £805,130 (2024 - £855,905) which is secured on the long leasehold land and buildings they relate to.
Obligations under finance leases are hire purchase contracts amounting to £40,626 (2024 - £127,846) are secured on the assets that they relate to.
Group and company
The bank loan is secured by fixed charges over the long leasehold and and buildings owned by the company.
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. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
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.
Called up share capital represents the nominal value of shares that have been issued.
Profit and loss reserves includes all current period retained profit and losses.
There is an unlimited guarantee dated 30 August 2021 with fellow group companies, Avoca Technical Limited and Avoca Motor Products Limited. As at 31 March 2025, the amount guaranteed was £nil (2024 - £nil).
Group
The group has taken advantage of the exemption under Financial Reporting Standard 102 33.1A from disclosing any transactions with group entities of which the group owns 100% of the share capital.
During the year, the group made sales to fellow group companies amounting to £1,601,622 (2024 - £2,195,329). The balance outstanding at the balance sheet date was £165,936 (2024 - £694,954).
During the year, the group made purchases from fellow group companies amounting to £7,152,750 (2024 - £11,462,613). The balance due to fellow group companies at the balance sheet date was £744,335 (2024 - £293,232).
During the year, the group made recharges to fellow group companies amounting to £330,135 (2024 - £293,844) of which £nil (2024 - £nil) was outstanding at the year end and was included in trade debtors. The company was recharged £136,017 (2024 - £185,085) by fellow group companies of which £nil (2024 - £nil) was outstanding at the year end and included in trade creditors. The group also incurred management charges amounting to £149,986 (2024 - £198,869).
As at 31 March 2025, the amount owed by group undertakings was £957 (2024 - £63,840) and the amount owed to group undertakings was £nil (2024 - £nil).
Company
During the year, the company made sales to fellow group companies amounting to £1,601,622 (2024 - £2,195,329). The balance outstanding at the balance sheet date was £165,936 (2024 - £694,954).
During the year, the company made recharges to fellow group companies amounting to £330,135 (2024 - £293,844) of which £nil (2024 - £nil) was outstanding at the year end and was included in trade debtors. The company was recharged £136,017 (2024 - £185,085) by fellow group companies of which £nil (2024 - £nil) was outstanding at the year end and included in trade creditors. The company also incurred management charges amounting to £149,986 (2024 - £198,869).
During the year, the inter-company loan owed by the company's subsidiary undertaking, Avoca Motor Products Limited was provided against as the subsidiary company does not have sufficient liquidity available to be in a position to repay the loan. The provision against the inter-company loan amounted to £4,582,444. The balance due from Avoca Motor Products Limited as at 31 March 2025 was £nil.
As at 31 March 2025, the amount owed by group undertakings was £957 (2024 - £4,394,851) and the amount owed to group undertakings was £nil (2024 - £nil).
The company has taken advantage of the exemption under the Financial Reporting Standard 102 Section 33.1A from disclosing any transactions with group entities which are consolidated in the group financial statements of Avoca Services Limited.
Sale of fixed asset
In August 2025, the company completed the sale of a piece of plant and equipment that was held at the balance sheet date. The plant and equipment was sold for £200,000 (including commissioning costs incurred post year end), compared with a carrying amount of £163,609 at 31 March 2025. Any gain or loss on this disposal will be recognised in the financial statements for the year ending 31 March 2026.
This transaction occurred after the reporting date and is therefore a non-adjusting event under section 32 of FRS 102. No adjustment has been made to the carrying amount of assets or liabilities as at 31 March 2025.
The company is a wholly owned subsidiary undertaking of Manc Capital Limited, a company registered in the British Virgin Islands. Manc Capital Limited is controlled by Emerald Head Investments Limited, a company registered in the British Virgin Islands.
The smallest and largest group in which the results are consolidated is that headed by Avoca Services Limited.
Copies of the group consolidated accounts for Avoca Services Limited. can be obtained from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.