Company Registration No. 04086465 (England and Wales)
B & W PLANT HIRE AND SALES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
B & W PLANT HIRE AND SALES LIMITED
COMPANY INFORMATION
Director
Mr W R Whitwell
Company number
04086465
Registered office
Shorrocks Delf
Brandy House Brow
Blackburn
BB2 3EY
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
B & W PLANT HIRE AND SALES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
B & W PLANT HIRE AND SALES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 1 -
The director presents the strategic report for the year ended 31 March 2020.
Fair review of the business
For the year ended 31 March 2020, the company has seen an increase in turnover from £12.3m to £12.9m. The increase has been achieved mainly from the hire of operated plant, which has impacted on gross margin and seen a decrease in gross profit margin from 55.0% to 50.7%. Non-operated plant continues to be the core income stream and has seen a small amount of growth in the year. Profit before tax has reduced slightly from £2.7m to £2.4m, with net profit before tax margin also having fallen slightly from 22.4% to 18.2%. Despite this fall in profit margin, the company has still had another very successful year and has seen net assets increase from £11.6m to £13m.
Principal risks and uncertainties
The principal risks and uncertainties the company faces, along with how the director seeks to mitigate these risks are explained below:
The company's operations expose it to a variety of financial risks that include the effects of changes in debt market prices, price risk, credit risk, liquidity risk and interest rate risk, where relevant. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs and as such, no hedge accounting is applied.
The company keeps abreast of all changing industry standards and regulations through both formal and informal training programs.
Sales performance can be dependant on the wider performance of the UK construction and building market and the Director keeps a careful eye on the impact of the current Covid-19 pandemic, along with any future implications of the ongoing Brexit negotiations. Whilst the company has mitigated these risks by taking advantage of payment holidays, government support and reducing costs where possible, the long term impact of these factors is still unknown.
Development and performance
The company has continued to invest in the plant fleet to maintain modern and reliable machines. Together with the retention of skilled staff, the company is able to provide a reliable service to its customer base. As such, the Director considers it well positioned for the future.
Trading for the first quarter to June 2020 has been impacted by the closure of some building sites and the initial lockdown restrictions implemented by the British Government. As these restrictions continue to ease and additional building sites re-open and return to normal levels of activity, the Director is confident of another successful year, albeit he is not expecting to achieve the same levels of turnover and profit as have been seen in recent years. However, the director is aware of the impact that Covid-19 has had on the industry and that this presents a material uncertainty in respect of the company's ability to continue trading as a going concern.
Key performance indicators
The company's key performance indicators are as follows:
Gross profit - 2020: 50.7% (2019: 55.0%)
Profit before dividends - 2020: £1.8m (2019: £2.3m)
Both key performance indicators were in line with company expectations.
B & W PLANT HIRE AND SALES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 2 -
Other information and explanations
Finally, the director would like to place on record his sincere thanks to the dedicated and talented staff employed throughout the company, without whose efforts the company would not continue to thrive.
Mr W R Whitwell
Director
15 July 2020
B & W PLANT HIRE AND SALES LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 3 -
The director presents his annual report and financial statements for the year ended 31 March 2020.
Principal activities
The principal activity of the company during the year was the hire and sale of construction industry plant and machinery.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr W R Whitwell
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £358,000. The director does not recommend payment of a further dividend.
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
It has done so in respect of future developments and financial instruments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr W R Whitwell
Director
15 July 2020
B & W PLANT HIRE AND SALES LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2020
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
B & W PLANT HIRE AND SALES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF B & W PLANT HIRE AND SALES LIMITED
- 5 -
Opinion
We have audited the financial statements of B & W Plant Hire and Sales Limited (the 'company') for the year ended 31 March 2020 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2020 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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 financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements 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.
Material uncertainty relating to going concern
We draw attention to note 1.2 to the financial statements which explains that despite reporting a retained profit of £1.4m and having net assets of £13m at the balance sheet date, conditions relating to the current Covid-19 pandemic indicate that a material uncertainty exists which may cast doubt over the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements 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 financial statements 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 our audit
:
-
the information given in the strategic report and the director's r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
B & W PLANT HIRE AND SALES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF B & W PLANT HIRE AND SALES LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the director's
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the director is responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
B & W PLANT HIRE AND SALES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF B & W PLANT HIRE AND SALES LIMITED
- 7 -
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to him in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member for our audit work, for this report, or for the opinions we have formed.
Virginia Cooper (Senior Statutory Auditor)
for and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
16 July 2020
B & W PLANT HIRE AND SALES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
- 8 -
2020
2019
Notes
£
£
Turnover
3
12,938,918
12,262,540
Cost of sales
(6,381,551)
(5,515,702)
Gross profit
6,557,367
6,746,838
Administrative expenses
(3,861,067)
(3,689,851)
Operating profit
4
2,696,300
3,056,987
Interest receivable and similar income
7
1,206
1,179
Interest payable and similar expenses
8
(342,801)
(309,480)
Profit before taxation
2,354,705
2,748,686
Tax on profit
9
(581,182)
(497,784)
Profit for the financial year
1,773,523
2,250,902
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
B & W PLANT HIRE AND SALES LIMITED
BALANCE SHEET
AS AT
31 MARCH 2020
31 March 2020
- 9 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
12
25,228,422
22,228,452
Current assets
Stocks
13
139,541
143,194
Debtors
14
3,124,650
3,084,099
Cash at bank and in hand
6,726
144,626
3,270,917
3,371,919
Creditors: amounts falling due within one year
15
(7,478,943)
(6,892,552)
Net current liabilities
(4,208,026)
(3,520,633)
Total assets less current liabilities
21,020,396
18,707,819
Creditors: amounts falling due after more than one year
16
(6,456,235)
(6,056,358)
Provisions for liabilities
19
(1,584,606)
(1,087,429)
Net assets
12,979,555
11,564,032
Capital and reserves
Called up share capital
22
500,100
500,100
Profit and loss reserves
12,479,455
11,063,932
Total equity
12,979,555
11,564,032
The financial statements were approved and signed by the director and authorised for issue on 15 July 2020
Mr W R Whitwell
Director
Company Registration No. 04086465
B & W PLANT HIRE AND SALES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2018
500,100
9,392,280
9,892,380
Year ended 31 March 2019:
Profit and total comprehensive income for the year
-
2,250,902
2,250,902
Dividends
10
-
(579,250)
(579,250)
Balance at 31 March 2019
500,100
11,063,932
11,564,032
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
1,773,523
1,773,523
Dividends
10
-
(358,000)
(358,000)
Balance at 31 March 2020
500,100
12,479,455
12,979,555
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
- 11 -
1
Accounting policies
Company information
B & W Plant Hire and Sales Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Shorrocks Delf, Brandy House Brow, Blackburn, BB2 3EY.
1.1
Accounting convention
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on 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
f
low and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts
of financial instruments
;
-
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Brandy House Holdings Limited. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
1.2
Going concern
At the time of approving the financial statements, the
true
director has
a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus the
director continues
to adopt the going concern basis of accounting in preparing the financial statements.
In January 2020, the World Health Organisation declared a global health emergency due to a pandemic outbreak of a new virus known as Covid-19. The pandemic will have a significant impact on a large number of businesses; thus the director is aware of certain material uncertainties which may cast doubt over the company’s ability to continue as a going concern.
The current pandemic has resulted in management reviewing costs and overheads, with cost cutting measures put in place to remove non-essential costs whilst not impacting on the quality and speed of service provided, whilst also taking advantage of the furlough scheme
and
payment holidays on offer by suppliers. There are also Government assistance measures, such as temporary funding, which could be taken up by the company if required.
As such, the director is confident that the company has adequate cash resources and can continue to operate within the current bank facilities available.
Given the fluidity of the situation, management continue to monitor events and take action as required. However, the director is aware of certain material uncertainties which may cause doubt on the company’s ability to continue as a going concern.
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 12 -
1.3
Turnover
The turnover shown in the profit and loss account represents amounts invoiced during the year for the hire and sale of construction industry plant and equipment, exclusive of Value Added Tax. Income is recognised in line with service delivery, the period of hire or based upon the progress of the relevant contract as appropriate.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Fixtures & equipment
15% straight line
Plant and machinery
over 3 - 7 years
Computer equipment
10% straight line
Motor vehicles
25% straight line
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 credited or charged to profit or loss
.
1.6
Impairment of fixed assets
At each reporting end date, the
company
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.
1.7
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Cost is calculated using the first in first out method.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash at bank and in hand
Cash and cash equivalents include cash in hand, deposits held at call with banks
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 13 -
1.9
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
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
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
All of the company's financial assets are basic financial instruments.
Impairment of financial assets
Financial assets
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.
Derecognition of financial assets
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.
Classification of financial liabilities
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.
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including trade and other payables
and
loans from
fellow group companies are
initially recognised at transaction price.
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. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. Trade creditors are recognised initially at transaction
price
.
Other financial liabilities
All of the company's financial liabilities are basic financial instruments.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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.
1.12
Employee benefits
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.
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 15 -
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
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 lease
s
asset are consumed.
1.15
Foreign exchange
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 are included in the profit and loss account for the period.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Leases
The
Company
enters into commercial property leases for its
office and storage buildings
. Where management has determined, based on an evaluation of the terms and conditions, that the lessor retains all significant risks and rewards of these properties, it will account for the contracts as operating leases.
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
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.
Depreciation
In determining the appropriate depreciation rates for the Company’s assets, management reviews the operating policies of the business and makes judgements as to the applicable useful economic lives of the assets, considering residual values.
Stock valuation
Stocks
are stated at the lower of cost (first
in
first
out method) or net reali
s
able value. The cost of
stocks
comprise net prices paid for materials purchased. Net reali
s
able value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Stock
provisions are recogni
s
ed for slow-moving, obsolete or unsalable
stock
and are reviewed on a quarterly basis.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Plant hire and sales
12,938,918
12,262,540
2020
2019
£
£
Other significant revenue
Interest income
1,206
1,179
2020
2019
£
£
Turnover analysed by geographical market
UK sales
12,938,918
12,262,540
4
Operating profit
2020
2019
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
521
-
Fees payable to the company's auditor for the audit of the company's financial statements
4,500
4,500
Depreciation of owned tangible fixed assets
1,322,926
1,346,480
Depreciation of tangible fixed assets held under finance leases
2,129,685
1,735,682
Profit on disposal of tangible fixed assets
(708,574)
(738,111)
Operating lease charges
354,699
344,947
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Sales
2
4
Distribution
47
48
Administration
12
14
61
66
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
2,062,749
2,131,283
Social security costs
218,274
213,871
Pension costs
118,015
105,374
2,399,038
2,450,528
6
Director's remuneration
2020
2019
£
£
Remuneration for qualifying services
14,428
14,388
Company pension contributions to defined contribution schemes
37,683
44,360
52,111
58,748
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2019 - 1).
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Other interest income
1,206
1,179
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 18 -
8
Interest payable and similar expenses
2020
2019
£
£
Interest on bank overdrafts and loans
17,350
9,063
Interest on finance leases and hire purchase contracts
304,568
281,696
Interest on invoice finance arrangements
20,883
14,882
Other interest
-
3,839
342,801
309,480
9
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
84,005
243,240
Deferred tax
Origination and reversal of timing differences
369,244
284,490
Changes in tax rates
127,933
(29,946)
Total deferred tax
497,177
254,544
Total tax charge
581,182
497,784
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:
2020
2019
£
£
Profit before taxation
2,354,705
2,748,686
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
447,394
522,250
Tax effect of expenses that are not deductible in determining taxable profit
4,541
4,110
Effect of change in corporation tax rate
127,933
(29,946)
Group relief
-
(18)
Depreciation on assets not qualifying for tax allowances
1,314
1,388
Taxation charge for the year
581,182
497,784
On 17 March 2020, the UK Government passed a resolution that had statutory effect under the Provisional Collection of Taxes Act 1968 to maintain the current corporation tax charge of 19%.
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 19 -
10
Dividends
2020
2019
£
£
Final paid
358,000
579,250
11
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2019 and 31 March 2020
500,000
Amortisation and impairment
At 1 April 2019 and 31 March 2020
500,000
Carrying amount
At 31 March 2020
-
At 31 March 2019
-
12
Tangible fixed assets
Fixtures & equipment
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2019
446,335
33,677,788
45,266
1,554,900
35,724,289
Additions
58,017
7,041,521
7,053
316,226
7,422,817
Disposals
-
(3,244,974)
-
(155,383)
(3,400,357)
At 31 March 2020
504,352
37,474,335
52,319
1,715,743
39,746,749
Depreciation and impairment
At 1 April 2019
270,357
12,247,301
26,114
952,065
13,495,837
Depreciation charged in the year
40,307
3,124,024
9,505
278,775
3,452,611
Eliminated in respect of disposals
-
(2,293,768)
-
(136,353)
(2,430,121)
At 31 March 2020
310,664
13,077,557
35,619
1,094,487
14,518,327
Carrying amount
At 31 March 2020
193,688
24,396,778
16,700
621,256
25,228,422
At 31 March 2019
175,978
21,430,487
19,152
602,835
22,228,452
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
12
Tangible fixed assets
(Continued)
- 20 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2020
2019
£
£
Plant and machinery
16,612,777
15,563,706
Motor vehicles
418,942
393,553
17,031,719
15,957,259
13
Stocks
2020
2019
£
£
Finished goods and goods for resale
139,541
143,194
14
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
2,863,772
2,487,789
Corporation tax recoverable
15,995
-
Other debtors
141,743
449,953
Prepayments and accrued income
103,140
146,357
3,124,650
3,084,099
15
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Bank loans and overdrafts
17
740,172
586,003
Obligations under finance leases
18
4,872,647
4,415,643
Trade creditors
1,420,337
1,343,596
Amounts owed to group undertakings
215,000
200,000
Corporation tax
-
143,240
Other taxation and social security
52,078
71,144
Other creditors
-
6,266
Accruals and deferred income
178,709
126,660
7,478,943
6,892,552
The overdraft facility is secured by way of fixed and floating charges over all assets of the company. Finance leases are secured against the assets to which they relate.
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 21 -
16
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Obligations under finance leases
18
6,456,235
6,056,358
Finance leases are secured against the assets to which they relate.
17
Loans and overdrafts
2020
2019
£
£
Bank overdrafts
740,172
586,003
Payable within one year
740,172
586,003
The bank overdrafts above are secured by fixed charges over the assets of the company.
18
Finance lease obligations
2020
2019
Future minimum lease payments due under finance leases:
£
£
Within one year
5,165,556
4,608,524
In two to five years
6,925,884
6,404,581
12,091,440
11,013,105
Less: future finance charges
(762,558)
(541,104)
11,328,882
10,472,001
Finance lease payments represent rentals payable by the company 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. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finance leases include £1,034,156 of balances relating to assets acquired before 31 March 2020 but where the finance was completed within 3 months of the year end.
19
Provisions for liabilities
2020
2019
Notes
£
£
Deferred tax liabilities
20
1,584,606
1,087,429
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 22 -
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2020
2019
Balances:
£
£
Accelerated capital allowances
1,585,146
1,088,302
Short term timing differences
(540)
(873)
1,584,606
1,087,429
2020
Movements in the year:
£
Liability at 1 April 2019
1,087,429
Charge to profit or loss
369,244
Effect of change in tax rate - profit or loss
127,933
Liability at 31 March 2020
1,584,606
It is not possible to quantify the amounts expected to reverse over the upcoming twelve months owing to uncertainties over the capital expenditure of the company.
21
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
118,015
105,374
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
500,100 Ordinary shares of £1 each
500,100
500,100
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 23 -
23
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for
four
properties. These property leases have original terms of
5 or 10
years
each.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£
£
Within one year
217,000
216,992
Between two and five years
698,417
753,416
In over five years
237,667
352,939
1,153,084
1,323,347
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Category
Description of
Income
Expenditure
transaction
2020
2019
2020
2019
£
£
£
£
Entities with control, joint control or significant influence over the company
Interest paid
16,100
Other related parties
Rent paid
210,133
201,800
Other related parties
Sales and purchases
3,557,657
4,299,446
1,604
23,811
Amounts owed to/by related parties
The following amounts were outstanding at the reporting end date:
Category
Amount owed to
Amounts owed by
2020
2019
2020
2019
£
£
£
£
Entities with control, joint control or significant influence over the company
215,000
200,000
Key management personnel
6,266
Other related parties
1,052
438
638,795
927,213
B & W PLANT HIRE AND SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 24 -
25
Ultimate controlling party
The ultimate parent company is Brandy House Holdings Limited, a company incorporated in England and Wales.
The registered office of Brandy House Holdings is
Shorrocks Delf, Brandy House Brow, Blackburn, BB2 3EY.
The ultimate controlling party is Mr W R Whitwell.
The largest and smallest group in which the results of the company are consolidated is that headed by Brandy House Holdings Limited. The consolidated financial statements of this group are available to the public and may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
2020-03-31
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