Hanson Plywood (Holdings) Ltd - Limited company accounts 18.2

REGISTERED NUMBER: 03585017 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 NOVEMBER 2018

FOR

HANSON PLYWOOD (HOLDINGS) LTD

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Consolidated Profit and Loss Account

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

G M Scott

M Scott

J G Mitchell

J M Scott

J W Scott

T G Scott

SECRETARY:

J G Mitchell

REGISTERED OFFICE:

Drakes Industrial Estate

Shay Lane

Ovenden

Halifax

West Yorkshire

HX3 6RL

REGISTERED NUMBER:

03585017 (England and Wales)

AUDITORS:

Bairstow and Atkinson

Statutory Auditors

Chartered Accountants

Carlton House

Bull Close Lane

Halifax

HX1 2EG

The directors present their strategic report of the company and the group for the year ended 30 November 2018.

The group is established as one of the UK's leading importers and distributors of timber based panel products. The

group provides a nationwide service to a wide ranging and diverse customer base, including merchants and specialist

manufacturers.

The group has a program of ongoing staff training and recruitment to ensure the business can operate at high levels of

service within the industry. High priority is given to technical training and environmental awareness. Regular visits are

made to various suppliers around the world to ensure relationships and trading expectations are fully maintained and

appreciated.

Marketing practices have a focus on presenting products directly to architects and specifiers to promote awareness of a

wide range of fit for purpose products. Our presentation at trade shows continues to be of particular benefit in these

practices.

REVIEW OF BUSINESS

We are pleased to report that revenues continued to grow month on month, and the group was able to trade strongly

despite some significant fluctuations in currency and product costs. Although markets have been uncertain, overall

trading has remained positive.

During the year product costs have continued to rise and profit margins have been below expectations. The combination

of increased costs and a competitive market place has resulted in a reduced overall profit margin for the year. The

uncertainties surrounding the Brexit process continue to affect trading.

The group has increased the monthly order intake in line with the increase in revenues. Order values therefore remain

constant.

The cost of bad debts was £118,595 compared to £53,161 in 2017.

Debt management continues to be a focus to ensure risk exposure is limited as far as possible.

Revenue for the financial year was £39,477,517 which is 17% up on last year's £33,632,878

Operating profit was £2,054,795, up £235,897 from £1,818,898 last year (13%).

Profit after tax was £1,639,467 compared to £1,452,522 last year.

Net assets (total equity) were £11,353,897 compared to £9,950,107 last year.

Trading margins were a little disappointing during the year and resulted in an overall margin which was lower than the

previous year (16.7% compared to 17.3% in 2017). Operating costs are increasing as the group expands staffing and

resources to accommodate current and any future growth. The group continues to invest in all resources to accommodate

further growth. Our primary aim is to ensure our customer needs are fully met at all times.

PRINCIPAL RISKS AND UNCERTAINTIES

Procedures for identifying, quantifying and managing the risks faced by the group are in place and undergo constant

monitoring and analysis.

Trading Risk

The group mitigates trading risks by ensuring products are distributed over a very wide range of industries covering

various economic sectors.

Stocks

Stocks are carefully monitored to ensure volumes are in line with current and future demands, and there is minimal risk

from reduced values or market demand.

IT Risk

Computers and IT risks are covered by storing and managing data offsite.

Other Risks

The group operates with a disaster recovery plan which can be immediately implemented should the group experience

any catastrophic event.

The directors monitor specific business sectors to ensure stocks are managed in accordance with any significant factors

which may adversely influence industry trading patterns. Staff actively manage and report on performance against

budgets, performance targets and capital expenditure.

QUALITY

The group operates using a Quality Management System that is certified to the ISO 9001:2015 standard (having recently

transitioned to the latest version of the standard). This provides a framework of continual improvement for the group and

its processes.

The main objectives of the group's Quality Management System are to control non-conforming products and customer

returns while maintaining a healthy average margin. In addition to these main objectives the costs of external haulage is

monitored and appropriate zonal charges are applied. This allows the group to accurately measure the benefit of using

our own fleet of vehicles. Costing objectives are monitored and measured on a monthly basis.

In 2017 the percentage of non-conforming products in relation to sales orders rose to 5.12% from 3.18% the previous

year. In 2018, staff successfully implemented tighter controls and more transparent reporting, resulting in a reduction of

this percentage to 3.2%.

The group's zonal charge objective is based on the potential saving the group makes from not using external haulage

providers and delivering with group-owned vehicles. By comparing actual costs with notional market rates, the transport

department can identify some significant cost savings.

ENVIRONMENT

Reduction and mitigation of environmental impacts is a key concern and the group operates an Environmental

Management System (certified to ISO 14001:2015) to monitor these aspects.

As an importer of timber-based products, procurement presents the most pressing concern for the group and careful

consideration is given to the sustainability and legality of wood-based panel products sourced from high risk countries.

Since the enactment of the European Union Timber Regulation (EUTR), there are now legal ramifications for not

carrying out sufficient due diligence on the supply chains of products sourced from outside of the EU. To comply with

EUTR, the group has a developed Due Diligence System that is certified and externally audited under the Timber Trade

Federation's Responsible Purchasing Policy.

In addition to a strong focus on the legality of supply chains, the group is certified under FSC® and PEFC™ Chain of

Custody management schemes. This ensures that all goods certified under these schemes have been sourced from

certified forest management units who operate with sustainable forest management plans. The group monitors the

purchase of certified goods annually and has seen this figure grow from 77.39% (2014) to 82.60% (2015) to 84.30%

(2016) and then to 85.7%. In 2018, the group saw a reduction of this figure to 81.5% certified purchases.

The group's strong ties with trade in Indonesia has also allowed it to benefit from the Forest Law Enforcement,

Governance and Trade Voluntary Partnership Agreement between the EU and Indonesia. The Indonesian government

implemented a nation-wide timber legality assurance system ensuring that all exported timber products legally comply

with EUTR and do not require due diligence as a result. The fall in percentage of 3rd party certified purchases (FSC®

and PEFC™) is explained by the increase on FLEGT licenced products. In 2017, 3% of the group's purchases were

FLEGT licenced; this rose to 7.5% in 2018.

Other crucial environmental aspects are those of fuel consumption and waste management. These aspects are monitored

monthly through the help of a telematics solution that diagnoses vehicle performance, and a recycling company with

vehicles that are able to obtain accurate weight figures for our waste. The group directly recycled 81% of waste

produced on site. The remaining 19% (General Waste) was diverted from land fill to a material recovery facility where it

is further segregated and potentially recycled further. In addition to a zero-waste-to-landfill policy, the group has

implemented management-led policies on the reduction of single use plastics and has set targets to reduce packaging

purchased and used. The group has signed up to a Packaging Regulations Compliance Scheme monitored by the GBN.

This not only ensures compliance with packaging obligations, but also presents a financial incentive to reduce

packaging.

SOCIAL RESPONSIBILITY

In 2018, the group took a clear stance on social responsibility. The company employs 62 people from a single site in

Halifax, West Yorkshire and places a lot of emphasis on the way employees are cared for, ensuring that they always feel

valued and secure in their employment. To assist with this, the group has the following internal policies in place:

-

Equal Opportunities Policy

-

Anti-Corruption and Bribery Policy

-

Staff Privacy Policy

-

Health & Safety Policy

With the above in mind, the group has the greatest confidence that no employees are exploited or forced into

compulsory labour in line with the Modern Slavery Act 2015.

This confidence extends to the group's supply chain, where a robust Due Diligence System and recognised Third Party

Certification schemes (such as FSC®, PEFC™ and FLEGT) work to eliminate modern slavery and human trafficking

from our supply chains.

A system is in place to ensure that relevant staff within the business are able to recognise signs of forced labour and

human trafficking and employ appropriate prevention measures.

HEALTH AND SAFETY

A Health & Safety Management System is in operation. Aspects of this system are integrated into the Quality and

Environmental Management Systems with weekly checks of high risk areas and considerable investment into the latest

safety equipment and PPE. Staff are fully aware of requirements under HSE and the group monitors any noted hazards

against the number of near misses and accidents in order to locate areas of notable risk to the health and safety of

employees, customers, visitors and other persons affected by the operations of the group.

ON BEHALF OF THE BOARD:

G M Scott - Director

3 April 2019

The directors present their report with the financial statements of the company and the group for the year ended

30 November 2018.

DIVIDENDS

Interim dividends per share were paid as follows:

Ordinary £1 shares

0.75

- 28 February 2018

Ordinary A £1 shares

1.00

- 28 February 2018

The directors recommend that no final dividends be paid.

The total distribution of dividends for the year ended 30 November 2018 will be £ 235,677 .

FUTURE DEVELOPMENTS

The directors are working on strategies which will promote further opportunities and growth. The core strength of the

group is providing specialist products and technical advice which is of greater value in the market place. Our Marketing

& Media department is a rapidly expanding resource for the group and operations are closely linked to the sales

department with a particular focus on promoting the group's reputation from a technical and advisory standpoint.

During 2019 the group is looking to acquire new property to expand its material storage capacity.

New delivery vehicles are being purchased to replace vehicles and expand fleet capacity.

The group's website continues to provide significant support for growth and development. Dedicated staff are engaged in

progressive marketing and promotional activities.

Although the prevailing political and economic climate remains unpredictable, the group is in a strong financial and

trading position to be able to capitalise on any opportunities available.

We continue to offer our customers a very high level of service, technical knowledge and expertise.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 December 2017 to the date of this

report.

G M Scott

M Scott

J G Mitchell

J M Scott

J W Scott

T G Scott

THIRD PARTY INDEMNITY PROVISION FOR DIRECTORS

Qualifying third party indemnity provision for the directors is in place for the benefit of all directors of the company.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial

statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have 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 directors must not

approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the

company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the

directors are 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have

taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the

group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

G M Scott - Director

3 April 2019

Opinion

We have audited the financial statements of Hanson Plywood (Holdings) Ltd (the 'parent company') and its subsidiaries

(the 'group') for the year ended 30 November 2018 which comprise the Consolidated Profit and Loss Account,

Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company

Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow

Statement, 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 Financial Reporting Standard 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 group's and of the parent company affairs as at 30 November 2018 and of the group's 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.

Basis for 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 Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the group 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.

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 financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group'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 financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the

Auditors 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.

Opinion 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 Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in

the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the

Directors.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page seven, the directors are

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 directors determine 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 directors are responsible for assessing the group's and the parent 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 directors either intend to liquidate the group or the parent company or to cease

operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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 www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Peter Dyson FCA (Senior Statutory Auditor)

for and on behalf of Bairstow and Atkinson

Statutory Auditors

Chartered Accountants

Carlton House

Bull Close Lane

Halifax

HX1 2EG

3 April 2019

TURNOVER

3

39,477,517

33,632,878

Cost of sales

32,886,860

27,797,829

GROSS PROFIT

6,590,657

5,835,049

Distribution costs

1,989,611

1,778,316

Administrative expenses

2,810,289

2,470,960

4,799,900

4,249,276

1,790,757

1,585,773

Other operating income

264,038

233,125

OPERATING PROFIT

6

2,054,795

1,818,898

Interest receivable and similar income

944

-

2,055,739

1,818,898

Interest payable and similar expenses

7

16,186

18,160

PROFIT BEFORE TAXATION

2,039,553

1,800,738

Tax on profit

8

400,086

348,216

PROFIT FOR THE FINANCIAL YEAR

1,639,467

1,452,522

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,639,467

1,452,522

Profit attributable to:

Owners of the parent

1,639,467

1,452,522

Total comprehensive income attributable to:

Owners of the parent

1,639,467

1,452,522

FIXED ASSETS

Tangible assets

11

2,727,700

2,656,454

Investments

12

-

-

2,727,700

2,656,454

CURRENT ASSETS

Stocks

13

4,774,136

4,367,028

Debtors

14

10,204,922

9,015,371

Cash at bank and in hand

1,596,997

1,295,496

16,576,055

14,677,895

CREDITORS

Amounts falling due within one year

15

7,665,372

7,088,670

NET CURRENT ASSETS

8,910,683

7,589,225

TOTAL ASSETS LESS CURRENT LIABILITIES

11,638,383

10,245,679

CREDITORS

Amounts falling due after more than one year

16

(165,051

)

(184,231

)

PROVISIONS FOR LIABILITIES

20

(119,435

)

(111,341

)

NET ASSETS

11,353,897

9,950,107

CAPITAL AND RESERVES

Called up share capital

21

295,902

295,902

Retained earnings

22

11,057,995

9,654,205

SHAREHOLDERS' FUNDS

11,353,897

9,950,107

The financial statements were approved by the Board of Directors on 3 April 2019 and were signed on its behalf by:

G M Scott - Director

FIXED ASSETS

Tangible assets

11

-

-

Investments

12

553,855

553,855

553,855

553,855

CURRENT ASSETS

Debtors

14

2,517,900

2,561,806

Cash at bank and in hand

149

158

2,518,049

2,561,964

CREDITORS

Amounts falling due within one year

15

220,515

251,373

NET CURRENT ASSETS

2,297,534

2,310,591

TOTAL ASSETS LESS CURRENT LIABILITIES

2,851,389

2,864,446

CAPITAL AND RESERVES

Called up share capital

21

295,902

295,902

Retained earnings

22

2,555,487

2,568,544

SHAREHOLDERS' FUNDS

2,851,389

2,864,446

Company's profit for the financial year

222,620

241,464

The financial statements were approved by the Board of Directors on 3 April 2019 and were signed on its behalf by:

G M Scott - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 December 2016

295,902

8,437,360

8,733,262

Changes in equity

Dividends

-

(235,677

)

(235,677

)

Total comprehensive income

-

1,452,522

1,452,522

Balance at 30 November 2017

295,902

9,654,205

9,950,107

Changes in equity

Dividends

-

(235,677

)

(235,677

)

Total comprehensive income

-

1,639,467

1,639,467

Balance at 30 November 2018

295,902

11,057,995

11,353,897

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 December 2016

295,902

2,562,757

2,858,659

Changes in equity

Dividends

-

(235,677

)

(235,677

)

Total comprehensive income

-

241,464

241,464

Balance at 30 November 2017

295,902

2,568,544

2,864,446

Changes in equity

Dividends

-

(235,677

)

(235,677

)

Total comprehensive income

-

222,620

222,620

Balance at 30 November 2018

295,902

2,555,487

2,851,389

Cash flows from operating activities

Cash generated from operations

1

1,421,617

1,385,727

Interest paid

(6,368

)

(5,635

)

Interest element of hire purchase payments paid

(11,287

)

(12,172

)

Tax paid

(452,076

)

(498,130

)

Net cash from operating activities

951,886

869,790

Cash flows from investing activities

Purchase of tangible fixed assets

(303,483

)

(78,365

)

Sale of tangible fixed assets

10,751

3,900

Interest received

944

-

Net cash from investing activities

(291,788

)

(74,465

)

Cash flows from financing activities

Bank loan repayments

(46,090

)

(109,219

)

Capital repayments in year

(35,856

)

(101,841

)

Amount introduced by directors

159,263

164,363

Amount withdrawn by directors

(200,237

)

(167,670

)

Equity dividends paid

(235,677

)

(235,677

)

Net cash from financing activities

(358,597

)

(450,044

)

Increase in cash and cash equivalents

301,501

345,281

Cash and cash equivalents at beginning of year

2

1,295,496

950,215

Cash and cash equivalents at end of year

2

1,596,997

1,295,496

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

30.11.18

30.11.17

£

£

Profit before taxation

2,039,553

1,800,738

Depreciation charges

220,943

204,071

Loss on disposal of fixed assets

543

6,437

Finance costs

16,186

18,160

Finance income

(944

)

-

2,276,281

2,029,406

Increase in stocks

(407,108

)

(479,222

)

Increase in trade and other debtors

(1,189,551

)

(1,208,700

)

Increase in trade and other creditors

741,995

1,044,243

Cash generated from operations

1,421,617

1,385,727

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 30 November 2018

30.11.18

1.12.17

£

£

Cash and cash equivalents

1,596,997

1,295,496

Year ended 30 November 2017

30.11.17

1.12.16

£

£

Cash and cash equivalents

1,295,496

950,215

3.	MAJOR NON-CASH TRANSACTIONS

During the year, the group entered into finance agreements in respect of assets totalling £83,011 (2017 -

£79,108) at the inception of the lease.