M Markovitz Limited - Limited company accounts 18.2

REGISTERED NUMBER: 00627513 (England and Wales)

Strategic Report, Directors' Report and

Financial Statements for the Year Ended 31 December 2018

for

M Markovitz Limited

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

DIRECTORS:

Mrs Audrey Hopkins

Mr David John Brian Hopkins

Mr Robert William Hopkins

REGISTERED OFFICE:

Town End Yard

Richard Lane

Tideswell

Buxton

Derbyshire

SK17 8PZ

REGISTERED NUMBER:

00627513 (England and Wales)

AUDITORS:

DonnellyBentley Limited

Chartered Accountants

Statutory Auditor

Hazlemere

70 Chorley New Road

Bolton

Lancashire

BL1 4BY

BANKERS:

Nat West

Bakewell Branch

1 Water Lane

Bakewell

Derbyshire

DE45 1YY

The directors present their strategic report for the year ended 31 December 2018.

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our

business during the year and its position at the year end. Our review is consistent with the size and nature of

our business and is written in the context of the risks and uncertainties we face.

The principal activity of the company remains that of builders' and plumbers' merchants and civils merchants.

The company also sells kitchens, bathrooms, and stoves from both our dedicated showrooms at Tideswell

and Chesterfield, and through our builders' and plumbers' merchants branches. Following the expansion of

the business into the civils market, the business has further expanded into the insulation and drylinings sector

with the opening of a distribution centre in Irlam, Manchester. The company plans continued growth in this

sector with the opening of a further depot in 2019. As we continue our expansion, we remain mindful of

protecting and developing our core focus as general builders' and plumbers' merchants.

The company's activities are organised into the following divisions:-

Builders and Plumbers Merchants

Tideswell

Glossop

Darley Dale

Buxton

Leek

Clay Cross

Wigan

Civils Merchants

Midland Branch, Clay Cross

North West Branch, Wigan

Yorkshire and Humberside Branch, Sheffield

Insulation and Drylining

Irlam Branch, Manchester

Kitchen and Bathroom Showrooms

Tideswell

Chesterfield

The Directors are pleased to report increased revenues by 11.3% to £40.1m in 2018 (2017: 36.1m). We

continue to invest in the future development of the business with the addition of the Irlam distribution centre to

our network.

The company continues to have a good relationship with our bankers, the NatWest. The availability of

affordable finance has been an important factor in enabling the company to expand.

PRINCIPAL RISKS AND UNCERTAINTIES

The company is primarily exposed to fluctuations in the construction industry, credit risk and interest rate risk.

The overall aim of the company's risk management policies is to minimise the potential adverse effects of

such risks.

Credit Risk

Providing credit to customers is a necessary part of the business and as such the company is exposed to

potential bad debts. The company has a broad customer base and has no overdue reliance on any single

customer. As well as actively monitoring the company's debtors ledger and reviewing credit limits of

customers, an insurance policy has been taken out to further mitigate the risk of bad debts.

Interest Rate Risk

The company has a number of ongoing bank loans at floating rates of interest, the majority of which are

repayable over the next six years. An increase in the interest rates would therefore impact on the financial

performance of the company, but the directors are comfortable with the current level of interest cover.

KEY PERFORMANCE INDICATORS

The company's overall results continue to improve and are encouraging.

- Turnover has increased by 11.3% to £40.1m (2017: £36.1m).

- Operating profit for the year was £1,119,248 (2017: £998,867)

Other standard accounting ratios and KPI's can be abstracted from the accounts.

FUTURE DEVELOPMENTS

The focus for 2019 is to continue to consolidate our position by maximising the potential of all the depots with

particular attention to our new distribution centre in Irlam. We will remain open to further prospective

expansion opportunities as they may arise.

ON BEHALF OF THE BOARD:

Mr David John Brian Hopkins - Director

5 September 2019

The directors present their report with the financial statements of the company for the year ended 31 December 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of Builders and Plumbers Merchants.

DIVIDENDS

An interim dividend of 4.5p per share was paid on the Preference £1 shares on 1 February 2018. No dividends were paid on the Ordinary £1 shares.

The total distribution of dividends for the year ended 31 December 2018 will be £ 26,910 .

DIRECTORS

The directors set out in the table below have held office during the whole of the period from 1 January 2018 to

the date of this report unless otherwise stated.

Other changes in directors holding office are as follows:

Mr Brian Hopkins (Deceased) - deceased 30.7.2018

The beneficial interests of the directors holding office at 31 December 2018 in the shares of the company,

according to the register of directors' interests, were as follows:

31.12.18

1.1.18

Ordinary shares of £1 each

Mrs Audrey Hopkins

-

100

Mr David John Brian Hopkins

-

-

Mr Robert William Hopkins

-

-

Preference shares of £1 each

Mrs Audrey Hopkins

-

299,000

Mr David John Brian Hopkins

-

-

Mr Robert William Hopkins

-

-

These directors did not hold any non-beneficial interests in any of the shares of the company.

DISCLOSURE IN THE STRATEGIC REPORT

Items required under schedule 7 to be disclosed in the Directors' Report are set out in the Strategic Report.

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Strategic Report, the Directors' Report 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 of the profit or loss of the company 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 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. They

are 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.

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 company'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 company's auditors are aware of that information.

AUDITORS

The auditors, DonnellyBentley Limited, will be proposed for re-appointment at the forthcoming Annual

General Meeting.

ON BEHALF OF THE BOARD:

Mr David John Brian Hopkins - Director

5 September 2019

Opinion

We have audited the financial statements of M Markovitz Limited (the 'company') for the year ended

31 December 2018 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of

Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 31 December 2018 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.

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

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.

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 company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

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

Strategic Report and the Directors' Report, 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the 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.

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 identified material misstatements in the Strategic Report or the Directors' Report.

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 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 Directors' Responsibilities Statement set out on pages four and five, 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 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 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.

Jonathan Hargraves BA (Hons) FCA Senior Statutory Auditor

for and on behalf of DonnellyBentley Limited

Chartered Accountants

Statutory Auditor

Hazlemere

70 Chorley New Road

Bolton

Lancashire

BL1 4BY

5 September 2019

TURNOVER

40,147,204

36,058,589

Other operating income

36,300

8,092

40,183,504

36,066,681

Raw materials and consumables

(30,706,983

)

(27,689,025

)

9,476,521

8,377,656

Staff costs

3

(4,861,501

)

(4,324,920

)

Depreciation

(349,014

)

(320,916

)

Other operating expenses

(3,146,758

)

(2,732,953

)

OPERATING PROFIT

4

1,119,248

998,867

Interest payable and similar expenses

5

(56,758

)

(37,776

)

PROFIT BEFORE TAXATION

1,062,490

961,091

Tax on profit

6

(239,464

)

(180,589

)

PROFIT FOR THE FINANCIAL YEAR

823,026

780,502

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

823,026

780,502

FIXED ASSETS

Intangible assets

8

114,709

147,346

Tangible assets

9

3,046,109

3,163,384

Investments

10

1,250

1,250

3,162,068

3,311,980

CURRENT ASSETS

Stocks

11

4,813,039

4,494,604

Debtors

12

9,874,319

8,016,021

Cash at bank

28,653

6,838

14,716,011

12,517,463

CREDITORS

Amounts falling due within one year

13

9,864,713

7,895,879

NET CURRENT ASSETS

4,851,298

4,621,584

TOTAL ASSETS LESS CURRENT LIABILITIES

8,013,366

7,933,564

CREDITORS

Amounts falling due after more than one year

14

(678,865

)

(1,394,543

)

PROVISIONS FOR LIABILITIES

18

(113,995

)

(114,631

)

NET ASSETS

7,220,506

6,424,390

CAPITAL AND RESERVES

Called up share capital

19

600,000

600,000

Retained earnings

20

6,620,506

5,824,390

SHAREHOLDERS' FUNDS

7,220,506

6,424,390

The financial statements were approved by the Board of Directors on 5 September 2019 and were signed on its behalf by:

Mr David John Brian Hopkins - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2017

600,000

5,096,512

5,696,512

Changes in equity

Dividends

-

(52,624

)

(52,624

)

Total comprehensive income

-

780,502

780,502

Balance at 31 December 2017

600,000

5,824,390

6,424,390

Changes in equity

Dividends

-

(26,910

)

(26,910

)

Total comprehensive income

-

823,026

823,026

Balance at 31 December 2018

600,000

6,620,506

7,220,506

Cash flows from operating activities

Cash generated from operations

1

(112,383

)

880,097

Interest paid

(56,758

)

(37,776

)

Tax paid

(202,956

)

(221,884

)

Net cash from operating activities

(372,097

)

620,437

Cash flows from investing activities

Purchase of intangible fixed assets

-

(56,992

)

Purchase of tangible fixed assets

(246,687

)

(1,334,593

)

Sale of tangible fixed assets

47,585

95,687

Net cash from investing activities

(199,102

)

(1,295,898

)

Cash flows from financing activities

New loans in year

-

1,228,140

Loans - capital repayments

(231,588

)

(135,156

)

HP contracts - capital repayments

(8,365

)

(257,829

)

Amount introduced by directors

-

20,300

Amount withdrawn by directors

(14,500

)

(29,000

)

Equity dividends paid

(26,910

)

(52,624

)

Net cash from financing activities

(281,363

)

773,831

(Decrease)/increase in cash and cash equivalents

(852,562

)

98,370

Cash and cash equivalents at beginning of year

2

(1,361,450

)

(1,459,820

)

Cash and cash equivalents at end of year

2

(2,214,012

)

(1,361,450

)

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

2018

2017

£

£

Profit before taxation

1,062,490

961,091

Depreciation charges

329,580

325,758

Loss/(profit) on disposal of fixed assets

19,434

(4,842

)

Finance costs

56,758

37,776

1,468,262

1,319,783

Increase in stocks

(318,435

)

(738,500

)

Increase in trade and other debtors

(1,858,298

)

(1,859,154

)

Increase in trade and other creditors

596,088

2,157,968

Cash generated from operations

(112,383

)

880,097

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 31 December 2018

31.12.18

1.1.18

£

£

Cash and cash equivalents

28,653

6,838

Bank overdrafts

(2,242,665

)

(1,368,288

)

(2,214,012

)

(1,361,450

)

Year ended 31 December 2017

31.12.17

1.1.17

£

£

Cash and cash equivalents

6,838

36,352

Bank overdrafts

(1,368,288

)

(1,496,172

)

(1,361,450

)

(1,459,820

)

1.	STATUTORY INFORMATION

M Markovitz Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information

page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102

'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies

Act 2006. The financial statements have been prepared under the historical cost convention and on a

going concern basis.

Turnover

Turnover from a sale is recognised when significant risks and rewards of ownership of the goods have

transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the

economic benefits associated with the transaction will flow to the company and the costs incurred or to

be incurred in respect of the transaction can be measured reliably. This is usually on dispatch of the

goods.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2001, has now

been fully amortised.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured

at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% on cost

Improvements to property

-

2% on cost

Plant and machinery

-

10% on reducing balance

Fixtures and fittings

-

10% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

25% on reducing balance

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation

and accumulated impairment losses. Cost includes costs directly attributable to making the asset

capable of operating as intended.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for

obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of

Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive

income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been

enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at

the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods

different from those in which they are recognised in financial statements. Deferred tax is measured

using tax rates and laws that have been enacted or substantively enacted by the year end and that are

expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable

that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet.

Those held under hire purchase contracts are depreciated over their estimated useful lives. Those

held under finance leases are depreciated over their estimated useful lives or the lease term,

whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The

capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the

period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the

company's pension scheme are charged to profit or loss in the period to which they relate.

Investments

Fixed asset investments are stated at cost less provision for permanent diminution in value.

Debtors and creditors receivable / payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are

recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss

account in other administrative expenses.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs.

Subsequently, they are measured at amortised cost using the effective interest rate method, less

impairment. If an arrangement constitutes a finance transaction it is measured at present value.

Significant judgements and estimates

The preparation of these financial statements requires certain judgements, estimates and assumptions

that affect the reported amounts of assets, liabilities, income and expenses. Estimates and judgements

are continually evaluated and are based on historical experience and other factors, including

expectations of future events that are believed to be reasonable under the circumstances.

Preference shares

The preference shares have been treated as equity as there are no circumstances, other than on the

winding up of the company, when the preference shares would be repaid and, even then, it will only be

after all other creditors. The dividends on the preference shares are only payable to the extent that

there are profits available for distribution. In addition, the holders of the preference shares have, on

certain occasions, the right to speak at annual general meetings.

3.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

4,368,016

3,914,544

Social security costs

402,415

354,793

Other pension costs

91,070

55,583

4,861,501

4,324,920

The average number of employees during the year was as follows:

2018

2017

Distribution

168

158

Administration

24

22

192

180

The directors are the only key management personnel and their remuneration is disclosed below.

2018

2017

£

£

Directors' remuneration

207,879

185,653

Information regarding the highest paid director for the year ended 31 December 2018 is as follows:

2018

£

Emoluments etc

88,227