G. J. Handy (Trading) Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 00551762 (England and Wales)

G. J. HANDY (TRADING) LTD

PREVIOUSLY KNOWN AS

G.J.HANDY & COMPANY LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

30TH NOVEMBER 2019

Page

Company Information

1

Strategic Report

2

to

3

Report of the Directors

4

to

5

Report of the Independent Auditors

6

to

7

Statement of Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

13

to

23

DIRECTORS:

Mr D L Belcher

Mr S A Belcher

Mrs D S Belcher

Mr S Bartlett

Mr M A Moseley

REGISTERED OFFICE:

Handy Distribution

Murdock Road

Dorcan

SWINDON

Wiltshire

SN3 5HY

REGISTERED NUMBER:

00551762 (England and Wales)

AUDITORS:

Morris Owen

Statutory Auditors

43-45 Devizes Road

SWINDON

Wiltshire

SN1 4BG

BANKERS:

National Westminster Bank Plc

84 Commercial Road

SWINDON

Wiltshire

SN1 5NW

The directors have pleasure in presenting their strategic report for the year ended 30 November 2019.

COVID19

After the year end the World Health Organisation declared the spread of Coronavirus Disease (COVID19) a worldwide pandemic. COVID19 is having significant effects on global markets, supply chains, businesses, and communities. While we are yet to know the full effects of COVID19 on the business through government support, partial restructuring and strong ecommerce business which has been driven by periods of high-street lockdowns it is looking like the business has faired well in these unprecedented times and is expected to show good financial strength in 2019-2020 accounts.

REVIEW OF BUSINESS

The sector in which the company trades is seasonal and is dependent to some degree on the weather at key times.

2019 was an average year weather wise although the summer months were hot and dry which is not ideal growing weather.

The turnover for the year was £15.3m, down by approximately £3.2m compared to the previous year. This was mainly due to some changes to existing distribution agreements with a key supplier and with new agreements in place post year end the 2020 accounts reflect a turnover more in line with the previous year.

The company has a loss in 2019 and this was due mainly to the reduction in turnover but also partly to less than favourable exchange rates due to the ongoing position of the UK. The reason for such a large loss was due to a large intercompany loan write off between this company and G. J. Handy (Properties) limited of £869,564.

The Webb, The Handy and Q Garden brands continues to grow at a strong pace alongside our other brands which compliment the big brand names we represent.

As previous years, we continued to aim to deliver the best distribution infrastructure in our industry coupled with a highly skilled and knowledgeable team of staff means we can continue to grow our business and lead in our sector.

POSITION AT THE END OF THE YEAR

The company balance sheet has remained stable despite the 2019 performance and the directors continue to closely monitor overheads and stock levels.

PRINCIPAL RISKS AND UNCERTAINTIES

The company has two main risks and uncertainties. The main risk, like a lot of businesses that import, is the implications of the BREXIT process; the major uncertainty is the weather, particularly at certain times in the year.

With regard the direct risk associated with BREXIT, currently sales outside of the UK in the EU are very limited, as is any trade in Euros.

The indirect risks of BREXIT are equally important to the company as this continues to cause exchange rate fluctuations - the Directors continue to closely monitor the exchange rate risk, hedging where appropriate, to reduce the impact on the business.

Weather is always the biggest uncertainty, the impact of this is mitigated where possible through closely managed stock levels.

KEY PERFORMANCE INDICATORS

The directors have identified that the key performance indicators when looking at the business are the monitoring of turnover on a monthly basis compared to the seasonalised budget, margin levels (2019 9.2%, 2018 13.0%), stock turn (2019 2.3, 2018 3.2), control of overheads compared to budget and cash flow.

FUTURE DEVELOPMENTS

We are committed to developing sustainable business, so we can offer industry leading service and we will continue to grow the business in a sensible way while the UK navigates through BREXIT. We are partnered by the leading brands as well as our own brand offerings making us the one stop wholesaler in our industry, we aim to further cement this position even further in the coming year.

The nature of retail sales has changed over time, moving more to an internet based model than the more traditional High Street shop and one of the implications of the COVID pandemic has been to see a step change in this transition. Since the year end, contributed by this step change in retail behaviour, the decision has been taken to close the physical retail unit as it was not cost effective and to place more emphasis on the Company's virtual retail store. Accordingly whilst there has been a cessation of the physical retail presence, the company continues to undertake retail trade, just through a different delivery mechanism.

ON BEHALF OF THE BOARD:

Mr S A Belcher - Director

27th November 2020

The directors present their report with the financial statements of the company for the year ended 30th November 2019.

CHANGE OF NAME

The company passed a special resolution on 29th October 2020 changing its name from G.J.Handy & Company Limited to G. J. Handy (Trading) Ltd.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of retailing and distribution of domestic and professional garden machinery.

DIVIDENDS

Dividends totalling £22.39 per share were paid during the year. The total distribution of dividends for the year end 30th November 2019 was £380,573

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st December 2018 to the date of this report.

Mr D L Belcher

Mr S A Belcher

Mrs D S Belcher

Mr S Bartlett

Mr M A Moseley

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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, Morris Owen, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr S A Belcher - Director

27th November 2020

Opinion

We have audited the financial statements of G. J. Handy (Trading) Ltd (the 'company') for the year ended 30th November 2019 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 30th November 2019 and of its loss 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 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.

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

-	the 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, 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 Statement of Directors' Responsibilities set out on page four, 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.

Mr Alan John Barlow (Senior Statutory Auditor)

for and on behalf of Morris Owen

Statutory Auditors

43-45 Devizes Road

SWINDON

Wiltshire

SN1 4BG

27th November 2020

REVENUE

3

15,355,825

18,564,454

Cost of sales

13,941,134

16,147,427

GROSS PROFIT

1,414,691

2,417,027

Administrative expenses

2,751,777

1,804,388

(1,337,086

)

612,639

Other operating income

4

38,695

102,731

OPERATING (LOSS)/PROFIT

6

(1,298,391

)

715,370

Interest payable and similar expenses

7

33,270

35,398

(LOSS)/PROFIT BEFORE TAXATION

(1,331,661

)

679,972

Tax on (loss)/profit

8

(70,746

)

189,436

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(1,260,915

)

490,536

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,260,915

)

490,536

FIXED ASSETS

Intangible assets

10

2,925

7,325

Property, plant and equipment

11

285,834

402,515

288,759

409,840

CURRENT ASSETS

Inventories

12

4,909,835

4,238,288

Debtors

13

3,033,647

5,252,596

Cash at bank and in hand

639

429,599

7,944,121

9,920,483

CREDITORS

Amounts falling due within one year

14

3,172,216

3,588,009

NET CURRENT ASSETS

4,771,905

6,332,474

TOTAL ASSETS LESS CURRENT LIABILITIES

5,060,664

6,742,314

CREDITORS

Amounts falling due after more than one year

15

(60,273

)

(111,046

)

PROVISIONS FOR LIABILITIES

20

(89,337

)

(78,726

)

NET ASSETS

4,911,054

6,552,542

CAPITAL AND RESERVES

Called up share capital

21

17,000

17,000

Capital redemption reserve

22

9,000

9,000

Retained earnings

22

4,885,054

6,526,542

SHAREHOLDERS' FUNDS

4,911,054

6,552,542

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 27th November 2020 and were signed on its behalf by:

Mr S A Belcher - Director

Mr D L Belcher - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1st December 2017

17,000

6,245,368

9,000

6,271,368

Changes in equity

Dividends

-

(209,362

)

-

(209,362

)

Total comprehensive income

-

490,536

-

490,536

Balance at 30th November 2018

17,000

6,526,542

9,000

6,552,542

Changes in equity

Dividends

-

(380,573

)

-

(380,573

)

Total comprehensive income

-

(1,260,915

)

-

(1,260,915

)

Balance at 30th November 2019

17,000

4,885,054

9,000

4,911,054

Cash flows from operating activities

Cash generated from operations

1

(427,888

)

1,231,532

Interest paid

(23,694

)

(28,744

)

Interest element of hire purchase payments paid

(9,576

)

(9,243

)

Tax paid

(156,324

)

(55,828

)

Net cash from operating activities

(617,482

)

1,137,717

Cash flows from investing activities

Purchase of tangible fixed assets

(40,191

)

(315,672

)

Sale of tangible fixed assets

22,917

49,782

Net cash from investing activities

(17,274

)

(265,890

)

Cash flows from financing activities

Capital repayments in year

(119,302

)

(101,649

)

Amount introduced by directors

79,647

3,177

Amount withdrawn by directors

-

(31,104

)

Equity dividends paid

(380,573

)

(209,362

)

Net cash from financing activities

(420,228

)

(338,938

)

(Decrease)/increase in cash and cash equivalents

(1,054,984

)

532,889

Cash and cash equivalents at beginning of year

2

429,599

(103,290

)

Cash and cash equivalents at end of year

2

(625,385

)

429,599

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2019

2018

£

£

(Loss)/profit before taxation

(1,331,661

)

679,972

Depreciation charges

212,364

295,152

Profit on disposal of fixed assets

(12,064

)

(34,782

)

Increase/(Decrease) in provision

31,231

(102

)

Finance costs

33,270

35,398

(1,066,860

)

975,638

(Increase)/decrease in inventories

(671,547

)

508,654

Decrease in trade and other debtors

2,268,856

1,409,979

Decrease in trade and other creditors

(958,337

)

(1,662,739

)

Cash generated from operations

(427,888

)

1,231,532

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 30th November 2019

30.11.19

1.12.18

£

£

Cash and cash equivalents

639

429,599

Bank overdrafts

(626,024

)

-

(625,385

)

429,599

Year ended 30th November 2018

30.11.18

1.12.17

£

£

Cash and cash equivalents

429,599

899

Bank overdrafts

-

(104,189

)

429,599

(103,290

)

1.	STATUTORY INFORMATION

GJ Handy (Trading) Limited is private company, limited by shares, registered in England and Wales.

The registered office address is Murdock Road, Dorcan, Swindon, Wiltshire, SN3 5HY.

These financial statements are presented in British Pounds (GBP), which is the company's functional and presentational currency.

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.

After the year end the World Health Organisation declared the spread of Coronavirus Disease (COVID19) a worldwide pandemic. COVID19 is having significant effects on global markets, supply chains, businesses, and communities. While we are yet to know the full effects of COVID19 on the business through government support, partial restructuring and strong ecommerce business which has been driven by periods of high-street lockdowns it is looking like the business has fared well in these unprecedented times and is expected to show good financial strength in 2019-2020 accounts.

Significant judgements and estimates

The directors have calculated an annual stock provision for any slowing moving or obsolete third party stock. The directors believe the most accurate way to calculate this provision is to review each stock line held at the year end and compare this to sales post year end. All stock lines that have had less than 20% sales are deemed to be slowing moving and/or obsolete. Of this total of slowing moving and/or obsolete stock, the directors believe that 25% should be provided for. The period for the post year end review is considered to capture the seasonality of the business. The provision has been calculated at £176,342 (2018: £142,766)

The directors also have determined an appropriate provision for bad and doubtful debts by assessing the recoverability of all balances on a balance by balance basis.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of vat, discounts, and rebates. Turnover is recognised when goods are despatched or made available for collection. Turnover in foreign currencies is translated into sterling at the rates published by HMRC.

Intangible fixed assets

Amortisation is provided over 3 years to write off the website costs over its estimated useful life.

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.

Property improvements

-

10% on cost

Plant and machinery

-

20% on cost

Fixtures and fittings

-

20% on cost

Motor vehicles

-

40% on reducing balance

Computer equipment

-

20% on cost

Stocks and work in progress

Stocks are valued at the lower of cost and net realisable value, after make due allowance for obsolete and slow moving items. The cost of inventories is measured using the first-in first-out basis.

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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Foreign currencies

Transactions in all other foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date.

The company enters into a forward agreements to minimise against the risk of fluctuations in the dollar.

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 for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.

Financial instruments

Financial instruments are classified by the directors as basic or advanced following the conditions in FRS 102 Section 11. Basic financial instruments are recognised at amortised cost using the effective interest method. The only advanced instruments recognised by the company are derivatives (being forward foreign exchange contracts). Derivative financial instruments are initially recorded at cost and thereafter at fair value with changes recognised in arriving at profit before tax. Derivative assets are included in other debtors and derivative liabilities are included in other creditors.

3.

REVENUE

The revenue and loss (2018 - profit) before taxation are attributable to the one principal activity of the company.

4.	OTHER OPERATING INCOME

2019

2018

£

£

Other income

38,695

102,731

5.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

1,443,755

1,420,633

Social security costs

154,711

142,997

Other pension costs

30,909

27,246

1,629,375

1,590,876

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

2019

2018

Management staff

5

5

Administration staff

18

18

Sales, distribution & workshop staff

33

38

56

61

2019

2018

£

£

Directors' remuneration

212,331

136,363

Directors' pension contributions to money purchase schemes

6,329

4,840

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

3

Information regarding the highest paid director for the year ended 30th November 2019 is as follows:

2019

£

Emoluments etc

108,738

Pension contributions to money purchase schemes

3,189

6.	OPERATING (LOSS)/PROFIT

The operating loss (2018 - operating profit) is stated after charging/(crediting):

2019

2018

£

£

Hire of plant and machinery

9,410

8,199

Depreciation - owned assets

114,364

161,943

Depreciation - assets on hire purchase contracts

93,600

128,810

Profit on disposal of fixed assets

(12,064

)

(34,782

)

Website costs amortisation

4,400

4,400

Auditors' remuneration

18,310

15,335

Auditors' remuneration for non audit work

13,297

11,134

Foreign exchange differences

15,476

(45,861

)

Recharged costs

45

323

Forward currency contract movement

723

(24,289

)

Amounts of stock recognised as an expense during the period

11,401,344

13,729,908

Auditors' remuneration for non audit work includes the fees of £5,405 (2018: £5,000) payable to the company's auditors for the audit of its fellow subsidiary company, GJ Handy (Property) Limited, and for the GJ Handy (Holdings) Limited Group as a whole.

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Bank interest

23,694

26,155

Hire purchase

9,576

9,243

33,270

35,398

8.

TAXATION

Analysis of the tax (credit)/charge

The tax (credit)/charge on the loss for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

(49,907

)

156,543

Over/under provision in

previous year

(219

)

(155

)

Total current tax

(50,126

)

156,388

Deferred tax

(20,620

)

33,048

Tax on (loss)/profit

(70,746

)

189,436

UK corporation tax has been charged at 19% (2018 - 19%).