STAIRWAYS_(HOLDINGS)_LIMI - Accounts
STAIRWAYS_(HOLDINGS)_LIMI - Accounts
Company Registration No. 02851575 (England and Wales)
FOR THE YEAR ENDED 31 DECEMBER 2014
DIRECTORS AND ADVISERS
Directors
Secretary
Company number
Registered office
Registered auditors
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditors' report
4 - 5
Consolidated profit and loss account
6
Balance sheets
7
Consolidated cash flow statement
8
Notes to the consolidated cash flow statement
9
Notes to the financial statements
10 - 20
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2014
- 1 -
The directors present the strategic report and financial statements for the year ended 31 December 2014.
Review of the business
In 2014 market conditions in the construction industry saw a marked improvement with greater numbers of house-builds than the immediate previous years, particularly with Government incentives to encourage building. However there has been a sharpening in the competitive nature of the industry and this has been reflected in the Group’s results for 2014.
Although turnover increased from £7,980,785 in 2013 to £8,812,635 in 2014 (an improvement of 10.4%), the market place being very price sensitive resulted in a reduced gross margin performance for the group, with gross profit down from 28.7% in 2013 to 26.0% in 2014 a reduction of 2.7%.
The customer base has widened as the product offering and groups capability develops, placing the business into new sectors. With the maintained investment in the sales team, the forward order book continues to increase providing growth and stability. Overheads have been contained through management control of KPI’s and a 3.4% saving has evolved resulting in a Profit Before Tax of £532,927 which is at 6.05% compared to the 6.97% achieved in 2013 which reflects the aforementioned squeeze on margins.
The group continues to be subject to the status of the house building market in the UK which currently remains politicised and uncertain. To protect its future the group continues to invest strategically in the research of new materials and development of manufacturing processes with the aim of continued market appeal and growth and to improve quality and profitability.
The latter has also been supported by a significant investment in purchase of equipment at one of our plants to self- heat and burn our own waste. Consideration is also being undertaken for a further site. Further IT upgrades have also been undertaken throughout the group.
At the balance sheet date the company net asset position had improved by £231,449, a 3.9% increase which is down by a similar level to the previous year. There is improvement at the important net current asset level which showed an increase of 9.74% which has been a consistent level in the immediate preceding years.
The directors remain confident that the measures initiated in prior years are now bearing fruit and are confident of an improvement again in 2015 subject to the Political situation and continued House Building trends from 2014.
The Group is a strong advocate of Key Performance Indicators (KPIs). Results for the group for the year
expressed as KPIs are as follows:
• Pre-tax profit margin 6.05%, (2013: 7.47%)
• Current Ratio 5.84 (2013: 5.76)
• Sales/Net Working Capital 1.42 (2013: 1.34)
• Equity % 88.02% (2013: 88.38%)
• Liquidity/Acid Test 4.20 (2013: 4.06)
• ROCE 8.59% (2013: 9.31%)
• Return on Total Assets Employed 8.59% (2013: 9.31%)
• Current Debt Ratio 0.13 (2013: 0.12).
On behalf of the board
Director
20 May 2015
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2014
- 2 -
The directors present their report and financial statements for the year ended 31 December 2014.
Principal activities
Results and dividends
The consolidated profit and loss account for the year is set out on page 6.
Directors
The following directors have held office since 1 January 2014:
Auditors
The auditors, Chapman Worth Limited, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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 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;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group 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 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.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 3 -
Statement of disclosure to auditors
On behalf of the board
Director
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF STAIRWAYS (HOLDINGS) LIMITED
- 4 -
We have audited the group and parent company financial statements (the "financial statements") of Stairways (Holdings) Limited for the year ended 31 December 2014 set out on pages 6 to 20. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on pages 2 - 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
-
give a true and fair view of the state of the group's and parent company's affairs as at 31 December 2014 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.
The financial statements of Stairways (Holdings) Limited for the year ended 31 December 2013, were audited by another auditor who expressed an unmodified opinion on those financial statements.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF STAIRWAYS (HOLDINGS) LIMITED
- 5 -
Matters on which we are required to report by exception
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.
for and on behalf of Chapman Worth Limited
Chartered Accountants
Statutory Auditor
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2014
- 6 -
2014
2013
Notes
£
£
Turnover
2
8,812,635
7,980,786
Cost of sales
(6,522,481)
(5,535,876)
Gross profit
2,290,154
2,444,910
Administrative expenses
(1,784,380)
(1,888,994)
Other operating income
27,153
-
Operating profit
3
532,927
555,916
Other interest receivable and similar income
21,653
40,156
Profit on ordinary activities before taxation
3
554,580
596,072
Tax on profit on ordinary activities
4
(132,131)
(135,802)
Profit on ordinary activities after taxation
422,449
460,270
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the profit and loss account.
BALANCE SHEETS
AS AT
31 DECEMBER 2014
- 7 -
Group
Company
2014
2013
2014
2013
Notes
£
£
£
£
Fixed assets
Intangible assets
7
2
2
-
-
Tangible assets
8 & 9
2,374,695
2,484,847
Investments
10
2
2
2,374,699
2,484,851
Current assets
Stocks
11
589,502
515,294
-
-
Debtors
12
1,977,857
1,073,261
Cash at bank and in hand
2,102,454
2,680,132
4,669,813
4,268,687
Creditors: amounts falling due within one year
13
(799,044)
(741,356)
(59,931 )
(143,667 )
Net current assets
3,870,769
3,527,331
Total assets less current liabilities
6,245,468
6,012,182
Provisions for liabilities
14
(45,037)
(43,200)
(42,663 )
(40,255 )
6,200,431
5,968,982
Capital and reserves
Called up share capital
16
1,000
1,000
Profit and loss account
17
6,199,431
5,967,982
Shareholders' funds
18
6,200,431
5,968,982
Approved by the Board and authorised for issue on 20 May 2015
Director
Company Registration No. 02851575
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2014
- 8 -
2014
2013
£
£
£
£
Net cash (outflow)/inflow from operating activities
(226,001)
998,126
Returns on investments and servicing of finance
Interest received
21,653
40,156
Net cash inflow for returns on investments and servicing of finance
21,653
40,156
Taxation
(130,498)
(73,561)
Capital expenditure
Receipts from sales of tangible assets
(51,832)
(152,218)
Net cash inflow/(outflow) for capital expenditure
(51,832)
-
(152,218)
Equity dividends paid
(191,000)
(138,000)
Net cash (outflow)/inflow before management of liquid resources and financing
(577,678)
674,503
(Decrease)/increase in cash in the year
(577,678)
674,503
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2014
- 9 -
1
Reconciliation of operating profit to net cash (outflow)/inflow from operating activities
2014
2013
£
£
Operating profit
532,927
555,915
Depreciation of tangible assets
160,680
176,219
Loss on disposal of tangible assets
1,305
3,237
Increase in stocks
(74,208)
162,148
Increase in debtors
(904,596)
(53,738)
Increase in creditors within one year
57,891
154,345
Net cash (outflow)/inflow from operating activities
(226,001)
998,126
2
Analysis of net funds
1 January 2014
Cash flow
Other non-cash changes
31 December 2014
£
£
£
£
Net cash:
Cash at bank and in hand
2,680,132
(577,678)
-
2,102,454
Net funds
2,680,132
(577,678)
-
2,102,454
3
Reconciliation of net cash flow to movement in net funds
2014
2013
£
£
(Decrease)/increase in cash in the year
(577,678)
674,503
Movement in net funds in the year
(577,678)
674,503
Opening net funds
2,680,132
2,005,627
Closing net funds
2,102,454
2,680,132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
- 10 -
1
Accounting policies
1.1
Accounting convention
No material uncertainties that may cast significant doubt about the ability of the company to continue as a going concern have been identified by the directors. On this basis the accounts have been prepared on a going concern basis.
1.2
Compliance with accounting standards
The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).
1.3
Basis of consolidation
The consolidated profit and loss account and balance sheet include the financial statements of the company and its subsidiary undertakings made up to 31 December 2014. The results of subsidiaries sold or acquired are included in the profit and loss account up to, or from the date control passes. Intra-group sales and profits are eliminated fully on consolidation.
MDF Profiles Limited and Brankbrook Limited are not consolidated in the group financial statements; as they are both dormant companies and exemption has been claimed under S477 and S479A of the Companies Act 2006
1.4
Turnover
1.5
Goodwill
1.6
Tangible fixed assets and depreciation
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
1.7
Leasing
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.8
Investments
Fixed asset investments are stated at cost less provision for diminution in value.
1.9
Stock
Stock is valued at the lower of cost and net realisable value.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
1
Accounting policies
(Continued)
- 11 -
1.10
Pensions
The Group operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.11
Deferred taxation
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
2
Turnover
The total turnover of the group for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
3
Operating profit
2014
2013
£
£
Operating profit is stated after charging:
Depreciation of tangible assets
160,680
176,219
Loss on disposal of tangible assets
1,305
3,237
Operating lease rentals
123,978
134,530
Fees payable to the group's auditor for the audit of the group's annual accounts
10,000
10,000
Additional consultancy work carried out by the auditors
5,695
1,890
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 12 -
4
Taxation
2014
2013
£
£
Domestic current year tax
U.K. corporation tax
130,295
120,223
Adjustment for prior years
-
(1)
Total current tax
130,295
120,222
Deferred tax
Origination and reversal of timing differences
1,836
15,580
1,836
15,580
132,131
135,802
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation
554,580
596,072
Profit on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 21.5% (2013 - 23.25%)
119,235
138,587
Effects of:
Non deductible expenses
839
4,757
Depreciation add back
35,388
43,710
Capital allowances
(20,654)
(45,605)
Adjustments to previous periods
-
(10,275)
Other tax adjustments
(4,513)
(10,952)
11,060
(18,365)
Current tax charge for the year
130,295
120,222
5
Profit for the financial year
As permitted by section 408 Companies Act 2006, the holding company's profit and loss account has not been included in these financial statements. The profit for the financial year is made up as follows:
2014
2013
£
£
Holding company's profit for the financial year
96,099
238,522
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 13 -
6
Dividends
2014
2013
£
£
Ordinary interim paid
191,000
138,000
7
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2014 & at 31 December 2014
2
Net book value
At 31 December 2014
2
At 31 December 2013
2
8
Tangible fixed assets
Group
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 January 2014
2,245,838
869,352
294,753
3,409,943
Additions
-
56,777
450
57,227
Disposals
-
(19,460)
-
(19,460)
At 31 December 2014
2,245,838
906,669
295,203
3,447,710
Depreciation
At 1 January 2014
336,605
596,748
150,723
1,084,076
On disposals
-
(12,758)
-
(12,758)
Charge for the year
44,406
81,698
34,576
160,680
At 31 December 2014
381,011
665,688
185,299
1,231,998
Net book value
At 31 December 2014
1,864,827
240,981
109,904
2,215,712
At 31 December 2013
1,909,233
272,602
144,029
2,325,864
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
8
Tangible fixed assets
(Continued)
- 14 -
Tangible fixed assets
Company
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 January 2014
Additions
-
Disposals
-
(19,460 )
-
(19,460 )
At 31 December 2014
Depreciation
At 1 January 2014
On disposals
-
(12,758 )
-
(12,758 )
Charge for the year
At 31 December 2014
Net book value
At 31 December 2014
At 31 December 2013
9
Tangible fixed assets
Investment properties
Group
Company
£
£
Cost
At 1 January 2014 & at 31 December 2014
158,983
Depreciation
At 1 January 2014 & at 31 December 2014
-
-
Net book value
At 31 December 2014
158,983
The valuations of investment properties were made as at 31 December 2014 by the directors, on an open market basis. No depreciation is provided in respect of these properties.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 15 -
10
Fixed asset investments
Group
Shares in group undertakings
£
Cost
At 1 January 2014 & at 31 December 2014
2
Net book value
At 31 December 2014
2
At 31 December 2013
2
In the opinion of the directors, the aggregate value of the company's investment in subsidiary undertakings is not less than the amount included in the balance sheet.
Company
Shares in group undertakings
£
Cost
At 1 January 2014 & at 31 December 2014
82
Net book value
At 31 December 2014
At 31 December 2013
In the opinion of the directors, the aggregate value of the company's investment in subsidiary undertakings is not less than the amount included in the balance sheet.
Holdings of more than 20%
The company holds more than 20% of the share capital of the following companies:
Company
Country of registration or incorporation
Shares held
Class
%
Subsidiary undertakings
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
The principal activity of these undertakings for the last relevant financial year was as follows:
Principal activity
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
10
Fixed asset investments
(Continued)
- 16 -
11
Stocks
Group
Company
2014
2013
2014
2013
£
£
£
£
Raw materials and consumables
589,502
515,294
-
-
12
Debtors
Group
Company
2014
2013
2014
2013
£
£
£
£
Trade debtors
1,914,423
959,412
Amounts owed by group undertakings
-
-
Other debtors
-
6,549
-
Prepayments and accrued income
63,434
107,300
-
-
1,977,857
1,073,261
13
Creditors : amounts falling due within one year
Group
Company
2014
2013
2014
2013
£
£
£
£
Trade creditors
415,825
385,210
Corporation tax
130,295
130,498
Taxes and social security costs
120,645
55,492
-
Other creditors
20,361
24,830
-
Accruals and deferred income
111,918
145,326
799,044
741,356
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 17 -
14
Provisions for liabilities
Group
Deferred taxation
£
Balance at 1 January 2014
43,201
Profit and loss account
1,836
Balance at 31 December 2014
45,037
Company
Balance at 1 January 2014
40,256
Profit and loss account
2,407
Balance at 31 December 2014
42,663
The deferred tax liability is made up as follows:
Group
Company
2014
2013
2014
2013
£
£
£
£
Accelerated capital allowances
45,037
43,200
15
Pension and other post-retirement benefit commitments
Defined contribution
2014
2013
£
£
Contributions payable by the group for the year
16,695
9,011
16
Share capital
2014
2013
£
£
Allotted, called up and fully paid
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 18 -
17
Statement of movements on profit and loss account
Group
Profit
and loss
account
and loss
account
£
Balance at 1 January 2014
5,967,982
Profit for the year
422,449
Dividends paid
(191,000)
Balance at 31 December 2014
6,199,431
Company
Profit
and loss
account
and loss
account
£
Balance at 1 January 2014
Profit for the year
Dividends paid
(191,000 )
Balance at 31 December 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 19 -
18
Reconciliation of movements in shareholders' funds
2014
2013
Group
£
£
Profit for the financial year
422,449
460,270
Dividends
(191,000)
(138,000)
Net addition to shareholders' funds
231,449
322,270
Opening shareholders' funds
5,968,982
5,646,712
Closing shareholders' funds
6,200,431
5,968,982
2014
2013
Company
£
£
Profit for the financial year
Dividends
(191,000 )
(138,000 )
Net (depletion in)/addition to shareholders' funds
(94,901 )
Opening shareholders' funds
Closing shareholders' funds
19
Financial commitments
At 31 December 2014 the group had annual commitments under non-cancellable operating leases as follows:
Land and buildings
Other
2014
2013
2014
2013
£
£
£
£
Expiry date:
Within one year
225,504
225,504
18,264
22,603
20
Directors' remuneration
2014
2013
£
£
Remuneration
17,037
17,036
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2014
- 20 -
21
Employees
Number of employees
The average monthly number of employees (including directors) during the year was:
2014
2013
Number
Number
Production
69
62
Sales and administration
38
33
107
95
Employment costs
2014
2013
£
£
Wages and salaries
2,211,116
1,914,065
Social security costs
169,474
156,081
Other pension costs
16,695
9,011
2,397,285
2,079,157
22
Related party relationships and transactions
The following directors were paid dividends during the year as outlined in the table below:
2014
2013
£
£
K Wood
95,500
69,000
N Stevens
95,500
69,000
191,000
138,000
Company
Stairways (Holdings) Limited rented plant, machinery and freehold land and buildings to Stairways (Midlands) Limited a subsidiary of the company to the value of £547,491 (2013: £737,303). The company also purchased services from Stairways (Midlands) Limited to the value of £177,848 (2013: £147,734).
At the balance sheet date the company was owed £231,867 (2013:£1,625) from Stairways (Midlands) Limited
23
Control
The ultimate controlling parties are Mr N Stevens and Mrs K Wood as directors and shareholders.