Lane End Developments Construction Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 09948160 (England and Wales)

FOR

Page

Company Information  

1

Strategic Report  

2

Report of the Directors  

5

Report of the Independent Auditors  

7

Income Statement  

10

Other Comprehensive Income  

11

Balance Sheet  

12

Statement of Changes in Equity  

13

Cash Flow Statement  

14

Notes to the Cash Flow Statement  

15

Notes to the Financial Statements

16

DIRECTORS:

Mr Richard James Harrison

Mr Robert Stratton

Mrs Leanne Mutton

REGISTERED OFFICE:

Unit 2

Station Court

Stockport Road

Thelwall

Cheshire

WA4 2GW

REGISTERED NUMBER:

09948160 (England and Wales)

AUDITORS:

Hale Financial Limited

Chartered Accountants

Registered Auditors

Spring Court

Spring Road

Hale

Altrincham

Cheshire

WA14 2UQ

The directors present their strategic report for the year ended 31 May 2021.

REVIEW OF BUSINESS

The Company saw an increase in turnover in the year to 31st May 2021, this was due to the 2 month shut down of the business in the year to May 20 due to COVID-19.  The Company has had steady growth during the year, increasing our workforce from 91 (May 20) to 108 (May 21), this has increased salary costs during the year.

The key financial and non financial performance indicators of the business are as follows:

Financial Key Performance Indicators

31.05.21

31.05.20

£   

£   

Turnover

78,289

67,677

Gross profit

2,404

2,291

Operating profit

411

418

Non-Financial Key Performance Indicators

31.05.21

31.05.20

Average Number of Employees

100

82

Cash at Bank

£5,711,027

£2,064,763

Debtor Days

26 Days

13 Days

Creditor Days

49 Days

39 Days

PRINCIPAL RISKS AND UNCERTAINTIES

The Board of Directors is responsible for assessing and monitoring business risk.  These risks are being mitigated by weekly Director reviews of the Company's performance, potential risks and areas of uncertainty and weekly meetings with key management heads.

Operational risk management

The key operational business risks and uncertainties affecting the Company at this moment are the delays in planning permissions being heard and subsequent site starts delayed due to the impact of the COVID-19.  There is also the risks of delays on sites due to the lack of availability of skilled supply chain and materials manufacturing again caused by COVID-19 and also Brexit.

Due to our unique business model the company is not subject to the risk of open market tendering, as we facilitate all of our opportunities in house alongside our partners within the housing association sector, assisting them to deliver their five year programme, for much needed nationwide affordable homes in line with the agreed £12.4b housing budget set by the government this year.

Financial risk management

The key financial business risks are the uncertainty in the credit insurance market due to COVID-19 and the failure of long-established construction businesses affecting credit availability to our supply chain, subsequent renewed pressure on payment terms, lack of resource within government departments to undertake statutory responsibilities.  These risks have been mitigated by regularly meeting our supply chain and assessing their exposure and effective KPI's.  Aligning ourselves with a diverse client base of AAA rated standard.  Effective monthly debt and credit control measures including cash in and out and ensuring payment terms are adhered to

SECTION 172(1) STATEMENT

Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In furtherance of this, section 172 requires a director to have regard amongst other matters, to the:

- likely consequences of any decisions in the long term;

- interests of the company's employees;

- need to foster the company's business relationships with suppliers, customers and others;

- impact of the company's operations on the community and environment;

- desirability of the company maintaining a reputation for high standards of business conduct; and

- need to act fairly as between members of the company.

In discharging their section 172 duties, the Directors of the Company, have regard to the factors set out above. They also have regard to other factors which they consider relevant to the decision being made. Those factors, for example, include the Company's applicable legal and regulatory obligations.

The Directors acknowledge that every decision taken will not necessarily result in a positive outcome for all of the Company's stakeholders. However, by considering the Lane End Developments Construction Ltd and therefore Company's, purpose, vision and values, together with its strategic priorities, and having agreed processes in place for decision- making, they do aim to ensure that decisions are consistent and appropriate in all circumstances.

As is normal for large companies, authority for day-to-day management of the Company is delegated to senior management, with the setting and oversight of business strategy and related policies, the responsibility of the Directors.

The Company is represented by a Board of Directors. The Board reviews health and safety, financial and operational performance and legal and regulatory compliance at every meeting, in addition to other pertinent areas over the course of the financial year, including: the Company's business strategy; key risks; stakeholder-related matters; diversity and inclusion; environmental matters; corporate responsibility; governance, compliance and legal matters. This is done through the consideration and discussion of reports which are sent in advance of each meeting and through presentations to the Board.

The views of the Company's stakeholders are always considered where appropriate in decision making across the company. The mechanisms which are in place to assist the Directors in understanding relevant views are set out in the Strategic Report. Information is generally provided in a range of different formats including specific reports and presentations on financial and operational performance, non-financial KPIs, with the intended outcome being a rounded understanding of stakeholder issues and concerns.

FUTURE DEVELOPMENTS

The Company has seen an increase in the number of projects and the value of the contracts in the past 12 months which will continue in the future.  The pipeline for the business is secured for the next four years with funding and delivery alongside our key Housing Association partners.

Over the past 12 months we have brought a number of key processes in-house to increase control and mitigate commercial risk within the business.

GOING CONCERN

COVID-19 is not expected to have a significant impact on the entity.  Management has determined that there is no material uncertainty that casts doubt on the entity's ability to continue as a going concern.  It expects that COVID-19 might have some impact, though not significant, for example, in relation to expected future performance, or the effects of delays of materials.

ON BEHALF OF THE BOARD:

Mr Richard James Harrison - Director

6 September 2021

The directors present their report with the financial statements of the company for the year ended 31 May 2021.

PRINCIPAL ACTIVITY

DIVIDENDS

An interim dividend of £915 per share was paid on 31 May 2021. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 May 2021 will be £ 183,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 June 2020 to the date of this report.

Mr Richard James Harrison

Mr Robert Stratton

Mrs Leanne Mutton

ENGAGEMENT WITH EMPLOYEES

It is company's policy that there should be effective communication with all employees who, subject to practical and commercial considerations, should be consulted on and involved in decisions that affect their current jobs and future prospects.

The achievement of this policy has to be treated flexibly in accordance with the varying circumstances and needs of the company but, in all cases, the emphasis is on communication at the local level.

The company actively encourages the promotion of safe working conditions and procedures and the development of practices which secure and enhance the health and welfare at work of employees.

Applications for employment by disabled persons are fully and fairly considered having regard to the abilities of each applicant. Efforts are made to enable any employee who becomes disabled during employment to continue their career with the company. Training, career development and promotion of disabled persons is, as far as possible, identical to that of other employees who are not disabled.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

The Company's stakeholders are people, communities and organisations with an interest or concern in its purpose, strategy, operations and actions, and who in turn, may be affected by them. This includes: shareholders and debt providers; employees; government and regulators; NGOs, communities and civil society; suppliers, contractors and partners; and customers. The perspectives, insights and opinions of stakeholders are recognised as a key factor in the relevant operational, investment and business decisions taken by the Company and its Directors, to ensure that as a whole they are more robust and sustainable.

STREAMLINED ENERGY AND CARBON REPORTING

2021

Energy consumption used to calculate emissions:

38,241KWh

Emissions from combustion of gas tCOze (Scope 1)  

1.46

Emissions from combustion of fuel for transport purposes tCOze (Scope 1)

12.94

Emissions from purchased electricity tCOze (Scope 2)  

10.95

Total gross tCO2e based on above    

25.05

Intensity ratio: tCOze gross figure based from mandatory fields above/£lm

revenue    

0.32  

The energy and carbon footprint cover Scope 1, 2 and selected Scope 3 emissions for the year ended 31 May 2021 in respect of the company which falls within the scope of the energy and carbon reporting requirements. The footprint is calculated in accordance with the Greenhouse Gas (GHG) Protocol. Outputs are in kWh & CO2e using the most up to date conversion factors issued by the National Energy Foundation (NEF).

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

AUDITORS

The auditors,  Hale Financial Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr Richard James Harrison - Director

6 September 2021

Opinion

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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 this gives rise to a material misstatement in the financial statements themselves. 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 six, 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We assess the internal controls in operation and their suitability to the size of the business. We assess the influence of directors and management in the operation of the business and in the preparation of the financial statements. We seek documentary evidence to support the figures in the financial statements and design tests to provide comfort on the reliability of the internal controls. We perform an analytical review of the figures in the financial statements.

Given the nature of the entity's operations, we believe that these procedures provide reasonable assurance that irregularities in the financial statements will be detected.

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.

ANTHONY KNOWLES (Senior Statutory Auditor)

for and on behalf of Hale Financial Limited

Chartered Accountants

Registered Auditors

Spring Court

Spring Road

Hale

Altrincham

Cheshire

WA14 2UQ

6 September 2021

TURNOVER

78,289,700

67,677,250

Cost of sales

75,884,806

65,385,687

GROSS PROFIT

2,404,894

2,291,563

Administrative expenses

2,075,118

2,263,190

329,776

28,373

Other operating income

81,428

389,716

OPERATING PROFIT

4

411,204

418,089

Interest payable and similar expenses

5

2,091

6,722

PROFIT BEFORE TAXATION

409,113

411,367

Tax on profit

6

27,305

13,887

PROFIT FOR THE FINANCIAL YEAR

381,808

397,480

PROFIT FOR THE YEAR

381,808

397,480

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME

FOR THE YEAR

381,808

397,480

FIXED ASSETS

Tangible assets

8

403,625

405,517

CURRENT ASSETS

Stocks

9

3,974,705

2,520,819

Debtors

10

13,251,225

7,188,841

Cash at bank and in hand

5,711,227

2,064,763

22,937,157

11,774,423

CREDITORS

Amounts falling due within one year

11

20,904,984

10,412,626

NET CURRENT ASSETS

2,032,173

1,361,797

TOTAL ASSETS LESS CURRENT

LIABILITIES

2,435,798

1,767,314

CREDITORS

Amounts falling due after more than one

year

12

(1,012,759

)

(533,258

)

PROVISIONS FOR LIABILITIES

15

(67,223

)

(77,048

)

NET ASSETS

1,355,816

1,157,008

CAPITAL AND RESERVES

Called up share capital

16

200

200

Retained earnings

17

1,355,616

1,156,808

SHAREHOLDERS' FUNDS

19

1,355,816

1,157,008

The financial statements were approved by the Board of Directors and authorised for issue on 6 September 2021 and were signed on its behalf by:

Mr Richard James Harrison - Director

Called up

share

Retained

Total

capital

earnings

equity

£   

£   

£   

Balance at 1 June 2019

200

850,628

850,828

Changes in equity

Dividends

-

(91,300

)

(91,300

)

Total comprehensive income

-

397,480

397,480

Balance at 31 May 2020

200

1,156,808

1,157,008

Changes in equity

Dividends

-

(183,000

)

(183,000

)

Total comprehensive income

-

381,808

381,808

Balance at 31 May 2021

200

1,355,616

1,355,816

Cash flows from operating activities

Cash generated from operations

1

4,188,359

(1,526,806

)

Interest paid

(654

)

(5,621

)

Interest element of hire purchase payments

paid

(1,437

)

(1,101

)

Tax paid

(12

)

-

Net cash from operating activities

4,186,256

(1,533,528

)

Cash flows from investing activities

Purchase of tangible fixed assets

(94,790

)

(88,937

)

Sale of tangible fixed assets

1,275

-

Net cash from investing activities

(93,515

)

(88,937

)

Cash flows from financing activities

Capital repayments in year

49,413

(7,947

)

Amount withdrawn by directors

3,170

830

Equity dividends paid

(183,000

)

(91,300

)

Net cash from financing activities

(130,417

)

(98,417

)

Increase/(decrease) in cash and cash equivalents

3,962,324

(1,720,882

)

Cash and cash equivalents at beginning of

year

2

2,064,763

3,815,547

Cash and cash equivalents at end of year

2

5,711,227

2,064,763

1.

RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM

OPERATIONS

31.5.21

31.5.20

£   

£   

Profit before taxation

409,113

411,367

Depreciation charges

95,405

89,000

Finance costs

2,091

6,722

506,609

507,089

Increase in stocks

(1,453,886

)

(757,091

)

(Increase)/decrease in trade and other debtors

(5,746,510

)

4,522,622

Increase/(decrease) in trade and other creditors

10,882,146

(5,799,426

)

Cash generated from operations

4,188,359

(1,526,806

)

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 May 2021

31.5.21

1.6.20

£   

£   

Cash and cash equivalents

5,711,227

2,064,763