Michael Davies and Associates Limited Company accounts
Michael Davies and Associates Limited Company accounts
COMPANY REGISTRATION NUMBER:
02165614
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Financial Statements |
Year ended 31 December 2020
Contents |
Page |
Strategic report |
1 |
Directors' report |
3 |
Independent auditor's report to the members |
5 |
Statement of income and retained earnings |
9 |
Statement of financial position |
10 |
Notes to the financial statements |
11 |
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Strategic Report |
Year ended 31 December 2020
The directors present their strategic report for the year ended 31 December 2020.
Review of the business
The business is engaged in the procurement and fulfillment of branded point of sale collateral and the storage and fulfillment of certain primary goods for our clients. Following on from a record year of sales in 2019, £44.558m, the impact of Covid-19 can be seen in this year's results with revenue reducing by 20% to £35.478m. Initially, upon the first lockdown on 23 March 2020, there was a sharp drop in activity. This was particularly prevalent with a number of our key clients who are in the Hospitality and Retail sectors. At that stage we prepared a stress test forecast for the remainder of the year and immediately availed of UK Government support in particular the Coronavirus Job Retention Scheme (Furlough). Once we moved through Q2 and restrictions were eased, activity started to pick up and our recent strategic diversification away from our historical core assisted us in recovering to a position whereby from July through to October our revenues were higher than the pre-pandemic months of January and February. The nationwide lockdown from 5 November to 2 December in England reduced activity again but to a much lesser degree than the first lockdown and we finished the year with EBITDA of £3.510m which compares to 2019 of £5.396m and encouragingly compares to the aforementioned stress test forecast which had EBITDA of £1.649m. The operating loss for the year of (£0.962m) compares to an operating profit in 2019 of £1.379m. In both these numbers, within administrative expenses, there is goodwill amortisation of £3.100m. This has obviously no cash impact. We are confident that the strong finish to 2020, given the circumstances, will continue throughout 2021. We are currently in the process of integrating some new significant client wins which continues our diversification strategy as we move further into the burgeoning world of multi channel logistics solutions. We believe that this allied to our current estate of 6 warehouse units approaching capacity and the support of our French group (Staci S.A.S.) puts us in a strong position to continue growing this year and beyond. Rebrand From 1 February 2021 we are now Michael Davies & Associates Ltd t/a Staci rather than t/a mda. We are confident this will help us to win more new business and grow our revenue. In recent months we have seen an increase in interest from existing and prospective clients who want us to support them with their fulfilment and logistics activity across multiple European countries. By rebranding mda as Staci we believe we'll get even more new business opportunities, convert even more of the opportunities we do get, and ultimately generate more revenue to support and grow our UK business.
Principal risks and uncertainties
(i) Liquidity As a result of the pandemic, even more focus was placed on cash management and it has been pleasing that there were no bad debts recorded in the year and cash collection has remained strong with cash of £7.463m at the year end compared to 2019 of £3.715m. The increase in cash has came despite opening warehouse no 6 with a capital investment of £1.4m. We believe that we will continue to generate similar levels of cash and with this and backing from our French Group we will be able to continue to invest in growing the business. (ii) Covid-19 As with most businesses there has been an impact. Our main focus throughout the pandemic has been to ensure that we look after the wellbeing of our colleagues, customers and suppliers. From a trading perspective, the mitigation we have taken and continue to take, on an ongoing basis, is to work closely with our clients to understand their activity levels and to then convert this into a financial forecast to ensure we continue to trade profitably. This has served us well throughout the pandemic and we we have been able to control costs in a timely manner in line with client activity levels. (iii) Brexit While we are seeing some impact, in terms of time, with customs requirements for EU despatches there is no material financial impact on trading. On the contrary, being part of a French group has opened up some opportunities whereby we are being asked to consider servicing clients who now believe it is better to have their UK fulfilment conducted here rather than from the EU.
This report was approved by the board of directors on 4 May 2021 and signed on behalf of the board by:
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Director |
Registered office: |
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Directors' Report |
Year ended 31 December 2020
The directors present their report and the financial statements of the company for the year ended
31 December 2020
.
Directors
The directors who served the company during the year were as follows:
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(Appointed
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(Resigned
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Dividends
The directors do not recommend the payment of a dividend.
Future developments
We continue to have a robust sales pipeline not just in the UK but across Europe thanks to continued support from our French group and with the rebranding of the business to Staci we believe this will open up even more opportunities in particular for clients that are seeking a pan-European solution.
The diversification of the business to become a multi channel logistics solutions provider will continue to be a focus in the months and years ahead, alongside maintaining and growing our historical core marketing fulfilment expertise. As noted in the strategic report, we now have some new significant client wins which are currently being integrated. We believe that with these wins and the re-opening up of the economy it will return us to the pre-pandemic trading levels of 2019.
Employment of disabled persons
Employee involvement
Directors' responsibilities statement
Each of the persons who is a director at the date of approval of this report confirms that:
-
so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on
4 May 2021
and signed on behalf of the board by:
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Director |
Registered office: |
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Independent Auditor's Report to the Members of
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Year ended 31 December 2020
Opinion
Basis for 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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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
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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
Responsibilities of directors
Auditor's responsibilities for the audit of the financial statements
Use of own 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 an auditor's 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.
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(Senior Statutory Auditor) |
For and on behalf of |
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Chartered accountants & statutory auditor |
Sterling House |
501 Middleton Road |
Chadderton |
Oldham |
OL9 9LY |
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Statement of Income and Retained Earnings |
Year ended 31 December 2020
2020 |
2019 |
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Note |
£000 |
£000 |
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Turnover |
4 |
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Cost of sales |
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-------- |
-------- |
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Gross profit |
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Administrative expenses |
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Other operating income |
5 |
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-------- |
-------- |
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Operating (loss)/profit |
6 |
(
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Other interest receivable and similar income |
10 |
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Interest payable and similar expenses |
11 |
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-------- |
-------- |
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(Loss)/profit before taxation |
(
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Tax on (loss)/profit |
12 |
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------- |
------- |
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(Loss)/profit for the financial year and total comprehensive income |
(
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------- |
------- |
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Dividends paid and payable |
13 |
(
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(
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Retained earnings at the start of the year |
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------- |
---- |
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Retained (losses)/earnings at the end of the year |
(
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------- |
---- |
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All the activities of the company are from continuing operations.
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Statement of Financial Position |
2020 |
2019 |
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Note |
£000 |
£000 |
£000 |
£000 |
Fixed assets
Intangible assets |
14 |
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Tangible assets |
15 |
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-------- |
-------- |
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Current assets
Stocks |
16 |
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Debtors |
17 |
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Cash at bank and in hand |
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-------- |
-------- |
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Creditors: amounts falling due within one year |
18 |
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-------- |
-------- |
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Net current assets |
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-------- |
-------- |
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Total assets less current liabilities |
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|||
Creditors: amounts falling due after more than one year |
19 |
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Provisions |
21 |
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-------- |
-------- |
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Net assets |
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-------- |
-------- |
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Capital and reserves
Called up share capital |
25 |
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Profit and loss account |
26 |
(
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-------- |
-------- |
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Shareholders funds |
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-------- |
-------- |
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These financial statements were approved by the
board of directors
and authorised for issue on
4 May 2021
, and are signed on behalf of the board by:
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Director |
Company registration number:
02165614
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Notes to the Financial Statements |
Year ended 31 December 2020
1.
General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is MDA, Walker Park, Blackamoor Road, Blackburn, BB1 2LG.
2.
Statement of compliance
3.
Accounting policies
Basis of preparation
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Staci SAS which are available from head office at ZI du Vert Galant, 36 Avenue du Fond de Vaux, Saint-Ouen-l'Aumône 95310, France. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) Disclosures in respect of each class of share capital have not been presented. (b) No cash flow statement has been presented for the company. (c) Disclosures in respect of financial instruments have not been presented. (d) No disclosure has been given for the aggregate remuneration of key management personnel.
Judgements and key sources of estimation uncertainty
Revenue recognition
Income tax
Operating leases
Goodwill
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill |
- |
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If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Land and buildings |
- |
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Plant and machinery |
- |
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Fixtures and fittings |
- |
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Equipment |
- |
3-10 years straight line
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Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Finance leases and hire purchase contracts
Government grants
Provisions
Financial instruments
Defined contribution plans
4.
Turnover
Turnover arises from:
2020 |
2019 |
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£000 |
£000 |
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Sale of goods |
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Rendering of services |
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-------- |
-------- |
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-------- |
-------- |
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The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5.
Other operating income
2020 |
2019 |
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£000 |
£000 |
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Government grant income |
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------- |
---- |
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6.
Operating profit
Operating profit or loss is stated after charging:
2020 |
2019 |
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£000 |
£000 |
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Amortisation of intangible assets |
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Depreciation of tangible assets |
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Foreign exchange differences |
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Operating lease charges |
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------- |
------- |
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7.
Auditor's remuneration
2020 |
2019 |
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£000 |
£000 |
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Fees payable for the audit of the financial statements |
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---- |
---- |
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8.
Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2020 |
2019 |
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No. |
No. |
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Administrative staff |
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Management staff |
12 |
12 |
Number of sales staff |
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Number of warehouse staff |
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---- |
---- |
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---- |
---- |
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The aggregate payroll costs incurred during the year, relating to the above, were:
2020 |
2019 |
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£000 |
£000 |
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Wages and salaries |
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Social security costs |
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Other pension costs |
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-------- |
-------- |
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-------- |
-------- |
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9.
Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2020 |
2019 |
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£000 |
£000 |
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Remuneration |
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Company contributions to defined contribution pension plans |
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---- |
---- |
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---- |
---- |
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Remuneration of the highest paid director in respect of qualifying services:
2020 |
2019 |
|
£000 |
£000 |
|
Aggregate remuneration |
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Company contributions to defined contribution pension plans |
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---- |
---- |
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---- |
---- |
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10.
Other interest receivable and similar income
2020 |
2019 |
|
£000 |
£000 |
|
Interest on cash and cash equivalents |
|
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---- |
---- |
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11.
Interest payable and similar expenses
2020 |
2019 |
|
£000 |
£000 |
|
Interest on banks loans and overdrafts |
– |
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Interest on obligations under finance leases and hire purchase contracts |
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---- |
---- |
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---- |
---- |
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12.
Tax on (loss)/profit
Major components of tax expense
2020 |
2019 |
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£000 |
£000 |
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Current tax:
UK current tax expense |
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Adjustments in respect of prior periods |
(
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---- |
---- |
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Total current tax |
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---- |
---- |
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Deferred tax:
Origination and reversal of timing differences |
– |
(
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---- |
---- |
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Tax on (loss)/profit |
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---- |
---- |
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Reconciliation of tax expense
The tax assessed on the (loss)/profit on ordinary activities for the year is higher than (2019: higher than) the
standard rate of corporation tax in the UK
of
19
% (2019:
19
%).
2020 |
2019 |
|
£000 |
£000 |
|
(Loss)/profit on ordinary activities before taxation |
(
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---- |
------- |
|
(Loss)/profit on ordinary activities by rate of tax |
(
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|
Adjustment to tax charge in respect of prior periods |
(
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|
Effect of expenses not deductible for tax purposes |
|
|
Effect of capital allowances and depreciation |
(
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(
|
Effect of revenue exempt from tax |
(
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(
|
Effect of goodwill amortisation |
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---- |
------- |
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Tax on (loss)/profit |
|
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---- |
------- |
|
13.
Dividends
2020 |
2019 |
|
£000 |
£000 |
|
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year ) |
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Dividends proposed after the year end and not recognised as a liability |
– |
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---- |
---- |
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14.
Intangible assets
Goodwill |
|
£000 |
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Cost |
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At 1 January 2020 and 31 December 2020 |
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-------- |
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Amortisation |
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At 1 January 2020 |
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Charge for the year |
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-------- |
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At 31 December 2020 |
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-------- |
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Carrying amount |
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At 31 December 2020 |
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-------- |
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At 31 December 2019 |
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-------- |
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15.
Tangible assets
Land and buildings |
Plant and machinery |
Fixtures and fittings |
Equipment |
Assets under construction |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
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Cost |
||||||
At 1 Jan 2020 |
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Additions |
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Transfers |
– |
– |
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– |
(
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– |
------- |
------- |
------- |
---- |
---- |
------- |
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At 31 Dec 2020 |
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------- |
------- |
------- |
---- |
---- |
------- |
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Depreciation |
||||||
At 1 Jan 2020 |
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– |
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Charge for the year |
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– |
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------- |
------- |
------- |
---- |
---- |
------- |
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At 31 Dec 2020 |
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– |
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------- |
------- |
------- |
---- |
---- |
------- |
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Carrying amount |
||||||
At 31 Dec 2020 |
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------- |
------- |
------- |
---- |
---- |
------- |
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At 31 Dec 2019 |
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------- |
------- |
------- |
---- |
---- |
------- |
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The net book value of land and buildings comprises freehold of £1,400,000 (2019: £1,440,000) and short leasehold of £
3,410
00 (2019: £319,000).
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Plant and machinery |
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£000 |
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At 31 December 2020 |
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---- |
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At 31 December 2019 |
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---- |
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16.
Stocks
2020 |
2019 |
|
£000 |
£000 |
|
Raw materials and consumables |
|
|
Work in progress |
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---- |
---- |
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---- |
---- |
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17.
Debtors
2020 |
2019 |
|
£000 |
£000 |
|
Trade debtors |
|
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Amounts owed by group undertakings |
|
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Prepayments and accrued income |
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Other debtors |
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-------- |
-------- |
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-------- |
-------- |
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18.
Creditors:
amounts falling due within one year
2020 |
2019 |
|
£000 |
£000 |
|
Trade creditors |
|
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Amounts owed to group undertakings |
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Accruals and deferred income |
|
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Corporation tax |
|
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Social security and other taxes |
|
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Obligations under finance leases and hire purchase contracts |
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Other creditors |
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-------- |
-------- |
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-------- |
-------- |
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Obligations under finance leases and hire purchase contracts are secured on the assets concerned.
19.
Creditors:
amounts falling due after more than one year
2020 |
2019 |
|
£000 |
£000 |
|
Accruals and deferred income |
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Obligations under finance leases and hire purchase contracts |
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---- |
---- |
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---- |
---- |
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Obligations under finance leases and hire purchase contracts are secured on the assets concerned.
20.
Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2020 |
2019 |
|
£000 |
£000 |
|
Not later than 1 year |
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Later than 1 year and not later than 5 years |
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---- |
---- |
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---- |
---- |
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21.
Provisions
Deferred tax (note 22) |
Dilapidations |
Total |
|
£000 |
£000 |
£000 |
|
At 1 January 2020 |
|
|
|
Additions |
– |
|
|
---- |
------- |
------- |
|
At 31 December 2020 |
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---- |
------- |
------- |
|
22.
Deferred tax
The deferred tax included in the statement of financial position is as follows:
2020 |
2019 |
|
£000 |
£000 |
|
Included in provisions (note 21) |
|
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---- |
---- |
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The deferred tax account consists of the tax effect of timing differences in respect of:
2020 |
2019 |
|
£000 |
£000 |
|
Accelerated capital allowances |
|
|
Provisions |
(
|
(
|
---- |
---- |
|
83 |
83 |
|
---- |
---- |
|
23.
Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £
285,818
(2019: £
264,297
).
24.
Government grants
The amounts recognised in the financial statements for government grants are as follows:
2020 |
2019 |
|
£000 |
£000 |
|
Recognised in creditors:
Deferred government grants due within one year |
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Deferred government grants due after more than one year |
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---- |
---- |
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---- |
---- |
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Recognised in other operating income:
Government grants recognised directly in income |
1,130 |
75 |
Government grants released to profit or loss |
48 |
48 |
------- |
---- |
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------- |
---- |
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25.
Called up share capital
Issued, called up and fully paid
2020 |
2019 |
|||
No. |
£000 |
No. |
£000 |
|
|
|
36,964 |
|
36,964 |
------------- |
-------- |
------------- |
-------- |
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26.
Reserves
27.
Capital commitments
Capital expenditure contracted for but not provided for in the financial statements is as follows:
2020 |
2019 |
|
£000 |
£000 |
|
Tangible assets |
– |
|
---- |
---- |
|
28.
Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2020 |
2019 |
|
£000 |
£000 |
|
Not later than 1 year |
|
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Later than 1 year and not later than 5 years |
|
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Later than 5 years |
|
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-------- |
-------- |
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-------- |
-------- |
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29.
Contingencies
30.
Related party transactions
The company is exempt from disclosing related party transactions as they are with other companies that are wholly owned within the Group.
31.
Controlling party
The company's immediate parent undertaking, and the smallest group in which the results of the company are consolidated is
Staci SAS
, a company incorporated in France. Copies of Staci SAS's financial statements can be obtained from the head office at ZI du Vert Galant, 5/7 Avenue des Gros Chevaux, 95310 Saint-Ouen l'Aumône, France
. The ultimate parent undertaking and largest group in which the results of the company are consolidated was since October 2019 Wilson Holding
(renamed Augusta Progess on April 19th 2021). Copies of their financial statements can be obtained from 5/7 Avenue des Gros Chevaux, ZAC du Vert Galant, 95310 Saint-Ouen l'Aumône, France
. The ultimate controlling party is Ardian France
.