Wheeler Electrical Limited - Limited company accounts 20.1

REGISTERED NUMBER: 00801027 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2021

FOR

WHEELER ELECTRICAL LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

9

Other Comprehensive Income

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Statement of Cash Flows

13

Notes to the Statement of Cash Flows

14

Notes to the Financial Statements

16

DIRECTORS:

E D Wheeler

C P Wheeler

REGISTERED OFFICE:

Church View Chambers

38 Market Square

Toddington

Bedfordshire

LU5 6BS

REGISTERED NUMBER:

00801027 (England and Wales)

AUDITORS:

Landers Accountants Ltd

Church View Chambers

38 Market Square

Toddington

Bedfordshire

LU5 6BS

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

REVIEW OF BUSINESS

The principal activity of the company in the year under review was that of electrical installation.

Results and performance

At the start of the financial year our turnover was still recovering from the first Covid-19 lockdown, but by August 2020 most of the sites where we were working had reopened and our turnover quickly recovered and ended 2020 very strongly. The construction industry and its supply chain was permitted to operate during the winter lockdown therefore our business was not adversely impacted, and turnover continued strongly into 2021. In a time of unprecedented challenge for everyone we were able to achieve a turnover for the financial year in excess of £13 million, and to do so with a strong gross profit return.

Demand for housebuilding has been strong in 2021 and should remain strong for some time. The industry as a whole remains competitive and there is pressure on margins from increasing material and labour costs, but the company is in a good position. We have reviewed our processes to allow us to purchase more efficiently and improve our pricing competitiveness, and we are continually developing our internal control and reporting processes to drive efficiency.

Our order book is strong and we are well placed to manage our way through short term difficulties. Our cashflow has remained strong during the year and throughout the lockdown period, and our supply chain has remained robust.

In our opinion the key financial performance indicators are as follows;

2021

2020

2019

Gross profit ratio

21.42%

21.88%

20.32%

Net profit ratio

9.92%

9.32%

11.08%

Turnover

£13,864,953

£10,454,235

£14,268,771

Turnover growth

32.63%

-26.73%

36.59%

PRINCIPAL RISKS AND UNCERTAINTIES

All major house builders continue to report that demand in the housing market and house price inflation continues to be robust, and forecast house building starts are expected to continue to rise in 2021 and 2022, despite the end of the Stamp Duty holiday and changes to the Help to Buy schemes in 2021. The outlook is particularly strong for houses outside major cities, owing to shifts in working patterns, and is likely to remain so for the short to medium term according to house builders.

The key risks in the coming months are:

- A further wave of COVID-19 infections and partial reintroduction of lockdown restrictions over the winter months disrupts work on-sites and the recovery in project starts

- supply constraints on building materials slowing progress on construction sites

- potential shortage of skilled labour

- increasing costs for materials and labour impacting profitability on fixed price contracts

- uncertainty over the impact of the end of government stimulus and policy measures on 30 September 2021 in relation to the wider economy

- weaker economic performance being reflected in the wider housing market, and curbing private housing starts.

The longer-term outlook for the housebuilding industry remains positive, with 2022 forecast to be a strong year for the construction industry and continued growth expected in the following 3 years.

ON BEHALF OF THE BOARD:

E D Wheeler - Director

25 January 2022

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

DIVIDENDS

The total distribution of dividends for the year ended 31 May 2021 will be £218,800 (2020: £496,657).

DIRECTORS

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

E D Wheeler

C P Wheeler

POLITICAL DONATIONS AND EXPENDITURE

During the year, the company made no political donations.

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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Landers Accountants Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

E D Wheeler - Director

25 January 2022

Opinion

We have audited the financial statements of Wheeler Electrical Limited (the 'company') for the year ended 31 May 2021 which comprise the Income Statement, Other 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 31 May 2021 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- Results of our enquiries of management about their own identification and assessment of the risks of irregularities;

- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.

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.

Robert Brown (Senior Statutory Auditor)

for and on behalf of Landers Accountants Ltd

Church View Chambers

38 Market Square

Toddington

Bedfordshire

LU5 6BS

25 January 2022

REVENUE

13,864,953

10,454,235

Cost of sales

10,895,730

8,167,140

GROSS PROFIT

2,969,223

2,287,095

Administrative expenses

1,787,197

1,569,640

1,182,026

717,455

Other operating income

3

193,026

256,724

OPERATING PROFIT

5

1,375,052

974,179

Interest receivable and similar income

36

1,000

1,375,088

975,179

Interest payable and similar expenses

6

35,918

30,013

PROFIT BEFORE TAXATION

1,339,170

945,166

Tax on profit

7

256,712

209,366

PROFIT FOR THE FINANCIAL YEAR

1,082,458

735,800

PROFIT FOR THE YEAR

1,082,458

735,800

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,082,458

735,800

FIXED ASSETS

Property, plant and equipment

9

864,609

590,345

CURRENT ASSETS

Inventories

10

60,000

55,000

Debtors

11

4,202,432

1,916,757

Cash at bank and in hand

951,874

1,529,123

5,214,306

3,500,880

CREDITORS

Amounts falling due within one year

12

2,826,877

1,788,947

NET CURRENT ASSETS

2,387,429

1,711,933

TOTAL ASSETS LESS CURRENT LIABILITIES

3,252,038

2,302,278

CREDITORS

Amounts falling due after more than one year

13

(672,593

)

(622,013

)

PROVISIONS FOR LIABILITIES

17

(133,954

)

(98,412

)

NET ASSETS

2,445,491

1,581,853

CAPITAL AND RESERVES

Called up share capital

18

110

130

Capital redemption reserve

19

105

85

Retained earnings

19

2,445,276

1,581,638

SHAREHOLDERS' FUNDS

2,445,491

1,581,853

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 25 January 2022 and were signed on its behalf by:

E D Wheeler - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 June 2019

100

1,342,495

85

1,342,680

Changes in equity

Issue of share capital

30

-

-

30

Dividends

-

(496,657

)

-

(496,657

)

Total comprehensive income

-

735,800

-

735,800

Balance at 31 May 2020

130

1,581,638

85

1,581,853

Changes in equity

Issue of share capital

(20

)

-

-

(20

)

Dividends

-

(218,800

)

-

(218,800

)

Total comprehensive income

-

1,082,438

20

1,082,458

Balance at 31 May 2021

110

2,445,276

105

2,445,491

Cash flows from operating activities

Cash generated from operations

1

461,070

1,081,737

Interest paid

(10,194

)

(6,892

)

Interest element of hire purchase payments paid

(25,724

)

(23,121

)

Tax paid

(445,123

)

(35,812

)

Net cash from operating activities

(19,971

)

1,015,912

Cash flows from investing activities

Purchase of tangible fixed assets

(588,906

)

(270,719

)

Sale of tangible fixed assets

136,340

134,042

Interest received

36

1,000

Net cash from investing activities

(452,530

)

(135,677

)

Cash flows from financing activities

New loans in year

-

400,000

Loan repayments in year

(63,158

)

-

Capital repayments in year

177,230

82,270

Amount introduced by directors

14,204

6,084

Amount withdrawn by directors

(14,204

)

(6,084

)

Share issue

(20

)

30

Equity dividends paid

(218,800

)

(496,657

)

Net cash from financing activities

(104,748

)

(14,357

)

(Decrease)/increase in cash and cash equivalents

(577,249

)

865,878

Cash and cash equivalents at beginning of year

2

1,529,123

663,245

Cash and cash equivalents at end of year

2

951,874

1,529,123

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

31.5.21

31.5.20

£

£

Profit before taxation

1,339,170

945,166

Depreciation charges

174,259

131,451

Loss on disposal of fixed assets

4,043

32,568

Increase/(Decrease) in group company

(415,209

)

(253,900

)

Finance costs

35,918

30,013

Finance income

(36

)

(1,000

)

1,138,145

884,298

Increase in inventories

(5,000

)

(14,500

)

(Increase)/decrease in trade and other debtors

(1,868,466

)

999,403

Increase/(decrease) in trade and other creditors

1,196,391

(787,464

)

Cash generated from operations

461,070

1,081,737

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 31 May 2021

31.5.21

1.6.20

£

£

Cash and cash equivalents

951,874

1,529,123

Year ended 31 May 2020

31.5.20

1.6.19

£

£

Cash and cash equivalents

1,529,123

663,245

3.	ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1.6.20

Cash flow

At 31.5.21

£

£

£

Net cash

Cash at bank and in hand

1,529,123

(577,249

)

951,874

1,529,123

(577,249

)

951,874

Debt

Finance leases

(370,247

)

(177,230

)

(547,477

)

Debts falling due within 1 year

(63,158

)

(21,053

)

(84,211

)

Debts falling due after 1 year

(336,842

)

84,211

(252,631

)

(770,247

)

(114,072

)

(884,319

)

Total

758,876

(691,321

)

67,555

1.	STATUTORY INFORMATION

Wheeler Electrical Limited is a private company, limited by shares, registered in England and Wales. Its registered office is Church View Chambers, 38 Market Square, Toddington, Bedfordshire, LU5 6BS.

Its principal place of business is Unit 3-4, Blackmoore Business Park, New Road, Maulden, MK45 2BG.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention and on a going concern basis.

Turnover

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

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.

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

All fixed assets are initially recorded at cost.

Inventories

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

Financial instruments are classified by the directors as basic or advanced following the conditions in FRS102 Section 11. Basic financial instruments are recognised at amortised cost using the effective interest method.

Taxation

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

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.

Lease modifications provided by the lessor to the lessee are recognised in the period benefiting from the payment holiday.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.	OTHER OPERATING INCOME

31.5.21

31.5.20

£

£

Sundry receipts

4,198

-

Government grants

188,828

256,724

193,026

256,724

The company received government grants of £178,378 (2020: £256,724) under the Coronavirus Job Retention Scheme to compensate for employees placed on furlough. £2,344 (2020: £nil) was also received this year under the Coronavirus Statutory Sick Pay Rebate Scheme and a £8,105 (2020: £nil) Coronavirus Business Interruption Loan to cover the first 9 months' interest charge.

There are no unfulfilled conditions or other contingencies attached to these grants.

4.	EMPLOYEES AND DIRECTORS

31.5.21

31.5.20

£

£

Wages and salaries

2,580,858

2,360,580

Social security costs

239,797

227,917

Other pension costs

65,776

63,478

2,886,431

2,651,975

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

31.5.21

31.5.20

Number of directors

2

2

Number of operational staff

80

79

82

81

31.5.21

31.5.20

£

£

Directors' remuneration

53,147

58,365

Directors' pension contributions to money purchase schemes

4,000

10,000

5.	OPERATING PROFIT

The operating profit is stated after charging:

31.5.21

31.5.20

£

£

Hire of plant and machinery

9,870

13,724

Depreciation - owned assets

35,566

49,077

Depreciation - assets on hire purchase contracts

138,693

82,374

Loss on disposal of fixed assets

4,043

32,568

Auditors' remuneration

5,000

5,000

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.5.21

31.5.20

£

£

Bank interest

8,105

2,704

Interest on corporation tax

2,089

4,188

Hire purchase

25,724

23,121

35,918

30,013

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.5.21

31.5.20

£

£

Current tax:

UK corporation tax

221,170

191,502

Deferred tax

35,542

17,864

Tax on profit

256,712

209,366

UK corporation tax has been charged at 19% (2020 - 19%).

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.5.21

31.5.20

£

£

Profit before tax

1,339,170

945,166

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

254,442

179,582

Effects of:

Expenses not deductible for tax purposes

2,269

13,841

Depreciation in excess of capital allowances

35,542

1,852

Deferred tax: origination and reversal of timing differences

(35,541

)

14,091

Total tax charge

256,712

209,366

8.

DIVIDENDS

31.5.21

31.5.20

£

£

Ordinary shares of £1 each

Interim

198,000

480,000

Ordinary A shares of £1 each

Interim

14,000

11,300

Ordinary B shares of £1 each

Interim

6,800

5,357

218,800

496,657