Integrated Technical Solutions Group - Limited company accounts 20.1

REGISTERED NUMBER: 11869494 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

FOR

INTEGRATED TECHNICAL SOLUTIONS GROUP

LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Director

5

Report of the Independent Auditors

6

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTOR:

Mr G L Cardinal

SECRETARY:

Mrs K M Cardinal

REGISTERED OFFICE:

West Farm House

Cams Hall Estate

Fareham

PO16 8UT

REGISTERED NUMBER:

11869494 (England and Wales)

AUDITORS:

Gibson Whitter Limited

Statutory Auditors

Larch House

Parklands Business Park

Denmead

Hampshire

PO7 6XP

The director presents his strategic report of the company and the group for the year ended 30 September 2021.

REVIEW OF BUSINESS

In 2021 the business like many others found its-self-navigating an uncertain business environment / economy due to further restrictions and uncertainty around COVID.

This disruption resulted in many office spaces in London continuing to operate at 10-15% occupancy for most of the year and much capital spend was pulled back. Although, some customers did use this opportunity to upgrade their capital plant and workspaces, which helped with additional project works.

The leadership navigated another challenging year, which resulted in a further 9% net growth and 53% cumulative net growth over the 2 years trading with COVID restrictions and low building occupancy levels.

We have noticed that trends with our customers are shifting heavily towards Environmental, Social & Governance (ESG) best practices and our ability to be a responsible business, whilst working towards the United Nations sustainable development goals (SGDs) is crucial for future growth and alliances and customers look to select responsible partners.

Our strategic focus remains to continue the development of data led maintenance and strengthening our ESG credentials to better support our customers with decarbonization of their properties.

The results of the Group show a pre-tax profit of £2,066,144 (2020: £1,647,391) from sales of £28,891,056 (2020: £26,534,026) and which after dividends brings the Shareholders' Funds to £2,770,076 (2020: £1,741,717).

Business Environment and Future Outlook

Our outlook for 2022 has to remain controlled as we still do not know the full effects of COVID, and what will change when our customers return fully to their office spaces.

That said, we have worked hard in 2021 to ensure that we are well balance to support their future needs, with better technology, more self-delivery and a focus on our sustainability to ensure we are Net Zero Carbon by 2025.

We have launched our group sustainability strategy document of Act Responsible, Think Sustainable which outlines our approach and what UN SDGs we are working towards.

We focus on providing innovative and business focused maintenance programmes that 'best fit' our clients' needs and constantly review latest technology to incorporate into our programmes to provide enhanced and cost-effective service models.

Our strong cash management and two strategic investments in 2020, in the remote monitoring and HVAC self-delivery business has placed Platinum, as the main Group Brand, in a much stronger position and given it greater depth and greater control to deliver the highest standards to our customers. We will continue to invest in self delivery throughout 2022, with a strong focus on water treatment.

REVIEW OF BUSINESS

Strategy

The Group strategy is to achieve sustainable and profitable organic growth in its core business of MEPF maintenance delivered through the four operating platforms of Platinum Technical, Platinum Fabric, Platinum Projects and Platinum Energy and to build wider capability to self deliver as much as possible supplemented by the management and delivery of wider general facilities services in partnership with selected service sub-contractors. This will be achieved through continued alignment to our Company vision, mission and values.

Key elements of this strategy are:

-

Technology and Innovation - Our services will be technology led to ensure that we optimise efficiency and drive value to our customers through a best-in-class approach and have an ability to optimise management information (MI) reporting at a touch of a button.

-

Client relationships - We work closely with our clients to deliver a cost effective, flexible and compliant service, with a focus on introducing innovation and new technology where appropriate. Client retention and contract renewals remain very important as the base for growth whilst enhancing the Company's reputation. Director and senior management contact with clients are a top priority.

-

Staff recruitment and retention - We aim to be an employer of choice and recognised in the market as providing development opportunities, competitive terms, conditions and benefits.

-

Risk Management - We continue to operate with strong management controls and analysis and management of risk together with proactive credit control and cash collection.

-

Self-Delivery - We continue to develop existing staff and recruit new staff with broader skills to enable greater self-delivery of services and less reliance on specialist subcontractors. Following NICEIC accreditation and certification we have created a business unit to self-deliver electrical project works, electrical testing and inspections.

-

Supply chain relationships and management - We select and engage specialist service subcontractors who share our commitment to deliver cost effective client focused services.

KPI's

The Board monitors progress on the Group strategy and the individual strategic elements by reference to KPI's.

Which are:

-

Growth in sales at Business Unit and Contract Levels - An increasing backlog of secured base maintenance - Additional works and projects

-

Gross Margin at Business Unit and Contract Levels - An improvement of base maintenance profitability percentages - Additional works and projects

-

Control and management of overhead costs

-

Client satisfaction and senior level contact

-

Achievement of Health and Safety targets and objectives

-

Achievement of Environmental and Quality targets and objectives

-

Employee retention

-

Specialist sub-contractor performance

-

Cash flow - Actual against budget

-

WIP (work in progress) and debt management - Sales invoice generation and payment turnaround

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy are subject to several risks: -

-

Retention of existing contracts at renewal.

-

Increased competition - Large Facilities Management companies acquiring smaller/medium size maintenance companies and chasing greater market share.

-

Key staff retention as competitors look to acquire skills.

-

Increased pressure on margins, and some competitors 'buying' turnover.

-

Existing clients getting into financial difficulties.

Objectives and policies

Protecting customers, staff and supply partners, in their environment, in an efficient, ethical and sustainable manner are the Group's key objectives. To date the Group is proud to have had zero serious incidents. The board and senior management team are responsible for developing policies and procedures, supported by the Managers. All employees and supply partners are made fully aware of their responsibilities to operate and maintain operating procedures with safety, health, environment & quality being paramount. Each contract starts with undertaking detailed analysis to build a specific operational risk profile for each built environment.

The Group has a tailored Integrated Management System, independently assessed and accredited to meet the exacting standards of ISO 9001, ISO 14001, ISO 45001, ISO 55001, SAFE contractor and Contractors Health & Safety Assessment Scheme (CHAS). In 2022 we will be adding to these with ISO 50001 and ISO 20400.

The Group has designed a bespoke web-enabled operating and delivery model for their clients that creates a system of templated standardised policies and procedures across specific contracts that is built upon our UKAS certified ISO 550001, branding it 'Platinum Business Focused Maintenance'(PBFM). However regular/recurring service contracts are based around the Building Engineering Services Association industry standard Building and Engineering Services SFG20 prescribed maintenance schedules. The approach also adopts The Building Services Research and Information Association 'soft landings' framework. These systems are reinforced by a central helpdesk for all staff and customers; integrated tablet technology at remote customer locations; regular internal auditing; training programmes; and an online safety, health, environment & quality risk register and energy dashboard for all contracts.

ON BEHALF OF THE BOARD:

Mr G L Cardinal - Director

25 March 2022

The director presents his report with the financial statements of the company and the group for the year ended 30 September 2021.

DIVIDENDS

The total distribution of dividends for the year ended 30 September 2021 will be £580,000.

DIRECTORS

Mr G L Cardinal has held office during the whole of the period from 1 October 2020 to the date of this report.

Other changes in directors holding office are as follows:

Mrs K M Cardinal - resigned 30 January 2021

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he 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 group's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

Mr G L Cardinal - Director

25 March 2022

Opinion

We have audited the financial statements of Integrated Technical Solutions Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2021 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 group's and of the parent company affairs as at 30 September 2021 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.

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 group 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 director's 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 group's and the parent 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Director 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director.

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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page five, the director is 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 director determines 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 director is responsible for assessing the group's and the parent 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 director either intends to liquidate the group or the parent company or to cease operations, or has 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.

We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.

Procedures performed by the group audit team included:

-

Discussions with management regarding known or suspected instances of non-compliance with laws and regulations; and

-

Assessing journals entries as part of our planned audit approach. Evaluation of management incentives and opportunities for fraudulent manipulation of the financial statements including management override, and considering that the principal risk were related to the posting of inappropriate journal entries to improve the result before tax for the year.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all of our audits we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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.

Gavin Whitter (Senior Statutory Auditor)

for and on behalf of Gibson Whitter Limited

Statutory Auditors

Larch House

Parklands Business Park

Denmead

Hampshire

PO7 6XP

25 March 2022

TURNOVER

3

28,891,056

26,534,026

Cost of sales

23,528,150

22,793,172

GROSS PROFIT

5,362,906

3,740,854

Administrative expenses

3,369,518

2,050,960

1,993,388

1,689,894

Other operating income

341,567

303,383

OPERATING PROFIT

5

2,334,955

1,993,277

Interest receivable and similar income

146

169

2,335,101

1,993,446

Interest payable and similar expenses

7

268,957

346,055

PROFIT BEFORE TAXATION

2,066,144

1,647,391

Tax on profit

8

443,628

360,962

PROFIT FOR THE FINANCIAL YEAR

1,622,516

1,286,429

Profit attributable to:

Owners of the parent

1,586,524

1,286,429

Non-controlling interests

35,992

-

1,622,516

1,286,429

PROFIT FOR THE YEAR

1,622,516

1,286,429

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,622,516

1,286,429

Total comprehensive income attributable to:

Owners of the parent

1,586,524

1,286,429

Non-controlling interests

35,992

-

1,622,516

1,286,429

FIXED ASSETS

Intangible assets

11

3,692,068

3,902,044

Tangible assets

12

377,649

368,988

Investments

13

-

-

4,069,717

4,271,032

CURRENT ASSETS

Debtors

14

7,529,458

6,004,485

Cash at bank

1,362,430

1,584,519

8,891,888

7,589,004

CREDITORS

Amounts falling due within one year

15

9,052,730

7,394,475

NET CURRENT (LIABILITIES)/ASSETS

(160,842

)

194,529

TOTAL ASSETS LESS CURRENT LIABILITIES

3,908,875

4,465,561

CREDITORS

Amounts falling due after more than one year

16

(1,102,371

)

(2,679,250

)

PROVISIONS FOR LIABILITIES

21

(36,428

)

(44,594

)

NET ASSETS

2,770,076

1,741,717

CAPITAL AND RESERVES

Called up share capital

22

110

110

Share premium

23

529,900

529,900

Retained earnings

23

2,218,231

1,211,707

SHAREHOLDERS' FUNDS

2,748,241

1,741,717

NON-CONTROLLING INTERESTS

24

21,835

-

TOTAL EQUITY

2,770,076

1,741,717

The financial statements were approved and authorised for issue by the director and authorised for issue on 25 March 2022 and were signed by:

Mr G L Cardinal - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

6,984,051

6,983,961

6,984,051

6,983,961

CURRENT ASSETS

Debtors

14

550,000

10

Cash at bank

127,953

1,445,532

677,953

1,445,542

CREDITORS

Amounts falling due within one year

15

4,169,251

4,183,917

NET CURRENT LIABILITIES

(3,491,298

)

(2,738,375

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,492,753

4,245,586

CREDITORS

Amounts falling due after more than one year

16

1,102,371

2,679,250

NET ASSETS

2,390,382

1,566,336

CAPITAL AND RESERVES

Called up share capital

22

110

110

Share premium

23

529,900

529,900

Retained earnings

23

1,860,372

1,036,326

SHAREHOLDERS' FUNDS

2,390,382

1,566,336

Company's profit for the financial year

1,404,046

1,224,249

The financial statements were approved and authorised for issue by the director and authorised for issue on 25 March 2022 and were signed by:

Mr G L Cardinal - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 October 2019

100

148,612

529,900

Changes in equity

Issue of share capital

10

-

-

Dividends

-

(223,334

)

-

Total comprehensive income

-

1,286,429

-

Balance at 30 September 2020

110

1,211,707

529,900

Changes in equity

Dividends

-

(580,000

)

-

Total comprehensive income

-

1,586,524

-

110

2,218,231

529,900

Acquisition of non-controlling interest

-

-

-

Balance at 30 September 2021

110

2,218,231

529,900

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1 October 2019

678,612

-

678,612

Changes in equity

Issue of share capital

10

-

10

Dividends

(223,334

)

-

(223,334

)

Total comprehensive income

1,286,429

-

1,286,429

Balance at 30 September 2020

1,741,717

-

1,741,717

Changes in equity

Dividends

(580,000

)

(14,167

)

(594,167

)

Total comprehensive income

1,586,524

35,992

1,622,516

2,748,241

21,825

2,770,066

Acquisition of non-controlling interest

-

10

10

Balance at 30 September 2021

2,748,241

21,835

2,770,076

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 October 2019

100

35,410

529,900

565,410

Changes in equity

Issue of share capital

10

-

-

10

Dividends

-

(223,333

)

-

(223,333

)

Total comprehensive income

-

1,224,249

-

1,224,249

Balance at 30 September 2020

110

1,036,326

529,900

1,566,336

Changes in equity

Dividends

-

(580,000

)

-

(580,000

)

Total comprehensive income

-

1,404,046

-

1,404,046

Balance at 30 September 2021

110

1,860,372

529,900

2,390,382

Cash flows from operating activities

Cash generated from operations

1

1,726,997

3,626,931

Interest paid

(268,957

)

(346,055

)

Tax paid

(313,491

)

(241,217

)

Net cash from operating activities

1,144,549

3,039,659

Cash flows from investing activities

Purchase of tangible fixed assets

(138,561

)

(216,585

)

New loan to connected company in year

(550,000

)

-

Interest received

146

169

Net cash from investing activities

(688,415

)

(216,416

)

Cash flows from financing activities

New loans in year

1,422,801

49,041

Loan repayments in year

(1,506,867

)

(1,212,446

)

Share issue

-

10

Share issue to minority interest

10

-

Equity dividends paid

(594,167

)

(223,334

)

Net cash from financing activities

(678,223

)

(1,386,729

)

(Decrease)/increase in cash and cash equivalents

(222,089

)

1,436,514

Cash and cash equivalents at beginning of year

2

1,584,519

148,005

Cash and cash equivalents at end of year

2

1,362,430

1,584,519

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

30.9.21

30.9.20

£

£

Profit before taxation

2,066,144

1,647,391

Depreciation charges

339,876

290,577

Finance costs

268,957

346,055

Finance income

(146

)

(169

)

2,674,831

2,283,854

(Increase)/decrease in trade and other debtors

(1,216,190

)

129,261

Increase in trade and other creditors

268,356

1,213,816

Cash generated from operations

1,726,997

3,626,931

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 30 September 2021

30.9.21

1.10.20

£

£

Cash and cash equivalents

1,362,430

1,584,519

Year ended 30 September 2020

30.9.20

1.10.19

£

£

Cash and cash equivalents

1,584,519

148,005

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.10.20

Cash flow

At 30.9.21

£

£

£

Net cash

Cash at bank

1,584,519

(222,089

)

1,362,430

1,584,519

(222,089

)

1,362,430

Debt

Debts falling due within 1 year

(607,496

)

(1,492,813

)

(2,100,309

)

Debts falling due after 1 year

(2,679,250

)

1,576,879

(1,102,371

)

(3,286,746

)

84,066

(3,202,680

)

Total

(1,702,227

)

(138,023

)

(1,840,250

)