Road Maintenance Services (Holdings) Limited Group accounts (Group and Company)

Road Maintenance Services (Holdings) Limited Group accounts (Group and Company)

ROAD MAINTENANCE SERVICES (HOLDINGS) LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: 00437756
Road Maintenance Services (Holdings) Limited
Financial Statements
31 December 2022
Road Maintenance Services (Holdings) Limited
Financial Statements
Year ended 31 December 2022
Contents
Pages
Officers and professional advisers
1
Strategic report
2 to 3
Directors' report
4 to 5
Independent auditor's report to the members
6 to 9
Consolidated statement of comprehensive income
10
Consolidated statement of financial position
11
Company statement of financial position
12
Consolidated statement of changes in equity
13 to 14
Company statement of changes in equity
15 to 16
Consolidated statement of cash flows
17
Notes to the financial statements
18 to 29
Road Maintenance Services (Holdings) Limited
Officers and Professional Advisers
The board of directors
Stephen J Barlow
Gregory W Barlow
Jonathan Chorlton
Andrew P Holland
Company secretary
Stephen J Barlow
Registered office
Mowpen Brow
High Legh
Knutsford
Cheshire
WA16 6PB
Auditor
Downham Mayer Clarke Limited
Chartered Accountants & Statutory Auditor
41 Greek Street
Stockport
Cheshire
SK3 8AX
Bankers
Lloyds TSB Bank plc
53 King Street
Manchester
M2 4LQ
Road Maintenance Services (Holdings) Limited
Strategic Report
Year ended 31 December 2022
Road Maintenance Services (Holdings) Limited is a family business which is managed and operated by a highly experienced and professional management team. In 2022 the Group celebrated 75 years of successful business operation. Business review The principal activity of the group is the provision of Low Carbon preventative maintenance solutions to the highways and airfield markets. The group operates in competitive sectors and is subject to trading and environmental risks set out further below. The group's turnover for the year was £35.38m (2021: £36.99m). Operating profit was £4.82m (2021: £3.89m). The directors consider these to be key financial performance indicators. People are the lifeblood of the business. We continually strive to be an employer of choice to our employees; both existing and potential. Being a family business we value all our staff, everyone matters, everyone has something to contribute to the team effort of continued success. The professional management of HSQE and legal compliance are key areas on which the group concentrates. The group has increased its investment in skilled professional managers and advisors to ensure its performance continues to improve beyond the high standards already being achieved. The group is committed to being a responsible contributor to improving the environment through the management of its operations and promotion and use of its innovative proprietary processes designed to reduce carbon production. The group's core values are:- High Standards of HSQE - Legal Compliance - Professionalism - Efficiency 2022 proved to be a reasonable financial performance despite the continued challenges caused by the effects of the uncertainty caused by world events and labour difficulties. The production costs of the processes provided are very sensitive to changes in the price of oil which requires careful management. Risks and uncertainties Whilst we consider our prospects for the year to 31 December 2023 to be positive, all businesses face risks and uncertainties which could have a material impact on the group's performance and could cause results to differ materially from expected or historical results. The maintenance processes provided by the group are susceptible to weather conditions. Adverse weather is one of the principal risks to the group in terms of productivity and the risks of remedial works. The seasonal nature of the business concentrates turnover within the time period of March to October which requires careful management of cash flow. This seasonal operation also dictates a mixture of full-time and seasonal work force employment which makes the retention of skilled staff a risk. The effects of Brexit and Covid together with changing social attitudes continue to be a challenge to attracting and retaining operational staff. The group maintains a strong, positive level of working capital at all times in order to provide cover against unexpected trading and market risks. Prudent business and financial management should ensure that future prospects are satisfactory. Outlook for 2023 We foresee ongoing but reduced effects caused by COVID. Undoubtedly inflationary cost increases and uncertainty caused by world events will be major challenges to manage. We are confident in the outlook for the next accounting year because of our experienced management team's innovative ability to find responses to the challenges we face. The outlook for the next financial year is expected to be reasonable.
This report was approved by the board of directors on 6 July 2023 and signed on behalf of the board by:
Stephen J Barlow
Company Secretary
Road Maintenance Services (Holdings) Limited
Directors' Report
Year ended 31 December 2022
The directors present their report and the financial statements of the group for the year ended 31 December 2022 .
Directors
The directors who served the company during the year were as follows:
Stephen J Barlow
Gregory W Barlow
Jonathan Chorlton
Andrew P Holland
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Research and development
The group undertakes research and development activities in connection with its principal activity.
Disclosure of information in the strategic report
The directors have included the review of the group's business, future developments, key performance indicators and principal risk and uncertainties in the strategic report.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report 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). 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 group and the company and the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments 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. Auditor
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 group and 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 group and the company's auditor is aware of that information. A resolution to reappoint Downham Mayer Clarke Limited as auditors will be proposed at the forthcoming Annual General Meeting.
This report was approved by the board of directors on 6 July 2023 and signed on behalf of the board by:
Stephen J Barlow
Company Secretary
Road Maintenance Services (Holdings) Limited
Independent Auditor's Report to the Members of Road Maintenance Services (Holdings) Limited
Year ended 31 December 2022
Opinion
We have audited the financial statements of Road Maintenance Services (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, 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 FRS 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's affairs as at 31 December 2022 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's 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 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 group's or 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 directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- 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
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 strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 is 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 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 directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 an auditor’s report 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: The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. Our approach was as follows: We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant are those that relate to the reporting framework (UK GAAP and the Companies Act 2006). In addition the Group has to comply with laws and regulations relating to its operations and health and safety. We understood how Road Maintenance Services (Holdings) Limited is complying with those frameworks by making inquiries of management and the HSQE Manager who is responsible for company legislation and confirmation to identify any non-compliance with laws and regulations. We assessed the susceptibility of the Group's financial statements to material misstatement, including how fraud might occur by discussion with directors to understand where it's considered there was a susceptibility to fraud. We considered the controls that the Group has established to address risks identified, or that otherwise prevent, deter and detect fraud. Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations that could materially impact the financial statements. Taking into accounts our understanding of the Group, our procedures involved enquires of management and focussed testing as appropriate with consideration to risk assessment. 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 auditor’s report. 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 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.
Andrew Bland
(Senior Statutory Auditor)
For and on behalf of
Downham Mayer Clarke Limited
Chartered Accountants & Statutory Auditor
41 Greek Street
Stockport
Cheshire
SK3 8AX
6 July 2023
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Comprehensive Income
Year ended 31 December 2022
2022
2021
Note
£
£
Turnover
4
35,376,898
36,993,405
Cost of sales
( 26,499,496)
( 28,910,744)
-------------
-------------
Gross profit
8,877,402
8,082,661
Administrative expenses
( 4,062,528)
( 4,128,568)
Other operating income
5
6,489
8,625
------------
------------
Operating profit
6
4,821,363
3,962,718
Other interest receivable and similar income
10
43,286
9,663
Interest payable and similar expenses
11
( 31,245)
( 28,330)
------------
------------
Profit before taxation
4,833,404
3,944,051
Tax on profit
12
( 1,311,893)
( 678,230)
------------
------------
Profit for the financial year
3,521,511
3,265,821
------------
------------
Revaluation of tangible assets
1,395,935
–
Reclassification from revaluation reserve to profit and loss account
19,626
(43,744)
Tax relating to components of other comprehensive income
19,684
–
------------
--------
Other comprehensive income for the year
1,435,245
( 43,744)
------------
------------
Total comprehensive income for the year
4,956,756
3,222,077
------------
------------
All the activities of the group are from continuing operations.
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Financial Position
31 December 2022
2022
2021
Note
£
£
Fixed assets
Tangible assets
15
9,358,367
8,120,029
Investments
16
43,292
55,681
------------
------------
9,401,659
8,175,710
Current assets
Stocks
17
1,493,890
804,799
Debtors
18
2,110,089
1,103,582
Cash at bank and in hand
17,350,700
15,719,906
-------------
-------------
20,954,679
17,628,287
Creditors: amounts falling due within one year
19
7,618,286
7,814,351
-------------
-------------
Net current assets
13,336,393
9,813,936
-------------
-------------
Total assets less current liabilities
22,738,052
17,989,646
Creditors: amounts falling due after more than one year
20
492,708
616,669
Provisions
Taxation including deferred tax
22
1,577,632
1,145,781
-------------
-------------
Net assets
20,667,712
16,227,196
-------------
-------------
Capital and reserves
Called up share capital
26
4,302
4,302
Share premium account
27
1,200
1,200
Revaluation and fair value reserves
27
4,816,020
3,372,443
Capital redemption reserve
27
1,497
1,497
Profit and loss account
27
15,844,693
12,847,754
-------------
-------------
Shareholders funds
20,667,712
16,227,196
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 6 July 2023 , and are signed on behalf of the board by:
Stephen J Barlow
Director
Company registration number: 00437756
Road Maintenance Services (Holdings) Limited
Company Statement of Financial Position
31 December 2022
2022
2021
Note
£
£
Fixed assets
Tangible assets
15
9,358,367
8,120,029
Investments
16
200
200
------------
------------
9,358,567
8,120,229
Current assets
Debtors
18
1,290,923
1,122,357
Cash at bank and in hand
10,661,716
5,191,249
-------------
------------
11,952,639
6,313,606
Creditors: amounts falling due within one year
19
10,816,483
5,363,572
-------------
------------
Net current assets
1,136,156
950,034
-------------
------------
Total assets less current liabilities
10,494,723
9,070,263
Creditors: amounts falling due after more than one year
20
492,708
616,669
Provisions
Taxation including deferred tax
22
1,575,107
1,179,202
-------------
------------
Net assets
8,426,908
7,274,392
-------------
------------
Capital and reserves
Called up share capital
26
4,302
4,302
Share premium account
27
1,200
1,200
Revaluation and fair value reserves
27
4,785,524
3,333,211
Capital redemption reserve
27
1,497
1,497
Profit and loss account
27
3,634,385
3,934,182
------------
------------
Shareholders funds
8,426,908
7,274,392
------------
------------
The profit for the financial year of the parent company was £ 233,511 (2021: £ 609,651 ).
These financial statements were approved by the board of directors and authorised for issue on 6 July 2023 , and are signed on behalf of the board by:
Stephen J Barlow
Director
Company registration number: 00437756
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Changes in Equity
Year ended 31 December 2022
Called up share capital
Share premium account
Revaluation and fair value reserves
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
At 1 January 2021
4,302
1,200
3,332,219
1,497
10,483,281
13,822,499
Profit for the year
3,265,821
3,265,821
Other comprehensive income for the year:
Reclassification from revaluation reserve to profit and loss account
–
–
40,224
–
(83,968)
(43,744)
-------
-------
------------
-------
-------------
-------------
Total comprehensive income for the year
–
–
40,224
–
3,181,853
3,222,077
Dividends paid and payable
13
–
–
–
–
( 817,380)
( 817,380)
-------
-------
------------
-------
-------------
-------------
Total investments by and distributions to owners
–
–
–
–
( 817,380)
( 817,380)
At 31 December 2021
4,302
1,200
3,372,443
1,497
12,847,754
16,227,196
Profit for the year
3,521,511
3,521,511
Other comprehensive income for the year:
Revaluation of tangible assets
15
–
–
1,395,935
–
–
1,395,935
Reclassification from revaluation reserve to profit and loss account
–
–
27,958
–
(8,332)
19,626
Tax relating to components of other comprehensive income
12
–
–
19,684
–
–
19,684
-------
-------
------------
-------
-------------
-------------
Total comprehensive income for the year
–
–
1,443,577
–
3,513,179
4,956,756
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Changes in Equity (continued)
Year ended 31 December 2022
Called up share capital
Share premium account
Revaluation and fair value reserves
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
Dividends paid and payable
13
–
–
–
–
( 516,240)
( 516,240)
----
----
----
----
---------
---------
Total investments by and distributions to owners
–
–
–
–
( 516,240)
( 516,240)
-------
-------
------------
-------
-------------
-------------
At 31 December 2022
4,302
1,200
4,816,020
1,497
15,844,693
20,667,712
-------
-------
------------
-------
-------------
-------------
Road Maintenance Services (Holdings) Limited
Company Statement of Changes in Equity
Year ended 31 December 2022
Called up share capital
Share premium account
Revaluation and fair value reserves
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
At 1 January 2021
4,302
1,200
3,302,919
1,497
4,215,947
7,525,865
Profit for the year
609,651
609,651
Other comprehensive income for the year:
Reclassification from revaluation reserve to profit and loss account
–
–
30,292
–
(74,036)
(43,744)
-------
-------
------------
-------
------------
------------
Total comprehensive income for the year
–
–
30,292
–
535,615
565,907
Dividends paid and payable
13
–
–
–
–
( 817,380)
( 817,380)
-------
-------
------------
-------
------------
------------
Total investments by and distributions to owners
–
–
–
–
( 817,380)
( 817,380)
At 31 December 2021
4,302
1,200
3,333,211
1,497
3,934,182
7,274,392
Profit for the year
233,511
233,511
Other comprehensive income for the year:
Revaluation of tangible assets
15
–
–
1,395,935
–
–
1,395,935
Reclassification from revaluation reserve to profit and loss account
–
–
36,694
–
(17,068)
19,626
Tax relating to components of other comprehensive income
12
–
–
19,684
–
–
19,684
-------
-------
------------
-------
------------
------------
Total comprehensive income for the year
–
–
1,452,313
–
216,443
1,668,756
Road Maintenance Services (Holdings) Limited
Company Statement of Changes in Equity (continued)
Year ended 31 December 2022
Called up share capital
Share premium account
Revaluation and fair value reserves
Capital redemption reserve
Profit and loss account
Total
Note
£
£
£
£
£
£
Dividends paid and payable
13
–
–
–
–
( 516,240)
( 516,240)
----
----
----
----
---------
---------
Total investments by and distributions to owners
–
–
–
–
( 516,240)
( 516,240)
-------
-------
------------
-------
------------
------------
At 31 December 2022
4,302
1,200
4,785,524
1,497
3,634,385
8,426,908
-------
-------
------------
-------
------------
------------
Road Maintenance Services (Holdings) Limited
Consolidated Statement of Cash Flows
Year ended 31 December 2022
2022
2021
£
£
Cash flows from operating activities
Profit for the financial year
3,521,511
3,265,821
Adjustments for:
Depreciation of tangible assets
993,882
965,686
Government grant income
( 501)
( 2,637)
Unrealised gain/(loss) on financial assets and investments at fair value through profit or loss
(4,679)
(74,818)
Other interest receivable and similar income
( 43,286)
( 9,663)
Interest payable and similar expenses
31,245
28,330
Loss on disposal of tangible assets
13,815
18,649
Tax on profit
1,311,893
678,230
Accrued expenses/(income)
218,628
( 308,770)
Changes in:
Stocks
( 689,091)
( 254,824)
Trade and other debtors
( 1,006,507)
193,165
Trade and other creditors
( 603,656)
( 411,034)
------------
------------
Cash generated from operations
3,743,254
4,088,135
Interest paid
( 31,245)
( 28,330)
Interest received
43,286
9,663
Tax paid
( 647,144)
( 872,766)
------------
------------
Net cash from operating activities
3,108,151
3,196,702
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 856,343)
( 952,065)
Proceeds from sale of tangible assets
25,870
49,150
------------
------------
Net cash used in investing activities
( 830,473)
( 902,915)
------------
------------
Cash flows from financing activities
Government grant income
501
2,637
Payments of finance lease liabilities
( 148,212)
( 125,747)
Dividends paid
( 516,240)
( 817,380)
Revaluation of cash equivalents
17,067
61,575
------------
------------
Net cash used in financing activities
( 646,884)
( 878,915)
------------
------------
Net increase in cash and cash equivalents
1,630,794
1,414,872
Cash and cash equivalents at beginning of year
15,719,906
14,305,034
-------------
-------------
Cash and cash equivalents at end of year
17,350,700
15,719,906
-------------
-------------
Road Maintenance Services (Holdings) Limited
Notes to the Financial Statements
Year ended 31 December 2022
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Mowpen Brow, High Legh, Knutsford, Cheshire, WA16 6PB.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities measured at fair value through profit or loss . The financial statements are prepared in sterling , which is the functional currency of the entity.
Asset revaluations
The directors reassessed the carrying values of all tangible fixed assets based on capital value. As a result the values of plant and machinery and motor vehicles were adjusted and the net uplift in values taken to revaluation reserve. The directors also assessed the depreciation rates applicable to tangible fixed assets and amended them as appropriate. The directors will consider the valuations of assets annually and make adjustments thereto as appropriate.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under 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.
Consolidation
The group's consolidated financial statements consolidate the financial statements of the parent company and all its group subsidiaries as at 31 December 2022. All subsidiaries have a reporting date of 31 December. All transactions and balances between group companies are eliminated on consolidation, including unrealised gains and losses on transactions between group companies. Amounts reported in the financial statements of subsidiaries have been adjusted, where necessary, to ensure consistency with the accounting policies adopted by the group. As a consolidated group statement of comprehensive income is published, a separate statement of comprehensive income for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.
Judgements and key sources of estimation uncertainty
The directors do not believe that the estimates and judgements contained in these accounts have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the provision of goods and services is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer (usually on despatch of the goods or the provision of services), the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
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
-
10% straight line
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
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
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:
Freehold land and buildings
-
straight line over fifty years
Plant and machinery
-
10% reducing balance
Fixtures, fittings and equipment
-
25% straight line
Motor vehicles
-
20% reducing balance
Freehold improvements - straight line over 4 years
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised initially in the profit and loss account and then transferred to the fair value reserve as the change in fair value is not distributable until realised.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2022
2021
£
£
Road resurfacing services
35,376,898
36,993,405
-------------
-------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Other operating income
2022
2021
£
£
Government grant income
501
2,637
Other operating income
5,988
5,988
-------
-------
6,489
8,625
-------
-------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2022
2021
£
£
Depreciation of tangible assets
993,882
965,686
Loss on disposal of tangible assets
13,815
18,649
Fair value adjustments to investments
12,389
( 13,243)
Revaluation of cash equivalents
17,068
61,575
---------
---------
Included in the depreciation charge above, the amount that relates to assets held under finance lease and hire purchase is £237,108, (2021: £212,640).
7. Auditor's remuneration
2022
2021
£
£
Fees payable for the audit of the financial statements
7,000
7,000
-------
-------
8. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2022
2021
No.
No.
Administrative staff
44
47
Management staff
7
6
Contracting staff
103
106
----
----
154
159
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2022
2021
£
£
Wages and salaries
7,169,963
7,015,362
Social security costs
864,075
828,158
Other pension costs
416,667
382,491
------------
------------
8,450,705
8,226,011
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2022
2021
£
£
Remuneration
389,408
609,108
Company contributions to defined contribution pension plans
10,000
10,000
---------
---------
399,408
619,108
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2022
2021
No.
No.
Defined contribution plans
2
2
----
----
Remuneration of the highest paid director in respect of qualifying services:
2022
2021
£
£
Aggregate remuneration
216,102
393,576
---------
---------
10. Other interest receivable and similar income
2022
2021
£
£
Interest on cash and cash equivalents
43,286
9,663
--------
-------
11. Interest payable and similar expenses
2022
2021
£
£
Interest on obligations under finance leases and hire purchase contracts
28,812
25,492
Other interest payable and similar charges
2,433
2,838
--------
--------
31,245
28,330
--------
--------
12. Tax on profit
Major components of tax expense
2022
2021
£
£
Current tax:
UK current tax expense
845,768
697,757
Adjustments in respect of prior periods
14,590
( 16,123)
---------
---------
Total current tax
860,358
681,634
---------
---------
Deferred tax:
Origination and reversal of timing differences
451,535
( 3,404)
------------
---------
Tax on profit
1,311,893
678,230
------------
---------
Tax recognised as other comprehensive income or equity
The aggregate current and deferred tax relating to items recognised as other comprehensive income or equity for the year was £( 19,684 ) (2021: £Nil).
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2021: lower than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
2022
2021
£
£
Profit on ordinary activities before taxation
4,833,404
3,944,051
------------
------------
Profit on ordinary activities by rate of tax
918,347
749,370
Adjustment to tax charge in respect of prior periods
12,221
(17,373)
Effect of expenses not deductible for tax purposes
14,508
7,137
Non taxable income
( 4,381)
( 12,837)
Effect of change in rate for deferred tax
108,515
2,475
Unequalised movement on deferred tax
262,683
( 50,542)
------------
------------
Tax on profit
1,311,893
678,230
------------
------------
13. Dividends
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year):
2022
2021
£
£
Dividends on ordinary shares
516,240
817,380
---------
---------
14. Intangible assets
Group
Goodwill
Other intangible assets
£
£
Cost
At 1 January 2022 and 31 December 2022
35,000
–
--------
----
Amortisation
At 1 January 2022 and 31 December 2022
35,000
–
--------
----
Carrying amount
At 1 January 2022 and 31 December 2022
–
–
--------
----
At 31 December 2021
–
–
--------
----
The company has no intangible assets.
15. Tangible assets
Group and company
Land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2022
2,013,934
10,994,256
227,475
431,353
13,667,018
Additions
–
802,967
17,031
36,345
856,343
Disposals
–
( 66,904)
–
–
( 66,904)
Revaluations
–
( 2,139,665)
–
–
( 2,139,665)
------------
-------------
---------
---------
-------------
At 31 December 2022
2,013,934
9,590,654
244,506
467,698
12,316,792
------------
-------------
---------
---------
-------------
Depreciation
At 1 January 2022
210,162
4,905,944
184,067
246,816
5,546,989
Charge for the year
78,736
858,475
15,970
40,701
993,882
Disposals
–
( 46,845)
–
–
( 46,845)
Revaluations
–
( 3,535,601)
–
–
( 3,535,601)
------------
-------------
---------
---------
-------------
At 31 December 2022
288,898
2,181,973
200,037
287,517
2,958,425
------------
-------------
---------
---------
-------------
Carrying amount
At 31 December 2022
1,725,036
7,408,681
44,469
180,181
9,358,367
------------
-------------
---------
---------
-------------
At 31 December 2021
1,803,772
6,088,312
43,408
184,537
8,120,029
------------
-------------
---------
---------
-------------
Tangible assets held at valuation
The directors have appraised the carrying value of the company's tangible fixed assets as at 31 December 2022 . These values have been assessed taking into account estimated replacement costs and current trading values for similar assets . They consider the values shown to be the fair capital value of the assets as at that date . During the year new finance lease assets with a cost of £283,700 were acquired. The closing net book value of these additions, as included in the note below, amounted to £239,981.
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:
Group and company
Plant and machinery
£
At 31 December 2022
1,226,934
------------
At 31 December 2021
1,533,818
------------
16. Investments
Group
Other investments other than loans
£
Cost
At 1 January 2022
55,681
Revaluations
( 12,389)
--------
At 31 December 2022
43,292
--------
Impairment
At 1 January 2022 and 31 December 2022
–
--------
Carrying amount
At 31 December 2022
43,292
--------
At 31 December 2021
55,681
--------
Company
Shares in group undertakings
£
Cost
At 1 January 2022 and 31 December 2022
200
----
Impairment
At 1 January 2022 and 31 December 2022
–
----
Carrying amount
At 1 January 2022 and 31 December 2022
200
----
At 31 December 2021
200
----
The market value of the listed investments at 31 December 2022 was £43,292 (2021 £55,681)
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Road Maintenance Services Limited
Ordinary
100
Road Maintenance Services (Preservations) Limited
Ordinary
100
17. Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Raw materials and consumables
1,493,890
804,799
–
–
------------
---------
----
----
18. Debtors
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade debtors
2,049,066
1,026,125
–
–
Amounts owed by group undertakings
–
–
1,229,900
1,044,900
Prepayments and accrued income
61,023
77,457
61,023
77,457
------------
------------
------------
------------
2,110,089
1,103,582
1,290,923
1,122,357
------------
------------
------------
------------
19. Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade creditors
758,620
1,358,219
137,909
19,202
Amounts owed to group undertakings
–
–
10,091,641
4,542,282
Accruals and deferred income
4,970,936
4,752,308
10,270
186,258
Corporation tax
833,954
620,740
81,227
42,511
Social security and other taxes
681,971
686,028
122,631
176,263
Obligations under finance leases and hire purchase contracts
372,805
397,056
372,805
397,056
------------
------------
-------------
------------
7,618,286
7,814,351
10,816,483
5,363,572
------------
------------
-------------
------------
20. Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Obligations under finance leases and hire purchase contracts
492,708
616,669
492,708
616,669
---------
---------
---------
---------
21. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Not later than 1 year
372,805
397,056
372,805
397,056
Later than 1 year and not later than 5 years
492,708
616,669
492,708
616,669
---------
------------
---------
------------
865,513
1,013,725
865,513
1,013,725
---------
------------
---------
------------
The hire purchase creditor represents vehicles, plant and machinery acquired under finance lease arrangements. Interest is payable as part of the monthly repayments at various rates between 0% and 3%. Finance lease and hire purchase creditors are secured on the assets to which they relate. Where the company also has the option to acquire these assets at the end of the respective lease terms it intends to exercise the option.
22. Provisions
Group
Deferred tax (note 23)
£
At 1 January 2022
1,145,781
Additions
431,851
------------
At 31 December 2022
1,577,632
------------
Company
Deferred tax (note 23)
£
At 1 January 2022
1,179,202
Additions
395,905
------------
At 31 December 2022
1,575,107
------------
23. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Included in provisions (note 22)
1,577,632
1,145,781
1,575,107
1,179,202
------------
------------
------------
------------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2022
2021
2022
2021
£
£
£
£
Accelerated capital allowances
1,513,048
1,097,459
1,513,048
1,097,459
Revaluation of tangible assets
62,247
81,931
62,247
81,931
Other revaluations
7,796
11,449
–
–
Deferred tax - other timing differences
( 5,459)
( 45,058)
( 188)
( 188)
------------
------------
------------
------------
1,577,632
1,145,781
1,575,107
1,179,202
------------
------------
------------
------------
24. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 416,667 (2021: £ 382,491 ).
The amount outstanding at the year end was £ 21,832 (2021: £180,229) and is included in creditors.
25. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Recognised in other operating income:
Government grants recognised directly in income
501
2,637
–
–
----
-------
----
----
The government grants derive from the Coronavirus Job Retention Scheme.
26. Called up share capital
Issued, called up and fully paid
2022
2021
No.
£
No.
£
Ordinary shares of £ 1 each
4,302
4,302
4,302
4,302
-------
-------
-------
-------
27. Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Revaluation and fair value reserves - This reserve records the revaluation of tangible fixed assets recognised in other comprehensive income and accumulated in equity as well as the value of investment and cash equivalents revaluations and fair value movements on investments and cash equivalents recognised initially in the profit and loss account and then transferred to this non distributable reserve. Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company . Profit and loss account - This reserve records retained earnings and accumulated losses.
28. Analysis of changes in net debt
At 1 Jan 2022
Cash flows
At 31 Dec 2022
£
£
£
Cash at bank and in hand
15,719,906
1,630,794
17,350,700
Debt due within one year
(397,056)
24,251
(372,805)
Debt due after one year
(616,669)
123,961
(492,708)
-------------
------------
-------------
14,706,181
1,779,006
16,485,187
-------------
------------
-------------
29. Related party transactions
Company
Dividends totalling £516,240 were paid to the directors and close family members during the year (2021 - £817,380).