Pyroban_Group_Limited - Accounts
Pyroban_Group_Limited - Accounts
The directors present the strategic report for the year ended 31 December 2022.
The principal activity of the Company is that of a holding company.
The principal activity of the Group is the development, production and sale of explosion protection systems for equipment operating in hazardous areas and the provision of associated consultancy and training worldwide.
After the Group successfully managed the COVID-19 issues in the previous year, the deep global supply chain issues of price escalation, lack of availability and short notice delays meant 2022 had its fair share of challenges. Commercially, quotes had to reflect the cost and lead time implications and include risk control measures. Production planning remained challenging due to unpredictability of customer-supplied equipment for the fork truck conversions and engine lead times affecting Oil & Gas customer project timing. Investment in tactical stock holding of key electronic components and raw materials supported the continuation of material supply.
Overall, 2022 was a very successful year with order intake, revenue and profitability exceeding budgets by significant levels. The Group expanded the overall product and service offerings through launching the EXSolutions business stream. Providing end-users with services for their fixed equipment including Ex lighting, inspection, audit, assessment, and training. Services for OEMs wanting to enter the Ex market through an end-end support provision including design, testing, certification, documentation and ongoing lifecycle management. Digitisation and IIoT capability with specialist sensors to support proactive maintenance programs for fixed equipment. Fire suppression for both mobile and fixed equipment completed the comprehensive range of product and support being offered.
The Oil & Gas markets remained buoyant and the Group’s expanded PSOs achieved growth from larger, more complex projects in addition to the traditional kits and powerpacks. Consequently, order intake and revenue exceeded previous year performance.
Forklift truck demand remained strong despite the OEMs extending their manufacturing lead times to unprecedented levels. Order intake achieved target, the long customer-supplied equipment lead times further built revenue backlog into 2023 and 2024.
With end-users further extending existing equipment lease agreements and Oil & Gas equipment being refurbished due to lack of new OEM equipment being available, the aftersales orders and revenue exceeded targets and prior year performance.
The Group’s commitment to R&D continued through 2022 with programs in both Oil & Gas and fork truck sectors progressing positively to further strengthen the Group’s market position.
The embedding of the Euro Access product into the Group and building the working relationship with BAE Systems progressed positively throughout the year with parts, training, audits and repair orders and revenue being achieved.
From a team perspective, 2022 was an excellent year with high staff retention, successful recruitment programs, and significant staff development opportunities being made available and undertaken. 13% of the staff undertook development training courses supporting role expansions, promotions and future career opportunities. The Group won the Large Business category at the Adur & Worthing Business Awards in November.
Tight cost control, efficiency improvements, and leveraging the smaller facility footprint improved the Operational Gearing significantly.
The directors consider the key business risks and uncertainties affecting the Group relate to short term material supply, markets and competition. In response, the Group is expanding supply chain flexibility and continuing to invest in the development of its products and services.
As markets recover, material supply is anticipated to remain unpredictable through 2023 with associated price inflation also expected. The Group’s pricing models are routinely reviewed and adapted to reduce the risk of purchase price volatility.
The directors believe that preparing the financial statements on the going concern basis is appropriate due to the revolving credit facility available from parent company Pioneer Safety Group Limited.
The positive market outlook and planned revenue growth across all sectors of the business will require additional recruitment to maintain capacity. The Group will continue to invest in ongoing research and development programmes.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The group is exposed to a variety of financial risks. The group's overall risk management programme seeks to minimise potential risks for the Group. The board reviews and agrees policies for managing risks. The most important components of financial risk affecting the Group are as follows:
The technical complexity of fork lift trucks produced for conversion continues to increase. While these changes create pressure on profitability the group remains confident that its investment in training people and product innovation will sustain its market leading position. In recent years fork lift manufacturers have increased the number of conversions they undertake in house. This has led to greater levels of competition within the material handling hazard protection market. The group also has a high proportion of sales to customers operating within the oil and gas industry and faces risks from fluctuating global oil prices.
The Group has a strong culture of health and safety and environmental awareness. It monitors the environmental impact of its product designs, sourcing of materials, methods of manufacture and the ultimate disposals. Consideration is given to the impact on its staff and their working environment and control of waste products through the appropriate recycling processes.
The Group sells products and services to a number of customers globally in both Euros and US Dollars. The Group does not consider hedging foreign currency exposures is necessary but management ensure foreign quotes and prices are adjusted regularly in line with exchange rate fluctuations.
The Group is not significantly affected by price for its oil and gas range of products. The increased levels of competition seen in the material handling market has meant the Group has to demonstrate its market leading product quality in order to maintain its price levels.
The Group manages liquidity risk through a mixture of cash resources and inter group funding arrangements. The Group's debt is intercompany and short term. The revolving credit facility with Pioneer Safety Group Limited ensures that the Group has sufficient available funds for operations and planned expansions.
Credit risk
The Group has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit which is reassessed regularly by the Board.
The Group has a strong credit management track record. Credit risks are minimised by the quality of the customer care applied in the overall management of credit control.
The Group is committed to research and development activities. A number of programmes are being undertaken to widen the product portfolio for customers in the Oil & Gas sector.
The directors believe that preparing the financial statements on the going concern basis is appropriate, as referred to in note 1.2.
In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the company will be put at a General Meeting.
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
give a true and fair view of the state of the company's affairs as at 31 December 2022 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
Material uncertainty relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
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 remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.
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 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.
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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 of 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 to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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 or intentional misrepresentations, or through collusion.
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.
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Pyroban Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Mercer Street, Covent Garden, London, WC2H 9QJ.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest thousand pound.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Pyroban Group Limited is a wholly owned subsidiary of Pioneer Safety Group Limited and the results of Pyroban Group Limited are included in the consolidated financial statements of Pioneer Safety Group Limited which are available from 1 Mercer Street, London, WC2H 9QJ.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The average monthly number of persons (including directors) employed by the company during the year was
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The company has taxable losses of £14,325 (2021: £14,124) to carry forward against future trading profits.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Other reserves include capital contributions and currency reserves.
The company has taken advantage of the exemption available under section 33 of FRS 102 whereby it is not required to disclose transactions and balances with any fellow group companies.
The company is a wholly owned subsidiary of Pioneer Safety Group Limited, a company incorporated in England and Wales. The ultimate parent undertaking is Longacre Group Limited, a company incorporated in England and Wales.
Pioneer Safety Group Limited is the smallest group to prepare consolidated financial statements which include these financial statements. Longacre Group Limited is the largest group to prepare consolidated financial statements which include these financial statements. Copies of the financial statements can be obtained from 1 Mercer Street, London, WC2H 9QJ.