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Registered number: 14247079
ISS LABOUR GROUP (HOLDINGS) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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ISS LABOUR GROUP (HOLDINGS) LIMITED
COMPANY INFORMATION
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G Beeston (appointed 31 August 2022)
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C J Cowan (appointed 20 July 2022)
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C Kelly (appointed 31 August 2022)
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T Kirkham (appointed 31 August 2022)
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W Roiter (appointed 20 July 2022)
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134 Buckingham Palace Road
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Chartered Accountants & Statutory Auditor
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ISS LABOUR GROUP (HOLDINGS) LIMITED
CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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ISS LABOUR GROUP (HOLDINGS) LIMITED
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MARCH 2023
ISS Labour Group (Holdings) Limited was incorporated on 20 July 2022 and on 31 August 2022 acquired the shares in ISS Labour Group Limited which in turn owns Infrastructure Support Solutions Limited (formerly Infra Safety Services Labour Limited) ("ISS") and Fencing and Lighting Contractors Ltd, as well as a JV with MITA Joint Venture Limited.
I am pleased to report that ISS Labour Group (Holdings) Limited has overall enjoyed a successful period despite the industry and economic challenges that we have faced over the last 8 months.
Our successes include the strategic management buy out by of ISS by the Senior Management Team backed by our Investors Baystone Associates. Following the MBO the business has gone from strength to strength, and ISS have achieved an increase in revenues of 31% on the previous period and remain a Tier 1 supplier to blue-chip rail and construction companies throughout the UK.
Fencing and Lighting Contractors Ltd traded satisfactorily during the year, following some strategic investments in new eco-friendly lighting technologies that opened additional opportunities within our market sectors. To support our trading position, we achieved a saving by re-locating and downsizing Derby warehouse with a smaller facility in Nottingham.
Following a decision to exit the Rail Systems Alliance Scotland contract and in the absence of any other suitable contract we agreed close the MITA Joint Venture with effect from 31st March 2023.
ISS generated turnover of £48,087,851 (2022: £35,996,483) and achieved an EBITDA of £4,312,354 (2022: - £139,786) during the year.
The Board is committed to the ongoing investment within the organisation to further strengthen our business in terms of developing highly skilled local talent pools and driving innovation through our portfolio of services and in this respect have made the decision not to declare a dividend in this financial year.
Business Results
Infrastructure Support Solutions Limited
2023 2022
Revenue £48.1m £36.0m
EBITDA £4.30m £184k
Fencing and Lighting Contractors Ltd
2023 2022
Revenue £1.02m £1.48m
EBITDA £0.90m £0.90m
Mita Joint Venture Limited
2023 2022
Revenue £0m £0.40m
EBITDA £0.0m £0.2m
Dividend
The board declared a dividend payment on the 24th March 2023 from Fencing and Lighting Contractors Ltd to
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ISS LABOUR GROUP (HOLDINGS) LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
Infrastructure Support Solutions Limited. No other dividends have been declared within any other of the companies of the Group Ltd in the period ending 31st March 2023
Corporate governance
We recognise that all members of the the Group's Senior Management Team have a critical role in shaping a positive culture within the business and for personally championing the behaviours we expect to see from others both within our business and within the supply chain. Our governance journey which is underpinned by our Core Values sets out what we stand for, what we expect from our workforce and how we intend to deliver our corporate responsibility strategy. Our Governance Journey is based around sets out our commitments to: Safety; Social Value; Health and Wellbeing; Customer Focus and Expectation; Code of Conduct and Accountability; Environmental Responsibility; Respect, Trust, and Integrity.
We rigorously enforce our Group policies around modern slavery; antibribery and corruption; equality, diversity, and inclusion; and health and safety and have a zero tolerance for breaches of the guidelines and expectations therein which is supported by regular awareness training.
Social responsibility
We strongly believe that as a successful business that can make an impact and leave a positive legacy within the communities we work amongst, it is important that we pro-actively seek out opportunities to implement our social value strategy. We are passionate about encouraging the next generation of workers into our industry and have strong engagement relationships with local, schools, colleges, and universities. We have a dedicated Group Social Value Champion who works closely with partner organisations to support individuals whose routes to recruitment can be more challenging.
Future developments
As we look to the future the outlook for the Group remains extremely positive with the recent, strategic acquisition of the PSR Group (post year-end) which includes PSR Group, PSR Staffing Solutions, Novello, SYK and PCN. These companies complement our existing portfolio of businesses and will allow us to draw on mutual synergies to develop our businesses in the future.
Principal risks and uncertainties
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All companies within the Group have documented risk management processes that clearly identifies, evaluates, prioritises, and puts in place mitigation strategies for key risks within the business. These are reviewed by the senior management team monthly and those that are deemed as a principal risk, due to their potential severity and impact are escalated to the Group Board.
The Directors specifically recognise that the continued uncertainty created by inflationary pressures and potential interest rate rises are a risk in the short to medium term.
Financial key performance indicators
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The board monitors progress on the overall company strategy and the individual strategic elements by reference to monthly KPI reviews.
The KPI’s are turnover, revenue and EBITDA.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
This report was approved by the board and signed on its behalf.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
DIRECTORS' REPORT
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
The directors present their report and the financial statements for the period ended 31 March 2023.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of audited financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.
The principal activity of the Company is that of a holding company for the Group and its subsidiaries.
The principal activity of the Group is that of supplying labour and hire of equipment to the railway industry.
The profit for the 7 month period, after taxation, amounted to £737,354.
No dividends were declared in the current year.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
The directors who served during the 7 month period were:
G Beeston (appointed 31 August 2022)
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C J Cowan (appointed 20 July 2022)
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C Kelly (appointed 31 August 2022)
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T Kirkham (appointed 31 August 2022)
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W Roiter (appointed 20 July 2022)
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Matters covered in the Group Strategic Report
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The Directors have chosen, in accordance with s414C of the Companies Act, to disclose the information relating to principal risk and uncertainties, review of the business, key performance indicators and future developments in the Strategic Report.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Post balance sheet events
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Post year end, the Company acquired shares in a joint venture, Conduit Staffing Limited. At the reporting date, the Company held 62.50% in Conduit Staffing Limited. Conduit Staffing Limited owns 100% of PSR Group Limited. The acquisition was effected in order to increase the trading capacity of the Group.
BKL Audit LLP was appointed to fill a casual vacancy arising during the year. Under section 487(2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ISS LABOUR GROUP (HOLDINGS) LIMITED
We have audited the financial statements of ISS Labour Group (Holdings) Limited (the 'parent Company') and its subsidiaries (the 'Group') for the 7 month period ended 31 March 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity 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 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's affairs as at 31 March 2023 and of the Group's profit for the 7 month period 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.
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 United Kingdom, including the Financial Reporting Council'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
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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.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ISS LABOUR GROUP (HOLDINGS) LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial 7 month period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group 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
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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 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.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ISS LABOUR GROUP (HOLDINGS) LIMITED (CONTINUED)
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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.
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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 Group 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:
∙Enquiring of management and those charged with governance around actual and potential litigation and claims;
∙Enquiring of management and those charged with governance to identify any instances of non compliance with laws and regulations;
∙Reviewing board meeting minutes for all meetings taking place throughout the year up until the date of signature of these financial statements;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
∙Reviewing the general ledger in detail for all transactions with related parties;
∙Performing walk through testing to ensure systems and controls are operating as recorded where appropriate;
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ISS LABOUR GROUP (HOLDINGS) LIMITED (CONTINUED)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 purpose of expressing an opinion of 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 Auditors' 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 Auditors' 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.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
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.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ISS LABOUR GROUP (HOLDINGS) LIMITED (CONTINUED)
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 Auditors' 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.
Nick Bishop FCA (Senior Statutory Auditor)
for and on behalf of
BKL Audit LLP
Chartered Accountants
Statutory Auditor
London
22 December 2023
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ISS LABOUR GROUP (HOLDINGS) LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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7 month period ended
31 March
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Exceptional administrative expenses
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Interest payable and similar expenses
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Profit for the financial 7 month period
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Profit for the 7 month period attributable to:
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Owners of the parent Company
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There was no other comprehensive income for 2023.
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The notes on pages 17 to 33 form part of these financial statements.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
REGISTERED NUMBER: 14247079
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 33 form part of these financial statements.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
REGISTERED NUMBER: 14247079
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 33 form part of these financial statements.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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Comprehensive income for the 7 month period
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Profit for the 7 month period
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Total comprehensive income for the 7 month period
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Contributions by and distributions to owners
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Shares issued during the 7 month period
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The notes on pages 17 to 33 form part of these financial statements.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
Comprehensive income for the period
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Loss for the 7 month period
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Total comprehensive income for the 7 month period
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Contributions by and distributions to owners
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Shares issued during the 7 month period
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Total transactions with owners
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The notes on pages 17 to 33 form part of these financial statements.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
Cash flows from operating activities
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Profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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Corporation tax (paid)/received
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net (decrease) in cash and cash equivalents
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Cash and cash equivalents at the end of 7 month period comprise:
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The notes on pages 17 to 33 form part of these financial statements.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
The principal activity of the Company is that of a holding company for ISS Labour Group Limited and its subsidiaries.
The principal activity of the Group is that of supplying labour and hire of equipment to the railway industry.
The Company is a private company limited by shares and registered in England and Wales.
The Company's Registered Office address is 134 Buckingham Palace Road, London, SW1W 9SA.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland ('FRS 102') and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The financial statements have been prepared on the going concern basis, which assumes that the Group will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements, and will be able to meet its debts as they fall due.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Revenue represents income from provison of temporary labour which is recognised at the end of the completed working week based on hours worked multiplied by the contracted rates and also income from hire of safety critical equipment which is recognised at the end of the completed working week based on contracted rates.
Revenue is also derivied from the hire of trackside lighting and safety barrier fencing to the railway industry.
In each case, revenue is only recognised when the service has been provided and the Group is contractually entitled to the revenue. Amounts invoiced by the Group in respect of sales completed during the year, exclude value added tax.
Sales are wholly attributed to activities within the UK.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the 7 month period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Intangible assets are amortised over a period of 10 years.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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(i) Financial assets
Basic financial assets, including fixed asset investment, trade and other debtors, are initially recognised at transaction price, unless the arrangement consitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including loans, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are reasonable under the circumstances.
Revisions to accounting estimates are recognised in the period in which the estimates are revised and in
any future periods affected.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 13 for the carrying amount of the tangible assets, and accounting policy note 2.11 for the useful economic lives of each class of asset.
Useful economic lives of intangible assets
The annual amortisation charge for intangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 12 for the carrying amount of the intangible assets, and accounting policy note 2.10 for the useful economic lives of each class of asset.
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An analysis of turnover by class of business is as follows:
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7 month period ended
31 March
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All turnover arose within the United Kingdom.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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The operating profit is stated after charging:
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7 month period ended
31 March
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During the 7 month period, the Group obtained the following services from the Company's auditors and their associates:
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7 month period ended
31 March
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Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
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Fees payable to the Company's auditors in respect of:
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The auditing of accounts of associates of the Company
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Taxation compliance services
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the 8 month period was as follows:
The Group had 6 directors and 57 employees.
The Company had 5 directors.
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7 month period ended
31 March
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Group contributions to defined contribution pension schemes
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During the 7 month period retirement benefits were accruing to 6 directors in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £405,174.
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The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £19,741.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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Interest payable and similar expenses
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7 month period ended
31 March
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Other loan interest payable
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Loans from group undertakings
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7 month period ended
31 March
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Current tax on profits for the year
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Origination and reversal of timing differences
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
10.Taxation (continued)
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Factors affecting tax charge for the 7 month period/period
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The tax assessed for the 7 month period/period is lower than the standard rate of corporation tax in the UK of 19%. The differences are explained below:
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7 month period ended
31 March
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19%.
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Fixed asset timing differences
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Expenses not deductible for tax purposes
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Profit on sale of fixed assets
|
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Adjustments in respect of prior periods
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Group relief surrendered / (claimed)
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Total tax charge for the 7 month period/period
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Factors that may affect future tax charges
|
On 03 March 2021, the UK Government announced its intention to increase the rate of UK corporation tax from 19% to 25% with effect from 01 April 2023. The increase in the rate of UK corporation tax was enacted in the Finance Act 2021 which received Royal Assent on 10 June 2021.
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7 month period ended
31 March
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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Charge for the 7 month period on owned assets
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The negative goodwill arose in respect of the acquisition of ISS Labour Group Limited on 31 August 2022.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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Acquired through business combinations
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Charge for the 7 month period on owned assets
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Acquired through business combinations
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
|
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Investments in associates
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On acquisition of subsidiaries
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Investments in subsidiary companies
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
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The following were subsidiary undertakings of the Company:
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Pure Offices, Suites 136 And 137 Lake View Drive, Annesley, Nottingham, England, NG15 0DT
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Infrastructure Support Solutions Limited*
|
Pure Offices, Suites 136 And 137 Lake View Drive, Annesley, Nottingham, England, NG15 0DT
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Fencing & Lighting Contractors Limited*
|
Pure Offices, Suites 136 And 137 Lake View Drive, Annesley, Nottingham, England, NG15 0DT
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The aggregate of the share capital and reserves as at 31 March 2023 and the profit or loss for the 7 month period ended on that date for the subsidiary undertakings were as follows:
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Aggregate of share capital and reserves
|
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Infrastructure Support Solutions Limited*
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Fencing & Lighting Contractors Limited*
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On 31 August 2022 ISS Labour Group (Holdings) Limited ("ISSLGH") purchased the entire share capital of ISS Labour Group Limited ("ISSLG") for a consideration of £1. The net assets of ISSLG Group at the time of acquisition were £2,400,264 made up of bank balances of (£197,375), fixed assets of £1,252,048, debtors of £ £8,814,789 and creditors of (£7,469,198). The difference between the consideration and the net assets at aquisition led to negative goodwill of (£2,600,264).
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
|
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Prepayments and accrued income
|
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Cash and cash equivalents
|
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Creditors: Amounts falling due within one year
|
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Amounts owed to group undertakings
|
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Other taxation and social security
|
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|
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|
Accruals and deferred income
|
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|
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
|
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|
|
|
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|
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Charged to profit or loss
|
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Arising on business combinations
|
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Accelerated capital allowances
|
|
|
|
|
Authorised, allotted, called up and fully paid
|
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100 Ordinary Shares of £1.00 each
|
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During the period 100 Ordinary shares of £1 each were issued at par.
Profit and loss account
Includes all current retained profits and losses.
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £167,534. Contributions totalling £52,738 were payable to the fund at the reporting date and are included in creditors.
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ISS LABOUR GROUP (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 7 MONTH PERIOD ENDED 31 MARCH 2023
|
|
Commitments under operating leases
|
|
|
At 31 March 2023 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
|
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Related party transactions
|
|
|
The Company has taken advantage of the exemption conferred by FRS 102 section 33.1A from the requirement to disclose transactions with other wholly owned group undertakings.
The Group paid transactions worth £4,436,690 to Conduit Rail Limited during the year. Amounts worth £4,436,691 were also received from Conduit Rail Limited during the year. The balance owned to the Group by Conduit Rail Limited at year end was £1.
ISS Labour Group Limited repaid a loan to SPS Investments Group Limited, the previous parent company, worth £7,099,913 and received a waiver on the capital and interest payable to SPS Group Investements Limited worth £12,531,320 on another loan. The balance at year end on both loans was £0.
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Post balance sheet events
|
Post year end, the Company acquired shares in a joint venture, Conduit Staffing Limited. At the reporting date, the Company held 62.50% in Conduit Staffing Limited. Conduit Staffing Limited owns 100% of PSR Group Limited. The acquisition was effected in order to increase the trading capacity of the Group.
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