McNally and Thompson (UK Contracts) Limited 30/04/2023 iXBRL

McNally and Thompson (UK Contracts) Limited 30/04/2023 iXBRL

MCNALLY AND THOMPSON (UK CONTRACTS) LIMITED - Company Information

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0 30/04/2023 2023-04-30 false false false false true false false false false false false false false true false false true false false false false false true false No description of principal activities is disclosed 2022-01-01 Sage Accounts Production 21.0 - FRS102_2021 xbrli:pure xbrli:shares iso4217:GBP 03485540 2022-01-01 2023-04-30 03485540 2023-04-30 03485540 2021-12-31 03485540 2021-01-01 2021-12-31 03485540 2021-12-31 03485540 2020-12-31 03485540 core:LandBuildings core:ShortLeaseholdAssets 2022-01-01 2023-04-30 03485540 core:PlantMachinery 2022-01-01 2023-04-30 03485540 core:FurnitureFittingsToolsEquipment 2022-01-01 2023-04-30 03485540 core:MotorVehicles 2022-01-01 2023-04-30 03485540 bus:RegisteredOffice 2022-01-01 2023-04-30 03485540 bus:OrdinaryShareClass1 2022-01-01 2023-04-30 03485540 bus:Director1 2022-01-01 2023-04-30 03485540 bus:Director2 2022-01-01 2023-04-30 03485540 bus:Director3 2022-01-01 2023-04-30 03485540 bus:Director4 2022-01-01 2023-04-30 03485540 bus:Director5 2022-01-01 2023-04-30 03485540 bus:Director6 2022-01-01 2023-04-30 03485540 bus:Director7 2022-01-01 2023-04-30 03485540 bus:Director8 2022-01-01 2023-04-30 03485540 bus:CompanySecretary1 2022-01-01 2023-04-30 03485540 core:WithinOneYear 2023-04-30 03485540 core:WithinOneYear 2021-12-31 03485540 core:LandBuildings core:ShortLeaseholdAssets 2021-12-31 03485540 core:PlantMachinery 2021-12-31 03485540 core:FurnitureFittingsToolsEquipment 2021-12-31 03485540 core:MotorVehicles 2021-12-31 03485540 core:LandBuildings core:ShortLeaseholdAssets 2023-04-30 03485540 core:PlantMachinery 2023-04-30 03485540 core:FurnitureFittingsToolsEquipment 2023-04-30 03485540 core:MotorVehicles 2023-04-30 03485540 core:AfterOneYear 2023-04-30 03485540 core:AfterOneYear 2021-12-31 03485540 core:RetainedEarningsAccumulatedLosses 2021-01-01 2021-12-31 03485540 core:RetainedEarningsAccumulatedLosses 2022-01-01 2023-04-30 03485540 core:UKTax 2022-01-01 2023-04-30 03485540 core:UKTax 2021-01-01 2021-12-31 03485540 core:ShareCapital 2023-04-30 03485540 core:ShareCapital 2021-12-31 03485540 core:CapitalRedemptionReserve 2023-04-30 03485540 core:CapitalRedemptionReserve 2021-12-31 03485540 core:RetainedEarningsAccumulatedLosses 2023-04-30 03485540 core:RetainedEarningsAccumulatedLosses 2021-12-31 03485540 core:ShareCapital 2020-12-31 03485540 core:CapitalRedemptionReserve 2020-12-31 03485540 core:RetainedEarningsAccumulatedLosses 2020-12-31 03485540 core:RestatedAmount core:ShareCapital 2020-12-31 03485540 core:CapitalRedemptionReserve core:RestatedAmount 2020-12-31 03485540 core:RestatedAmount core:RetainedEarningsAccumulatedLosses 2020-12-31 03485540 core:RestatedAmount 2020-12-31 03485540 core:RestatedAmount core:ShareCapital 2021-12-31 03485540 core:CapitalRedemptionReserve core:RestatedAmount 2021-12-31 03485540 core:RestatedAmount core:RetainedEarningsAccumulatedLosses 2021-12-31 03485540 core:RestatedAmount 2021-12-31 03485540 bus:OrdinaryShareClass1 core:ShareCapital 2023-04-30 03485540 bus:OrdinaryShareClass1 core:ShareCapital 2021-12-31 03485540 core:BetweenOneFiveYears 2023-04-30 03485540 core:BetweenOneFiveYears 2021-12-31 03485540 core:AcceleratedTaxDepreciationDeferredTax 2023-04-30 03485540 core:AcceleratedTaxDepreciationDeferredTax 2021-12-31 03485540 core:LandBuildings core:ShortLeaseholdAssets 2021-12-31 03485540 core:FurnitureFittingsToolsEquipment 2021-12-31 03485540 core:MotorVehicles 2021-12-31 03485540 core:DeferredTaxation 2021-12-31 03485540 core:DeferredTaxation 2023-04-30 03485540 bus:FRS102 2022-01-01 2023-04-30 03485540 bus:Audited 2022-01-01 2023-04-30 03485540 bus:FullAccounts 2022-01-01 2023-04-30 03485540 bus:LargeMedium-sizedCompaniesRegimeForAccounts 2022-01-01 2023-04-30 03485540 bus:PrivateLimitedCompanyLtd 2022-01-01 2023-04-30 03485540 core:DeferredTaxation 2022-01-01 2023-04-30
Company registration number: 03485540
McNally and Thompson (UK Contracts) Limited
Financial statements
30 April 2023
McNally and Thompson (UK Contracts) Limited
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the members
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
McNally and Thompson (UK Contracts) Limited
Directors and other information
Directors David Errington (Appointed 1 June 2022)
David Gourley (Appointed 1 June 2022)
Fred Gordon Hood
Peter Stephen Malone (Appointed 1 June 2022)
Weston Malone (Appointed 1 June 2022)
Graeme Redford (Appointed 1 June 2022)
Graham Reid (Appointed 1 June 2022)
David Robert Wealleans
Secretary Fred Gordon Hood
Company number 03485540
Registered office Gosforth Industrial Estate
Newcastle upon Tyne
Tyne and Wear
NE3 1XL
Business address Unit 1
North Hylton Enterprises Park
Sunderland
SR5 3AD
Auditor Harrison Hutchinson Ltd
246 Park View
Whitley Bay
Tyne and Wear
NE26 3QX
McNally and Thompson (UK Contracts) Limited
Strategic report
Period ended 30 April 2023
Principal activity
The principal activity remained that of electrical engineers.
Business review and future developments
We aim to present a balanced and comprehensive review of the company's performance and development during the year and its position at the year end. Our review is consistent with the size and nature of our business and also covers the principal risks and uncertanties faced by the company.
Development and performance of the company
The company has returned an impressive performance despite the challenging economic environment in which the company operates.The company has a strong order book and is focusing on sectors that offer potential growth, including educational establishments and large commercial applications.
Key performance indicators
The financial KPI's used to measure the company's progress and performance are revenue, operating profit margin, net assets and net current assets. 2023 2021 Revenue £24,142,275 £14,222,639 Operating profit margin 2.7% 4% Net assets £1,703,812 £1,165,766 Net current asset £1,672,495 £1,243,848
Principal risks and uncertainties
The principal risks and uncertainties face by the business and the mitigating factors in place are as follows;
Market conditions
The construction industry has faced extremely challenging conditions over a number of years, with low levels of confidence throughout the UK economy and austerity measures impacting on the demand for new build. The company mitigates this risk by ensuring it offers its services over a broad range of sectors and seeking to establish lasting relationships with key contractors and end user clients based on our reputation for delivery and the financial strength of the company.
Contractual and operational risk
Failure to deliver projects to time, quality or budget, and contractuals disputes that can arrive over the scope and valuation of contracts, may make the ultimate outcome of contracts uncertain. The company continually assesses and manages contractual and operational risks, including health and safety risks, throughout the bidding stage to the final commissioning of an installation and handover to client, using its experienced team of estimators, engineers, supervisors and surveyors. Our business information systems monitor profit and cashflow throughout the life of a contract and regular review meetings are held to monitor progress and ientify and address operational and financial issues as they arise.
Cost inflation
The majority of projects that we secure do not allow for the recovery of any increase in labour costs. Labour costs for electrical engineers are determined annually by national agreements over which the company has no control. The company manages and, where possible, mitigates this risk by allowing for the potential labour cost increases within the contract costings at the beginning of a contract.
Credit and counterparty risk
The company's main financial assets are contract and other trade receivables and bank balances. These assets represent the company's main exposure to credit risk, which is a risk that a counterparty will fail to discharge its obligations, resulting in financial loss to the company. The company may also be exposed to financial risk through the failure of a subcontractor or supplier. The financial strength of counterparties is considered prior to signing contracts, and reviewed as contracts progress where there are indications that a counterparty may be experiencing financial difficulty. Procedures include the use of credit agencies to check the credit worthiness of existing and new clients and the use of approved supplier lists and framework agreements with key suppliers.
Liquidity risk
The company manages liquidity risk by maintaining adequate cash reserves and banking facilities, monitoring cash flow and by matching maturity profiles of financial assets and liabilities within the bounds of its contractual obligations.
This report was approved by the board of directors on 16 January 2024 and signed on behalf of the board by:
Weston Malone
Director
McNally and Thompson (UK Contracts) Limited
Directors report
Period ended 30 April 2023
The directors present their report and the financial statements of the company for the period ended 30 April 2023.
Directors
The directors who served the company during the period were as follows:
David Errington (Appointed 1 June 2022)
David Gourley (Appointed 1 June 2022)
Fred Gordon Hood
Peter Stephen Malone (Appointed 1 June 2022)
Weston Malone (Appointed 1 June 2022)
Graeme Redford (Appointed 1 June 2022)
Graham Reid (Appointed 1 June 2022)
David Robert Wealleans
Future developments
The company has returned an impressive performance despite the challenging economic environment in which the company operates.The company has a strong order book and is focusing on sectors that offer potential growth, including educational establishments and large commercial applications.
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 period. 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 company and the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent; and
- 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 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 company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 16 January 2024 and signed on behalf of the board by:
Weston Malone
Director
McNally and Thompson (UK Contracts) Limited
Independent auditor's report to the members of
McNally and Thompson (UK Contracts) Limited
Period ended 30 April 2023
Opinion
We have audited the financial statements of McNally and Thompson (UK Contracts) Limited (the 'company') for the period ended 30 April 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 company's affairs as at 31 December 2022 and of its profit for the 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.
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other Information
The 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 period for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and the 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 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.
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: 1. We identified the laws and regulations which apply to the Company and assessed the areas which could have a material effect on the financial statements2. We analysed the financial statements to assess their susceptibility to material misstatement by obtaining an understanding of the entity's operations and control environment 3. We ensured the engagement team were familiar with the entity and the sector in which it operates, including the laws and regulations applicable to it. The engagement team remained alert to any indications of non compliance throughout the audit4. By testing manual journal entries, particularly those relating to management estimates or those that were large or unusual, were able to address the risk of management override of controls5. We reviewed the assumptions and judgements of management in accounting estimates to assess any bias resulting in the risk of material misstatement, indicative of fraud6. Board meeting minutes are reviewed. Our audit procedures are designed to make us aware of instances of non-compliance with laws and regulations leading to the risk of material misstatement. There are inherent limitations with the audit procedures as detecting a material misstatement due to fraud is more difficult than error, due to deliberate concealment or collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment 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 on the effectiveness of the 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.
Other matters
Comparative information in the financial statements is derived from the company's prior period financial statements which were not audited. The prior period's closing balances have been appropriately brought into the current period and sufficient evidence has been acquired to show there are no material misstatements. There has been a prior year adjustment made to work in progress and amounts recoverable on long term contracts in order to bring the accounting policies in line with the parent company. Comparatives have been amended and disclosure has been made in the notes to the accounts.
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 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.
Paul Hutchinson (Senior Statutory Auditor)
For and on behalf of
Harrison Hutchinson Ltd
Senior Auditor and Statutory Auditors
246 Park View
Whitley Bay
Tyne and Wear
NE26 3QX
16 January 2024
McNally and Thompson (UK Contracts) Limited
Statement of comprehensive income
Period ended 30 April 2023
Period Year
ended ended
30/04/23 31/12/21
Note £ £
Turnover 4 24,142,275 14,222,639
Cost of sales ( 21,826,560) ( 12,429,795)
_________ _________
Gross profit 2,315,715 1,792,844
Administrative expenses ( 1,660,113) ( 1,238,519)
Other operating income 5 6,000 21,192
_________ _________
Operating profit 6 661,602 575,517
Other interest receivable and similar income 8 1,860 25
Interest payable and similar expenses 9 ( 7,828) ( 11,515)
_______ _______
Profit before taxation 655,634 564,027
Tax on profit 10 ( 72,589) ( 71,938)
_______ _______
Profit for the financial period and total comprehensive income 583,045 492,089
_______ _______
All the activities of the company are from continuing operations.
McNally and Thompson (UK Contracts) Limited
Statement of financial position
30 April 2023
30/04/23 31/12/21
Note £ £ £ £
Fixed assets
Tangible assets 12 147,717 107,093
_______ _______
147,717 107,093
Current assets
Stocks 13 331,286 30,405
Debtors 14 4,351,127 2,867,796
Cash at bank and in hand 946,933 1,070,518
_________ _________
5,629,346 3,968,719
Creditors: amounts falling due
within one year 15 ( 3,956,852) ( 2,724,871)
_________ _________
Net current assets 1,672,494 1,243,848
_________ _________
Total assets less current liabilities 1,820,211 1,350,941
Creditors: amounts falling due
after more than one year 16 ( 106,244) ( 175,635)
Provisions for liabilities 18 ( 10,156) ( 9,540)
_________ _________
Net assets 1,703,811 1,165,766
_________ _________
Capital and reserves
Called up share capital 23 600 600
Capital redemption reserve 24 400 400
Profit and loss account 24 1,702,811 1,164,766
_________ _________
Shareholders funds 1,703,811 1,165,766
_________ _________
These financial statements were approved by the board of directors and authorised for issue on 16 January 2024 , and are signed on behalf of the board by:
Weston Malone
Director
Company registration number: 03485540
McNally and Thompson (UK Contracts) Limited
Statement of changes in equity
Period ended 30 April 2023
Called up share capital Capital redemption reserve Profit and loss account Total
£ £ £ £
At 1 January 2021 (as previously reported) 600 400 1,014,667 1,015,667
Prior period adjustments (-) (-) (169,490) (169,490)
_______ _______ _______ _______
At 1 January 2021 (restated) 600 400 845,177 846,177
Profit for the period 492,089 492,089
_______ _______ _______ _______
Total comprehensive income for the period - - 492,089 492,089
Equity payments ( 172,500) ( 172,500)
_______ _______ _______ _______
Total investments by and distributions to owners - - ( 172,500) ( 172,500)
At 31 December 2021 (as previously reported) 600 400 1,298,053 1,299,053
Prior period adjustments (-) (-) (133,287) (133,287)
_______ _______ _________ _________
At 31 December 2021 (restated) and 1 January 2022 600 400 1,164,766 1,165,766
Profit for the period 583,045 583,045
_______ _______ _______ _______
Total comprehensive income for the period - - 583,045 583,045
Equity payments ( 45,000) ( 45,000)
_______ _______ _______ _______
Total investments by and distributions to owners - - ( 45,000) ( 45,000)
_______ _______ _________ _________
At 30 April 2023 600 400 1,702,811 1,703,811
_______ _______ _________ _________
McNally and Thompson (UK Contracts) Limited
Statement of cash flows
Period ended 30 April 2023
Period Year
ended ended
30/04/23 31/12/21
£ £
Cash flows from operating activities
Profit for the financial period 583,045 492,089
Adjustments for:
Depreciation of tangible assets 58,012 46,714
Government grant income ( 6,000) ( 21,192)
Other interest receivable and similar income ( 1,860) ( 25)
Interest payable and similar expenses 7,828 11,515
Gain/(loss) on disposal of tangible assets ( 7,304) ( 11,793)
Tax on profit 72,589 71,938
Accrued expenses/(income) 332,755 163,842
Rounding (1) -
Changes in:
Stocks ( 300,881) ( 24,905)
Trade and other debtors ( 1,483,331) ( 199,544)
Trade and other creditors 899,281 147,004
_________ _________
Cash generated from operations 154,133 675,643
Interest paid ( 7,828) ( 11,515)
Interest received 1,860 25
Tax paid - ( 71,131)
_______ _______
Net cash from operating activities 148,165 593,022
_______ _______
Cash flows from investing activities
Purchase of tangible assets ( 123,331) ( 85,665)
Proceeds from sale of tangible assets 32,000 98,207
_______ _______
Net cash (used in)/from investing activities ( 91,331) 12,542
_______ _______
Cash flows from financing activities
Proceeds from borrowings ( 163,487) ( 33,347)
Government grant income 6,000 21,192
Payment of finance lease liabilities 22,068 99,318
Equity payments ( 45,000) ( 172,500)
_______ _______
Net cash used in financing activities ( 180,419) ( 85,337)
_______ _______
Net increase/(decrease) in cash and cash equivalents ( 123,585) 520,227
Cash and cash equivalents at beginning of period 1,070,518 550,291
_________ _________
Cash and cash equivalents at end of period 946,933 1,070,518
_________ _________
McNally and Thompson (UK Contracts) Limited
Notes to the financial statements
Period ended 30 April 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Gosforth Industrial Estate, Newcastle upon Tyne, Tyne and Wear, NE3 1XL.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Turnover
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); 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.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, 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.
Tangible assets
tangible assets are initially recorded at cost, and are 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 capital and reserves, 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 capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves 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:
Short leasehold property - 10 % straight line
Plant and machinery - 33 % straight line
Fittings fixtures and equipment - 10 % straight line
Motor vehicles - 25 % straight line
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of tangible assets, the depreciation is revised prospectively to reflect the new estimates.
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
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 stocks to their present location and condition.
Hire purchase and finance leases
Assets held under finance leases 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.
Construction contracts
Where the outcome of construction contracts can be reliably estimated, contract revenue and contract costs are recognised by reference to the stage of completion of the contract activity as at the period end. Where the outcome of construction contracts cannot be estimated reliably, revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable, and contract costs are recognised as an expense in the period in which they are incurred. The entity uses the percentage of completion method to determine the amounts to be recognised in the period. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred for work performed to date do not include costs relating to future activity, such as for materials or prepayments.
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. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
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. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised in finance costs in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
Period Year
ended ended
30/04/23 31/12/21
£ £
Construction contracts 24,142,275 14,222,639
_________ _________
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
Period Year
ended ended
30/04/23 31/12/21
£ £
Government grant income 6,000 21,192
_______ _______
6. Operating profit
Operating profit is stated after charging/(crediting):
Period Year
ended ended
30/04/23 31/12/21
£ £
Depreciation of tangible assets 58,012 46,714
(Gain)/loss on disposal of tangible assets ( 7,304) ( 11,793)
Fees payable for the audit of the financial statements 7,000 -
_______ _______
7. Staff costs
The aggregate payroll costs incurred during the period were:
Period Year
ended ended
30/04/23 31/12/21
£ £
Wages and salaries 3,529,288 2,204,241
Social security costs 265,013 222,048
Other pension costs 138,326 311,744
_________ _________
3,932,627 2,738,033
_________ _________
8. Other interest receivable and similar income
Period Year
ended ended
30/04/23 31/12/21
£ £
Bank deposits 1,860 25
_______ _______
9. Interest payable and similar expenses
Period Year
ended ended
30/04/23 31/12/21
£ £
Bank loans and overdrafts 988 5,182
Other loans made to the company:
Finance leases and hire purchase contracts 6,840 6,333
_______ _______
7,828 11,515
_______ _______
10. Tax on profit
Major components of tax expense
Period Year
ended ended
30/04/23 31/12/21
£ £
Current tax:
UK current tax expense 71,973 71,131
_______ _______
Deferred tax:
Origination and reversal of timing differences 616 807
_______ _______
Tax on profit 72,589 71,938
_______ _______
Reconciliation of tax expense
The tax assessed on the profit for the period is lower than (2021: lower than) the standard rate of corporation tax in the UK of 19.00 % (2021: 19.00%).
Period Year
ended ended
30/04/23 31/12/21
£ £
Profit before taxation 655,634 564,027
_______ _______
Profit multiplied by rate of tax 124,570 107,165
Effect of expenses not deductible for tax purposes 1,091 1,857
Effect of capital allowances and depreciation 1,372 ( 3,034)
Rounding on tax charge 1 -
Increase in tax rates for partial period 2,456 -
Adjustments to tax charge in respect of prior periods ( 57,518) ( 7,285)
Research and development enhanced deduction - ( 27,572)
_______ _______
Tax on profit 71,972 71,131
_______ _______
11. Earnings per share
Basic earnings/(loss) per share
The earnings/(loss) and weighted average number of shares used in the calculation of basic earnings/(loss) per share are as follows:
Period Year
ended ended
30/04/23 31/12/21
£ £
Profit for the period attributable to the owners of the company 583,045 492,089
_______ _______
Diluted earnings/(loss) per share
The earnings/(loss) and weighted average number of shares used in the calculation of diluted earnings/(loss) per share are as follows:
Period Year
ended ended
30/04/23 31/12/21
£ £
Earnings/(loss) used in calculation of basic earnings/(loss) per share 583,045 492,089
_______ _______
12. Tangible assets
Short leasehold property Plant and machinery Fixtures, fittings and equipment Motor vehicles Total
£ £ £ £ £
Cost
At 1 January 2022 3,483 533 37,132 198,151 239,299
Additions - - 3,717 119,614 123,331
Disposals - - - ( 35,921) ( 35,921)
_______ _______ _______ _______ _______
At 30 April 2023 3,483 533 40,849 281,844 326,709
_______ _______ _______ _______ _______
Depreciation
At 1 January 2022 2,843 533 29,592 99,238 132,206
Charge for the year 464 - 4,194 53,353 58,011
Disposals - - - ( 11,225) ( 11,225)
_______ _______ _______ _______ _______
At 30 April 2023 3,307 533 33,786 141,366 178,992
_______ _______ _______ _______ _______
Carrying amount
At 30 April 2023 176 - 7,063 140,478 147,717
_______ _______ _______ _______ _______
At 31 December 2021 640 - 7,540 98,913 107,093
_______ _______ _______ _______ _______
13. Stocks
30/04/23 31/12/21
£ £
Work in progress 325,786 24,905
Finished goods and goods for resale 5,500 5,500
_______ _______
331,286 30,405
_______ _______
14. Debtors
30/04/23 31/12/21
£ £
Trade debtors 4,009,460 2,797,976
Prepayments and accrued income 49,760 14,217
Other debtors 291,907 55,603
_________ _________
4,351,127 2,867,796
_________ _________
15. Creditors: amounts falling due within one year
30/04/23 31/12/21
£ £
Bank loans and overdrafts - 32,969
Trade creditors 3,142,193 2,166,521
Accruals and deferred income 666,087 333,332
Corporation tax 71,973 -
Social security and other taxes 60,741 133,966
Obligations under finance leases 15,142 26,183
Director loan accounts - 28,018
Other creditors 716 3,882
_________ _________
3,956,852 2,724,871
_________ _________
16. Creditors: amounts falling due after more than one year
30/04/23 31/12/21
£ £
Bank loans and overdrafts - 102,500
Obligations under finance leases 106,244 73,135
_______ _______
106,244 175,635
_______ _______
17. Obligations under finance leases
Company lessee
The total future minimum lease payments under finance lease agreements are as follows:
30/04/23 31/12/21
£ £
Not later than 1 year 15,142 26,183
Later than 1 year and not later than 5 years 106,244 73,135
_______ _______
121,386 99,318
_______ _______
Present value of minimum lease payments 121,386 99,318
_______ _______
30/04/23 31/12/21
18. Provisions
Deferred tax (note 19) Total
£ £
At 1 January 2022 9,540 9,540
Other movements 1 616 616
_______ _______
At 30 April 2023 10,156 10,156
_______ _______
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
30/04/23 31/12/21
£ £
Included in provisions (note 18) 10,156 9,540
_______ _______
The deferred tax account consists of the tax effect of timing differences in respect of:
30/04/23 31/12/21
£ £
Accelerated capital allowances 10,156 9,540
_______ _______
20. Employee benefits
The amount recognised in profit or loss in relation to defined contribution plans was £ 138,326 (2021: £ 311,744 ).
21. Government grants
The amounts recognised in the financial statements for government grants are as follows:
30/04/23 31/12/21
£ £
Recognised in other operating income:
Government grants recognised directly in income 6,000 21,192
_______ _______
22. Prior period errors
Prior period adjustments have been made to align accounting policies with the partent company. Adjustments have been made to work in progress, amounts recoverable on contracts and accruals.
23. Called up share capital
Issued, called up and fully paid
30/04/23 31/12/21
No £ No £
Ordinary shares of £ 1.00 each 600 600 600 600
_______ _______ _______ _______
24. Reserves
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.
25. Analysis of changes in net debt
At 1 January 2022 Cash flows At 30 April 2023
£ £ £
Cash and cash equivalents 1,070,518 (123,585) 946,933
Debt due within one year (87,170) 72,028 (15,142)
Debt due after one year (175,635) 69,391 (106,244)
_______ _______ _________
807,713 17,834 825,547
_______ _______ _________