MPH Merchant (South Coast) Limited - Period Ending 2023-08-31

MPH Merchant (South Coast) Limited

Contents

Company Information	1
Balance Sheet	2
Notes to the Unaudited Financial Statements	3 to 9

MPH Merchant (South Coast) Limited

Company Information

Directors

J E Milligan S Massey M N Turner C A Edwards

Company secretary

J E Milligan

Registered office

Olympus House Britannia Road Patchway Bristol BS34 5TA

Accountants

Hazlewoods LLP Windsor House Bayshill Road Cheltenham GL50 3AT

MPH Merchant (South Coast) Limited

(Registration number: 06723751)
Balance Sheet as at 31 August 2023

	Note	2023  £	2022  £
Fixed assets
Tangible assets	4	73,398	91,420
Other financial assets		1,300	1,300
		74,698	92,720
Current assets
Stocks	5	624,279	712,995
Debtors	6	1,813,503	2,193,915
Cash at bank and in hand		37,129	39,590
		2,474,911	2,946,500
Creditors: Amounts falling due within one year	7	(1,249,802)	(1,779,057)
Net current assets		1,225,109	1,167,443
Net assets		1,299,807	1,260,163
Capital and reserves
Called up share capital		22,211	22,211
Share premium reserve		17,216	17,216
Profit and loss account		1,260,380	1,220,736
Total equity		1,299,807	1,260,163

For the financial year ending 31 August 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

•	The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and
•	The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 9 February 2024 and signed on its behalf by:
 

J E Milligan
Director

MPH Merchant (South Coast) Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Olympus House
Britannia Road
Patchway
Bristol
BS34 5TA

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Judgements and estimation uncertainty

These financial statements do not contain any significant judgements or estimation uncertainty.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company. The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.

MPH Merchant (South Coast) Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2023

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current 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 operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Fixtures and fittings	20% straight line basis
Motor vehicles	20% straight line basis
Leasehold improvements	Over the term of the lease
Plant and machinery	Over 15 years on a straight line basis

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the First In First Out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

MPH Merchant (South Coast) Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2023

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

MPH Merchant (South Coast) Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2023

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

MPH Merchant (South Coast) Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2023

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was as follows:

	2023  No.	2022  No.
Average number of employees	22	26

4

Tangible assets

	Leasehold improvements £	Furniture, fittings and equipment  £	Motor vehicles  £	Total £
Cost
At 1 September 2022	122,171	217,522	33,087	372,780
Additions	2,100	7,249	-	9,349
At 31 August 2023	124,271	224,771	33,087	382,129
Depreciation
At 1 September 2022	74,745	173,528	33,087	281,360
Charge for the year	9,439	17,932	-	27,371
At 31 August 2023	84,184	191,460	33,087	308,731
Carrying amount
At 31 August 2023	40,087	33,311	-	73,398
At 31 August 2022	47,426	43,994	-	91,420

5

Stocks

	2023  £	2022  £
Goods for resale	624,279	712,995

6

Debtors

	Note	2023  £	2022  £
Trade debtors		704,076	716,043
Amounts owed by group undertakings	12	973,285	1,307,817
Other debtors		49,078	92,145
Prepayments		89,265	76,789
Deferred tax assets		(2,201)	1,121
		1,813,503	2,193,915

MPH Merchant (South Coast) Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2023

7

Creditors

	Note	2023  £	2022  £
Due within one year
Loans and borrowings	8	283,306	544,087
Trade creditors		711,755	800,073
Social security and other taxes		15,350	164,816
Other creditors		8,770	27,903
Accrued expenses		198,181	210,430
Corporation tax liability		32,440	31,748
		1,249,802	1,779,057

8

Loans and borrowings

	2023 £	2022 £
Current loans and borrowings
Bank borrowings	26,192	37,036
Confidential invoice discounting arrangement	257,114	507,051
	283,306	544,087

The above discounting liability is secured via a fixed and floating charge over the company's assets.

9

Share capital

Allotted, called up and fully paid shares

	2023		2022
	No.	£	No.	£
Ordinary A shares of £1 each	18,000	18,000	18,000	18,000
Ordinary B shares of £1 each	4,211	4,211	4,211	4,211
	22,211	22,211	22,211	22,211

Rights, preferences and restrictions

The shares rank pari passu in all respects except the right to dividends.

10

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £29,588 (2022 - £26,184).

MPH Merchant (South Coast) Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2023

11

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

	2023  £	2022  £
Not later than one year	91,459	109,556
Later than one year and not later than five years	-	91,459
	91,459	201,015

12

Related party transactions

Other related party transactions

During the year the company made the following related party transactions:

Kellaway Building Supplies Limited
(a company controlled by director (J E Milligan)
The company made purchases of £299,741 (2022 - £312,631) from Kellaway Building Supplies Limited. The company was charged management charges of £85,544,(2022 - £84,672) by Kellaway Building Supplies Limited.

MPH Merchant Limited
(a company controlled by director (J E Milligan)
At the balance sheet date, the amount due from MPH Merchant Limited was £870,247 (2022 - £1,307,817).

13

Parent and ultimate parent undertaking

The company's immediate parent company is MPH Merchant Limited, incorporated in England and Wales.

 The ultimate controlling party is J E Milligan by virtue of his shareholding in MPH Merchant Limited.

14

Disclosure under Section 444(5B) CA 2006

As permitted by Section 444 CA 2006, these accounts do not contain a copy of the company’s Profit and Loss account or a copy of the Directors’ Report. These accounts are unaudited.