PALLET_PLUS_LIMITED - Accounts


Company registration number 05529345 (England and Wales)
PALLET PLUS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023
PALLET PLUS LIMITED
COMPANY INFORMATION
Directors
Mr M J Kilner
(Appointed 15 August 2023)
Mr A D Taylor
(Appointed 15 August 2023)
Company number
05529345
Registered office
Premier Point Premier Gate
Staithgate Lane
Bradford
United Kingdom
BD6 1DW
Auditor
Azets Audit Services Limited
12 King Street
Leeds
LS1 2HL
PALLET PLUS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
PALLET PLUS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 1 -

The directors present the strategic report for the Period ended 30 November 2023.

Review of the business

The Directors are pleased to report a stable year in terms of the financial performance of the business which like for like was only slightly behind 2022. Industry pressures continued to be prevalent and high levels of inflation resulted in significant cost increases across all areas of the business, challenging margin levels.

 

The strategy for the period remained focussed on providing a cost effective, high level of service to the customer base in the Colchester area. During the year the business was acquired by Expect Distribution Group Ltd as part of their plan to offer a greater service offering throughout the UK.

 

The current period is a 15 month period from 1 September 2022 to 30 November 2023, as such, the results are not directly comparable. When comparing like for like (November 2022 to November 2023), revenue decreased by £231k (2.2%) when compared to 2022 and profit before tax reduced by £199k year on year. This was primarily down to a reduction in our existing customer despatches combined with increasing cost pressures some of which not recovered from our customers.

 

Investment in our people and infrastructure remained one of the highest priorities throughout the year as it is recognised that development and the welfare of our people is the key to our success. We continue to attract the industry's talent by operating a culture of opportunity with career progression for those who wish, particularly being part of the wider Expect Distribution Group.

 

Benchmarking of pay rates and employee benefits were undertaken in the year across the workforce and increases awarded to maintain our position in the upper quartile of the market. It is as important as ever that our colleagues are appropriately remunerated given current cost of living increases, but also that our benefits package remains industry leading and contributes to their well-being accordingly.

 

Our 2024 strategy is to focus on developing our service offering in line with the Expect Group, with long term partnerships our primary aim where we add value to our customers’ supply chain. Retention of existing customers is a priority and we must focus on continuing to service those customers to a high standard, whilst investing heavily in the workforce that enable our day to day success.

 

The tough trading conditions continue to bring challenges to our growth aspirations, but the Directors are confident that we have the strength to navigate through and continue with the path of positive growth within the business.

 

Our priorities continue to remain the health, safety and well-being of those employees and on delivering strong service levels for all our customers. The Directors would like to recognise the dedication of all Pallet Plus colleagues once again and thank all involved in making the year a success.

 

 

PALLET PLUS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 2 -
Principal risks and uncertainties

Financial risk management objectives and policies;

The Company operates mainly in the UK and seeks to mitigate exposure to all forms of risk both internal and external.

 

Customer and Suppliers;

The Company is not wholly dependent on any one main customer or supplier and has a low concentration risk across the customer base.

 

Credit Risk;

The Company seeks to reduce risk by carrying out credit checks on new customers and operating strict credit control on its debtor ledger.

 

Laws and Regulations;

The Company complies with all road traffic, health and safety and employment law and takes its responsibilities very seriously.

 

Employees;

The Company continues to be an equal opportunities employer. In employment related decisions, the company complies with anti-discrimination requirements concerning matters of race, colour, national origin, marital status, sexual orientation, religious belief, age and physical or mental ability. Disabled people are given full and equal consideration for employment and their development is assisted and encouraged.

 

Employees are consulted about changes which may affect them through the Company's appointed officers.

 

 

Key performance indicators

Key performance indicators for the business were as follows:

 

 

 

Period to

Year to

 

 

Nov-23

Aug-22

 

 

 

 

Turnover

 

12,401,033

10,436,202

Gross Profit

3,262,913

2,779,217

Gross Margin

26%

27%

Profit Before Tax

1,357,196

1,090,380

 

On behalf of the board

Mr M J Kilner
Director
11 June 2024
PALLET PLUS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 3 -

The directors present their annual report and financial statements for the Period ended 30 November 2023.

Principal activities

The principal activity of the company continued to be that of distribution services.

Results and dividends

The results for the Period are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the Period and up to the date of signature of the financial statements were as follows:

Mr M J Kilner
(Appointed 15 August 2023)
Mr A D Taylor
(Appointed 15 August 2023)
A Rowe
(Resigned 15 August 2023)
G Rowe
(Resigned 15 August 2023)
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr M J Kilner
Director
11 June 2024
PALLET PLUS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of 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 judgements and accounting estimates that are reasonable and prudent;

  • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

 

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.

PALLET PLUS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PALLET PLUS LIMITED
- 5 -

Opinion

We have audited the financial statements of Pallet Plus Limited (the 'company') for the Period ended 30 November 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

  • give a true and fair view of the state of the company's affairs as at 30 November 2023 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 qualified opinion

We were not appointed as auditor of the company until after 31 August 2022 and thus did not audit the closing balances at the end of the prior year. We were unable to satisfy ourselves by alternative means concerning the balances outstanding at 31 August 2022. Consequently we were unable to determine whether any adjustments to these amounts were necessary. 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 qualified 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 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.

PALLET PLUS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PALLET PLUS LIMITED
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

  • the information given in the strategic report and the directors' report for the financial Period for which the financial statements are prepared is consistent with the financial statements; and

  • the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

  • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

  • the financial statements are not in agreement with the accounting records and returns; or

  • certain disclosures of remuneration specified by law are not made; or

  • we have not received all the information and explanations we require for our audit.

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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

PALLET PLUS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PALLET PLUS LIMITED
- 7 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we 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.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

  • Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

  • Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection; 

  • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

  • Performing audit work over the risk of management bias and 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 indicators of potential bias; and

  • Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.

 

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 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.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.

Chris Butt
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
11 June 2024
Chartered Accountants
Statutory Auditor
12 King Street
Leeds
LS1 2HL
PALLET PLUS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 8 -
Period
Year
ended
ended
30 November
31 August
2023
2022 (unaudited)
Notes
£
£
Turnover
3
12,401,033
10,436,202
Cost of sales
(9,138,120)
(7,656,985)
Gross profit
3,262,913
2,779,217
Administrative expenses
(1,943,006)
(1,750,194)
Other operating income
89,557
97,171
Operating profit
4
1,409,464
1,126,194
Interest payable and similar expenses
7
(52,268)
(35,814)
Profit before taxation
1,357,196
1,090,380
Tax on profit
8
(347,780)
(172,907)
Profit for the financial Period
1,009,416
917,473

The profit and loss account has been prepared on the basis that all operations are continuing operations.

PALLET PLUS LIMITED
BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 9 -
30 November 2023
31 August 2022 (unaudited)
Notes
£
£
£
£
Fixed assets
Intangible assets
10
125,000
-
0
Tangible assets
11
1,891,010
2,422,956
2,016,010
2,422,956
Current assets
Stocks
12
24,036
-
Debtors
13
3,874,096
2,156,282
Cash at bank and in hand
28,796
349,945
3,926,928
2,506,227
Creditors: amounts falling due within one year
14
(2,070,643)
(2,203,662)
Net current assets
1,856,285
302,565
Total assets less current liabilities
3,872,295
2,725,521
Creditors: amounts falling due after more than one year
15
(549,699)
(546,001)
Provisions for liabilities
Deferred tax liability
18
496,011
362,351
(496,011)
(362,351)
Net assets
2,826,585
1,817,169
Capital and reserves
Called up share capital
20
102
102
Profit and loss reserves
2,826,483
1,817,067
Total equity
2,826,585
1,817,169
The financial statements were approved by the board of directors and authorised for issue on 11 June 2024 and are signed on its behalf by:
Mr M J Kilner
Director
Company Registration No. 05529345
PALLET PLUS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2021
102
1,075,594
1,075,696
Year ended 31 August 2022:
Profit and total comprehensive income for the year
-
917,473
917,473
Dividends
9
-
(176,000)
(176,000)
Balance at 31 August 2022
102
1,817,067
1,817,169
Period ended 30 November 2023:
Profit and total comprehensive income for the period
-
1,009,416
1,009,416
Balance at 30 November 2023
102
2,826,483
2,826,585
PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 11 -
1
Accounting policies
Company information

Pallet Plus Limited is a private company limited by shares incorporated in England and Wales. The registered office is Premier Point Premier Gate, Staithgate Lane, Bradford, United Kingdom, BD6 1DW.

1.1
Reporting period

The reporting period for the entity is a 15 month period from 1 September 2022 to 30 November 2023. Therefore, the figures will not be wholly comparable with the prior period.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

  • Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

  • Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

  • Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

  • Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

 

The company has taken advantage of the exemption conferred by section 33.11 of FRS102 allowing it not to disclose transactions and balance within its group, on the grounds that those entities are related by virtue of having the same control as defined in 33.11(b).

 

The financial statements of the company are consolidated in the financial statements of Expect Distribution Group Limited. These consolidated financial statements are available from its registered office, Premier Point, Premier Gate, Staithgate Lane, Bradford, BD6 1DW.

 

The immediate parent company is Expect Distribution Group Limited. ,Expect Distribution Group Limited acquired the share capital of Pallet Plus Limited during the year.

PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Going concern

The directors have considered all factors, including in the wider economy, as part of their assessment of going concern. Although the current economic climate creates both cashflow and profitability risks for the company, the company continues to trade profitably and is cash generative. Budgets and cashflows have been prepared using assumptions for customer demand and supply chain costs as well as expectations for legal and regulatory environmental impacts. These budgets and cashflows indicate continuing profitability and cash generation, consequently the directors believe on balance that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements. Accordingly, these financial statements have been prepared on the going concern basis. true

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
10% Straight line
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Over the term of the lease
Leasehold improvements
Over the term of the lease
Plant and equipment
20% on reducing balance
Fixtures and fittings
20% on reducing balance
Computers
20% on reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 13 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Stocks

Stock held is in relation to fuel and tyres for vehicles. Stock is held at the lower of cost and net realisable value.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.16
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

The directors do not consider there to be any significant judgements or estimations,

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The depreciation policies have been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £667,206 which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.

PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 17 -
3
Turnover and other revenue
2023
2022 (unaudited)
£
£
Turnover analysed by class of business
Distribution
12,401,033
10,436,202
2023
2022 (unaudited)
£
£
Turnover analysed by geographical market
United Kingdom
12,401,033
10,436,202
2023
2022 (unaudited)
£
£
Other revenue
Grants received
-
19,800
4
Operating profit
2023
2022 (unaudited)
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
-
(19,800)
Fees payable to the company's auditor for the audit of the company's financial statements
7,500
-
0
Depreciation of owned tangible fixed assets
339,718
223,462
Depreciation of tangible fixed assets held under finance leases
327,488
195,132
(Profit)/loss on disposal of tangible fixed assets
(151,495)
24,360
Operating lease charges
237,643
99,191
5
Employees

The average monthly number of persons (including directors) employed by the company during the Period was:

2023
2022 (unaudited)
Number
Number
Average number of employees
79
90
PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
5
Employees
(Continued)
- 18 -

Their aggregate remuneration comprised:

2023
2022 (unaudited)
£
£
Wages and salaries
3,069,582
2,627,821
Social security costs
301,935
258,558
Pension costs
101,646
58,252
3,473,163
2,944,631
6
Directors' remuneration
2023
2022 (unaudited)
£
£
Remuneration for qualifying services
25,000
25,000
Company pension contributions to defined contribution schemes
875
376
25,875
25,376

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 (unaudited) - 2).

7
Interest payable and similar expenses
2023
2022 (unaudited)
£
£
Interest on bank overdrafts and loans
3,131
8,879
Interest on finance leases and hire purchase contracts
49,137
26,935
52,268
35,814
8
Taxation
2023
2022 (unaudited)
£
£
Current tax
UK corporation tax on profits for the current period
214,120
102,691
Deferred tax
Origination and reversal of timing differences
133,660
70,216
Total tax charge
347,780
172,907
PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
8
Taxation
(Continued)
- 19 -

The actual charge for the Period can be reconciled to the expected charge for the Period based on the profit or loss and the standard rate of tax as follows:

2023
2022 (unaudited)
£
£
Profit before taxation
1,357,196
1,090,380
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022 (unaudited): 19.00%)
312,291
207,172
Tax effect of expenses that are not deductible in determining taxable profit
10,851
1,718
Adjustments in respect of prior years
110,520
-
0
Group relief
(100)
-
0
Research and development tax credit
(40,222)
(24,013)
Other non-reversing timing differences
(18,344)
-
0
Fixed asset differences
(27,216)
(11,970)
Taxation charge for the period
347,780
172,907
9
Dividends
2023
2022 (unaudited)
£
£
Final paid
-
0
176,000
10
Intangible fixed assets
Software
£
Cost
At 1 September 2022
-
0
Additions
125,000
At 30 November 2023
125,000
Amortisation and impairment
At 1 September 2022 and 30 November 2023
-
0
Carrying amount
At 30 November 2023
125,000
At 31 August 2022
-
0
PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 20 -
11
Tangible fixed assets
Leasehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
£
Cost
At 1 September 2022
4,321
624,874
2,712,820
118,149
43,805
3,503,969
Additions
3,938
40,080
711,554
-
0
8,097
763,669
Disposals
-
0
(664,954)
(333,190)
-
0
-
0
(998,144)
At 30 November 2023
8,259
-
0
3,091,184
118,149
51,902
3,269,494
Depreciation and impairment
At 1 September 2022
1,584
115,558
898,211
52,150
13,510
1,081,013
Depreciation charged in the Period
-
0
-
0
656,261
696
10,249
667,206
Eliminated in respect of disposals
-
0
(115,558)
(254,177)
-
0
-
0
(369,735)
At 30 November 2023
1,584
-
0
1,300,295
52,846
23,759
1,378,484
Carrying amount
At 30 November 2023
6,675
-
0
1,790,889
65,303
28,143
1,891,010
At 31 August 2022
2,737
509,316
1,814,609
65,999
30,295
2,422,956

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022 (unaudited)
£
£
Plant and equipment
1,369,086
1,020,906
12
Stocks
2023
2022 (unaudited)
£
£
Fuel and tyre stock
24,036
-
PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 21 -
13
Debtors
2023
2022 (unaudited)
Amounts falling due within one year:
£
£
Trade debtors
1,336,294
1,511,270
Amounts owed by group undertakings
2,391,966
-
0
Other debtors
59,122
411,749
Prepayments and accrued income
86,714
233,263
3,874,096
2,156,282

Amounts owed by group undertakings are repayable on demand.

14
Creditors: amounts falling due within one year
2023
2022 (unaudited)
Notes
£
£
Bank loans
16
-
0
635,409
Obligations under finance leases
17
443,371
464,388
Other borrowings
16
178,243
-
0
Trade creditors
505,614
458,860
Corporation tax
254,355
102,691
Other taxation and social security
457,485
-
0
Other creditors
183,771
200,693
Accruals and deferred income
47,804
341,621
2,070,643
2,203,662

Amounts owed from group undertakings are repayable on demand.

15
Creditors: amounts falling due after more than one year
2023
2022 (unaudited)
Notes
£
£
Obligations under finance leases
17
549,699
546,001
PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 22 -
16
Loans and overdrafts
2023
2022 (unaudited)
£
£
Bank loans
-
0
635,409
Other loans
178,243
-
0
178,243
635,409
Payable within one year
178,243
635,409

Other loans are in relation to an invoice discounting facility. Amounts are all due within one year.

17
Finance lease obligations
2023
2022 (unaudited)
Future minimum lease payments due under finance leases:
£
£
Within one year
487,104
464,388
In two to five years
593,694
618,436
1,080,798
1,082,824
Less: future finance charges
(87,728)
(72,435)
993,070
1,010,389

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022 (unaudited)
Balances:
£
£
Accelerated capital allowances
496,011
362,351
PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
18
Deferred taxation
(Continued)
- 23 -
2023
Movements in the Period:
£
Liability at 1 September 2022
362,351
Charge to profit or loss
133,660
Liability at 30 November 2023
496,011

The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.

 

The UK corporation tax rate was 19% until April 2023 when the rate increased to 25%. Deferred tax balances at the reporting date are therefore measured at 25% (2022 - 25%).

19
Retirement benefit schemes
2023
2022 (unaudited)
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
101,646
58,252

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The total commitment outstanding in relation to retirement benefit contributions totalled £6,712 (2022 - £10,251)

20
Share capital
2023
2022 (unaudited)
2023
2022 (unaudited)
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
Ordinary A of £1 each
1
1
1
1
Ordinary B of £1 each
1
1
1
1
102
102
102
102

The Ordinary A & Ordinary B shares have no voting rights attached to them.

PALLET PLUS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 24 -
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022 (unaudited)
£
£
Within one year
210,000
210,000
22
Subsidiaries

Details of the company's subsidiaries at 30 November 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Crossways Commercials Limited
Premier Point Premier Gate, Staithgate Lane, Bradford, England, BD6 1DW
Ordinary
100.00
23
Ultimate controlling party

The ultimate parent company and controlling party is Expect Distribution Group Limited, a company registered in England and Wales with registered office Premier Point, Premier Gate, Staithgate Lane, Bradford, BD6 1DW. Expect Distribution Group Limited is the smallest and largest group into which the company is consolidated.

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