Messenger Construction Limited - Limited company accounts 16.3

REGISTERED NUMBER: 07608158 (England and Wales)

Messenger Construction Limited

Strategic Report, Report of the Directors and

Financial Statements For The Year Ended 31st March 2017

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Income Statement

5

Other Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Notes to the Financial Statements

9

to

15

DIRECTORS:

P A Gibbons

K J Kosmaczewski

Mrs J F MacDonald

M C Cipriani

SECRETARY:

P A Gibbons

REGISTERED OFFICE:

310 Wellingborough Road

Northampton

Northamptonshire

NN1 4EP

BUSINESS ADDRESS:

The Messenger Centre

Crown Lane

Tinwell

Stamford

PE9 3UF

REGISTERED NUMBER:

07608158 (England and Wales)

AUDITORS:

Cheney & Co

Statutory Auditor

310 Wellingborough Road

Northampton

NN1 4EP

The directors present their strategic report for the year ended 31st March 2017.

During the year the company has continued to grow and expand as the reputation for high quality and reliable work

attracts more new customers to the already large client base. This has led to an increase in turnover on the previous

year.

REVIEW OF BUSINESS

The directors are pleased with business for the year, and would like to thank all their staff and suppliers for their

assistance throughout the year. During this period the company has also obtained planning permission to build new

offices and a heritage centre dedicated to the history of Collyweston stone slate production. The company has also

continued its research into the production of new Collyweston stone slates by applying new and innovative techniques,

with the aim of shortening the production time and increasing the availability of this unique roofing material.

The business has also continued to expand into complimentary areas in order to enable the business to develop and

also enable a more complete service package to the customer base.

During the year the company has undertaken some key works and is pleased with the results achieved.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors are not aware of any specific fundamental risks and uncertainties with regards to the current trading

activities, they are aware of the ongoing talks with regards to Brexit and the higher demand for skilled work and bespoke

services within the industry.

KEY PERFORMANCE INDICATORS

The directors would wish to disclose the following Key Performance Indicators

2017

2016

2015

£ 000's

£ 000's

£ 000's

Turnover

21,290

15,088

10,131

Percentage growth

41.11%

48.93%

91.63%

Gross profit %

12.12%

10.78%

16.59%

Liquidity ratio

116.68%

111.45%

118.18%

Debtor days

58

40

40

Trading ratio

8.66%

12.00%

5.93%

Net profit %

3.44%

3.1%

3.97%

Gearing

10.15%

6.13%

-%

BUSINESS GROWTH & DEVELOPMENT

The directors are happy with the expected growth and development with the future and have taken steps to extend the

service base and expand current customers winning some prestigious contracts for the forth coming years.

ON BEHALF OF THE BOARD:

P A Gibbons - Director

15th September 2017

The directors present their report with the financial statements of the company for the year ended 31st March 2017.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of property construction.

DIVIDENDS

The total distribution of dividends for the year ended 31st March 2017 will be £ 175,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1st April 2016 to the date of this report.

P A Gibbons

K J Kosmaczewski

M C Cipriani

Other changes in directors holding office are as follows:

Mrs J F MacDonald - appointed 1st April 2016

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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;

-	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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to

have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that

the company's auditors are aware of that information.

AUDITORS

The auditors, Cheney & Co, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

P A Gibbons - Director

15th September 2017

We have audited the financial statements of Messenger Construction Limited for the year ended 31st March 2017 on

pages five to fifteen. The financial reporting framework that has been applied in their preparation is applicable law and

United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial

Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

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 a Report of the Auditors 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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances

and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates

made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and

non-financial information in the Strategic Report and the Report of the Directors to identify material inconsistencies with

the audited financial statements and to identify any information that is apparently materially incorrect based on, or

materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of

any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31st March 2017 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter with regards to first year audit procedures

During the year the group of companies are now being audited and we have carried audit procedures on the opening

balances and standard audit procedures on the current year figures, however we have not completed an audit on the

comparatives balances within these financial statements, and as such offer no opinion upon those balances.

As a part of the audit work we have reviewed the opening balances and noted that the allocation of profits on two long

term contract projects had been overstated in the previous year, and in order to correctly reflect the attributable profit to

this years financial statements these have adjusted this in the proportion to the costs attributable to the previous year,

the adjustment of £239,785 has been reflected in the opening balance and comparative figures.

Matters on which we are required to report by exception

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 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.

Paul Sparks ACA FCCA (Senior Statutory Auditor)

for and on behalf of Cheney & Co

Statutory Auditor

310 Wellingborough Road

Northampton

NN1 4EP

15th September 2017

TURNOVER

21,290,959

15,088,566

Cost of sales

(18,710,586

)

(13,462,134

)

GROSS PROFIT

2,580,373

1,626,432

Administrative expenses

(1,832,261

)

(1,144,758

)

OPERATING PROFIT

4

748,112

481,674

Interest receivable and similar income

620

780

748,732

482,454

Interest payable and similar expenses

5

(15,592

)

(14,558

)

PROFIT BEFORE TAXATION

733,140

467,896

Tax on profit

6

(70,288

)

(143,234

)

PROFIT FOR THE FINANCIAL YEAR

662,852

324,662

PROFIT FOR THE YEAR

662,852

324,662

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

662,852

324,662

FIXED ASSETS

Tangible assets

9

224,050

168,228

CURRENT ASSETS

Stocks

10

1,641,244

1,587,321

Debtors

11

4,196,460

2,395,574

Cash at bank and in hand

432

354,516

5,838,136

4,337,411

CREDITORS

Amounts falling due within one year

12

5,003,709

3,891,799

NET CURRENT ASSETS

834,427

445,612

TOTAL ASSETS LESS CURRENT LIABILITIES

1,058,477

613,840

CREDITORS

Amounts falling due after more than one year

13

(136,687

)

(182,902

)

PROVISIONS FOR LIABILITIES

17

(13,600

)

(10,600

)

NET ASSETS

908,190

420,338

CAPITAL AND RESERVES

Called up share capital

18

150

150

Retained earnings

19

908,040

420,188

SHAREHOLDERS' FUNDS

908,190

420,338

The financial statements were approved by the Board of Directors on 15th September 2017 and were signed on its behalf by:

P A Gibbons - Director

K J Kosmaczewski - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st April 2015

150

310,526

310,676

Changes in equity

Dividends

-

(215,000

)

(215,000

)

Total comprehensive income

-

324,662

324,662

Balance at 31st March 2016

150

420,188

420,338

Changes in equity

Dividends

-

(175,000

)

(175,000

)

Total comprehensive income

-

662,852

662,852

Balance at 31st March 2017

150

908,040

908,190

1.	STATUTORY INFORMATION

Messenger Construction Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

These are the first financial statements that comply with Financial Reporting Standard 102 , the date of transition

is 1st April 2015.

The significant accounting policies applied in the preparation of these financial statements are set out

below.These policies have been consistently applied to all years presented unless otherwise stated.

Financial reporting standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial

statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of

Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

25% on cost

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on cost and at varying rates on cost

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance

for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in

bringing stocks to their present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws

that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal

of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those

held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance

leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element

of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

2017

2016

as restated

£

£

Wages and salaries

1,783,650

1,215,543

Social security costs

83,948

51,874

Other pension costs

43,665

127,787

1,911,263

1,395,204

The average monthly number of employees during the year was as follows:

2017

2016

as restated

Head office

25

25

Site

27

15

52

40

2017

2016

as restated

£

£

Directors' remuneration

138,516

68,434

Directors' pension contributions to money purchase schemes

24,372

100,000

Compensation to director for loss of office

-

59,160

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

4

4

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2017

2016

as restated

£

£

Hire of plant and machinery

411,984

452,392

Other operating leases

38,327

43,036

Depreciation - owned assets

39,158

28,828

Depreciation - assets on finance leases

31,590

23,748

Profit on disposal of fixed assets

-

(5,673

)

Auditors' remuneration

6,000

-

Foreign exchange differences

(9

)

(107

)

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2017

2016

as restated

£

£

Bank interest

8,375

284

Bank loan interest

-

4,436

Leasing

7,217

9,838

15,592

14,558

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2017

2016

as restated

£

£

Current tax:

UK corporation tax

67,288

139,032

Deferred tax

3,000

4,202

Tax on profit

70,288

143,234

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

2017

2016

as restated

£

£

Profit before tax

733,140

467,896

Profit multiplied by the standard rate of corporation tax in the UK of 20% (2016 - 20%)

146,628

93,579

Effects of:

Expenses not deductible for tax purposes

5,796

2,810

Capital allowances in excess of depreciation

(3,748

)

(5,315

)

Research and Development tax credits

(29,228

)

-

Deferred tax movement

(1,202

)

4,202

Adjustment to costs on long term contracts

(47,958

)

47,958

Total tax charge

70,288

143,234

7.

DIVIDENDS

2017

2016

as restated

£

£

Interim

175,000

215,000

8.	PRIOR YEAR ADJUSTMENT

The financial statements for the year ended 31st March 2016 have been re stated to adjust for finance lease

assets that were not recorded in fixed assets or lease purchase liabilities in 2016.This has resulted in an

increase in fixed assets of £115,332 and an increase in lease purchases liabilities of £115,332.There was no

change in profit as depreciation on these assets equalled the finance lease interest charge. As part of the review

of the opening balances it was discovered that two long term contracts had previously reported higher profits in

the previous year than was expected, these have been adjusted in last year's accounts and in the opening

balance to this year, the amount was £239,785.

9.	TANGIBLE FIXED ASSETS

Fixtures

Plant and

and

Motor

machinery

fittings

vehicles

Totals

£

£

£

£

COST

At 1st April 2016

49,309

62,955

158,075

270,339

Additions

42,600

1,636

88,324

132,560

Disposals

-

-

(5,990

)

(5,990

)

At 31st March 2017

91,909

64,591

240,409

396,909

DEPRECIATION

At 1st April 2016

22,240

41,877

37,994

102,111

Charge for year

16,656

14,338

39,754

70,748

At 31st March 2017

38,896

56,215

77,748

172,859

NET BOOK VALUE

At 31st March 2017

53,013

8,376

162,661

224,050

At 31st March 2016

27,069

21,078

120,081

168,228

The net book value of tangible fixed assets includes £ 152,415 (2016 - £ 115,332 ) in respect of assets held

under finance leases.

10.

STOCKS

2017

2016

as restated

£

£

Stocks

15,000

-

Work-in-progress

1,626,244

1,587,321

1,641,244

1,587,321

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2017

2016

as restated

£

£

Trade debtors

3,373,954

1,643,683

Amounts owed by group undertakings

490,390

472,577

Other debtors

244,778

7,521

VAT

52,535

261,701

Prepayments and accrued income

34,803

10,092

4,196,460

2,395,574

12.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2017

2016

as restated

£

£

Bank loans and overdrafts (see note 14)

214,235

72,980

Other loans (see note 14)

229,167

-

Finance leases (see note 15)

35,454

20,148

Trade creditors

2,385,899

1,485,631

Tax

67,288

139,032

Social security and other taxes

228,978

205,905

Other creditors

548,905

337,330

Accrued expenses

1,293,783

1,630,773

5,003,709

3,891,799