Wheeler Electrical Limited - Limited company accounts 17.3

REGISTERED NUMBER: 00801027 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2017

FOR

WHEELER ELECTRICAL LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

7

Statement of Financial Position

8

Statement of Changes in Equity

9

Statement of Cash Flows

10

Notes to the Statement of Cash Flows

11

Notes to the Financial Statements

12

DIRECTORS:

P C Wheeler

E D Wheeler

C P Wheeler

REGISTERED OFFICE:

Church View Chambers

38 Market Square

Toddington

Bedfordshire

LU5 6BS

REGISTERED NUMBER:

00801027 (England and Wales)

AUDITORS:

Landers Accountants Ltd

Church View Chambers

38 Market Square

Toddington

Bedfordshire

LU5 6BS

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

REVIEW OF BUSINESS

The principal activity of the company in the year under review was that of electrical installation.

Results and performance

2017 proved to be a positive year for the company with turnover outstripping expectations. The industry as a whole is

very competitive but Wheeler Electrical Limited is in a good position due to its focus on margins.

Over the medium term we plan to grow, despite price pressure on the electrical arm of the business, further with a fully

departmentalised internal structure to improve efficiency levels going forward.

A mechanical projects division is being developed, which is projected to increase the turnover.

We have also moved to a new larger premises to help provide room for continued growth. This will also allow us to

purchase more efficiently and enable to us to improve our pricing competitiveness. Staff levels are factored to increase

in line with turnover and the focus on improving overhead efficiencies is an ongoing process.

In our opinion the key financial performance indicators are as follows;

2017

2016

2015

Gross profit ratio

28.32%

23.33%

25.39%

Net profit ratio

14.88%

12.71%

15.86%

Turnover

£9,861,562

£7,799,018

£6,941,172

Turnover growth

26.45%

12.36%

39.54%

PRINCIPAL RISKS AND UNCERTAINTIES

The main risk to the business going forward is the potential to over exposing ourselves to inappropriately sized

contracts. Cash flow is positive, but open to large monthly fluctuations. The industry is very busy but build costs and

materials are expected to increase as we draw nearer to Brexit which will have a consequential effect on margin for us.

Industry growth forecasts are currently showing a drop from 1.2% to 0.7%, the slowest in six years for the construction

industry as a whole. However, following recent events there is a predicted growth forecast in social housing repairs

from 1.3% to 1.6% and the government's continued help-to-buy scheme improves demand for new housebuilding

programmes. There is a slowdown of projects in London due to residential price drops but continued gradual growth

elsewhere in the UK making the longer term outlook less predictable.

ON BEHALF OF THE BOARD:

E D Wheeler - Director

22 February 2018

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

DIVIDENDS

The total distribution of dividends for the year ended 31 May 2017 will be £127,159 (2016: £92,800).

DIRECTORS

P C Wheeler has held office during the whole of the period from 1 June 2016 to the date of this report.

Other changes in directors holding office are as follows:

E D Wheeler - appointed 31 March 2017

C P Wheeler - appointed 31 March 2017

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), including Financial Reporting

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

directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the

state of affairs of the company and 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 ought to have

taken as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, Landers Accountants Ltd, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

E D Wheeler - Director

22 February 2018

We have audited the financial statements of Wheeler Electrical Limited for the year ended 31 May 2017 on pages

seven to twenty two. 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 31 May 2017 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'; and

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

Opinion on other matter 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with

the financial statements, and has been prepared in accordance with applicable legal requirements. In the light of the

knowledge and understanding of the company and its environment, we have not identified any material misstatements

in the Strategic Report or the Report of the Directors.

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.

Robert Brown (Senior Statutory Auditor)

for and on behalf of Landers Accountants Ltd

Church View Chambers

38 Market Square

Toddington

Bedfordshire

LU5 6BS

22 February 2018

REVENUE

9,861,562

7,799,018

Cost of sales

7,068,651

5,979,737

GROSS PROFIT

2,792,911

1,819,281

Administrative expenses

1,342,350

862,045

1,450,561

957,236

Other operating income

17,127

33,648

OPERATING PROFIT

4

1,467,688

990,884

Interest receivable and similar income

3,041

1,454

1,470,729

992,338

Interest payable and similar expenses

5

45,342

50,741

PROFIT BEFORE TAXATION

1,425,387

941,597

Tax on profit

6

298,628

197,952

PROFIT FOR THE FINANCIAL YEAR

1,126,759

743,645

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,126,759

743,645

FIXED ASSETS

Property, plant and equipment

8

2,973,986

2,271,253

CURRENT ASSETS

Inventories

9

36,280

53,157

Debtors

10

2,485,912

1,742,846

Cash at bank and in hand

925,774

960,058

3,447,966

2,756,061

CREDITORS

Amounts falling due within one year

11

1,781,299

1,346,405

NET CURRENT ASSETS

1,666,667

1,409,656

TOTAL ASSETS LESS CURRENT LIABILITIES

4,640,653

3,680,909

CREDITORS

Amounts falling due after more than one year

12

(766,481

)

(833,205

)

PROVISIONS FOR LIABILITIES

16

(88,780

)

(61,912

)

NET ASSETS

3,785,392

2,785,792

CAPITAL AND RESERVES

Called up share capital

17

100

100

Capital redemption reserve

18

85

85

Retained earnings

18

3,785,207

2,785,607

SHAREHOLDERS' FUNDS

3,785,392

2,785,792

The financial statements were approved by the Board of Directors on 22 February 2018 and were signed on its behalf by:

P C Wheeler - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 June 2015

100

2,134,762

85

2,134,947

Changes in equity

Dividends

-

(92,800

)

-

(92,800

)

Total comprehensive income

-

743,645

-

743,645

Balance at 31 May 2016

100

2,785,607

85

2,785,792

Changes in equity

Dividends

-

(127,159

)

-

(127,159

)

Total comprehensive income

-

1,126,759

-

1,126,759

Balance at 31 May 2017

100

3,785,207

85

3,785,392

Cash flows from operating activities

Cash generated from operations

1

1,229,108

1,342,396

Interest paid

(26,069

)

(34,545

)

Interest element of hire purchase payments paid

(19,273

)

(16,196

)

Tax paid

(170,079

)

(235,722

)

Net cash from operating activities

1,013,687

1,055,933

Cash flows from investing activities

Purchase of tangible fixed assets

(827,135

)

(850,654

)

Sale of tangible fixed assets

1,700

39,300

Interest received

3,041

1,454

Net cash from investing activities

(822,394

)

(809,900

)

Cash flows from financing activities

New loans in year

-

379,688

Loan repayments in year

(85,732

)

(81,978

)

loan interest and charges

26,063

30,785

Capital repayments in year

65,577

62,428

Amount introduced by directors

39,319

-

Amount withdrawn by directors

(143,645

)

(7,612

)

Equity dividends paid

(127,159

)

(92,800

)

Net cash from financing activities

(225,577

)

290,511

(Decrease)/increase in cash and cash equivalents

(34,284

)

536,544

Cash and cash equivalents at beginning of year

2

960,058

423,514

Cash and cash equivalents at end of year

2

925,774

960,058

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2017

2016

£

£

Profit before taxation

1,425,387

941,597

Depreciation charges

120,176

69,162

Loss/(profit) on disposal of fixed assets

2,526

(2,080

)

Finance costs

45,342

50,741

Finance income

(3,041

)

(1,454

)

1,590,390

1,057,966

Decrease/(increase) in inventories

16,877

(17,864

)

(Increase)/decrease in trade and other debtors

(647,359

)

163,875

Increase in trade and other creditors

269,200

138,419

Cash generated from operations

1,229,108

1,342,396

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of

these Statement of Financial Position amounts:

Year ended 31 May 2017

31.5.17

1.6.16

£

£

Cash and cash equivalents

925,774

960,058

Year ended 31 May 2016

31.5.16

1.6.15

£

£

Cash and cash equivalents

960,058

423,514

1.	STATUTORY INFORMATION

Wheeler Electrical 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.

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.

Turnover

Revenue 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.

Freehold property

-

Not provided as is considered immaterial

Improvements to property

-

Not provided as is considered immaterial

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

All fixed assets are initially recorded at cost.

No depreciation has been provided on freehold property or improvements to freehold property. This is not in

accordance with Companies Act 2006. In the directors opinion, depreciation would be immaterial and has not

been charged. The property and improvements to property are maintained to ensure that their value does not

diminish over time. The maintenance costs are charged to the profit and loss account in the year incurred.

Stocks

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and

slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, except to the extent that it relates to items recognised in other comprehensive income or directly in

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 statement of financial position date.

Deferred tax

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

statement of financial position 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.

Government grants

Government grants are recognised in the profit and loss account in the same period as the expenditure to which

the grant relates.

3.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

1,774,280

1,404,615

Social security costs

182,990

222,195

Other pension costs

29,060

21,066

1,986,330

1,647,876

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

2017

2016

Number of directors

1

1

Number of operational staff

60

43

61

44

2017

2016

£

£

Directors' remuneration

86,675

33,416

4.	OPERATING PROFIT

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

2017

2016

£

£

Hire of plant and machinery

22,436

10,971

Depreciation - owned assets

9,618

7,905

Depreciation - assets on hire purchase contracts

110,558

62,186

Loss/(profit) on disposal of fixed assets

2,526

(2,080

)

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2017

2016

£

£

Bank interest

26,069

34,545

Hire purchase

19,273

16,196

45,342

50,741

6.

TAXATION

Analysis of the tax charge

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

2017

2016

£

£

Current tax:

UK corporation tax

271,760

170,079

Deferred tax

26,868

27,873

Tax on profit

298,628

197,952

UK corporation tax has been charged at 20% (2016 - 20%).

7.

DIVIDENDS

2017

2016

£

£

Ordinary shares of £1 each

Interim

127,159

92,800

8.	PROPERTY, PLANT AND EQUIPMENT

Improvements

Freehold

to

Plant and

property

property

machinery

£

£

£

COST

At 1 June 2016

1,831,721

60,916

13,450

Additions

426,703

130,715

48,286

At 31 May 2017

2,258,424

191,631

61,736

DEPRECIATION

At 1 June 2016

-

-

12,064

Charge for year

-

-

546

Eliminated on disposal

-

-

-

At 31 May 2017

-

-

12,610

NET BOOK VALUE

At 31 May 2017

2,258,424

191,631

49,126

At 31 May 2016

1,831,721

60,916

1,386