Smiths Equipment Hire Limited - Limited company accounts 18.1.1

REGISTERED NUMBER: 00992884 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2018

FOR

SMITHS EQUIPMENT HIRE LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTORS:

Mr D Smith

Mr T G Smith

REGISTERED OFFICE:

De Havilland House

15-16 Avroe Crescent

Blackpool

Lancashire

FY4 2DP

REGISTERED NUMBER:

00992884 (England and Wales)

AUDITORS:

Jones Harris Limited

Statutory Auditors

17 St Peters Place

Fleetwood

Lancashire

FY7 6EB

The directors present their strategic report for the year ended 28 February 2018.

The company's principal activity during the period under review was the hiring of plant and equipment to the DIY and

building markets

REVIEW OF BUSINESS

The company has had an extremely pleasing year with many targets being met. Contract numbers have risen this year

which is reflected in the results achieved. Reserves have increased from £3.6m to £4.0m, giving the company a healthy

balance sheet. A new branch in Leeds was in the process of being set up this year, with a view to it being opened shortly

after the year end. This will give the company a presence in West Yorkshire.

The company presents the following key performance indicators.

2018

2017

2016

£

£

£

Turnover

9,578

8,416

8,439

Gross profit

4,565

4,080

4,018

Profit before tax

827

497

561

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider the major risks to future profitability that the company continues to face are rising costs and a

struggling economy. They are also facing increased competition in the industry. However, the directors are satisfied that

in the current financial year they will once again be able to meet their objectives of continued growth and profitability

for the long term benefit of employees.

ON BEHALF OF THE BOARD:

Mr D Smith - Director

28 June 2018

The directors present their report with the financial statements of the company for the year ended 28 February 2018.

DIVIDENDS

Interim dividends totalling £320 per share were paid during the year. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 28 February 2018 will be £ 240,000 .

FUTURE DEVELOPMENTS

The company is to open a new branch in Leeds which will give the company a presence in West Yorkshire.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 March 2017 to the date of this report.

Mr D Smith

Mr T G Smith

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 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.

ON BEHALF OF THE BOARD:

Mr D Smith - Director

28 June 2018

Opinion

We have audited the financial statements of Smiths Equipment Hire Limited (the 'company') for the year ended

28 February 2018 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in

Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a

summary of significant accounting policies. The financial reporting framework that has been applied in their preparation

is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted

Accounting Practice).

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.

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 28 February 2018 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard,

and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If, 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.

Opinion on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 Report of the Directors.

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.

Responsibilities of directors

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, and

for such internal control as the directors determine 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.

Our 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 a Report of the Auditors 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 for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities . This description forms part of our Report of the Auditors.

Charles Bryning FCA (Senior Statutory Auditor)

for and on behalf of Jones Harris Limited

Statutory Auditors

17 St Peters Place

Fleetwood

Lancashire

FY7 6EB

28 June 2018

REVENUE

3

9,578,330

8,415,782

Cost of sales

5,013,322

4,335,420

GROSS PROFIT

4,565,008

4,080,362

Administrative expenses

3,622,477

3,462,757

OPERATING PROFIT

5

942,531

617,605

Interest payable and similar expenses

6

114,633

120,547

PROFIT BEFORE TAXATION

827,898

497,058

Tax on profit

7

140,377

104,111

PROFIT FOR THE FINANCIAL YEAR

687,521

392,947

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

687,521

392,947

FIXED ASSETS

Property, plant and equipment

9

8,833,455

7,740,349

CURRENT ASSETS

Inventories

10

292,654

209,392

Debtors

11

2,007,798

1,908,402

Cash in hand

14,389

16,509

2,314,841

2,134,303

CREDITORS

Amounts falling due within one year

12

4,158,489

3,790,058

NET CURRENT LIABILITIES

(1,843,648

)

(1,655,755

)

TOTAL ASSETS LESS CURRENT LIABILITIES

6,989,807

6,084,594

CREDITORS

Amounts falling due after more than one year

13

(2,390,570

)

(1,959,304

)

PROVISIONS FOR LIABILITIES

17

(534,100

)

(508,424

)

NET ASSETS

4,065,137

3,616,866

CAPITAL AND RESERVES

Called up share capital

18

1,500

750

Capital redemption reserve

19

250

250

Retained earnings

19

4,063,387

3,615,866

SHAREHOLDERS' FUNDS

4,065,137

3,616,866

The financial statements were approved by the Board of Directors on 28 June 2018 and were signed on its behalf by:

Mr D Smith - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 March 2016

750

3,512,919

250

3,513,919

Changes in equity

Dividends

-

(290,000

)

-

(290,000

)

Total comprehensive income

-

392,947

-

392,947

Balance at 28 February 2017

750

3,615,866

250

3,616,866

Changes in equity

Issue of share capital

750

-

-

750

Dividends

-

(240,000

)

-

(240,000

)

Total comprehensive income

-

687,521

-

687,521

Balance at 28 February 2018

1,500

4,063,387

250

4,065,137

Cash flows from operating activities

Cash generated from operations

1

1,812,476

1,595,368

Interest element of hire purchase payments paid

(114,633

)

(120,547

)

Tax paid

(75,571

)

(45,126

)

Net cash from operating activities

1,622,272

1,429,695

Cash flows from investing activities

Purchase of tangible fixed assets

(2,874,716

)

(2,354,326

)

Sale of tangible fixed assets

521,286

533,927

Net cash from investing activities

(2,353,430

)

(1,820,399

)

Cash flows from financing activities

Capital repayments in year

30,998

579,777

Share issue

750

-

Movement on intercompany loan

937,891

56,463

Equity dividends paid

(240,000

)

(290,000

)

Net cash from financing activities

729,639

346,240

Decrease in cash and cash equivalents

(1,519

)

(44,464

)

Cash and cash equivalents at beginning of year

2

(1,040,430

)

(995,966

)

Cash and cash equivalents at end of year

2

(1,041,951

)

(1,040,430

)

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

2018

2017

£

£

Profit before taxation

827,898

497,058

Depreciation charges

1,394,244

1,342,873

Profit on disposal of fixed assets

(133,918

)

(157,556

)

Finance costs

114,633

120,547

2,202,857

1,802,922

Increase in inventories

(83,262

)

(48,261

)

Increase in trade and other debtors

(400,333

)

(82,472

)

Increase/(decrease) in trade and other creditors

93,214

(76,821

)

Cash generated from operations

1,812,476

1,595,368

2.	CASH AND CASH EQUIVALENTS

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

Balance Sheet amounts:

Year ended 28 February 2018

28/2/18

1/3/17

£

£

Cash and cash equivalents

14,389

16,509

Bank overdrafts

(1,056,340

)

(1,056,939

)

(1,041,951

)

(1,040,430

)

Year ended 28 February 2017

28/2/17

1/3/16

£

£

Cash and cash equivalents

16,509

18,336

Bank overdrafts

(1,056,939

)

(1,014,302

)

(1,040,430

)

(995,966

)

1.	STATUTORY INFORMATION

Smiths Equipment Hire 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

Where turnover represents the value of hire services provided under contracts it is recognised to the extent that

there is a right to consideration and is recorded at the value of the consideration due. Where a contract has only

been partially completed at the balance sheet date turnover represents the value of the service provided to date

based on a proportion of the total expected consideration at completion. Where payments are received from

customers in advance of services provided, the amounts are recorded as deferred income and included as part of

creditors due within one year.

Where turnover represents sales of goods it is shown net of VAT and trade discounts. Turnover is recognised

when the goods are physically delivered to the customer.

Property, plant and equipment

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

Short leasehold

-

Over the remaining period of the lease

Plant and machinery

-

Between 5 and 12 years

Fixtures and fittings

-

33% on cost

Motor vehicles

-

20% on cost

Computer equipment

-

33% on cost

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment

losses. Such cost includes costs directly attributable to making the asset capable of operating as intended.

Stocks

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

slow moving items.

Cost includes all costs incurred in bringing each product to its present location and condition on a first in, first

out basis.

Net realisable value is based on estimated selling price less any further costs expected to be incurred to disposal.

Financial instruments

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with

an original maturity date of three months or less. For the purpose of the cash flow statement, cash and cash

equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Short-term debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at

transaction price. Any losses arising from impairment are recognised in the income statement in other operating

expenses.

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 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.

REVENUE

The revenue and profit before taxation are attributable to the one principal activity of the company.

An analysis of revenue by class of business is given below:

2018

2017

£

£

Equipment hire

6,766,279

6,169,500

Re-sales

1,004,733

925,274

Transport

524,814

484,351

Cross hire

841,367

487,880

Hire protect

154,399

128,348

Other sales

89,942

76,657

Training

196,796

143,772

9,578,330

8,415,782

4.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

2,970,120

2,740,255

Social security costs

286,547

261,314

Other pension costs

31,224

29,783

3,287,891

3,031,352

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

2018

2017

Staff

125

118

2018

2017

£

£

Directors' remuneration

-

-

5.	OPERATING PROFIT

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

2018

2017

£

£

Other operating leases

423,695

408,174

Depreciation - owned assets

928,738

766,078

Depreciation - assets on hire purchase contracts

465,504

576,795

Profit on disposal of fixed assets

(133,918

)

(157,556

)

Auditors' remuneration

8,000

9,000

Income from operating leases

(6,762,696

)

(6,169,500

)

Other accountancy and tax services provided by the auditor

3,400

3,850

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2018

2017

£

£

Hire purchase

114,633

120,547

7.

TAXATION

Analysis of the tax charge

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

2018

2017

£

£

Current tax:

UK corporation tax

114,701

75,571

Deferred tax:

Origination and reversal of

timing differences

25,676

28,540

Tax on profit

140,377

104,111