Marco Group Limited - Limited company accounts 18.2

REGISTERED NUMBER: 08265040 (England and Wales)

MARCO GROUP LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2017

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

S D Fox

D B Gill

K J W Weir

REGISTERED OFFICE:

238B Perimeter Road South

London Gatwick Airport

Crawley

West Sussex

RH6 0PQ

REGISTERED NUMBER:

08265040 (England and Wales)

AUDITORS:

Hopper Williams & Bell Limited

Statutory Auditor

Highland House

Mayflower Close

Chandler's Ford

Eastleigh

Hampshire

SO53 4AR

The directors present their strategic report of the company and the group for the year ended 31 October 2017.

REVIEW OF BUSINESS

Marco Group Limited is a holding with a number of wholly owned subsidiaries. The subsidiaries are Airport Facilities

(Gatwick) Limited "AFGL", Airport Facilities (Heathrow) Limited "AFHL", Airport Facilities Electrical Limited

"AFEL", Airport Facilities (Maintenance) Limited "AFML", Marco (Utilities) Limited "MUL" and Marco Airport

Facilities Limited "MAFL".

All companies within the group trade under the banner of "Marco". The principal activities of its subsidiary undertakings

continues to be construction, maintenance, and electrical installations throughout Heathrow, Gatwick, Luton, Stansted,

and various other UK Airports.

RESULTS AND PERFORMANCE

The Performance of the Group has produced varied results.

Following the successful application by AFGL to join Gatwick Airport Limited's ("GAL") contractor framework for the

period to 2023, a change in procurement procedures involving considerably more "up front" design resulted in a delay in

projects being released. Additionally a new procurement policy of distributing projects to all framework contractors

culminated in a reduced portfolio.

As time has progressed, however, a number of the successful framework contractors have departed the airport and the

delay in the release of project work has reduced. The recent dialogue with GAL's procurement has been positive with a

number of larger projects being single sourced to AFGL. It is therefore expected that AFGL will show improved

profitability in the very near future.

Although the results of AFEL have been disappointing, the reputation of Marco's electrical arm continues to be

enhanced with increased direct approaches from numerous sources. We are confident that with greater focus, a new

management team and improved reporting, better results will be achieved over the coming months. It is the Directors'

intention to merge AFEL into AFGL on 1 November 2018 which will result in cost savings to improve profitability..

The performance of AFML has produced some encouraging results as the company and its processes have become more

refined, with the resultant increase in its client base. MUL is to be incorporated into AFML and increased services

offered to maintenance clients. It is anticipated that an increase in company profits will be seen over the next 12 months.

AFML has been awarded both an £800,000 increase in its annual contract with one of its main clients, along with an

extension of the contract to 2020.

GROUP KPI'S

2016/17

2015/16

Turnover (£)

15,306,634

13,292,528

Gross profit (£)

1,930,356

2,338,653

Gross profit margin (%)

12.6%

17.5%

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risk to the business is work availability.

As set out above all of the group trading companies are expecting to increase the turnover generated during the next

trading period.

AFGL - The delay in releasing projects is understood to be an issue purely arising as a result with the start up of the

main customer's new process. This process has now evolved through its preliminary issues and should not see any future

delays in awarding contracts.

In addition AFGL continues to strengthen its quality of senior management with the arrival of two members of the senior

management team who are experienced and respected by both the company's main customer and other contractors based

at the airport. The continued strengthening of the senior management team has seen AFGL experience recent success in

being awarded contracts up for tender against large multinational competitors.

AFHL - has seen its turnover increase in excess of 100% in the first nine months of 2017/18. AFHL seems to be

cementing a reputation for roofing projects at Heathrow Airport, with every completion seeing further larger projects

arising as a result. AFHL has also started carrying out refurbishment projects for operators at Heathrow Airport. It is

surmised that the fact Carillion are no longer controlling any of the work at Heathrow Airport will provide extensive

future opportunities for AFHL.

AFML - continues to expand its existing customer base within the concessionaires located at the various airports and is

seeing a marked improvement in the level of work generated at both Luton and Stansted, its two smaller airport clients.

In addition there is an increase in the level of work from other companies based at the airport.

STRATEGY

AFGL will continue to improve its efficiencies and the quality of its project delivery by implementing the processes

previously mentioned, administered by qualified individuals who have been selected to further enhance the Group's

reputation and ability to accommodate larger more complex projects. The Company has entered into dialogue with one

significant principal contractor who is eager for AFGL to self manage packages of work derived from more larger

schemes. Our belief is that our quality, focused, driven and flexible team at Gatwick will become Gatwick Airport

Limited's Contractor of choice from a delivery and commercial perspectives.

After the merger of AFEL into AFGL, Marco's electrical division will continue to service AFGL's Electrical

requirements and discussions are ongoing regarding adding a Mechanical arm to this business. The electrical division

will pursue both Maintenance and Project work independently and is well placed to succeed as the business is already

held in high regard by those responsible for Electrical work carried out at London Gatwick Airport. The electrical

division will also be providing services to AFHL thereby expanding into Heathrow Airport. The electrical division and

has also been engaged by a significant principal contractor on two occasions and we anticipate this to develop further.

AFML will this year acquire a CAFM system to further improve efficiencies and it is anticipated that the whole group

may follow suit. Further growth and profitability is expected with external opportunities being considered.

AFHL will enjoy an exciting future as it has applied to join Heathrow Airports contractor framework to become a First

Tier Supplier. This follows development this year into foofing works at Heathrow Airport's request. Furthermore as a

result of the demise of Carillion further opportunities are foreseen at Heathrow Airport, a location which was previously

a very successful market for AFHL. It is fully anticipated that new premises will be sought and the team expanded to

fully enjoy the benefits of the increased volume of work resulting from the third runway decision and its implications.

ON BEHALF OF THE BOARD:

S D Fox - Director

15 August 2018

The directors present their report with the financial statements of the company and the group for the year ended

31 October 2017.

DIVIDENDS

The total distribution of dividends for the year ended 31 October 2017 will be £ 65,667 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 November 2016 to the date of this

report.

S D Fox

D B Gill

K J W Weir

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group 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 the group 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 group'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 group's auditors are

aware of that information.

AUDITORS

The auditors, Hopper Williams & Bell Limited, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

S D Fox - Director

15 August 2018

Opinion

We have audited the financial statements of Marco Group Limited (the 'parent company') and its subsidiaries (the

'group') for the year ended 31 October 2017 which comprise the Consolidated Income Statement, Consolidated Other

Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in

Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated

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).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 October 2017 and of the group's 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 group 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 group'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 Group

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 Group 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 Group 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 group and the parent company and its environment obtained in

the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 five, 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 group's and the parent 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 group or the parent company or to cease

operations, or have no realistic alternative but to do so.

Auditors' 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.

Use of our report

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.

Richard Hurst FCA (Senior Statutory Auditor)

for and on behalf of Hopper Williams & Bell Limited

Statutory Auditor

Highland House

Mayflower Close

Chandler's Ford

Eastleigh

Hampshire

SO53 4AR

16 August 2018

TURNOVER

15,306,634

13,292,528

Cost of sales

(13,376,278

)

(10,963,875

)

GROSS PROFIT

1,930,356

2,328,653

Administrative expenses

(1,813,302

)

(1,612,622

)

OPERATING PROFIT

4

117,054

716,031

Interest receivable and similar income

11,877

4,221

128,931

720,252

Interest payable and similar expenses

5

(83,038

)

(77,405

)

PROFIT BEFORE TAXATION

45,893

642,847

Tax on profit

6

(19,908

)

(155,012

)

PROFIT FOR THE FINANCIAL YEAR

25,985

487,835

Profit attributable to:

Owners of the parent

25,985

487,835

PROFIT FOR THE YEAR

25,985

487,835

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

25,985

Prior year adjustment

(652,012

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(164,177

)

Total comprehensive income attributable to:

Owners of the parent

25,985

(164,177

)

FIXED ASSETS

Intangible assets

9

47,775

55,125

Tangible assets

10

164,576

102,991

Investments

11

-

-

212,351

158,116

CURRENT ASSETS

Stocks

12

38,289

83,969

Debtors

13

4,059,106

3,510,241

Cash at bank and in hand

252,111

806,474

4,349,506

4,400,684

CREDITORS

Amounts falling due within one year

14

(4,104,153

)

(4,196,489

)

NET CURRENT ASSETS

245,353

204,195

TOTAL ASSETS LESS CURRENT LIABILITIES

457,704

362,311

CREDITORS

Amounts falling due after more than one year

15

(461,048

)

(325,973

)

NET (LIABILITIES)/ASSETS

(3,344

)

36,338

CAPITAL AND RESERVES

Called up share capital

18

1,000

1,000

Retained earnings

19

(4,344

)

35,338

SHAREHOLDERS' FUNDS

(3,344

)

36,338

The financial statements were approved by the Board of Directors on 15 August 2018 and were signed on its behalf by:

D B Gill - Director

S D Fox - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

201,001

200,001

201,001

200,001

CURRENT ASSETS

Debtors

13

1,000

1,000

CREDITORS

Amounts falling due within one year

14

(201,001

)

(200,001

)

NET CURRENT LIABILITIES

(200,001

)

(199,001

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,000

1,000

CAPITAL AND RESERVES

Called up share capital

18

1,000

1,000

SHAREHOLDERS' FUNDS

1,000

1,000

Company's profit for the financial year

65,667

191,040

The financial statements have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

The financial statements were approved by the Board of Directors on 15 August 2018 and were signed on its behalf by:

D B Gill - Director

S D Fox - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 November 2015

1,000

390,555

391,555

Prior year adjustment

-

(652,012

)

(652,012

)

As restated

1,000

(261,457

)

(260,457

)

Changes in equity

Dividends

-

(191,040

)

(191,040

)

Total comprehensive income

-

487,835

487,835

Balance at 31 October 2016

1,000

35,338

36,338

Changes in equity

Dividends

-

(65,667

)

(65,667

)

Total comprehensive income

-

25,985

25,985

Balance at 31 October 2017

1,000

(4,344

)

(3,344

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 November 2015

1,000

-

1,000

Changes in equity

Dividends

-

(191,040

)

(191,040

)

Total comprehensive income

-

191,040

191,040

Balance at 31 October 2016

1,000

-

1,000

Changes in equity

Dividends

-

(65,667

)

(65,667

)

Total comprehensive income

-

65,667

65,667

Balance at 31 October 2017

1,000

-

1,000

Cash flows from operating activities

Cash generated from operations

1

(204,879

)

871,711

Interest paid

(83,038

)

(77,405

)

Net cash from operating activities

(287,917

)

794,306

Cash flows from investing activities

Purchase of tangible fixed assets

(130,225

)

(9,306

)

Sale of tangible fixed assets

3,100

-

Net cash from investing activities

(127,125

)

(9,306

)

Cash flows from financing activities

Amount introduced by directors

-

8,855

Amount withdrawn by directors

(164,967

)

-

Amount withdrawn by other shareholders

(118,562

)

(221,290

)

Amounts introduced by related parties

209,875

(108,696

)

Equity dividends paid

(65,667

)

(191,040

)

Net cash from financing activities

(139,321

)

(512,171

)

(Decrease)/increase in cash and cash equivalents

(554,363

)

272,829

Cash and cash equivalents at beginning of year

2

806,474

533,645

Cash and cash equivalents at end of year

2

252,111

806,474

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

2017

2016

£

£

Profit before taxation

45,893

642,847

Depreciation charges

71,036

65,275

Loss on disposal of fixed assets

1,855

-

Finance costs

83,038

77,405

Finance income

(11,877

)

(4,221

)

189,945

781,306

Decrease/(increase) in stocks

45,680

(51,009

)

Increase in trade and other debtors

(1,317,490

)

(747,290

)

Increase in trade and other creditors

876,986

888,704

Cash generated from operations

(204,879

)

871,711

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 31 October 2017

31.10.17

1.11.16

£

£

Cash and cash equivalents

252,111

806,474

Year ended 31 October 2016

31.10.16

1.11.15

£

£

Cash and cash equivalents

806,474

535,904

Bank overdrafts

-

(2,259

)

806,474

533,645

1.	STATUTORY INFORMATION

Marco Group 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 General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with FRS 102 "The Financial Reporting Standards

applicable in the UK and Republic of Ireland" ("FRS 102") and the requirements of the Companies Act 2006 as

applicable to companies subject to the small companies' regime.

The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure

is required to show a true and fair view.

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 £1.

The financial statements have been prepared under the historical cost convention, modified to include certain

financial instruments at fair value. The principal accounting policies adopted are set out below.

Going concern

These financial statements have been prepared on a going concern basis as the group continues to be supported

by BM (South Coast) Limited and Airport Facilities (Gatwick) Limited, in order to meet the demands of its

creditors.

Since the year end the group has secured additional funding in order to assist with cash flow and the initial

results for 2018/19 indicate that the group has returned to a positive position on its balance sheet.

As well as this, the shareholders have pledged to continue to support the group financially in order to meet the

demands of its creditors, and as as result the directors expect the company to continue to trade as a going concern

for a minimum of 12 months following the signing of these financial statements.

Turnover

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

value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2014, is being amortised evenly over its estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

- Over period of lease

Plant and machinery

- 25% straight line

Fixtures and fittings

- 25% straight line

Motor vehicles

- 25% straight line

Computer equipment

- 25% straight line

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 recognised in the income statement.