Househam Sprayers Limited - Limited company accounts 18.2

REGISTERED NUMBER: 02651880 (England and Wales)

HOUSEHAM SPRAYERS LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

Page

Company Information

1

Group Strategic Report

2

to

3

Report of the Directors

4

to

5

Report of the Independent Auditors

6

to

7

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Statement of Financial Position

10

Company Statement of Financial Position

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Statement of Cash Flows

14

Notes to the Consolidated Statement of Cash Flows

15

Notes to the Consolidated Financial Statements

16

to

29

DIRECTORS:

R J Willey

J S Dickinson

A Kneen

C J Trigg

J C Hind

REGISTERED OFFICE:

Househam Sprayers Limited

Roughton Moor

Woodhall Spa

Lincolnshire

LN10 6YQ

REGISTERED NUMBER:

02651880 (England and Wales)

AUDITORS:

Duncan & Toplis Limited, Statutory Auditor

27 - 29 Lumley Avenue

Skegness

Lincolnshire

PE25 2AT

BANKERS:

Santander

1 Exchange Arcade

Cornhill

Lincoln

Lincolnshire

LN5 7HJ

SOLICITORS:

Andrew & Co LLP

St Swithin's Court, 1 Flavian Road

Nettleham Road

Lincoln

Lincolnshire

LN2 4GR

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

REVIEW OF BUSINESS

The headline results for the year and two preceding years are as follows:

Year to

Year to

Year to

31 December 2017

31 December 2016

31 December 2015

£

£

£

Turnover

12,070,875

10,858,611

13,623,879

Gross profit

1,819,416

480,610

1,770,179

Gross profit margin

15.1%

4.4%

13.0%

Operating profit/(loss)

391,087

(1,261,295

)

114,738

Operating profit/(loss) margin

3.2%

(11.6%

)

0.8%

Despite increasingly tough trading continuing in the Agricultural sector, the newly designed self-propelled sprayers continued to sell well and total

turnover has increased in 2017 compared to 2016. Due to investing further in product improvements the operating profits have also increased.

The directors have considered the key performance indicators and the current economic conditions in the country and are pleased with the

progress made in an increasingly difficult market.

The statement of financial position remains strong and the group is in a positive position to manage the variable demand that is forecast in the

Agricultural sector for 2018.

PRINCIPAL RISKS AND UNCERTAINTIES

The group is affected by a number of factors, the principal ones of which are:

- The group is exposed to the risk of negative developments in global and regional economies and financial markets, either directly or through the

impact on the company's bankers, suppliers or customers. These developments can result in recession, inflation, deflation, currency fluctuations,

restrictions in the availability of credit, business failures in the customer or supplier base, or increases in financing costs, and in the cost of utilities,

raw materials and finished products. Such developments might increase operating costs, reduce revenues, lower asset values or result in the

businesses being unable to meet in full its strategic objectives.

- The group operates in a competitive market, and failure to compete effectively in terms of price, product specification or levels of service can

have an adverse effect on demand and / or margins.

The group mitigates risk in several ways:

- The group has in place an organisational structure with clearly defined lines of responsibility and delegation of authority. There are established

policies and procedures for the setting of corporate strategies; financial planning and budgeting for risk management; for information and

reporting systems; for systems of operational and financial internal control; and for monitoring operations and performance.

- Management and staff at all levels work closely with customers and suppliers to operate as effectively and efficiently as possible, whilst

maintaining long term working relationships, innovation and good lines of communication.

- The group operates a recruitment, training and selection process to ensure employees are experienced and competent in their work. The

workforce is trained to be alert, responsive to customer needs, and to operate in line with the company's corporate objectives.

FINANCIAL KEY PERFORMANCE INDICATORS

The key financial performance indicators used by the group are turnover, gross profit and operating profit. The primary statement of financial

position indicators are solvency and the working capital position.

DEVELOPMENT AND PERFORMANCE

The directors are satisfied with the group's financial position and see the current range and the investment in further designs as a good platform

for further growth. The directors are focused on a 3 to 5 year strategy of growth that can flex with market conditions.

The group actively develops relationships with customers to help grow export activity from within the UK. During the year it has focused greater

attention and staff in this area, especially in the new EEC countries and Ukraine, along with further development of the business in Australia and

New Zealand.

PENSIONS

The group operates both a defined contribution pension scheme and a Auto-enrolment scheme. Contributions payable to the group's pension

scheme are charged to the income statement in the period to which they relate.

ON BEHALF OF THE BOARD:

R J Willey - Director

25 September 2018

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

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the manufacture of crop sprayers and the sale of new and used crop

spraying machines along with spare parts and service.

DIVIDENDS

An interim dividend of £140 per share was paid on 4 April 2017. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2017 will be £ 70,000 .

RESEARCH AND DEVELOPMENT

The group has an in-house research and development activity which is designed to ensure the group remains at the forefront of sprayer

technology. Househam Sprayers Limited will continue to develop new products and maximise tax gains by using the Patent Box and R&D tax

incentives.

FUTURE DEVELOPMENTS

Market and credit conditions remain challenging for the company, its customers and suppliers. The group has responded by undergoing a process

of reorganisation, which has proved to be a positive move for the business and its staff.

The group remains a responsive, innovative and flexible operator with a highly motivated and well trained workforce, and is operating successfully

despite prevailing headwinds.

The directors continue to develop the group both in the UK and overseas in order to ensure a more robust and stronger business, and look forward

to the future of the group and the industry sector with cautious optimism.

DIRECTORS

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

R J Willey

J S Dickinson

A Kneen

C J Trigg

Other changes in directors holding office are as follows:

R Matthews - resigned 20 June 2017

J C Hind - appointed 16 November 2017

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). 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.

ON BEHALF OF THE BOARD:

R J Willey - Director

25 September 2018

Opinion

We have audited the financial statements of Househam Sprayers Limited (the 'parent company') and its subsidiaries (the 'group') for the year

ended 31 December 2017 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated

Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of

Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 December 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 four, 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.

Damon Brain FCA FMAAT (Senior Statutory Auditor)

for and on behalf of Duncan & Toplis Limited, Statutory Auditor

27 - 29 Lumley Avenue

Skegness

Lincolnshire

PE25 2AT

27 September 2018

TURNOVER

3

12,070,875

10,858,611

Cost of sales

10,251,459

10,378,001

GROSS PROFIT

1,819,416

480,610

Administrative expenses

1,433,129

1,746,705

386,287

(1,266,095

)

Other operating income

4,800

4,800

OPERATING PROFIT/(LOSS)

5

391,087

(1,261,295

)

Interest receivable and similar income

858

825

391,945

(1,260,470

)

Interest payable and similar expenses

6

101,386

126,335

PROFIT/(LOSS) BEFORE TAXATION

290,559

(1,386,805

)

Tax on profit/(loss)

7

47,799

(286,793

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

242,760

(1,100,012

)

Profit/(loss) attributable to:

Owners of the parent

242,760

(1,100,012

)

PROFIT/(LOSS) FOR THE YEAR

242,760

(1,100,012

)

OTHER COMPREHENSIVE INCOME

Reserve written off

(55,491

)

7,826

Exchange rate loss reserve

(2,932

)

(110

)

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(58,423

)

7,716

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

184,337

(1,092,296

)

Total comprehensive income attributable to:

Owners of the parent

184,337

(1,092,296

)

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

186,715

796,097

Investments

12

-

-

Investment property

13

160,000

-

346,715

796,097

CURRENT ASSETS

Stocks

14

4,125,073

3,998,866

Debtors

15

2,231,008

1,597,253

Cash at bank and in hand

37,588

37,775

6,393,669

5,633,894

CREDITORS

Amounts falling due within one year

16

4,216,582

4,284,437

NET CURRENT ASSETS

2,177,087

1,349,457

TOTAL ASSETS LESS CURRENT LIABILITIES

2,523,802

2,145,554

CREDITORS

Amounts falling due after more than one year

17

538,029

274,118

NET ASSETS

1,985,773

1,871,436

CAPITAL AND RESERVES

Called up share capital

23

500

500

Revaluation reserve

24

61,776

159,468

Capital redemption reserve

24

500

500

Retained earnings

24

1,922,997

1,710,968

SHAREHOLDERS' FUNDS

1,985,773

1,871,436

The financial statements were approved by the Board of Directors on 25 September 2018 and were signed on its behalf by:

R J Willey - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

186,713

793,441

Investments

12

100

100

Investment property

13

160,000

-

346,813

793,541

CURRENT ASSETS

Stocks

14

4,125,073

3,916,023

Debtors

15

2,231,008

1,635,191

Cash at bank and in hand

37,588

37,775

6,393,669

5,588,989

CREDITORS

Amounts falling due within one year

16

4,216,682

4,295,471

NET CURRENT ASSETS

2,176,987

1,293,518

TOTAL ASSETS LESS CURRENT LIABILITIES

2,523,800

2,087,059

CREDITORS

Amounts falling due after more than one year

17

538,029

274,118

NET ASSETS

1,985,771

1,812,941

CAPITAL AND RESERVES

Called up share capital

23

500

500

Revaluation reserve

24

61,776

159,468

Capital redemption reserve

24

500

500

Retained earnings

24

1,922,995

1,652,473

SHAREHOLDERS' FUNDS

1,985,771

1,812,941

Company's profit/(loss) for the financial year

242,830

(1,216,995

)

The financial statements were approved by the Board of Directors on 25 September 2018 and were signed on its behalf by:

R J Willey - Director

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2016

500

3,005,601

155,176

500

3,161,777

Changes in equity

Dividends

-

(200,000

)

-

-

(200,000

)

Total comprehensive income

-

(1,094,633

)

4,292

-

(1,090,341

)

Balance at 31 December 2016

500

1,710,968

159,468

500

1,871,436

Changes in equity

Dividends

-

(70,000

)

-

-

(70,000

)

Total comprehensive income

-

282,029

(97,692

)

-

184,337

Balance at 31 December 2017

500

1,922,997

61,776

500

1,985,773

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2016

500

3,065,934

155,176

500

3,222,110

Changes in equity

Dividends

-

(200,000

)

-

-

(200,000

)

Total comprehensive income

-

(1,213,461

)

4,292

-

(1,209,169

)

Balance at 31 December 2016

500

1,652,473

159,468

500

1,812,941

Changes in equity

Dividends

-

(70,000

)

-

-

(70,000

)

Total comprehensive income

-

340,522

(97,692

)

-

242,830

Balance at 31 December 2017

500

1,922,995

61,776

500

1,985,771

Cash flows from operating activities

Cash generated from operations

1

338,838

710,622

Interest paid

(98,509

)

(120,863

)

Interest element of hire purchase payments paid

(2,877

)

(5,472

)

Tax paid

49,599

(471

)

Net cash from operating activities

287,051

583,816

Cash flows from investing activities

Purchase of tangible fixed assets

(94,564

)

(30,830

)

Sale of tangible fixed assets

482,820

20,150

Increase in value of investments

(2,178

)

-

Interest received

858

825

Net cash from investing activities

386,936

(9,855

)

Cash flows from financing activities

New loans in year

1,330,000

185,000

Loan repayments in year

(812,365

)

(40,000

)

New HP loans in year

70,745

23,250

Capital repayments in year

(54,974

)

(305,144

)

Amount introduced by directors

145,000

166,046

Amount withdrawn by directors

(199,058

)

-

Exchange rate losses

(2,932

)

(1,494

)

Movement in restricted reserve

(55,491

)

1,954

Equity dividends paid

(70,000

)

(200,000

)

Net cash from financing activities

350,925

(170,388

)

Increase in cash and cash equivalents

1,024,912

403,573

Cash and cash equivalents at beginning of year

2

(1,443,636

)

(1,847,209

)

Cash and cash equivalents at end of year

2

(418,724

)

(1,443,636

)

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2017

2016

£

£

Profit/(loss) before taxation

290,559

(1,386,805

)

Depreciation charges

106,836

196,351

Profit on disposal of fixed assets

(43,532

)

(19,090

)

Finance costs

101,386

126,335

Finance income

(858

)

(825

)

454,391

(1,084,034

)

(Increase)/decrease in stocks

(126,207

)

685,299

(Increase)/decrease in trade and other debtors

(730,536

)

1,351,851

Increase/(decrease) in trade and other creditors

741,190

(242,494

)

Cash generated from operations

338,838

710,622

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 December 2017

31.12.17

1.1.17

£

£

Cash and cash equivalents

37,588

37,775

Bank overdrafts

(456,312

)

(1,481,411

)

(418,724

)

(1,443,636

)

Year ended 31 December 2016

31.12.16

1.1.16

£

£

Cash and cash equivalents

37,775

17,277

Bank overdrafts

(1,481,411

)

(1,864,486

)

(1,443,636

)

(1,847,209

)