Coltman Precast Concrete Limited - Limited company accounts 18.2

REGISTERED NUMBER: 01032721 (England and Wales)

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 MARCH 2019

FOR

COLTMAN PRECAST CONCRETE LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

D S Frost

K F Hughes

T A Jobson

D A Smith

SECRETARY:

Mrs L M Gilbert

REGISTERED OFFICE:

London Road

Canwell

Sutton Coldfield

West Midlands

B75 5SX

REGISTERED NUMBER:

01032721 (England and Wales)

AUDITORS:

Prime

Chartered Accountants

Statutory Auditor

No. 3 Caroline Court

13 Caroline Street

St Paul's Square

Birmingham

B3 1TR

The directors present their strategic report for the year ended 31 March 2019.

REVIEW OF BUSINESS

During the year the company was able to improve its gross profit margin by 7% to 20.2% (2018: 13.2%) and

return a reduced loss before tax of £108,971 (2018: loss of £320,107). This was achieved despite an 18.8%

decrease in sales.

At the beginning of the year a new management structure was implemented and the directors immediately

commenced on a strategy of change through greater control of sales, production and overhead costs in order

to improve efficiency and profitability. The strategy's main aim was to improve gross profit margins, which

they have already achieved, and ultimately turn the business back to profitability, whilst maintaining the quality

of products to its customers.

The initial step in this process was to improve efficiencies and flexibility in the workforce, to better react to

changing demand. The company implemented a programme of redundancies, reducing average production

employee numbers by 27% and incurring one-off redundancy costs of £198,174.

Following investment in this new strategy and implementation of new management practices, the company

returned to profitability in the last six months of the financial year and has remained profitable in each and

every month after the year end. The effect of these changes in the year reduced the loss after tax for the

year ended 31 March 2019 by 63.1% from 2018 and if the redundancy costs were excluded the company

would have returned a profit of £89,203.

Now that this initial transition period has passed, and the strategy implemented by the directors is cemented

into the business, sales and gross profit margins continue to be strong and control over all aspects of the

business ensure it is flexible to meet changing demands in the industry and also take advantage of new

opportunities.

The next stage of the strategy is investment in new plant in order to further improve production capacity and

reduce costs. This investment has already begun with the purchase of a Prestressed flooring machine, which

is fully operational, and new Precast equipment is expected to be in use during the current financial year.

Further investment in both Prestressed and Precast machinery will continue in the future as part of a five year

investment plan.

Reductions in losses in the year had a positive effect on cashflow, with bank balances at the year end

increasing by 43% to £905,240. Working capital remained stable, and positive, during the year.

The main KPIs for the business are:

1. The level of turnover, which at £8.7m was down 18.8% from the previous year;

2. Gross profit margin, which was 20.2% compared to 13.2% in the previous year; and

3. Orders in hand, which at the balance sheet date were £6m which is 3% lower than the previous year.

The business continues to enjoy a wide customer base of blue chip construction companies and contractors,

but is continuing to attract new customers. The spread and quality of the customer base, and continued

control of production and delivery, are considered key elements to the ongoing commercial and financial

success of the company.

PRINCIPAL RISKS AND UNCERTAINTIES

The UK construction market is showing mixed signals but house building appears to remain buoyant. The

principal risk to the business is managing its growth whilst competing effectively with the company's

competitors. To address these risks the directors are:

- Focusing on and providing a top quality service to existing customers;

- Reviewing costs and reducing them where practicable;

- Implementing a sustainable capital investment programme;

- Assessing production and delivery timeframes;

- Constantly monitoring the level of staff and increasing or reducing the workforce as necessary to ensure

efficiency; and

- Enhancing its efforts to ensure that all accessible enquiries that are received are processed with attractive

proposals.

DEVELOPMENT

The company designs, manufactures and erects structural precast concrete elements for its customers and

this is expected to continue for the foreseeable future.

Given the positive effect the changes and investment are already having on the business, the directors are

confident that with future capital investment the company will continue to improve its performance in the

current and future financial years.

ON BEHALF OF THE BOARD:

T A Jobson - Director

12 November 2019

The directors present their report with the financial statements of the company for the year ended 31 March 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the design, manufacture and

erection of structural precast concrete elements.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2019 (2018: £nil).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2018 to the date of this

report.

D S Frost

T A Jobson

Other changes in directors holding office are as follows:

K F Hughes - appointed 25 May 2018

D A Smith - appointed 25 May 2018

S D Humphries - resigned 22 May 2018

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, Prime, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

T A Jobson - Director

12 November 2019

Opinion

We have audited the financial statements of Coltman Precast Concrete Limited (the 'company') for the year

ended 31 March 2019 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet,

Statement of Changes in Equity and 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 company's affairs as at 31 March 2019 and of its loss 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, except to the extent

otherwise explicitly stated in our report, 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 we identify such

material inconsistencies or apparent material misstatements, we are required to determine whether there is a

material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions 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 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 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.

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.

Peter Hewston (Senior Statutory Auditor)

for and on behalf of Prime

Chartered Accountants

Statutory Auditor

No. 3 Caroline Court

13 Caroline Street

St Paul's Square

Birmingham

B3 1TR

12 November 2019

TURNOVER

2

8,716,171

10,733,815

Cost of sales

6,955,104

9,319,868

GROSS PROFIT

1,761,067

1,413,947

Administrative expenses

1,871,774

1,733,786

OPERATING LOSS

4

(110,707

)

(319,839

)

Interest receivable and similar income

1,834

275

(108,873

)

(319,564

)

Interest payable and similar expenses

5

98

543

LOSS BEFORE TAXATION

(108,971

)

(320,107

)

Tax on loss

6

-

(24,688

)

LOSS FOR THE FINANCIAL YEAR

(108,971

)

(295,419

)

LOSS FOR THE YEAR

(108,971

)

(295,419

)

OTHER COMPREHENSIVE INCOME

Capital reduction

800,000

-

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

800,000

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

691,029

(295,419

)

FIXED ASSETS

Intangible assets

7

54,253

43,392

Tangible assets

8

278,097

301,935

332,350

345,327

CURRENT ASSETS

Stocks

9

347,748

421,836

Debtors

10

1,394,878

1,711,614

Cash at bank

905,240

632,309

2,647,866

2,765,759

CREDITORS

Amounts falling due within one year

11

2,004,680

2,027,912

NET CURRENT ASSETS

643,186

737,847

TOTAL ASSETS LESS CURRENT LIABILITIES

975,536

1,083,174

CREDITORS

Amounts falling due after more than one year

12

1,333

-

NET ASSETS

974,203

1,083,174

CAPITAL AND RESERVES

Called up share capital

15

100,000

900,000

Retained earnings

16

874,203

183,174

SHAREHOLDERS' FUNDS

974,203

1,083,174

The financial statements were approved by the Board of Directors on 12 November 2019 and were signed on its behalf by:

T A Jobson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2017

100

478,593

478,693

Changes in equity

Issue of share capital

899,900

-

899,900

Total comprehensive income

-

(295,419

)

(295,419

)

Balance at 31 March 2018

900,000

183,174

1,083,174

Changes in equity

Issue of share capital

(800,000

)

-

(800,000

)

Total comprehensive income

-

691,029

691,029

Balance at 31 March 2019

100,000

874,203

974,203

1.	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.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

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

Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

The results of the company are consolidated in the ultimate parent's financial statements and these

can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

Significant judgements and estimates

In the application of the company's accounting policies the directors are required to make judgements,

estimates and assumptions about the carrying amounts of assets and liabilities that are not readily

apparent from other sources. The estimates and associated assumptions are based on historical

experience and other factors that are considered to be relevant. Actual results may differ from these

estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognised in the period in which the estimate is revised if the revision

affects only that period, or in the period of revision and future periods if the revision effects both current

and future periods.

In preparing these financial statements, the directors have made the following judgements:

The company reviews the carrying value of all assets for indications of impairment at each period. If

indicators of impairment exist, the carrying value of the asset is subject to further testing to determine

whether its carrying value exceeds its recoverable amount. This process will usually involve the

estimation of future cash flows which are likely to be generated by the asset.

A provision is recognised when the company has a present legal or constructive obligation as a result

of a past event for which it is probable that an outflow of resources will be required to settle the

obligation and the amount can be reliably estimated. If the effect is material, provisions are determined

by discounting the expected future cash flows at a rate that reflects the time value of money and the

risk specific to the liability.

Whether a present obligation is probable or not requires judgement. The nature and type of risks for

these provisions differ and management's judgement is applied regarding the nature and extent of

obligations in deciding if an outflow of resources is probable or not.

The directors have reviewed the asset lives and associated residual values of all fixed assets classes.

In re-assessing asset lives, factors such as technological innovation, product life cycles and

maintenance programmes are taken into account. Residual value assessments consider issues such

as future market conditions, the remaining life of the asset and projects disposal values.

Turnover

Turnover represents net invoiced sales of goods and services, excluding value added tax. Revenue is

recognised on the completion of each stage of work during a contract.

Intangible fixed assets

Amortisation is provided at 20% on cost in order to write each asset off over its estimated useful life.

Tangible fixed assets

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

Plant and machinery

-

10-33% on cost

Fixtures and fittings

-

10% on cost

Computer equipment

-

20% on cost

Stocks

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

allowance for obsolete and slow-moving items. Cost includes all direct expenditure and an appropriate

proportion of fixed and variable overheads.

Financial instruments

(i) Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call

with banks, other short-term liquid investments with original maturities of three months or less, and

bank overdrafts.

(ii) Financial assets and liabilities

All financial assets and liabilities are recognised when the company becomes party to the contractual

provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual

arrangements entered into. An equity instrument is any contract that evidences a residual interest in

the assets of the company after deducting all its liabilities.

All financial assets and liabilities are initially measured at transaction price (including transaction

costs), except for those financial assets classified as at fair value through profit and loss, which are

initially measured at fair value unless the arrangement constitutes a financing transaction. If an

arrangement constitutes a financing transaction, the financial asset or liability is measured at the

present value of the future payments discounted at a market rate of interest for a similar debt

instrument.

Financial assets and liabilities are only offset at the balance sheet date when, and only when there

exists a legally enforceable right to set off the recognised amounts and the company intends either to

settle on a net basis, or to realise the asset and settle the liability simultaneously.

Debt instruments that have no stated interest rate and are classified as payable or receivable within

one year are initially measured at an undiscounted amount of the cash or other consideration expected

to be paid or received, net of impairment. Other debt instruments not meeting these conditions are

measured at fair value through profit and loss.

Commitments to make or receive loans which meet the conditions mentioned above are measured at

cost less impairment.

Financial instruments - continued

(ii) Financial assets and liabilities - continued

Financial assets are derecognised when and only when the contractual rights to the cash flows for the

financial asset expire or are settled, when the company transfers to another party substantially all the

risks and rewards of ownership of the financial asset, or the company, despite having retained some,

but not all, significant risks and rewards of ownership, has transferred control of the asset to another

party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged,

cancelled or expires.

Current and deferred tax

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

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

equity.

Current or deferred taxation assets and liabilities are not discounted.

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

enacted or substantively enacted by the balance sheet date.

Deferred tax 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 and loss in the period to which they relate.

Differences between contributions payable in the year and contributions actually paid are shown as

either accruals or prepayments in the balance sheet.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each

balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in

profit or loss.

For financial assets carried at amortised costs, the amount of an impairment is the difference between

the asset's carrying amount and the present value of estimated future cash flows, discounted at the

financial asset's original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the

asset's carrying amount and the best estimate of the amount that would be received for the asset if it

were to be sold at the reporting date.

Where indicators exist for the decrease in impairment loss, and the decrease can be related

objectively to an event occuring after the impairment was recognised, the prior impairment loss is

tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset

to the extent that the revised recoverable value does not lead to a revised carrying amount higher than

the carrying value had no impairment been recognised.

2.

TURNOVER

All turnover for the year relates to the UK market in respect of the principal activity of the company.

3.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

2,757,239

2,975,694

Social security costs

259,649

290,726

Other pension costs

90,337

146,899

3,107,225

3,413,319

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

2019

2018

Management

4

5

Administration

40

39

Production

38

52

82

96

2019

2018

£

£

Directors' remuneration

213,676

111,905

Directors' pension contributions to money purchase schemes

17,985

35,970

Compensation to director for loss of office

29,566

-

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

Money purchase schemes

3

1

Information regarding the highest paid director for the year ended 31 March 2019 is as follows:

2019

£

Emoluments etc

66,814

4.	OPERATING LOSS

The operating loss is stated after charging:

2019

2018

£

£

Hire of plant and machinery

715,561

1,107,540

Other operating leases

59,365

70,770

Depreciation - owned assets

70,868

86,932

Loss on disposal of fixed assets

-

4,543

Computer software amortisation

28,029

20,251

Auditors' remuneration

13,000

13,000

During the year the company incurred redundancy costs of £198,174 (2018 £nil), which are included

within the Wages and salaries costs in Note 3.

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Hire purchase

98

543

6.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

2019

2018

£

£

Current tax:

Overprovision in prior periods

-

(24,688

)

Tax on loss

-

(24,688

)

Reconciliation of total tax credit included in profit and loss

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

difference is explained below:

2019

2018

£

£

Loss before tax

(108,971

)

(320,107

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

(20,704

)

(60,820

)

Effects of:

Expenses not deductible for tax purposes

438

2,743

Capital allowances in excess of depreciation

(1,879

)

(1,134

)

assets

Tax losses carried forward

12,651

59,211

Research and development enhanced deductions in respect of previous periods

-

(24,688

)

Tax losses surrendered as group relief

9,494

-

Total tax credit

-

(24,688

)

Tax effects relating to effects of other comprehensive income

2019

Gross

Tax

Net

£

£

£

Capital reduction

800,000

-

800,000

The company has corporation tax losses available to carry forward against future trading profits of

approximately £2,207,000 (2018 £2,140,000).