Fairport Containers Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02830990 (England and Wales)

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

FOR

FAIRPORT CONTAINERS 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

Statement of Financial Position

10

Statement of Changes in Equity

11

Statement of Cash Flows

12

Notes to the Statement of Cash Flows

13

Notes to the Financial Statements

14

Directors:

Mr A L J Porter

Mr D A Porter

Mr D L Holden

Mr S Collinson

Registered office:

No. 1 Market Place

Adlington

Lancashire

PR7 4EZ

Registered number:

02830990 (England and Wales)

Auditors:

NR Barton

1st Floor Waterside House

Waterside Drive

Wigan

Lancashire

WN3 5AZ

The directors are pleased to present their report and financial statements for the financial year to 31 March 2020

Review of business

The company's principal activities during the year were as follows:

- Specialist refurbishment, maintenance and modification of industrial and commercial metal waste containers, four wheeled trade waste containers and recycling banks for the waste sectors and associated industries

- Buying, refurbishing, selling and hiring of waste containers and recycling banks.

- Mobile repair and maintenance of waste containers and recycling banks.

- Commercial vehicle repairs, maintenance and hire.

The demand for the company's refurbishment services remained high with waste companies and recycling banks operators taking advantage of the considerable savings compared to buying new. However the effects of the fire that occurred in February 2019, just before the start of the financial year had an adverse affect on the results of the company to March 2020.

Although the fire occurred in premises occupied by one of its tenants it spread into part of the premises occupied by the company and the disruption, re-organisation and reduced capacity affected the turnover and results in the current financial year. In particular, a substantial contract was agreed with a new customer just prior to the fire and whilst this was fulfilled the reduced facility affected production with other customers. As such although turnover increased from the previous financial year, this was considerably less than expected due to the fire-damaged premises. Further to this a number of increased costs were borne, including the administration of the claim that continues to take up a significant proportion of management and directors' time.

Despite the issues mentioned the directors are confident of a reasonable insurance settlement. The plant and machinery damaged in the fire has been reimbursed by insurers to allow the necessary re-investment.

The commercial vehicle repair and maintenance division performed satisfactorily throughout the year.

Key performance indicators

The directors consider the key performance indicators of the business to be turnover, EBITDA, Shareholders' Funds and average number of employees. Compared to the previous financial year turnover was up by 8%, EBITDA reduced by 20.4%, Shareholders' Funds increased by 2.3% and the average number of employees increased by 1%

2020

2019

Turnover

£9,264,760

£8,576,300

EBITDA

£546,561

£686,891

Shareholders' Funds

£2,317,675

£2,264,045

Average number of employees

95

94

Personnel

The company expects to retain its key personnel who have the knowledge, skills and experience. The company is an equal opportunities employer which often promotes from within.

Employee matters

The company sees its people as its primary asset to achieving its business plan and has established policies for reviewing, training and development. It is committed to achieving excellence in Health & Safety, welfare and protection of its employees.

Employment within the company is based on the person's ability to work and not on the basis of race, individual characteristics, creed or political opinion.

The company would like to thank all employees for their efforts throughout the year.

Principal risks and uncertainties

Financial Risks

The company's risk to not receiving payment from its customers is low, as all new and existing customers are credit checked on a regular basis. To assist with the company's growth and to reduce the risk of exposure, the company continued with its ID facility secured against its assets.

Non Financial Risks

As a company managing risk effectively is fundamental to our strategy and to operating successfully. The principal risk to the company is competition. To guard against this risk, the company focuses on providing exceptional quality of service on a national basis at very competitive prices. The company continues to invest in high capital cost in trucks and specialist handling equipment in order to offer services that few competitors can offer.

The directors do not envisage Brexit to have an impact on the business but will review the growth strategy if exiting the European Union begins to have an effect on the UK economy.

The directors have considered the potential implications of the ongoing Coronavirus (COVID-19) pandemic on the business. Whilst the eventual financial impact of the pandemic on the company and the wider group, and on the overall economy, are uncertain, the directors are confident that the overall impact on the business will not be significant. To mitigate the impact of the business as far as possible, the company and wider group have accessed the various government support available."

Operational Risks

The company's policies, procedures and systems are reviewed regularly to ensure they remain current and appropriate.

On behalf of the board:

Mr A L J Porter - Director

29 March 2021

The directors present their report with the financial statements of the company for the year ended 31 March 2020.

Principal activities

The principal activities of the company are set out in the Strategic Report.

Dividends

No dividends will be distributed for the year ended 31 March 2020.

Directors

The directors shown below have held office during the whole of the period from 1 April 2019 to the date of this report.

Mr A L J Porter

Mr D A Porter

Mr D L Holden

Mr S Collinson

Disclosure in the strategic report

The disclosures in respect of the business review, future developments and the financial risk management, objectives and policies are included in the Strategic Report.The principal activities of the company are also disclosed in the Strategic Report.

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

On behalf of the board:

Mr A L J Porter - Director

29 March 2021

Opinion

We have audited the financial statements of Fairport Containers Limited (the 'company') for the year ended 31 March 2020 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the 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 company's affairs as at 31 March 2020 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, 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.

Catherine Rogers BSc FCA (Senior Statutory Auditor)

for and on behalf of NR Barton

1st Floor Waterside House

Waterside Drive

Wigan

Lancashire

WN3 5AZ

29 March 2021

TURNOVER

4

9,264,760

8,576,300

Cost of sales

7,832,950

6,963,702

GROSS PROFIT

1,431,810

1,612,598

Administrative expenses

1,377,718

1,330,129

54,092

282,469

Interest payable and similar expenses

6

63,900

38,014

(LOSS)/PROFIT BEFORE TAXATION

7

(9,808

)

244,455

Tax on (loss)/profit

8

(63,438

)

66,814

PROFIT FOR THE FINANCIAL YEAR

53,630

177,641

PROFIT FOR THE YEAR

53,630

177,641

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

53,630

177,641

FIXED ASSETS

Intangible assets

9

1,333

3,333

Tangible assets

10

1,945,956

1,837,060

1,947,289

1,840,393

CURRENT ASSETS

Stocks

11

371,948

314,716

Debtors

12

3,504,736

3,643,849

Cash at bank

1,499,059

577,251

5,375,743

4,535,816

CREDITORS

Amounts falling due within one year

13

4,325,646

3,586,182

NET CURRENT ASSETS

1,050,097

949,634

TOTAL ASSETS LESS CURRENT LIABILITIES

2,997,386

2,790,027

CREDITORS

Amounts falling due after more than one year

14

(529,238

)

(398,950

)

PROVISIONS FOR LIABILITIES

18

(150,473

)

(127,032

)

NET ASSETS

2,317,675

2,264,045

CAPITAL AND RESERVES

Called up share capital

19

2

2

Retained earnings

20

2,317,673

2,264,043

SHAREHOLDERS' FUNDS

2,317,675

2,264,045

The financial statements were approved by the Board of Directors and authorised for issue on 29 March 2021 and were signed on its behalf by:

Mr A L J Porter - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2018

2

2,086,402

2,086,404

Changes in equity

Total comprehensive income

-

177,641

177,641

Balance at 31 March 2019

2

2,264,043

2,264,045

Changes in equity

Total comprehensive income

-

53,630

53,630

Balance at 31 March 2020

2

2,317,673

2,317,675

Cash flows from operating activities

Cash generated from operations

1

1,440,103

865,743

Interest paid

(31,175

)

-

Interest element of hire purchase payments paid

(32,725

)

(38,014

)

Tax paid

(71

)

-

Net cash from operating activities

1,376,132

827,729

Cash flows from investing activities

Purchase of tangible fixed assets

(172,865

)

(146,247

)

Sale of tangible fixed assets

58,037

125,247

Net cash from investing activities

(114,828

)

(21,000

)

Cash flows from financing activities

Capital repayments in year

(339,496

)

(325,854

)

Net cash from financing activities

(339,496

)

(325,854

)

Increase in cash and cash equivalents

921,808

480,875

Cash and cash equivalents at beginning of year

2

577,251

96,376

Cash and cash equivalents at end of year

2

1,499,059

577,251

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

31.3.20

31.3.19

£

£

(Loss)/profit before taxation

(9,808

)

244,455

Depreciation charges

533,545

495,191

Profit on disposal of fixed assets

(41,076

)

(90,769

)

Finance costs

63,900

38,014

546,561

686,891

Increase in stocks

(57,232

)

(92,396

)

Decrease/(increase) in trade and other debtors

225,991

(253,842

)

Increase in trade and other creditors

724,783

525,090

Cash generated from operations

1,440,103

865,743

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 March 2020

31.3.20

1.4.19

£

£

Cash and cash equivalents

1,499,059

577,251

Year ended 31 March 2019

31.3.19

1.4.18

£

£

Cash and cash equivalents

577,251

96,376

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.4.19

Cash flow

changes

At 31.3.20

£

£

£

£

Net cash

Cash at bank

577,251

921,808

1,499,059

577,251

921,808

1,499,059

Debt

Finance leases

(689,437

)

339,496

(484,537

)

(834,478

)

(689,437

)

339,496

(484,537

)

(834,478

)

Total

(112,186

)

1,261,304

(484,537

)

664,581

1.	STATUTORY INFORMATION

Fairport Containers 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.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention.

Going concern

The directors have reviewed the company's forecasts and projections and, in particular, have considered the potential implications of the Coronavirus (COVID-19) pandemic both on the company itself and on the wider group of which it is a member. Whilst the eventual financial impact of the pandemic on the company and group, and on the overall economy, remains uncertain, the directors are confident that both the company and group will be able to remain operational throughout the pandemic. However, operations have inevitably had to be scaled back slightly and the company and group have accessed the various government support available.

The directors have a reasonable expectation that both the company and the group will have adequate funding and resources to continue in operational existence for the foreseeable future

The company and the group therefore continue to adopt the going concern basis in preparing their financial statements.

Turnover

Sale of goods

Turnover from the sale of goods is stated net of VAT and is recognised when the goods are delivered to the customer. It is recorded at the fair value of consideration received or receivable.

Rendering of services

Turnover relating to the rendering of services is stated net of VAT and represents the value of services provided to the extent that there is a right to consideration and is recorded at the fair value of consideration received or receivable.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2015, is being amortised evenly over its estimated useful life of five years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows :

Plant and machinery - 10% - 33.3% on a straight line basis

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets . Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives. Assets acquired under hire purchase contracts are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charges allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Pension costs and other post-retirement benefits

The company participates in a defined benefit pension scheme, along with other group companies. Full details of the scheme are disclosed within the financial statements of the parent company, Fairport Holdings Limited.

The contributions payable by the company in the year were £25,872 (2019 - £23,670).

The assets and liabilities of the scheme are recognised in the financial statements of Fairport Holdings Limited.

Taxation

The tax expenses for the year comprises current and deferred tax. Tax is recognised in the income statement, except that a change attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

Deferred tax balances are recognised in respect of timing differences that have originated but not reversed by the balance sheet date.

Current and deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Short term debtors and creditors receivable

Short term debtors and creditors with no stated interest rate are recorded at transaction price. Any losses arising from impairment are recognised in the income statement

4.

TURNOVER

The turnover and loss (2019 - profit) before taxation are attributable to the principal activities of the company.

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

31.3.20

31.3.19

£

£

Sale of goods

802,811

658,489

Rendering of services

8,461,949

7,917,811

9,264,760

8,576,300

5.	EMPLOYEES AND DIRECTORS

31.3.20

31.3.19

£

£

Wages and salaries

2,964,448

2,974,297

Other pension costs

25,872

23,670

2,990,320

2,997,967

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

31.3.20

31.3.19

Manufacturing and operational

81

80

Office and management

14

14

95

94

31.3.20

31.3.19

£

£

Directors' remuneration

57,772

55,391

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.3.20

31.3.19

£

£

Other interest

31,175

-

Hire purchase

32,725

38,014

63,900

38,014

7.	(LOSS)/PROFIT BEFORE TAXATION

The loss (2019 - profit) is stated after charging/(crediting):

31.3.20

31.3.19

£

£

Other operating leases

346,050

344,298

Depreciation - owned assets

531,545

493,191

Profit on disposal of fixed assets

(41,076

)

(90,769

)

Goodwill amortisation

2,000

2,000

Auditors remuneration is borne by the parent company.

8.

TAXATION

Analysis of the tax (credit)/charge

The tax (credit)/charge on the loss for the year was as follows:

31.3.20

31.3.19

£

£

Current tax:

UK corporation tax

(16,878

)

16,878

Tax credit in respect of Research & Development

(70,000

)

-

Total current tax

(86,878

)

16,878

Deferred tax

23,440

49,936

Tax on (loss)/profit

(63,438

)

66,814

Reconciliation of total tax (credit)/charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31.3.20

31.3.19

£

£

(Loss)/profit before tax

(9,808

)

244,455

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

(1,864

)

46,446

Effects of:

Expenses not deductible for tax purposes

8,426

7,655

Adjustments to tax charge in respect of previous periods

-

37,954

Utilisation of group relief

-

(25,241

)

Tax Credit in respect of Research & Development claim

(70,000

)

-

Total tax (credit)/charge

(63,438

)

66,814

9.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 April 2019

and 31 March 2020

10,000

AMORTISATION

At 1 April 2019

6,667

Amortisation for year

2,000

At 31 March 2020

8,667

NET BOOK VALUE

At 31 March 2020

1,333

At 31 March 2019

3,333