ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2020
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VIVALDA GROUP PLC
COMPANY INFORMATION
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VIVALDA GROUP PLC
CONTENTS
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VIVALDA GROUP PLC
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their strategic report with the financial statements of the group for the year ended 31 December 2020.
The directors are happy with the financial performance of the group in 2020. Group revenues grew by £3.3m to £37,129,584 (2019:£33,846,779), an increase of 9.7%. Our Gross profit margin remained static at 31% (2019: 31%). Operating costs increased by 9.4% in line with the Group's increased revenue. Excluding other operating income, profit before tax increased by 7.5% to £3,326,524 (2019: £3,093,472) and the Group EBITDA for 2020 was £3.8m (2019: £3.49m). Including other operating income, the EBITDA for 2020 was £4.42m.
The consolidated balance sheet continues to improve with net assets increasing by £2,256,611 to £15,044,573 (2019: £12,949,141), a 17.5% increase year on year. The return on capital employed (ROCE) has improved to 25.97% (2019: 23.62%). The cash balance increased to £4,439,379 (2019: £2,464,790). Vivalda Group has a strategic policy of using cash reserves where possible and in 2020 invested £2,378,583 in fixed assets. The Group intend to adopt the same policy in 2021 but, it should be noted that we have agreements in principle with lenders to secure funding for larger investments. During 2020, the Group purchased further office space in London as well as warehouse facilities in Manchester at a combined cost of £1.92m. Contracts have been exchanged on a new warehouse in Cheltenham with the completion scheduled in June 2021. All Group property is debt free and owned outright. The Group are also excited to have entered into a contract with a leading global ERP provider that will provide a superior platform for the Group to operate from. It is anticipated the platform will go live in late 2021. The outbreak of Coronavirus in 2020 provided new challenges for all companies in the Vivalda Group. It is credit to senior management that an emergency strategy was quickly devised and executed with the welfare of all employees central to strategy. Whilst a number of employees were placed on short term furlough leave, the Group declined the opportunity to obtain finance through Government CBIL or BBLS loans and quickly implemented a plan to get all employees back to work either remotely or in safe working environments. Whilst trading was impacted throughout the Group for a short period, in line with the Government's directive to keep the construction industry working, the Group invested in additional Health & Safety equipment to ensure we minimised disruption to active construction projects. The impact of the Grenfell Tower fire continues to influence the strategy of the Group. We continue to support the Ministry of Housing, Communities & Local Government (MHCLG) Cladding Remediation Programme by providing the expertise of Group Chairman Peter Johnson and non-executive director Chris Williams. The Group continues to campaign for the replacement of unsafe cladding with reputable products distributed by Vivalda Group companies which meet the new legislation. The Group is satisfied with its position after the United Kingdom's exit from the European Union in 2020. Despite the continued uncertainty of a "No Deal" Brexit, the signing of the Trade & Cooperation agreement in late 2020 brought clarity to the Group. We continue to work closely with our key manufacturers in the Eurozone and despite issues with increased freight costs, increased export/import documentation when the Brexit Transition period expired and the availability of hauliers in January 2021, the group has overcome the challenges and is operating at normal levels at the time of this report. The key to the success of the Group is a wealth of talented employees. Their dedication and loyalty have driven the growth in the Group performance and financial position in 2020. The directors of Vivalda Group PLC reiterate their gratitude to every single employee during what was a particularly challenging year, and fully commits to providing them with a safe, comfortable and enjoyable place of work, free from any form of prejudice. We continue to strive to provide opportunities for all employees to personally develop through internal and external training. As the Group grows in size, we will continue our policy of offering career paths for the most talented individuals. The Group continues to champion equal rights for all employees and continue to be committed to having a diverse range of employees at all levels. During the period in question, the Group retained 82% of the employees employed on 1st January 2020 at the end of the reporting period.
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VIVALDA GROUP PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
Despite the challenges faced during 2020, the Vivalda Group continued its strategy of rewarding employees with discretionary bonuses amounting to £350,000 being awarded during the year. The group continue to provide various staff benefits and wellbeing initiatives to maintain a motivated team of employees.
The Board of Directors took the decision in 2020 to appoint independent Health & Safety advisors who provide strategic advice, carry out regular Health & Safety audits and act as the company competent person as defined by the Management of Health & Safety at work regulations. In 2020 there were two reportable instances within the group. The Group also made a number of targeted charitable donations during the year 2020 and intend to make specific charitable donations in 2021.
The directors continue to review risks and uncertainties but key business risks affecting the Group are considered to be the state of the UK building industry and the level of consumer demand within the UK economy. The directors have ultimate responsibility for liquidity risk management in maintaining adequate reserves and banking facilities. The process is the continuing monitoring of both forecast and actual cash flows and matching the maturing profiles of financial assets and liabilities.
Financial Instruments The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are largely conducted in sterling. The company does not enter into any formal hedging arrangements. The group's financial instruments comprise of bank balances, bank loan and overdraft, hire purchase, lease finance, trade debtors and trade creditors. Due to the nature of the financial instruments used by the group, there is no exposure to price risk. The group's approach to managing other risks applicable to the financial instruments is shown below. In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of bank loans at market rates of interest. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. Trade creditors liquidity risk is managed by ensuring funds are available to meet amounts due.
The financial key performance indicators are turnover and profits. The group's performance against these criteria is discussed in the business review above.
The Directors of the Group, as those of all UK companies, must act in accordance with a set of general duties which are set out in detail in section 172 of UK Companies Act 2006. The following paragraphs summarise how the Directors’ fulfil their duties:
Risk Management: The Board has overall responsibility for risk management and in conjunction with the directors of our subsidiaries, we effectively identify, evaluate, manage and mitigate these risks. The board strategy is to continue to evolve in our approach to risk management but, to always act in a manner that protects the Vivalda Group, its employees and all stakeholders. Our People: We are committed to be a responsible business, aligned with expectations of our people, clients, communities’ and society. People are at the heart of our services, so we need to manage and develop our people’s performance and bring through talent. We must ensure we share common values and guide behaviour, so we achieve our goals the right way.
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VIVALDA GROUP PLC
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
Business Relationships: Our strategy is to grow the Vivalda Group organically, through new products and through business acquisitions. To do this we need to maintain and develop existing strong relationships with all stakeholders. Customer satisfaction is evidenced through repeat sales. Strong allegiances with suppliers ensure the Vivalda Group is trusted to distribute their products. As the company grows, we are developing closer relationships with external stakeholders such as credit rating agencies, insurance providers, professional services companies and our bankers. . Community and Environment: The company approach is act as a “Good neighbour” at all locations we operate from ensuring we are considerate to homes and businesses nearby. The group is developing a green transport policy and has already replaced older vehicles with newer less polluting vehicles and encourages staff to use public transport where possible. Shareholders: The board is committed to engaging with its key shareholders so that they understand our strategy and objectives. The board is also receptive to the opinions and advice offered by key shareholders. Collectively, the board and the shareholders share a common objective to enrich and grow the company by retaining profits to reinvest within the Vivalda Group. Employees: The Vivalda Group recognise the importance of all employees and their part in the success of the Group. A quarterly internal newsletter is circulated to keep all employees informed of ongoing activities across all sites. The Board welcome feedback from all employees and Regional Directors visit their branches regularly to share information and receive feedback from employees.
This report was approved by the board and signed on its behalf.
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VIVALDA GROUP PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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.
The profit for the year, after taxation, amounted to £3,146,932 (2019 - £2,517,386).
The results are detailed in the financial statements and commented upon in the strategic report. Dividends paid are disclosed in the financial statements.
The directors who served during the year were:
The directors anticipate the business environment will remain competitive. They believe that the group is in a good financial position and they remain confident that the group will continue to perform well. More details are given in the strategic report.
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VIVALDA GROUP PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
See Strategic Report for further details.
See Strategic Report for further details.
There have been no significant events affecting the Group since the year end.
The auditor, James Cowper Kreston, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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VIVALDA GROUP PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF VIVALDA GROUP PLC
We have audited the financial statements of Vivalda Group Plc (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2020, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, 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).
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 Auditor's 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 United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's Report 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.
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VIVALDA GROUP PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF VIVALDA GROUP PLC (CONTINUED)
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 Directors' Report.
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 an Auditor's Report 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 Group financial statements.
IOur 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 an Auditor's report 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.
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VIVALDA GROUP PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF VIVALDA GROUP PLC (CONTINUED)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows: • Enquiry of management those charged with governance around actual and potential litigation and claims; • Enquiry of management and those charged with governance to identify any material instances of non-compliance with laws and regulations; • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; • Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias.
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 Auditor's 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 an Auditor's Report 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.
for and on behalf of
Chartered Accountants and Statutory Auditor
Reading Bridge House
George Street
Berkshire
RG1 8LS
Date:
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VIVALDA GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
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VIVALDA GROUP PLC
REGISTERED NUMBER: 08121382
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 32 form part of these financial statements.
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VIVALDA GROUP PLC
REGISTERED NUMBER: 08121382
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 32 form part of these financial statements.
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VIVALDA GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
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VIVALDA GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
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VIVALDA GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
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VIVALDA GROUP PLC
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2020
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Vivalda Group Plc is a company incorporated and domiciled in England and has its registered office and principal place of business at 99 Victoria Road, Park Royal, London, NW10 6DJ.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases. The Group continues to recognise a merger reserve which arose on a past business combination that was accounted for as a merger in accordance with UK GAAP as applied at that time.
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
Functional and presentation currency
Transactions and balances
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Tangible fixed assets Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as the remaining life of the asset and projected disposal values. Bad debt provision Provisions are estimated by the company in respect of specific bad debts based upon the age of the debt and any known recoverability issues. Stock provision Provisions are estimated by the company in respect of specific stock items based upon the age and condition of the items and any known issues.
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Analysis of turnover by country of destination:
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
In the Spring Budget 2021, the Government announced that from 1 April 2023 the main corporation tax rate will increase to 25%. As the proposal to increase the rate to 25% had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements. However, it is likely that the overall effect of the change, had it been substantively enacted by the balance sheet date, would be to increase the tax expense for the period and to increase the deferred tax liability. The impact of these changes is not expected to be material.
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £
Page 25
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Page 26
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
13.Tangible fixed assets (continued)
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
13.Tangible fixed assets (continued)
Page 28
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Page 29
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Finance lease liabilities are secured on the related assets.
Page 30
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Page 31
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VIVALDA GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Merger Reserve
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £194,251 (2019: £113,446).
The ultimate controlling party is Mr Peter Johnson by virtue of his shareholding.
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