Littlewood Fencing UK Limited - Limited company accounts 22.3

REGISTERED NUMBER: 10750281 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2022

FOR

LITTLEWOOD FENCING UK LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

J M Hobden

Ms D A Symes

J Verjee

REGISTERED OFFICE:

North Trade Road

Battle

East Sussex

TN33 9LJ

REGISTERED NUMBER:

10750281 (England and Wales)

AUDITORS:

Watson Associates (Audit Services) Ltd

Statutory Auditor

30 - 34 North Street

Hailsham

East Sussex

BN27 1DW

The directors present their strategic report of the company and the group for the year ended 31 May 2022.

REVIEW OF BUSINESS

Littlewood Fencing UK Limited acts as a holding company managing its intermediary holding company, Littlewood Holdings (Sussex) Limited and its further two wholly-owned trading subsidiaries; Littlewood Fencing Limited and Littlewood Renewables Limited.

Littlewood Fencing Limited is a well established and reputable fencing contractor which services its clients all over the UK from its head office in the South East of England and two other locations in the South West and the East Midlands.

The Directors were pleased with the performance of the group in tough economic conditions and are positive about the coming year's trade.

Key performance indicators for the year:

2022

2021

£

£

Turnover

37,295,498

38,042,594

Gross Profit

8,455,876

7,544,502

Operating Profit

2,247,696

1,881,598

Gross Assets

15,409,947

17,178,261

Net Assets

7,247,868

5,433,500

Normalised earnings before interest, tax, depreciation and amortisation ('EBITDA') for the group are shown below:

2022

2021

£

£

Operating Profit

2,247,696

1,881,598

Depreciation

346,271

327,493

Amortisation

456,823

419,272

EBITDA

3,050,790

2,628,363

In March 2020 its operations in the UK were reduced due to the imposed lockdown as a result of the

COVID-19 pandemic.

This continues to be an unprecedented situation that has caused a significant amount of uncertainty for the

company and the wider economy. The principle risks and uncertainties the company continues to have as a

result of COVID-19 are liquidity risk, credit risk and strategic risk.

The directors have considered the potential implications of COVID-19 and have taken the following actions to

mitigate the principle risks and uncertainties. All measures taken by the company have taken into account the

effect of the extent and duration of social distancing measures announced by the government in March 2020,

as well as the impact on the economy and asset prices generally:

-Utilised the government's job retention scheme

-Deferral of VAT payments in accordance with government guidelines

Further measures are reviewed on an ongoing basis.

PRINCIPAL RISKS AND UNCERTAINTIES

The group operates in the construction industry and is subject to significant governmental regulation including stringent laws relating to health and safety.

Like every business, our management team is regularly monitoring our risk profile and provides clear guidelines and assurances that all social, legal and health and safety responsibilities are adhered to.

ON BEHALF OF THE BOARD:

J M Hobden - Director

10 November 2022

The directors present their report with the financial statements of the company and the group for the year ended 31 May 2022.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of a holding company.

DIVIDENDS

No dividends will be distributed for the year ended 31 May 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 June 2021 to the date of this report.

J M Hobden

Ms D A Symes

J Verjee

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Watson Associates (Audit Services) Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J M Hobden - Director

10 November 2022

Opinion

We have audited the financial statements of Littlewood Fencing UK Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2022 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 May 2022 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

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 and 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.

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, 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 this gives rise to a material misstatement in the financial statements themselves. 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Prior to engagement the following audit procedures are considered:

- Identification of laws and regulations being significant in the context of the entity;

- Understanding the entity's current activities, the scope of its authorisation and the effectiveness of its control environment where the entity is a regulated entity;

- Determining any key audit matters that require further explanation;

- In the case of a group, how the auditor addressed these matters at both at the group and component levels;

- communications with the engagement team and, where relevant, component auditors regarding non-compliance with laws and regulations and fraud.

Audit procedures performed by the engagement team to detect irregularities, including fraud from instances of non-compliance with laws and regulations included:

- Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;

- Reading key correspondence from regulatory bodies;

- Challenging assumptions and judgements made by management in it's significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. We focused on the valuation of provisions against WIP, retentions and application debtors, and the assessment of impairment of intangible and tangible assets, as well as any other estimates and provisions within the accounts;

- Consideration of recent correspondence with the companies legal advisors to ensure that it aligned with the conclusions drawn on obligations recognised in respect of uncertain legal matters;

- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or those posted by unexpected users; and

- Testing all material consolidation adjustments to ensure these were appropriate in nature and magnitude;

- Communicating with component auditors any matters which arise, and disclosing any instances of non-compliance or fraud, in addition to testing inter-group transactions and amounts owed by/(to) any group companies;

- Reviewing relevant meeting minutes including those of the board of directors

- Testing transactions entered into that are outside of the normal course of the Company's business

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and other management (as required by auditing standards), and from inspection of the group's regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.

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.

Stephen James Moore (Senior Statutory Auditor)

for and on behalf of Watson Associates (Audit Services) Ltd

Statutory Auditor

30 - 34 North Street

Hailsham

East Sussex

BN27 1DW

10 November 2022

TURNOVER

37,295,498

38,042,594

Cost of sales

(28,839,622

)

(30,498,092

)

GROSS PROFIT

8,455,876

7,544,502

Administrative expenses

(6,160,192

)

(5,682,599

)

2,295,684

1,861,903

Other operating income

1,007

69,801

2,296,691

1,931,704

Interest receivable and similar income

8,634

7,984

2,305,325

1,939,688

Interest payable and similar expenses

5

(57,629

)

(58,090

)

PROFIT BEFORE TAXATION

6

2,247,696

1,881,598

Tax on profit

7

(433,328

)

(494,517

)

PROFIT FOR THE FINANCIAL YEAR

1,814,368

1,387,081

OTHER COMPREHENSIVE LOSS

Revaluation

-

(110,473

)

Income tax relating to other comprehensive loss

-

-

OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF INCOME TAX

-

(110,473

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,814,368

1,276,608

Profit attributable to:

Owners of the parent

1,814,368

1,387,081

Total comprehensive income attributable to:

Owners of the parent

1,814,368

1,276,608

FIXED ASSETS

Intangible assets

9

2,866,447

2,947,756

Tangible assets

10

4,055,575

3,955,198

Investments

11

-

-

6,922,022

6,902,954

CURRENT ASSETS

Stocks

12

286,464

331,693

Debtors

13

5,354,825

8,323,938

Cash at bank and in hand

2,846,636

1,619,676

8,487,925

10,275,307

CREDITORS

Amounts falling due within one year

14

(5,838,884

)

(7,194,885

)

NET CURRENT ASSETS

2,649,041

3,080,422

TOTAL ASSETS LESS CURRENT LIABILITIES

9,571,063

9,983,376

CREDITORS

Amounts falling due after more than one year

15

(1,509,143

)

(3,772,995

)

PROVISIONS FOR LIABILITIES

18

(814,052

)

(776,881

)

NET ASSETS

7,247,868

5,433,500

CAPITAL AND RESERVES

Called up share capital

19

100,000

100,000

Share premium

20

33,998

33,998

Revaluation reserve

20

1,574,483

1,574,483

Capital redemption reserve

20

40

40

Retained earnings

20

5,539,347

3,724,979

SHAREHOLDERS' FUNDS

7,247,868

5,433,500

The financial statements were approved by the Board of Directors and authorised for issue on 10 November 2022 and were signed on its behalf by:

J M Hobden - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

11,756,576

11,381,062

11,756,576

11,381,062

CURRENT ASSETS

Debtors

13

1,800

8,341

Cash at bank

3,947

2,596

5,747

10,937

CREDITORS

Amounts falling due within one year

14

(10,514,931

)

(7,900,832

)

NET CURRENT LIABILITIES

(10,509,184

)

(7,889,895

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,247,392

3,491,167

CREDITORS

Amounts falling due after more than one year

15

(1,230,154

)

(3,473,667

)

NET ASSETS

17,238

17,500

CAPITAL AND RESERVES

Called up share capital

19

100,000

100,000

Retained earnings

20

(82,762

)

(82,500

)

SHAREHOLDERS' FUNDS

17,238

17,500

Company's loss for the financial year

(262

)

(3,080

)

The financial statements were approved by the Board of Directors and authorised for issue on 10 November 2022 and were signed on its behalf by:

J M Hobden - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 June 2020

100,000

2,337,898

33,998

Changes in equity

Total comprehensive income

-

1,387,081

-

Balance at 31 May 2021

100,000

3,724,979

33,998

Changes in equity

Total comprehensive income

-

1,814,368

-

Balance at 31 May 2022

100,000

5,539,347

33,998

Capital

Revaluation

redemption

Total

reserve

reserve

equity

£

£

£

Balance at 1 June 2020

1,684,956

40

4,156,892

Changes in equity

Total comprehensive income

(110,473

)

-

1,276,608

Balance at 31 May 2021

1,574,483

40

5,433,500

Changes in equity

Total comprehensive income

-

-

1,814,368

Balance at 31 May 2022

1,574,483

40

7,247,868

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2020

100,000

(79,420

)

20,580

Changes in equity

Total comprehensive loss

-

(3,080

)

(3,080

)

Balance at 31 May 2021

100,000

(82,500

)

17,500

Changes in equity

Total comprehensive loss

-

(262

)

(262

)

Balance at 31 May 2022

100,000

(82,762

)

17,238

Cash flows from operating activities

Cash generated from operations

1

4,708,374

2,165,564

Interest paid

(36,332

)

(39,831

)

Interest element of hire purchase payments paid

(21,297

)

(18,259

)

Tax paid

(195,891

)

(396,401

)

Deferred tax movement

37,171

96,517

Government grant income

1,007

69,801

Net cash from operating activities

4,493,032

1,877,391

Cash flows from investing activities

Purchase of intangible fixed assets

(375,514

)

(724,167

)

Purchase of tangible fixed assets

(477,081

)

(414,620

)

Sale of tangible fixed assets

53,428

65,220

Interest received

8,634

7,984

Net cash from investing activities

(790,533

)

(1,065,583

)

Cash flows from financing activities

New loans in year

1,403,402

-

Loan repayments in year

(3,903,058

)

(2,043,864

)

New Hire purchases in year

321,319

322,448

Capital repayments in year

(297,202

)

(297,791

)

Net cash from financing activities

(2,475,539

)

(2,019,207

)

Increase/(decrease) in cash and cash equivalents

1,226,960

(1,207,399

)

Cash and cash equivalents at beginning of year

2

1,619,676

2,827,075

Cash and cash equivalents at end of year

2

2,846,636

1,619,676

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

2022

2021

£

£

Profit before taxation

2,247,696

1,881,598

Depreciation charges

803,094

746,765

Profit on disposal of fixed assets

(22,993

)

(19,741

)

(Increase)/Decrease in AROC

1,098,640

(386,037

)

Government grants

(1,007

)

(69,801

)

Finance costs

57,629

58,090

Finance income

(8,634

)

(7,984

)

4,174,425

2,202,890

Decrease/(increase) in stocks

45,229

(106,850

)

Decrease/(increase) in trade and other debtors

1,870,473

(1,545,915

)

(Decrease)/increase in trade and other creditors

(1,381,753

)

1,615,439

Cash generated from operations

4,708,374

2,165,564

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 May 2022

31.5.22

1.6.21

£

£

Cash and cash equivalents

2,846,636

1,619,676

Year ended 31 May 2021

31.5.21

1.6.20

£

£

Cash and cash equivalents

1,619,676

2,827,075

3.	ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS

At 1.6.21

Cash flow

At 31.5.22

£

£

£

Net cash

Cash at bank and in hand

1,619,676

1,226,960

2,846,636

1,619,676

1,226,960

2,846,636

Debt

Finance leases

(544,612

)

(24,135

)

(568,747

)

Debts falling due within 1 year

(376,417

)

256,144

(120,273

)

Debts falling due after 1 year

(3,473,667

)

2,243,513

(1,230,154

)

(4,394,696

)

2,475,522

(1,919,174

)

Total

(2,775,020

)

3,702,482

927,462

1.	STATUTORY INFORMATION

Littlewood Fencing UK Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with 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 as modified by the revaluation of certain assets.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2017, is being amortised evenly over its estimated useful life of ten 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

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% on cost

Plant and machinery

-

25% on cost and 15% on reducing balance

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Stocks

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

Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, and loans to related parties.

Debt instruments that are payable or receivable within one year, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received; other debt instruments are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.

Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.