Company Registration No. 00319964 (England and Wales)
TUFFNELLS PARCELS EXPRESS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
TUFFNELLS PARCELS EXPRESS LIMITED
COMPANY INFORMATION
Directors
M Holt (Chairman)
(Appointed 2 May 2020)
C Rolandi (Non-executive)
(Appointed 2 May 2020)
C Tresadern
(Appointed 2 May 2020)
I Brewer
(Appointed 2 May 2020)
A Watson
(Appointed 2 May 2020)
Company number
00319964
Registered office
Unit 1 Meadowhall Business Park
Carbrook Hall Road
Sheffield
S9 2EQ
Auditor
Littlestone Golding
17 Cavendish Square
London
W1G 0PH
TUFFNELLS PARCELS EXPRESS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Income statement
10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14 - 38
TUFFNELLS PARCELS EXPRESS LIMITED
STRATEGIC REPORT
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 1 -
The directors present the strategic report
and audited financial statements
for the
16 month period ended 31 December 2020 with comparative information for the year ended 31 August 2019.
Promoting the success of the company
Throughout 2019 and 2020, the directors have complied with the requirements of Section 172 of the Companies Act 2006, in promoting the long-term success of the Company for the benefit of all stakeholders. The following disclosure describes how the directors have acted in regard to the matters set out in section 172.
Employees
Tuffnells is committed to providing a diverse and inclusive working environment and helping our employees gain skills that support their personal ambitions and drive the business forward. This is evidenced by the recent launch of our Green Shoots development programme. The Company recognises the need to ensure effective communication with employees and does this in a variety of ways, such as holding regular Executive update sessions and distributing company newsletters, alongside other informal communications.
Customers
We continue to work on long-term relationships with our customers and strive to offer the best customer service in the industry. To progress with this, the Company has embarked on a fleet refreshment programme to improve reliability and reduce its carbon footprint. We have in place two UK-based Customer Experience Centres, ensuring we are available to take our customer calls, and we utilise the services of Trustpilot to gain customer feedback.
Suppliers
Our suppliers and subcontractors are critical to our operations, and we take a long-term collaborative approach to working with them, recognising our responsibility to pay our suppliers to term.
Communities
We take our social responsibilities seriously, contributing to local community schemes. The Company recently sponsored a snowflake with The Sheffield Children’s Hospital.
High Standards of Business Conduct
The Company recognises the need to conduct its business in a way that is ethical, safe, compliant and of a high standard. Where a material business decision is taken, and it is practical, all affected stakeholders will be consulted. It is a priority of the Company to act in a fair and responsible manner and forge a reputation of working to the highest standards, whilst providing a return to its investors.
TUFFNELLS PARCELS EXPRESS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 2 -
Review of the business, performance and future developments
The company is a recognised leader in the movement of combined parcels, pallets and consignments of
irregular dimensions and weight. Specialising in express consignment collection and delivery throughout the UK,
Ireland and internationally, operating across multiple industry sectors.
Between 1st September 2019 and 1st May 2020 the company was under the ownership of Smiths News Group
Plc (formerly Connect Group Plc). During this eight month period four depots were closed as the company
responded to the Covid-19 epidemic and rationalised its customer base. This led to a reduction in volume
capacity, service deterioration and reduced revenue.
On 2nd May 2020 the company returned to private ownership, as Smith News Group Plc completed the sale to
Tuffnells Holdings Limited.
The eight month period since change of ownership saw an improvement in revenue to £114.3 million for May to
December 2020
from
£98.2 million for September 2019 to April 2020). Coupled with strong, but sensible, cost
controls built around providing a quality of service yielded a gross margin of 21.6% for the period May to
December 2020
compared to
11.
3
% for September 2019 to April 2020. Operating losses excluding exceptional items
reduced to £
0.7
million
for May to December 2020
from an
operating loss of £1
8
.
3
million for September 2019 to
April 2020). The final six months of 2020 (July to December) reported an operating profit of £1.05 million.
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OPERATING PROFIT/(LOSS) BEFORE EXCEPTIONAL ITEMS
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The improved financial and operational performance coincided with a strengthening of the executive board and
investment in resource throughout the network.
Future expectations
The Company expects volume and revenue growth, as a result of service improvements. Profits are expected to
follow the same pattern, but aided further by improved productivity and sustained cost management.
Principal risks and uncertainties
Management consider that the key risk to the company is the continuing uncertainly around the impact of the post Brexit trade deal on the supply chain, plus the generic competitive forces within the parcel delivery sector. As the economy emerges from the Covid-19 epidemic uncertainty exists around the short and long term economic impact. The company’s operations expose it to a variety of financial risks that include credit risk, interest rate risk and liquidity risk. The company has robust internal procedures to monitor cash and liquidity, sales, cost and profit performance. The company strives to provide industry leading customer service to mitigate these risks.
TUFFNELLS PARCELS EXPRESS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 3 -
Key performance indicators
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Operating profit/(loss) before exceptional items (£'000)
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Revenue per employee (annualised)
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M Holt
Chairman
6 May 2021
TUFFNELLS PARCELS EXPRESS LIMITED
DIRECTORS' REPORT
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 4 -
The directors present their annual report and financial statements for the 16 month period ended 31 December 2020 with comparative information for the year ended 31 August 2019.
Principal activities
The principal activity of the Company during the year continued to be that of a distributor of mixed and irregular freight throughout the United Kingdom.
Results and dividends
The results for the 16 month period are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the 16 month period and up to the date of signature of the financial statements were as follows:
M Holt (Chairman)
(Appointed 2 May 2020)
C Rolandi (Non-executive)
(Appointed 2 May 2020)
C Tresadern
(Appointed 2 May 2020)
I Brewer
(Appointed 2 May 2020)
A Watson
(Appointed 2 May 2020)
P Birks
(Resigned 18 November 2019)
A Blakeley
(Appointed 2 May 2020 and resigned 20 October 2020)
J Bunting
(Appointed 18 November 2019 and resigned 2 May 2020)
J Dawson
(Appointed 2 May 2020 and resigned 19 June 2020)
J Garat
(Appointed 2 May 2020 and resigned 25 June 2020)
A Grace
(Resigned 2 May 2020)
Qualifying third party indemnity provisions
The Company maintains liability insurance for its directors, with a cover limited for each claim or a series of claims against them in that capacity. The directors have also been granted a qualifying third party provision under section 234 of the Companies Act 2006.
Disabled persons
It is the Company's practice to facilitate the employment of disabled persons and to provide, whenever possible, opportunities for training, career development and promotion. In the event of employees becoming disabled in the service of the Company, every effort would be made to rehabilitate them in the former jobs or some other suitable alternative, and to provide appropriate training and specialist advice.
Employee involvement
The Company systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, so that views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the Company is encouraged, as achieving common awareness on the part of all employees of the financial and economic factors affecting the Company plays a major role in maintaining its core philosophy. The Company encourages the involvement of employees by means of Town Halls and colleague advisory forums.
The Strategic Report includes commentary on the Company's engagement
with its
employees and how it
take
s
account of their interests and
the
effect this has had on company’s principal decisions.
TUFFNELLS PARCELS EXPRESS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 5 -
Business relationships
The Strategic Report includes commentary on how the Company has
had regard to the need to foster business relationships with suppliers, customers and others including
its effect
on the principal decisions taken
during the year.
Auditor
Littlestone Golding were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Energy and carbon report
The Company's
greenhouse gas emissions, reportable under Streamlined Energy and Carbon Reporting
(
SECR
) for the 16 month period from 1 September 2019 to 31 December 2020
were 46,880 tonnes CO
2
e.
These include the emissions associated with electricity and natural gas consumption, gas oil, and business travel in company
. The Company's greenhouse gas emissions for the period are broken down as follows:
The annual quantity of energy consumed from activities for which the Company is responsible are set out below:
An ‘operational control’ approach has been used to define the greenhouse gas emissions boundary. This approach captures emissions associated with the operation of all the Company's buildings such as warehouses, offices and sites, plus company-owned and leased transport. This information covers UK operations only, as required by SECR for Non-Quoted Large Companies. This information was collected and reported in line with the methodology set out in the UK Government’s Environmental Reporting Guidelines, 2019. Emissions have been calculated using the latest conversion factors provided by the UK Government. There are no material omissions from the mandatory reporting scope. The reporting period is September 2019 to December 2020, as per the financial accounts.
During the SECR reporting period the following energy efficiency initiatives have been noted for Tuffnells Parcels Express Limited: Solar panels have been installed at the Sheffield site; Inenco manage the energy for the Company (including price and invoice management); most lighting has been replaced with LED; and some new energy-efficient gas boilers have been installed. Before 2020 driver training was required to help limit fuel consumption on the roads. However, the effects of the pandemic have limited this during the whole SECR reporting period.
TUFFNELLS PARCELS EXPRESS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 6 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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;
-
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 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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
I Brewer
Director
6 May 2021
TUFFNELLS PARCELS EXPRESS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TUFFNELLS PARCELS EXPRESS LIMITED
- 7 -
Opinion
We have audited the financial statements of Tuffnells Parcels Express Limited (the 'company') for the 16 month period ended 31 December 2020 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the 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 FRS 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 December 2020 and of its profit for the 16 month period 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.
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 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
.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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.
TUFFNELLS PARCELS EXPRESS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TUFFNELLS PARCELS EXPRESS LIMITED
- 8 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial 16 month period for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report 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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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 directors'
r
esponsibilities
s
tatement, 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 is 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.
Auditor's 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 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
TUFFNELLS PARCELS EXPRESS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TUFFNELLS PARCELS EXPRESS LIMITED
- 9 -
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.
Derek Humphrey BA ACA (Senior Statutory Auditor)
For and on behalf of Littlestone Golding
6 May 2021
Chartered Accountants
Statutory Auditor
17 Cavendish Square
London
W1G 0PH
TUFFNELLS PARCELS EXPRESS LIMITED
INCOME STATEMENT
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 10 -
16 Months
Year
ended
ended
31 December
31 August
2020
2019
Notes
£'000
£'000
Revenue
3
212,494
164,450
Cost of sales
(176,736)
(139,238)
Gross profit
35,758
25,212
Administrative expenses
(55,764)
(39,811)
Other operating income
1,022
Exceptional items
4
25,588
(14,435)
Operating profit/(loss)
5
6,604
(29,034)
Finance costs
8
(539)
(228)
Profit/(loss) before taxation
6,065
(29,262)
Tax on profit/(loss)
9
423
8,701
Profit/(loss) for the financial 16 month period
6,488
(20,561)
The income statement has been prepared on the basis that all operations are continuing operations.
TUFFNELLS PARCELS EXPRESS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 11 -
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Profit/(loss) for the 16 month period
6,488
(20,561)
Other comprehensive income
Actuarial gain/(loss) on defined benefit pension schemes
66
(814)
Tax relating to other comprehensive income
(13)
149
Other comprehensive income for the 16 month period
53
(665)
Total comprehensive income for the 16 month period
6,541
(21,226)
TUFFNELLS PARCELS EXPRESS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
31 December 2020
- 12 -
2020
2019
Notes
£'000
£'000
£'000
£'000
Non-current assets
Intangible assets
11
343
Property, plant and equipment
12
14,654
20,828
14,997
20,828
Current assets
Inventories
13
535
436
Trade and other receivables - deferred tax
20
5,049
3,672
Trade and other receivables - other
14
17,323
18,428
Cash and cash equivalents
6,524
29,431
22,536
Current liabilities
15
(25,761)
(31,695)
Net current assets/(liabilities)
3,670
(9,159)
Total assets less current liabilities
18,667
11,669
Non-current liabilities
16
(3,859)
(928)
Provisions for liabilities
19
(2,253)
(3,716)
Net assets excluding pension liability
12,555
7,025
Defined benefit pension liability
21
(1,856)
(2,867)
Net assets
10,699
4,158
Equity
Called up share capital
22
1,113
1,113
Share premium account
9,455
9,455
Retained earnings
131
(6,410)
Total equity
10,699
4,158
The financial statements were approved by the board of directors and authorised for issue on 6 May 2021 and are signed on its behalf by:
M Holt
I Brewer
Chairman
Director
Company Registration No. 00319964
TUFFNELLS PARCELS EXPRESS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 13 -
Share capital
Share premium account
Retained earnings
Total
£'000
£'000
£'000
£'000
Balance at 1 September 2018
1,113
9,455
14,816
25,384
Period ended 31 August 2019:
Loss for the period
-
-
(20,561)
(20,561)
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
(814)
(814)
Tax relating to other comprehensive income
-
-
149
149
Total comprehensive income for the period
(21,226)
(21,226)
Balance at 31 August 2019
1,113
9,455
(6,410)
4,158
Period ended 31 December 2020:
Profit for the period
-
-
6,488
6,488
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
66
66
Tax relating to other comprehensive income
-
-
(13)
(13)
Total comprehensive income for the period
6,541
6,541
Balance at 31 December 2020
1,113
9,455
131
10,699
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 14 -
1
Accounting policies
Company information
Tuffnells Parcels Express Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Unit 1 Meadowhall Business Park, Carbrook Hall Road, Sheffield, S9 2EQ.
1.1
Accounting convention
These financial statements have been prepared in accordance with applicable accounting standards and in compliance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £
1,000
.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
These financial statements for the 16 month period ended 31 December 2020
are the
first
financial statements of Tuffnells Parcels Express Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 September 2018. An explanation of how transition to FRS 102 has affected the reported financial position and financial performance is given in note 25.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Tuffnells Holdings Limited
. These consolidated financial statements are available from
Companies House.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 15 -
1.2
Going concern
The Company’s business activities, together with the factors likely to affect its future development and position, are set out in the Future expectations and Principle risks and uncertainties sections of the Strategic Report.
true
The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.
1.3
Reporting period
The financial statements are prepared for the 16 month period ended 31 December 2020 with comparative information for the year ended 31 August 2019 and therefore the
comparative amounts presented in the financial statements (including
the related notes) are not entirely comparable
.
The Company's reporting date was changed to 31 December so as to be co-terminus with the reporting date of its ultimate parent undertaking, Tuffnells Holdings Limited.
1.4
Revenue
Revenue is recognised
on the delivery of services to which it relates
at the fair value of the consideration received or receivable
based on agreed rates
net of
discounts,
VAT and other sales related taxes
.
1.5
Intangible fixed assets other than goodwill
Intangible assets
with finite useful lives that are
acquired separately are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over their estimated useful which is 3 years. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes being accounted for on a prospective basis.
1.6
Property, plant and equipment
Property, plant and equipment
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Land: not depreciated; buidings: 2% to 5%
Long leasehold land and buildings
Land: not depreciated; buidings: 2% to 5%
Short leasehold land and buildings
Lease life
Fixtures and fittings
10% - 40%
Plant and machinery
10% - 40%
Computer equipment
10% - 40%
Motor vehicles and trailers
12.5% to 25%
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to the Income Statement.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 16 -
1.7
Impairment of non-current assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can be identified, assets are allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Inventories
Inventories are stated at the lower of cost and
net realisable value and on a first in, first out basis
. Cost
represents the
direct
cost of stocks.
There is no material difference between the carrying value of inventories and their replacement cost.
1.9
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. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally 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.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 17 -
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
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 of its liabilities.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 18 -
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 19 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Provisions
Provisions are recognised when the
Company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in profit or loss in the period
in which
it arises.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 20 -
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The
net
defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.17
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 21 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Retirement benefit obligation estimate
The Company recognised and discloses its retirement benefit obligation in accordnace with the measurement and presentational requirement of FRS 102. The calculations include a number of judgements and estimations in respect of the expected rate of return on assets, the discount rate, inflation assumptions, the rate of increase on salaries and life expectancy, amongst others. Changes in these assumptions can have a significant effect on the value of the retirement benefit obligation. Management make these judgements in consultation with an independent actuary, Details of the judgements made in calculating the transactions are disclosed in note 21.
3
Revenue
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Revenue analysed by class of business
Parcel collection and deliveries
212,494
164,450
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Other significant revenue
Grants received
1,022
Grant income represents amounts receivable under the Government's Coronavirus Job Retention Scheme
.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
3
Revenue
(Continued)
- 22 -
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Revenue analysed by geographical market
All revenue originates in the United Kingdom
212,494
164,450
4
Exceptional items
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Group debt waiver
(19,910)
-
Impairment of assets
-
13,134
Profit on property disposals
(8,431)
-
Other exceptional items
2,753
1,301
(25,588)
14,435
Group debt waiver
As part of the disposal of the Company by Smiths News Plc (formerly Connect Group Plc) on 2 May 2020, repayments of amounts owed by the Company to its group undertakings were formally waived, which results in a credit to the Income Statement of £19.9 million.
Impairment of assets
During the previous period management reviewed the carrying value of the Tuffnells business unit and concluded that an impairment charge of £13.1 million was required in respect of property, plant and equipment, and intangible assets.
Profit on property disposals
During the period the Company sold and leased back eight properties which realised a total profit on disposal of £8.4 million.
Other exceptional items
Other exceptional items incurred during the period include costs relating to business restructuring and one-off costs arising from the sale and purchase of the company in May 2020. The business restructuring resulted in a number of roles being made redundant and the closure of a number of depots.
Other exceptional items incurred during the previous period include £0.7 million costs in respect of the sale and leaseback programme, £0.1 million in respect of insurance settlement costs, £0.5 million in respect of business reorganisation costs related to off-shoring of technology, customer services and finance functions, £0.1 million in respect of equalisation of guaranteed minimum payments of the Tuffnells Parcells Express pension scheme, and a credit of £0.15 million in respect of the release of provisions relating to a settlement with HMRC relating to the misapplication of national minimum wage legislation.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 23 -
5
Operating profit/(loss)
16 Months
Year
ended
ended
31 December
31 August
2020
2019
Operating profit/(loss) for the period is stated after charging/(crediting):
£'000
£'000
Government grants
(1,022)
Fees payable to the company's auditor for the audit of the company's financial statements
45
40
Depreciation of owned property, plant and equipment
2,623
4,181
Impairment of owned property, plant and equipment
12,711
Loss/(profit) on disposal of property, plant and equipment
(8,417)
(10)
Amortisation of intangible assets
278
211
Impairment of intangible assets
423
Share-based payments
36
Operating lease charges
23,352
17,105
6
Employees
The average monthly number of persons (including directors) employed by the company during the 16 month period was:
16 Months
Year
ended
ended
31 December
31 August
2020
2019
Number
Number
Haulage
1,935
2,225
Office and management
521
521
Total
2,456
2,746
Their aggregate remuneration comprised:
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Wages and salaries
80,225
65,228
Social security costs
6,762
4,050
Pension costs
2,017
485
89,004
69,763
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 24 -
7
Directors' remuneration
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Remuneration for qualifying services
646
Company pension contributions to defined contribution schemes
12
Compensation for loss of office
264
922
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2019 - 0).
Remuneration disclosed above include the following amounts paid to the highest paid director:
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Remuneration for qualifying services
243
-
Company pension contributions to defined contribution schemes
3
-
8
Finance costs
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Interest on bank overdrafts and loans
26
Interest on invoice finance arrangements
91
Other interest on financial liabilities
210
Interest on finance leases and hire purchase contracts
62
75
Net interest on the net defined benefit liability
55
52
Unwinding of discount on provisions
95
101
539
228
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 25 -
9
Taxation
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Current tax
UK corporation tax on profits for the current period
(2,958)
Adjustments in respect of prior periods
967
(3,188)
Total current tax
967
(6,146)
Deferred tax
Origination and reversal of timing differences
(1,555)
(2,555)
Changes in tax rates
(362)
Adjustment in respect of prior periods
527
Total deferred tax
(1,390)
(2,555)
Total tax credit
(423)
(8,701)
The actual credit for the 16 month period can be reconciled to the expected charge/(credit) for the 16 month period based on the profit or loss and the standard rate of tax as follows:
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Profit/(loss) before taxation
6,065
(29,262)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
1,152
(5,560)
Tax effect of expenses that are not deductible in determining taxable profit
(17)
(68)
Adjustments in respect of prior years
967
(3,188)
Effect of change in corporation tax rate
(362)
Depreciation on assets not qualifying for tax allowances
113
111
Share based payment charge
27
4
Deferred tax adjustments in respect of prior years
527
Group relief surrender
2,374
3,065
Receipt for group relief
(3,065)
Group debt waiver not taxable
(3,728)
Group relief received - capital losses
(1,476)
Taxation credit for the period
(423)
(8,701)
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
9
Taxation
(Continued)
- 26 -
In addition to the amount credited to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
13
(149)
Factors affecting future tax charges
The main rate of corporation tax is currently 19%. Previously this rate was enacted to reduce to 17% and that rate was used when calculating future tax charges (deferred tax balances) in the prior period financial statements. The rate will remain at 19%, as substantively enacted on 17 March 2020, and that rate has been used when calculating future tax charges (deferred tax balances) in these financial statements. The Chancellor of the Exchequer announced in his March 2021 budget that the main rate will increase to 25% with effect from 1 April 2023 and should this rate become substantively enacted then it will be reflected in deferred tax balances in future period financial statements.
The company has estimated tax losses of £12.5 million at 31 December 2020 and these are reflected in the deferred tax asset recognised in these financial statements (see note 20).
The directors believe that there is currently sufficient evidence that the deferred tax assets will be recovered in the foreseeable future.
10
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
16 Months
Year
ended
ended
31 December
31 August
2020
2019
£'000
£'000
In respect of:
Goodwill
Intangible assets
423
Property, plant and equipment
12,711
-
13,134
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 27 -
11
Intangible fixed assets
Software
£'000
Cost
At 1 September 2019
3,219
Additions
639
Transfers
(1,590)
At 31 December 2020
2,268
Amortisation and impairment
At 1 September 2019
3,219
Amortisation charged for the 16 month period
278
Transfers
(1,572)
At 31 December 2020
1,925
Carrying amount
At 31 December 2020
343
At 31 August 2019
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 28 -
12
Property, plant and equipment
Freehold land and buildings
Leasehold land and buildings
Fixtures and fittings
Plant and machinery
Computer equipment
Motor vehicles and trailers
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Cost
At 1 September 2019
19,776
5,636
10,976
7,823
1,654
18,923
64,788
Additions
16
606
739
776
187
2,324
Disposals
(5,073)
(1,823)
(1,807)
(743)
(2,357)
(11,803)
Transfers
66
(444)
158
1,610
1,390
At 31 December 2020
14,769
3,829
9,331
7,977
4,040
16,753
56,699
Depreciation and impairment
At 1 September 2019
3,702
4,347
9,498
7,248
1,623
17,542
43,960
Depreciation charged in the 16 month period
530
65
488
505
297
738
2,623
Eliminated in respect of disposals
(1,280)
(694)
(986)
(601)
(2,349)
(5,910)
Transfers
123
(564)
200
1,605
8
1,372
At 31 December 2020
3,075
3,718
8,436
7,352
3,525
15,939
42,045
Carrying amount
At 31 December 2020
11,694
111
895
625
515
814
14,654
At 31 August 2019
16,074
1,289
1,478
575
31
1,381
20,828
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
12
Property, plant and equipment
(Continued)
- 29 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2020
2019
£'000
£'000
Computer equipment
217
13
Inventories
2020
2019
£'000
£'000
Consumables
535
436
14
Trade and other receivables
2020
2019
Amounts falling due within one year:
£'000
£'000
Trade receivables
10,360
10,447
Corporation tax recoverable
2,840
Amounts owed by group undertakings
484
2,975
Other receivables
2,844
1,438
Prepayments and accrued income
3,635
728
17,323
18,428
15
Current liabilities
2020
2019
Notes
£'000
£'000
Bank loans and overdrafts
17
4,222
16,063
Obligations under finance leases
18
53
665
Trade payables
8,610
4,853
Taxation and social security
5,877
1,361
Other payables
2,616
4,357
Accruals and deferred income
4,383
4,396
25,761
31,695
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 30 -
16
Non-current liabilities
2020
2019
Notes
£'000
£'000
Bank loans and overdrafts
17
3,703
Obligations under finance leases
18
156
928
3,859
928
17
Borrowings
2020
2019
£'000
£'000
Bank loans
4,659
Bank overdrafts
3,266
16,063
7,925
16,063
Payable within one year
4,222
16,063
Payable after one year
3,703
The bank loans are repayable by monthly instalments over 5 year terms, repayable by 2025, and bear interest at between 3.35% and 4.35% over 3 month LIBOR. The bank overdraft is a receivables financing facility with a minimum 60 month term which bears interest at 2.3% over 3 month LIBOR.
The bank facilities are secured by the Company and its parent undertakings by way of fixed and floating charges over their property interests and other assets. The aggregate amount of secured liabilities at 31 December 2020 was £7,925,000 (2019: £16,063,000).
18
Finance lease obligations
2020
2019
Future minimum lease payments due under finance leases:
£'000
£'000
Within one year
53
665
In two to five years
156
928
209
1,593
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 31 -
19
Provisions for liabilities
2020
2019
£'000
£'000
Insurance provision
-
1,984
Property dilapidations
2,253
1,495
Other provisions
-
237
2,253
3,716
Movements on provisions:
Insurance provision
Property dilapidations
Other provisions
Total
£'000
£'000
£'000
£'000
At 1 September 2019
1,984
1,495
237
3,716
Additional provisions in the year
472
793
-
1,265
Reversal of provision
(2,064)
-
(232)
(2,296)
Utilisation of provision
(392)
(130)
(5)
(527)
Unwinding of discount
-
95
-
95
At 31 December 2020
-
2,253
-
2,253
Insurance provision
The insurance provision represents the expected future costs arising from self insurance relating to incidents prior to 2 May 2020 arising from the Company's employer's liability, public liability and motor accident insurance policies. Liabilities arise on the inception of claims and are settled in cash throughout the course of the period. The insurance provision is calculated using the best estimates on the facts of the claims and historical averages. A fully insured insurance programme was put in place with effect from 2 May 2020 and therefore such costs will not be incurred going forward in respect of incidents occurring after 2 May 2020.
Property dilapidations
The Company trades from a number of premises that are held on lease agreements. A provision for the potential costs of rectification of these premises back to their original state has been included within the financial statements. The provision is based on the current condition of the properties and estimated costs of remediation, discounted back to the point the liability will occur.
Other provisions
Other provisions comprise a legal provision which related to a balance of unsettled estimated historical underpayment of national minimum wage, and a reorganisation provision which related to redundancy costs accrued as part of a strategy to offshore shared service centre costs.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 32 -
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2020
2019
Balances:
£'000
£'000
Accelerated capital allowances
2,270
3,045
Tax losses
2,384
-
Retirement benefit obligations
353
487
Share based payments
-
27
Other
42
113
5,049
3,672
2020
Movements in the 16 month period:
£'000
Asset at 1 September 2019
(3,672)
Credit to profit or loss
(1,555)
Charge to other comprehensive income
13
Effect of change in tax rate - profit or loss
(362)
Other
527
Asset at 31 December 2020
(5,049)
The deferred tax asset set out above that is expected to reverse within 12 months of the reporting date and which relates to the utilisation of tax losses against future expected profits of the same period and the part reversal of the capital allowances deferred tax asset amounts to £1.8 million.
21
Retirement benefit schemes
2020
2019
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
1,878
316
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
21
Retirement benefit schemes
(Continued)
- 33 -
Defined benefit schemes
The Company operates a defined benefit pension scheme known as the Tuffnells Parcels Express Pension Scheme (“the Scheme”). Under the
Scheme, the employees are entitled to retirement benefits based on final salary on attainment of retirement age (or earlier withdrawal or death).
The Scheme is closed to future accrual of benefits.
The Trust is a registered funded pension scheme. The assets of the Scheme are held separately from the assets of the Company in trustee
administered funds.
The weighted average duration of the Scheme is 21 years.
The most recent comprehensive triennial valuation of the Scheme was carried out at 1 April 2019. The Company has employed an independent
actuary to approximately update this valuation allowing for differences between the actuarial assumptions used by the Trust for funding purposes
and those adopted by the Company to measure the Trust’s liabilities on the financial statements, as well as adjusting for actual pension increases
awarded and benefits paid by the Scheme.
Contributions into the Scheme are assessed in accordance with the advice of qualified actuaries and the Company made contributions into the
Scheme of £1.1m over the period ended 31 December 2020. The Company expects to contribute £0.5m
during the year ended 31 December 2021
.
2020
2019
Key assumptions
%
%
Discount rate
1.4
1.75
Expected rate of increase of pensions in payment
2.85
3.1
Expected rate of salary increases
N/A
2.2
Inflation assumption: Retail Price Index
2.9
3.2
Consumer Price Index
2.2
3.2
Pension increase in deferment
2.2
2.2
Mortality assumptions
The following table shows assumed life expectancies for example members at age 65. The underlying mortality tables at 31 December 2020 are
based on the published S2PA 3 ‘Pensioner’ morality base tables with a scaling factor of 99%, CMI 2019 mortality improvements with a long-term
improvement rate of 1% p.a., smoothing factor of 7.0 and additional initial improvement of 0.50% p.a.
2020
2019
Years
Years
Retiring today
- Males
87.2
87.1
- Females
89.5
89.1
Retiring in 20 years
- Males
88.2
88.3
- Females
90.6
90.4
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
21
Retirement benefit schemes
(Continued)
- 34 -
2020
2019
Amounts recognised in the income statement
£'000
£'000
Current service cost
11
14
Past service cost
30
100
Administration expenses
98
55
Net interest on the net defined benefit liability
55
52
Total costs
194
221
2020
2019
Amounts taken to other comprehensive income
£'000
£'000
Actual return on scheme assets
(604)
(1,035)
Less: calculated interest element
-
-
Return on scheme assets excluding interest income
(604)
(1,035)
Other gains and losses
538
1,863
Total costs/(income)
(66)
828
The amounts included in the statement of financial position arising from the company's obligations in respect of defined benefit plans are as follows:
2020
2019
£'000
£'000
Present value of defined benefit obligations
13,226
13,407
Fair value of plan assets
(11,370)
(10,540)
Deficit in scheme
1,856
2,867
2020
Movements in the present value of defined benefit obligations
£'000
Liabilities at 1 September 2019
13,407
Current service cost
11
Past service cost
30
Benefits paid
(1,069)
Contributions from scheme members
7
Other
840
At 31 December 2020
13,226
The defined benefit obligations arise from plans which are wholly or partly funded.
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
21
Retirement benefit schemes
(Continued)
- 35 -
2020
Movements in the fair value of plan assets
£'000
Fair value of assets at 1 September 2019
10,540
Return on plan assets (excluding amounts included in net interest)
604
Benefits paid
(1,069)
Contributions by the employer
1,139
Contributions by scheme members
7
Other
149
At 31 December 2020
11,370
The actual return on plan assets was £604,000 (2019: £1,035,000).
2020
2019
Fair value of plan assets at the reporting period end
£'000
£'000
Growth portfolio
7,166
6,484
Matching portfolio
4,073
4,056
Cash and other
131
-
11,370
10,540
22
Share capital
2020
2019
£'000
£'000
Ordinary share capital
Issued and fully paid
1,112,787 Ordinary shares of £1 each
1,113
1,113
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£'000
£'000
Within one year
11,436
11,440
Between two and five years
23,186
20,003
In over five years
24,640
11,031
59,262
42,474
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
- 36 -
24
Ultimate controlling party
The Company's ultimate parent company and ultimate controlling party is Tuffnells Holdings Limited, a company incorporated in England and Wales.
The Company's immediate parent undertaking is The Big Green Parcel Machine Limited, a company incorporated in England and Wales.
The parent undertaking of the largest and smallest group of undertakings for which group accounts are drawn up and of which the Company is a member is Tuffnells Holdings Limited, a company incorporated in England and Wales. Copies of the group accounts of Tuffnells Holdings Limited are available from Companies House.
25
Reconciliations on adoption of FRS 102
Reconciliations and descriptions of the effect of the transition to FRS 102 on; (i) equity at the date of transition to FRS 102; (ii) equity at the end of the comparative period; and (iii) profit or loss for the comparative period
as
reported under
FRS 101 Reduced Disclosure Framework
are given below.
Reconciliation of equity
1 September
31 August
2018
2019
£'000
£'000
Equity as reported under previous FRS 101 and under FRS 102
25,384
4,158
Reconciliation of loss for the financial period
2019
£'000
Loss as reported under FRS 101 and under FRS 102
(20,561)
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
25
Reconciliations on adoption of FRS 102
(Continued)
- 37 -
Reconciliation of equity
At 1 September 2018
At 31 August 2019
FRS 101
Effect of
transition
FRS 102
FRS 101
Effect of
transition
FRS 102
Notes
£'000
£'000
£'000
£'000
£'000
£'000
Non-current assets
Intangible assets
309
-
309
-
-
-
Property, plant and equipment
a
33,314
-
33,314
2,386
18,442
20,828
33,623
-
33,623
2,386
18,442
20,828
Current assets
Inventories
484
-
484
436
-
436
Trade and other receivables - deferred tax
1,041
-
1,041
3,672
-
3,672
Trade and other receivables - other
11,297
-
11,297
18,428
-
18,428
Assets held for sale
a
-
-
-
18,442
(18,442)
Bank and cash
7,477
-
7,477
-
-
20,299
-
20,299
40,978
(18,442)
22,536
Current liabilities
Borrowings
-
-
-
(16,063)
-
(16,063)
Finance leases
(1,295)
-
(1,295)
(665)
-
(665)
Taxation
(1,317)
-
(1,317)
(1,361)
-
(1,361)
Other payables
(16,760)
-
(16,760)
(13,606)
-
(13,606)
(19,372)
-
(19,372)
(31,695)
-
(31,695)
Net current assets/(liabilities)
927
-
927
9,283
(18,442)
(9,159)
Total assets less current liabilities
34,550
-
34,550
11,669
-
11,669
Non-current liabilities
Finance leases
(1,509)
-
(1,509)
(928)
-
(928)
Provisions for liabilities
Pension obligations
(2,197)
-
(2,197)
(2,867)
-
(2,867)
Other provisions
(5,460)
-
(5,460)
(3,716)
-
(3,716)
(7,657)
-
(7,657)
(6,583)
-
(6,583)
Net assets
25,384
-
25,384
4,158
-
4,158
TUFFNELLS PARCELS EXPRESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE 16 MONTH PERIOD ENDED 31 DECEMBER 2020
25
Reconciliations on adoption of FRS 102
At 1 September 2018
At 31 August 2019
FRS 101
Effect of
transition
FRS 102
FRS 101
Effect of
transition
FRS 102
Notes
£'000
£'000
£'000
£'000
£'000
£'000
(Continued)
- 38 -
Equity
Share capital
1,113
1,113
1,113
-
1,113
Share premium
9,455
9,455
9,455
-
9,455
Profit and loss
14,816
14,816
(6,410)
-
(6,410)
Total equity
25,384
-
25,384
4,158
-
4,158
Notes to reconciliations on adoption of FRS 102
a. Assets held for sale
Under FRS 101 assets held for sale are excluded from property, plant and equipment and reported on the Statement of Financial Position separately as assets held for sale, whereas under FRS 102 assets are retained within their relevant categories of property, plant and equipment and are derecognised on disposal. The Company transferred property, plant and equipment assets with a net book value of £18,442,000 to assets held for sale during the year ended 31 August 2019 in its financial statements for that period prepared under FRS 101. The effect of the transition to FRS 102 for the current reporting period is to increase the comparative amount reported as property, plant and equipment by £18,442,000 and to eliminate the amount previously reported as assets held for sale. There is no effect on the amounts reported in the Income Statement.
2020-12-31
2019-09-01
false
CCH Software
CCH Accounts Production 2021.100
M Holt (Chairman)
C Rolandi (Non-executive)
C Tresadern
I Brewer
A Watson
P Birks
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2019-08-31
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