Company registration number 01218121 (England and Wales)
M.P. MORAN & SONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
M.P. MORAN & SONS LIMITED
COMPANY INFORMATION
Directors
Mr M P Moran
Mrs N M Moran
Mr K T Moran
Mr M P Moran
Secretary
Mr M P Moran
Company number
01218121
Registered office
293-301 Kilburn High Road
London
NW6 7JR
Auditor
Higgisons
Higgison House
381-383 City Road
London
EC1V 1NW
Business address
293-301 Kilburn High Road
London
NW6 7JR
M.P. MORAN & SONS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 28
M.P. MORAN & SONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
M.P. Moran & Sons Ltd (the ‘Company’) continued trading as a builder’s merchant from its five UK branches throughout 2022, as well as increasing its online presence.
Total sales improved to £67m in 2022 (2021: £66m). Sales performance was pleasing due to generally tough economic conditions.
Net profit ended at £4.7m (2021: £4.6m). Despite 2022 being a difficult year for the industry, we managed to maintain our margin and we also kept all key expenses under control. As a result net profit finished higher than expected in 2022.
The Balance Sheet also strengthened and the net asset position of the Company at 31 December 2022 was increased to £20.4m (2021: £16.7m).
The results for the year and the financial position at the year-end were considered satisfactory by the directors.
Principal risks and uncertainties
The key business risks and uncertainties affecting the Company relate to volatility in trading and market conditions, competition and UK consumer confidence.
Uncertainty surrounding the resilience of the UK economy with rising interest rates and high inflation continue to present a difficult trading outlook across the retail sector, particularly in terms of delivering opportunities for growth.
The Company operates in a competitive business sector that is sensitive to both prevailing economic conditions and UK consumer confidence. Should the UK economy deteriorate significantly, this would most likely have an adverse effect on the results of the Company.
The directors are confident that the Company has sufficient financial flexibility and diverse supplier and customer bases, to manage the business through any worsening of the economic climate.
Overall, the operational and financial actions taken, give the company a sound footing in the current business climate and beyond.
M.P. MORAN & SONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Key performance indicators
The directors review progress continually and in a number of different ways.
All branches and departments are monitored regularly within three main categories of assessment: General management, financial performance and stock control.
Greenhouse Gas Emissions Statement:
This carbon report for MP Moran is to meet the reporting requirements under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 to implement the UK government’s policy on Streamlined Energy and Carbon Reporting (SECR). It also references the global carbon emissions reported from previous years.
During 2022 we have actively worked towards ensuring all of our shops/showrooms have been changed to LED lighting.
We have also installed electric chargers for our electric forklifts and have them set on timers to ensure the energy is taken during off peak times.
Sensor lighting has been installed in hallways/stairwells where there is lesser activity, to ensure we are not wasting energy unnecessarily.
Methodology & Scope:
The adopted methodology used is based on the Greenhouse Gas Protocol Corporate Reporting Standard reporting on equivalent CO2 emissions from organisational boundary. Information has been gathered in the same format as for compliance with the ESOS Regulations, for Scope 1 & 2 emissions, collated into kWh for all corresponding UK based operations, directly owned or operated by MP Moran (i.e. the organisational boundary).
These have been converted to equivalent tonnes of carbon dioxide (tCO2e) using the published UK Government GHG Conversion Factors for Company Reporting for 2022.
Global Greenhouse Gas (GHG) Emissions Summary:
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| Total tCO2e/£100k revenue | | Total tCO2e/£100k revenue | |
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M.P. MORAN & SONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
Future Developments
The Company is well placed to build on its strong position and realise opportunities to enable growth when possible. In order to help achieve this a number of business goals are in place including, but not limited to, the below:
Achieve a higher return on investment from our existing asset base.
Expand products offered by enhancing existing ranges and adding new lines to meet customer demands.
Substantial growth in sales from our online trading website.
Increase the Company’s existing branch network.
These goals enable the creation of opportunities for staff and the directors are keen to support this with more staff development and talent management for its workforce.
All future developments are working towards the director’s vision, which is to be the number one supplier of everything from foundations to finishings in London.
Mr K T Moran
Director
4 September 2023
M.P. MORAN & SONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of builders merchants.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £1,000,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M P Moran
Mrs N M Moran
Mr K T Moran
Mr M P Moran
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, at meetings, matters likely to affect employees' interests.
Future developments
The directors consider that despite challenging times, the company will continue to trade profitably.
Auditor
The auditor, Higgisons, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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
Mr K T Moran
Director
4 September 2023
M.P. MORAN & SONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
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.
M.P. MORAN & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF M.P. MORAN & SONS LIMITED
- 6 -
Opinion
We have audited the financial statements of M.P. Moran & Sons Limited (the 'company') for the year ended 31 December 2022 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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
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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The 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 contained within the annual report. 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. 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 course of 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 our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
M.P. MORAN & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M.P. MORAN & SONS LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which 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 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' responsibilities statement, 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.
Our audit procedures include walkthrough tests on payroll, reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations, auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business. We have also enquired with management in respect of any potential litigation and claims. These procedures are assumed sufficient to identify non-compliance with employment law as well as trade laws.
M.P. MORAN & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M.P. MORAN & SONS LIMITED
- 8 -
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We obtained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error , as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including but not limited to, the Companies Act 2006, UK tax legislation, Health and Safety Laws, Foreign Trade related law and the Trading Act. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and a review of legal and professional matters.There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Ian Shillinglaw
Senior Statutory Auditor
For and on behalf of Higgisons
4 September 2023
Chartered Accountants
Statutory Auditor
Higgison House
381-383 City Road
London
EC1V 1NW
M.P. MORAN & SONS LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
Notes
£
£
Turnover
3
66,920,099
65,536,668
Cost of sales
(40,979,732)
(40,587,099)
Gross profit
25,940,367
24,949,569
Distribution costs
(911,726)
(773,712)
Administrative expenses
(19,078,227)
(18,356,477)
Other operating income
16,926
47,553
Operating profit
4
5,967,340
5,866,933
Share of profits of associates
19,368
39,587
Interest receivable and similar income
8
7,100
4,501
Interest payable and similar expenses
9
(58,554)
(71,049)
Profit before taxation
5,935,254
5,839,972
Tax on profit
10
(1,229,553)
(1,194,318)
Profit for the financial year
4,705,701
4,645,654
The income statement has been prepared on the basis that all operations are continuing operations.
M.P. MORAN & SONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
2022
2021
£
£
Profit for the year
4,705,701
4,645,654
Other comprehensive income
-
-
Total comprehensive income for the year
4,705,701
4,645,654
M.P. MORAN & SONS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
12,053,314
10,801,925
Investments
13
457,792
438,424
12,511,106
11,240,349
Current assets
Stocks
15
11,365,824
10,708,755
Debtors
16
6,010,765
7,019,070
Cash at bank and in hand
7,095,682
6,173,454
24,472,271
23,901,279
Creditors: amounts falling due within one year
17
(15,254,706)
(16,764,952)
Net current assets
9,217,565
7,136,327
Total assets less current liabilities
21,728,671
18,376,676
Creditors: amounts falling due after more than one year
18
(897,913)
(1,386,746)
Provisions for liabilities
Deferred tax liability
20
412,659
277,532
(412,659)
(277,532)
Net assets
20,418,099
16,712,398
Capital and reserves
Called up share capital
23
50,000
50,000
Profit and loss reserves
20,368,099
16,662,398
Total equity
20,418,099
16,712,398
The financial statements were approved by the board of directors and authorised for issue on 4 September 2023 and are signed on its behalf by:
Mr K T Moran
Director
Company Registration No. 01218121
M.P. MORAN & SONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2021
50,000
14,016,744
14,066,744
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
4,645,654
4,645,654
Dividends
11
-
(2,000,000)
(2,000,000)
Balance at 31 December 2021
50,000
16,662,398
16,712,398
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
4,705,701
4,705,701
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 31 December 2022
50,000
20,368,099
20,418,099
M.P. MORAN & SONS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
5,968,058
6,258,641
Interest paid
(58,554)
(71,049)
Income taxes paid
(1,199,999)
(960,000)
Net cash inflow from operating activities
4,709,505
5,227,592
Investing activities
Purchase of tangible fixed assets
(2,328,140)
(873,811)
Proceeds on disposal of tangible fixed assets
197,836
242,852
Interest received
7,100
4,501
Net cash used in investing activities
(2,123,204)
(626,458)
Financing activities
Repayment of borrowings
(464,073)
(697,621)
Repayment of bank loans
(200,000)
(200,000)
Payment of finance leases obligations
(34,737)
Dividends paid
(1,000,000)
(2,000,000)
Net cash used in financing activities
(1,664,073)
(2,932,358)
Net increase in cash and cash equivalents
922,228
1,668,776
Cash and cash equivalents at beginning of year
6,173,454
4,504,678
Cash and cash equivalents at end of year
7,095,682
6,173,454
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
1
Accounting policies
Company information
M.P. Moran & Sons Limited is a private company limited by shares incorporated in England and Wales. The registered office is 293-301 Kilburn High Road, London, NW6 7JR.
1.1
Accounting convention
These financial statements have been prepared in accordance 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 amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets 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:
Leasehold land and buildings
Over the lifetime of the property
Plant and machinery
25% on reducing balance method
Fixtures, fittings & equipment
25% on reducing balance method
Motor vehicles
25% on reducing balance method
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 profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
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.
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.9
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.
Basic financial assets
Basic financial assets, which include debtors 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.
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities
Basic financial liabilities, including creditors, 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 payments 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 creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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 creditors 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 subsequently 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 through 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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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.
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
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.
1.12
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 fixed 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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The company operates a defined contribution scheme, The M P Moran & Sons Limited Pension Scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge includes contributions payable by the Company to the fund and amounted to £nil (2021: £nil).
The company operates a defined contribution scheme, The Kildun Pension Scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge includes contributions payable by the Company to the fund and amounted to £120,000 (2021: £130,000).
1.14
Leases
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 leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
Turnover analysed by geographical market
2022
2021
£
£
United Kingdom
66,880,301
65,462,736
Rest of Europe
39,798
73,932
66,920,099
65,536,668
Other significant revenue
Interest income
7,100
4,501
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(12,691)
5,330
Depreciation of owned tangible fixed assets
929,696
964,204
(Profit)/loss on disposal of tangible fixed assets
(50,781)
13,565
Operating lease charges
2,838,607
2,827,968
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £12,691 (2021 - £5,330).
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
32,000
32,000
For other services
All other non-audit services
35,350
35,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Employees
279
267
2022
2021
£
£
Wages and salaries
9,864,652
9,171,669
Social security costs
1,055,820
927,412
Pension costs
385,850
348,907
11,306,322
10,447,988
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
839,576
820,717
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2021 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
293,928
277,753
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
7,100
314
Other interest income
4,187
Total income
7,100
4,501
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
7,100
314
9
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
58,554
70,566
Other finance costs:
Interest on finance leases and hire purchase contracts
483
58,554
71,049
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
1,094,426
1,128,020
Deferred tax
Origination and reversal of timing differences
135,127
66,298
Total tax charge
1,229,553
1,194,318
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Taxation
(Continued)
- 22 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
5,935,254
5,839,972
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
1,127,698
1,109,595
Tax effect of expenses that are not deductible in determining taxable profit
121,341
36,264
Tax effect of income not taxable in determining taxable profit
(3,680)
(7,522)
Depreciation in excess of capital allowances
(150,933)
43,384
Deferred tax
135,127
12,597
Taxation charge for the year
1,229,553
1,194,318
11
Dividends
2022
2021
£
£
Interim paid
1,000,000
2,000,000
12
Tangible fixed assets
Leasehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2022
10,829,752
2,485,879
2,727,828
3,564,013
19,607,472
Additions
1,168,248
140,778
322,382
696,732
2,328,140
Disposals
(509)
(569,225)
(569,734)
At 31 December 2022
11,998,000
2,626,657
3,049,701
3,691,520
21,365,878
Depreciation and impairment
At 1 January 2022
2,443,157
1,981,212
2,162,487
2,218,693
8,805,549
Depreciation charged in the year
287,390
146,314
144,971
351,021
929,696
Eliminated in respect of disposals
(21)
(422,660)
(422,681)
At 31 December 2022
2,730,547
2,127,526
2,307,437
2,147,054
9,312,564
Carrying amount
At 31 December 2022
9,267,453
499,131
742,264
1,544,466
12,053,314
At 31 December 2021
8,386,596
504,667
565,342
1,345,320
10,801,925
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
13
Fixed asset investments
2022
2021
Notes
£
£
Investments in associates
14
457,792
438,424
The company has not designated any financial assets that are not classified as financial assets at fair value through profit or loss.
Fixed asset investments revalued
Associates are accounted for under the equity method of accounting. An equity investment is initially recognised at the transaction price and is subsequently adjusted to reflect the investor's share of the profit or loss.
Movements in fixed asset investments
Shares in associates
£
Cost or valuation
At 1 January 2022
438,424
Share of associate profit
19,368
At 31 December 2022
457,792
Carrying amount
At 31 December 2022
457,792
At 31 December 2021
438,424
14
Associates
Details of the company's associates at 31 December 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
M P Moran Builders Merchants Limited
Republic of Ireland
Ordinary
25.00
15
Stocks
2022
2021
£
£
Finished goods and goods for resale
11,365,824
10,708,755
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
16
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
4,756,360
5,876,681
Amounts owed by undertakings in which the company has a participating interest
558,175
349,601
Other debtors
146,079
346,705
Prepayments and accrued income
550,151
446,083
6,010,765
7,019,070
Trade debtors disclosed above are measured at amortised cost.
17
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
19
200,000
200,000
Other borrowings
19
294,069
469,309
Trade creditors
7,450,547
8,814,879
Amounts owed to group undertakings
3,824,719
3,574,719
Corporation tax
89,238
194,811
Other taxation and social security
1,145,236
1,230,157
Deferred income
21
308
308
Other creditors
364,107
580,131
Accruals and deferred income
1,886,482
1,700,638
15,254,706
16,764,952
18
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
19
800,000
1,000,000
Other borrowings
19
97,913
386,746
897,913
1,386,746
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
19
Loans and overdrafts
2022
2021
£
£
Bank loans
1,000,000
1,200,000
Other loans
391,982
856,055
1,391,982
2,056,055
Payable within one year
494,069
669,309
Payable after one year
897,913
1,386,746
The bank loans are secured as follows:
1) Mortgage debenture over the assets of the company.
2) First legal charge over the freehold property 449-451 Willesden High Road & buildings to the North-side of Glebe Road, Willesden, London NW10, vesting in the name of M.P. Moran Holdings Limited.
Long Term debt is expected to be paid in full within 2 years from 31 December 2022
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
412,659
277,532
2022
Movements in the year:
£
Liability at 1 January 2022
277,532
Charge to profit or loss
135,127
Liability at 31 December 2022
412,659
21
Deferred income
2022
2021
£
£
Arising from rental income
308
308
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
22
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
385,850
348,907
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.
23
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
24
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for certain of its properties.
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:
2022
2021
£
£
Within one year
866,167
827,317
Between two and five years
740,000
740,000
In over five years
447,083
632,083
2,053,250
2,199,400
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2022
2021
2022
2021
£
£
£
£
M.P. Moran Builders Merchants Limited
39,798
73,932
-
10,000
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
25
Related party transactions
(Continued)
- 27 -
The following amounts were outstanding at the reporting end date:
2022
2021
Amounts owed by related parties
£
£
M.P. Moran Builders Merchants Limited
558,175
349,601
The company has provided guarantees of £398,972 (€450,000) in respect of banking facilities to AIB Group (UK) Plc on behalf of M.P. Moran Builders Merchants Limited, a company incorporated in the Republic of Ireland.
The company has provided an unlimited cross guarantee on behalf of M.P. Moran Holdings Limited.
26
Ultimate controlling party
The parent company of M.P. Moran & Sons Limited is M.P. Moran Holdings Limited, a private company limited by shares incorporated in England and Wales. The registered office is 293-301 Kilburn High Road, London, NW6 7JR.
M.P. Moran Holdings Limited prepares group financial statements.
27
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
4,705,701
4,645,654
Adjustments for:
Share of results of associates and joint ventures
(19,368)
(39,587)
Taxation charged
1,229,553
1,194,318
Finance costs
58,554
71,049
Investment income
(7,100)
(4,501)
(Gain)/loss on disposal of tangible fixed assets
(50,781)
13,565
Depreciation and impairment of tangible fixed assets
929,696
964,204
Movements in working capital:
Increase in stocks
(657,069)
(3,578,578)
Decrease/(increase) in debtors
1,008,305
(462,452)
(Decrease)/increase in creditors
(1,229,433)
3,454,969
Cash generated from operations
5,968,058
6,258,641
M.P. MORAN & SONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
28
Analysis of changes in net funds
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
6,173,454
922,228
7,095,682
Borrowings excluding overdrafts
(2,056,055)
664,073
(1,391,982)
4,117,399
1,586,301
5,703,700
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