Company registration number 02875057 (England and Wales)
MOMENTUM INSTORE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
MOMENTUM INSTORE LIMITED
COMPANY INFORMATION
Directors
R M Gleave
S P Gleave
Company number
02875057
Registered office
Pinewood Court
Larkwood Way
Tytherington Business Park, Tytherington
Macclesfield
Cheshire
United Kingdom
SK10 2XR
Auditor
Azets Audit Services
Alpha House
4 Greek Street
Stockport
United Kingdom
SK3 8AB
MOMENTUM INSTORE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
MOMENTUM INSTORE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -
The directors present the strategic report for the year ended 31 May 2023.
Business review
The year saw a continuation of global economic uncertainty and unprecedented macro-economic challenges, which have impacted almost all businesses and sectors. Rampant inflation, rising energy costs and interest rates and continued supply chain pressures have had significant impacts on the business. These impacts have presented the business with many disruptive operational and cost challenges but despite these the business has evolved and learnt to live with them in a robust and proactive manner.
Despite the continued challenging economic landscape, the business has confidently continued to invest in its operations, IT infrastructure and further develop its strategic plan. We have continued to invest in our Aftermarket depot footprint and facilities in Loughborough. This large facility allows us to offer a full range of complimentary services to our retail customers. These include, pick, pack and collation, tester picking, secure storage, recycling, refurbishment and a full parts management and distribution service. This is a key driver in executing our strategy of offering our customers more than installation and merchandising services and being a key partner throughout the whole POS lifecycle. We are now able to offer customers a complete range of services both pre and post implementation. We have continued to invest in our Aftermarket offering throughout the year, both in people and additional space and will continue to do so in this growing service offering.
At the same time, we have continued to invest in “Insite” our proprietary ERP & reporting platform. Insite allows customers to manage every element of their POS journey through a single integrated platform. The business has made significant investment to improve the user interface upgrading to Insite 3.0. as well as adding a whole suite of additional functionality including a dedicated Aftermarket portal as well as new stock management, scheduling and maintenance portals. The business has also undertaken a major overhaul of its financial reporting software and processes during the year and has finalised the move of all its systems to the cloud.
The investment in Aftermarket and Insite has completely repositioned Momentum in the marketplace allowing us the ability to deliver our customers a single integrated service managed through a single reporting system. This repositioning has already seen Momentum make significant new contract wins which will boost sales and profitability in FY24 and beyond.
Given the challenging macroeconomic and geopolitical backdrop, it is difficult to predict the shape of future trading with certainty, but our progress has been encouraging and we are confident that by continuing to invest in our strategy we will deliver for our customers, people, suppliers and communities. We have come through so much already and our solidarity will continue to carry us forward to transform and grow our business.
Principal risks and uncertainties
The market within which the company operates, remains highly competitive and retail clients continue to exert pressure on margins. The company continuously monitors the market and client requirements and adapts operationally to mitigate the pressures on margin.
Management aim to minimise risk by retention of key staff, focusing on higher margin generative work streams and robust overhead management.
The inflationary pressure on costs during the year has been significant but the company has continued to negotiate effectively with suppliers and control its costs well and cash flow has continued to be strong and been professionally managed throughout the year.
Financial key performance indicators
In the opinion of the directors the key performance indicators of the company are as follows:
Gross profit margin of 41.7% (2022: 37.5%). Calculated as ratio of gross profit to turnover expressed as a percentage; and
Operating profit margin of 5% (2022: 3.7%). Calculated as a ratio of operating profit to turnover expressed as a percentage.
MOMENTUM INSTORE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Developments and future outlook
The directors remain highly positive about the future prospects for the business. The business’s sales pipeline is strong and the company expects to maximise this pipeline over the coming years.
FY 24 builds on the positive improvements of FY 23 and the company expects to post an improvement to the reported profitability in FY 24. The company holds a positive outlook for FY 24, based on the volume of positive client enquiries and new tender wins.
The company continues to invest in its infrastructure, systems and people, to position itself for future growth opportunities identified in the market. In addition, it expects its strategic repositioning and rebranding to be very well received by customers, both existing and new, and this is expected to drive sales growth.
The company post Covid has been operating a hybrid working policy which has led to reduced footfall at head office. Consequently, the business made the decision to downsize its head office and moved to a smaller premises in December 2023 which will generate a significant property cost savings in future years.
The positive changes and investments made during the year reinforce the directors’ positive view of the future prospects of the business.
This report was approved by the board and signed on its behalf.
R M Gleave
Director
28 February 2024
MOMENTUM INSTORE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2023.
Principal activities
The principal activity of the company continued to be that of the provision of retail marketing services.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were declared amounting to £294,000 (2022: £394,000).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R M Gleave
S P Gleave
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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;
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.
MOMENTUM INSTORE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 4 -
On behalf of the board
R M Gleave
Director
28 February 2024
MOMENTUM INSTORE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MOMENTUM INSTORE LIMITED
- 5 -
Opinion
We have audited the financial statements of Momentum Instore Limited (the 'company') for the year ended 31 May 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 May 2023 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.
MOMENTUM INSTORE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MOMENTUM INSTORE LIMITED
- 6 -
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 and the directors' report.
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 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.
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.
MOMENTUM INSTORE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MOMENTUM INSTORE LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Graham Rigby
Senior Statutory Auditor
For and on behalf of Azets Audit Services
28 February 2024
Chartered Accountants
Statutory Auditor
Alpha House
4 Greek Street
Stockport
United Kingdom
SK3 8AB
MOMENTUM INSTORE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
Notes
£'000
£'000
Turnover
3
14,319
14,409
Cost of sales
(8,349)
(9,001)
Gross profit
5,970
5,408
Administrative expenses
(5,251)
(4,897)
Other operating income
25
Operating profit
4
719
536
Interest payable and similar expenses
(98)
(27)
Profit before taxation
621
509
Tax on profit
7
(140)
(42)
Profit for the financial year
481
467
There are no recognised gains and losses other than those passing through the profit and loss account.
MOMENTUM INSTORE LIMITED
BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 9 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Intangible assets
8
385
261
Tangible assets
9
588
461
Investments
10
59
59
1,032
781
Current assets
Stocks
72
38
Debtors
12
5,757
6,486
Cash at bank and in hand
24
5,829
6,548
Creditors: amounts falling due within one year
13
(4,745)
(5,447)
Net current assets
1,084
1,101
Total assets less current liabilities
2,116
1,882
Creditors: amounts falling due after more than one year
14
(95)
(106)
Provisions for liabilities
Deferred tax liability
15
185
127
(185)
(127)
Net assets
1,836
1,649
Capital and reserves
Called up share capital
17
100
100
Profit and loss reserves
1,736
1,549
Total equity
1,836
1,649
The financial statements were approved by the board of directors and authorised for issue on 28 February 2024 and are signed on its behalf by:
R M Gleave
Director
Company Registration No. 02875057
MOMENTUM INSTORE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
Balance at 1 June 2021
100
1,476
1,576
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
467
467
Dividends
-
(394)
(394)
Balance at 31 May 2022
100
1,549
1,649
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
481
481
Dividends
-
(294)
(294)
Balance at 31 May 2023
100
1,736
1,836
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
1
Accounting policies
Company information
Momentum Instore Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pinewood Court, Larkwood Way, Tytherington Business Park, Tytherington, Macclesfield, Cheshire, United Kingdom, SK10 2XR.
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 £'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
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. The company has therefore taken advantage of exemptions from the following disclosure requirements:
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 Gleaventures Limited. These consolidated financial statements are available from its registered office, Pinewood Court, Larkwood Way, Tytherington Business Park, Tytherington, Macclesfield, Cheshire, SK10 2XR.
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 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.
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Intangible fixed assets other than goodwill
Amortisation 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:
Software
straight line between 3-5 years
1.5
Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
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 improvements
straight line over term of the lease
Equipment, fixtures and fittings
straight line between 3-10 years
Motor vehicles
15% reducing balance
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
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.
1.6
Fixed asset investments
Investments in subsidiaries are measured at cost less accumulated impairment.
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.
1.7
Stocks
Stocks are stated at the lower of cost and net realisable value after making due allowance for obsolete and slow moving stocks.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and represent cash in hand and deposits held at call with banks.
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 balance sheet when the company becomes party to the contractual provisions of the instrument.
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 13 -
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. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Basic financial liabilities
Basic financial liabilities, including trade creditors, are initially recognised at transaction price. 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. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
1.11
Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of income and retained earnings, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences are recognised that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the difference s between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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.
1.14
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 balance sheet 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 leases asset are consumed.
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
1.15
Government grants
Government grants are recognised at the fair value of the asset received 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.
1.16
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.
1.17
Finance costs are charged to the statement of income and retained earnings over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
1.18
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 16 -
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.
Job cost accrual
Ongoing projects at the year end are evaluated using costs incurred to date, turnover to date and expected job margins to calculate whether extra costs need to be accrued or whether some costs need to be deferred. Deferred costs are all shown within work in progress and accrued costs are shown within accruals.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£'000
£'000
Turnover analysed by geographical market
United Kingdom
14,319
14,409
2023
2022
£'000
£'000
Other revenue
Grants received
-
25
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£'000
£'000
Fees payable to the company's auditor for the audit of the company's financial statements
30
25
Depreciation of owned tangible fixed assets
110
196
Depreciation of tangible fixed assets held under finance leases
10
6
Amortisation of intangible assets
85
-
Operating lease charges
417
444
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
2
2
Management staff
20
16
Field staff
27
34
Office staff
58
43
Total
107
95
In addition to the note above, the company hired intermittent workers through out the year. The average number of such workers for the year was 119 (2022: 152).
Staff costs, including directors' remuneration, were as follows:
2023
2022
£'000
£'000
Wages and salaries
5,611
5,851
Social security costs
506
480
Pension costs
181
164
6,298
6,495
Included within wages and salaries, social security costs and other pension costs are £2,359,000 (2022: £3,076,000), £213,000 (2022: £212,000) and £37,000 (2022: £41,000) respectively, that relate to staff costs in connection to intermittent workers.
6
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
11
22
Company pension contributions to defined contribution schemes
37
26
48
48
7
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
81
Adjustments in respect of prior periods
2
Total current tax
81
2
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
7
Taxation
2023
2022
£'000
£'000
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
59
39
Adjustment in respect of prior periods
1
Total deferred tax
59
40
Total tax charge
140
42
The corporation tax rate to 31 March 2023 was 19%. This increased to 25% as of 1 April 2023.
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:
2023
2022
£'000
£'000
Profit before taxation
621
509
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
124
97
Tax effect of expenses that are not deductible in determining taxable profit
2
2
Adjustments in respect of prior years
2
Effect of change in corporation tax rate
9
Depreciation on assets not qualifying for tax allowances
2
3
Deferred tax adjustments in respect of prior years
7
1
Super deduction allowance
(5)
(15)
R&D additional deduction
(57)
Remeasurement of deferred tax for
changes in tax rates
10
Taxation charge for the year
140
42
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 19 -
8
Intangible fixed assets
Software
£'000
Cost
At 1 June 2022
652
Additions
209
At 31 May 2023
861
Amortisation and impairment
At 1 June 2022
391
Amortisation charged for the year
85
At 31 May 2023
476
Carrying amount
At 31 May 2023
385
At 31 May 2022
261
9
Tangible fixed assets
Leasehold improvements
Equipment, fixtures and fittings
Motor vehicles
Total
£'000
£'000
£'000
£'000
Cost
At 1 June 2022
745
521
74
1,340
Additions
186
61
247
At 31 May 2023
931
582
74
1,587
Depreciation and impairment
At 1 June 2022
455
418
6
879
Depreciation charged in the year
88
22
10
120
At 31 May 2023
543
440
16
999
Carrying amount
At 31 May 2023
388
142
58
588
At 31 May 2022
290
103
68
461
The net carrying value of tangible fixed assets includes the following in respect of assets held under hire purchase contracts.
2023
2022
£'000
£'000
Motor vehicles
58
68
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
10
Fixed asset investments
2023
2022
Notes
£'000
£'000
Investments in subsidiaries
11
59
59
11
Subsidiaries
Details of the company's subsidiaries at 31 May 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
NDI Momentum Limited
Pinewood Court, Larkwood Way, Tytherington Business Park, Tytherington, Macclesfield, Cheshire, SK10
Ordinary
100.00
12
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
3,731
4,683
Amounts owed by group undertakings
1,662
1,662
Other debtors
22
Prepayments and accrued income
342
141
5,757
6,486
Amounts owed by group undertakings are repayable on demand, however the directors do not anticipate the balance to be fully repayable within 12 months of the balance sheet date.
At the year end there was a balance due from the directors of £20,000 (2022: £nil), this amount is included within other debtors.
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
13
Creditors: amounts falling due within one year
2023
2022
£'000
£'000
Bank loans and overdrafts
2
Invoice discounting
2,092
2,683
Obligations under finance leases
10
9
Trade creditors
1,093
938
Corporation tax
84
Other taxation and social security
352
490
Other creditors
75
615
Accruals and deferred income
1,037
712
4,745
5,447
Invoice discounting balances are secured by a fixed and floating charge against all assets of Momentum Instore Limited.
Obligations under finance leases are secured against the assets to which they relate.
14
Creditors: amounts falling due after more than one year
2023
2022
£'000
£'000
Obligations under finance leases
36
47
Amounts owed to group undertakings
59
59
95
106
Obligations under finance leases are secured against the assets to which they relate.
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£'000
£'000
Accelerated capital allowances
191
141
Tax losses
-
(7)
Short term timing differences
(6)
(7)
185
127
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
15
Deferred taxation
(Continued)
- 22 -
2023
Movements in the year:
£'000
Liability at 1 June 2022
127
Charge to profit or loss
58
Liability at 31 May 2023
185
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
181
164
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. Included within other creditors is £35,000 (2022: £36,000) in respect of contributions to the company's defined contribution pension scheme.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100
100
18
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:
2023
2022
£'000
£'000
Within one year
624
417
Between two and five years
998
425
1,622
842
19
Related party transactions
MOMENTUM INSTORE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
19
Related party transactions
(Continued)
- 23 -
The company has taken full advantage of the exemption under section 33 of FRS 102 from disclosing transactions with other members of the group headed by Gleaventures Limited provided that consolidated financial statements in which the company is included, are publicly available.
At the balance sheet date the net amount owed from Gleaventures Limited was £1,662,000 (2022: £1,662,000). In addition the company owed £59,000 (2022: £59,000) to NDI Momentum Limited, a subsidiary of the company.
20
Ultimate controlling party
The immediate and ultimate parent undertaking is Gleaventures Limited, a company incorporated in England and Wales. Gleaventures Limited, was under the control of R M Gleave due to his majority shareholding throughout the current and preceding year.
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