Nigel Smith Plumbing And Mechanical Services Ltd

Business review We aim to present a balanced and comprehensive review of the development and performance of our business and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face. We consider that our key financial indicators are those that communicate the performance and strength of the company as a whole, being revenue, profitability and return on capital employed. Revenue has decreased from £9,759,174 to £7,662,701 for the current year. This is the result of a challenging construction sector which has seen large fluctuations in customer appetite and has resulted in an operating profit of only £20,930 (2024 - £566,742). The return on capital employed is 1% (2024 - 19.1%). Return on capital employed is calculated as operating profit before exceptional items, interest and tax, divided by capital employed. As with many businesses of our size, the business environment in which we operate continues to be challenging. Principal Risks and Uncertainties The financial risk management within the company is governed by policies established by the Board of Directors and senior management. The policies cover interest risk and such areas as cash management. Company's exposure to various risks: Credit risk The company is not exposed to credit risk. All cash is deposited in UK banks. The principal amounts within debtors are amounts due from UK based customers and group companies. Market risk - Foreign exchange The company is exposed to foreign exchange risk in respect of some suppliers who invoice the company in US dollars and Euros, though these are minimal. Business risks As a business we are well aware of the risks and impact that Brexit and ongoing supply chain challenges may bring the business but having assessed our situation, we believe that the financial position the business finds itself in will enable the directors to mitigate the risks for the long term protection of the business. With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside of our control, however in terms of what we can foresee at present, we remain very confident in the prospects of the business.