Toughsheet Limited

The directors present their strategic report for the year ended 31 March 2024. Business review and principal activities As a waste recycler, the company continues to recycle plastic waste, producing the following products from such waste: o Damp proof membranes o Specialist films o Rubble and refuse sacks o Jointing tapes The results for the year are set out on page 12. The group's profit on ordinary activities for the financial year is £955,531 (2023: £5,951,646). The Directors are satisfied with the results given the current economic climate and disruptions to production due to installation of new plant and machinery. Future outlook The external commercial environment is expected to continue to be very challenging in 2023/24 due to rising costs of raw materials and light and heat costs. The Group has benefitted in the current year from the significant capital expenditure which was incurred in the year to 31 March 2022. However, whilst the market in which the group operates is expected to remain competitive as new competitors enter the market place and existing competitors become more aggressive, the group is in a very strong position to exploit the opportunities which now exist as a result of waste not being sent to the EU and the Far East to be recycled. The directors are confident that the group will improve its level of performance in the future. Principal risks and uncertainties The management of the business and the execution of the group's strategic plans are subject to a number of risks. The key business risks and uncertainties affecting the group are considered to relate to the increased competition in the market place and retention of key employees. As for many businesses of our size, the business environment in which we operate continues to be challenging. The waste recycling market in the UK is highly competitive and margins continue to be tight. The business is also at risk from the fluctuations in the price of Packaging Recycling Notes (PRNs). The price of PRNs is variable and are set by market forces which are outside of the control of the directors. With these risks and uncertainties in mind, the directors are aware that any plans for the future development of the business may be subject to unforeseen future events outside of our control. The group has risks and uncertainties associated with fluctuating power costs. The group's trading activities are directly aligned to the construction industry and the directors are mindful of the fact that this particular sector is experiencing challenging times. The directors are looking to expand the group's customer base and envisage that the current turnover levels will be maintained. The directors are also continuing to improve production efficiencies in order to maintain the gross profit margin. Financial risk management The group's operations expose it to a variety of financial risks that include liquidity risk, credit risk, exchange rate risk and interest rate risk. The group's financial instruments comprise sterling bank accounts and a Euro bank account together with various balances such as accounts receivable and accounts payable that arise directly from its operations. The group may offer credit terms to its customers which allow payment of the debt after delivery of goods and services. The group is at risk to the extent that a customer may not be able to pay on the specified due date. This risk is mitigated by strong on-going customer relationships and by credit insurance. The group manages its liquidity risk, to ensure sufficient it meets its financial obligations as and when they fall due. The company expects to meet its financial obligations through operating cash flows. The group does not use any derivative financial instruments. Key performance indicators The Directors pro-actively manage the business by way of a number of Key Performance Indicators relating to past/current performance and forward forecasts to identify trends and further opportunities for improvement.