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1
2022-01-01
2022-12-31
COMPANY REGISTRATION NUMBER:
11031255
Year ended 31 December 2022
Officers and professional advisers |
1 |
|
|
Directors' responsibilities statement |
8 |
|
|
Independent auditor's report to the member |
9 |
|
|
Statement of comprehensive income |
14 |
|
|
Statement of financial position |
15 |
|
|
Statement of changes in equity |
16 |
|
|
Notes to the financial statements |
17 |
|
|
Officers and Professional Advisers |
|
The board of directors |
Mr Ovidio Javier Bartolomé De Miguel (Resigned 27 September 2022) |
|
Mr Eduardo Campos Pozuelo (Resigned 15 February 2022) |
|
Mr Luís Manuel De Almeida Cunha |
|
Mr Félix Corral Fernández (Resigned 15 February 2022) |
|
Mr Antonio Francis Belmonte Sánchez |
|
Mr Roberto Gomez Blanco (Appointed 15 February 2022) |
|
Mr Alejandro Mendoza Monfort |
|
|
Registered office |
1 Lyric Square (Office 2.13) |
|
Hammersmith |
|
London |
|
England |
|
United Kingdom |
|
W6 0NB |
|
|
Auditor |
Hall Morrice LLP |
|
Chartered Accountants & statutory auditor |
|
6 & 7 Queens Terrace |
|
Aberdeen |
|
Scotland |
|
AB10 1XL |
|
|
Bankers |
Santander UK PLC |
|
2 Triton Square |
|
Regents Place |
|
London |
|
England |
|
NW1 3AN |
|
|
Year ended 31 December 2022
Principal activities and review of the business
The company's primary activity is still infrastructure work under construction contracts with the intention of aligning
Sacyr UK Limited
contract awards with Sacyr Group ambition to become a P3 developer with a strong construction division. In this regard, FY2022 has been a successful year in terms of strategic goals accomplished as the Group has been chosen as the preferred bidder in a significant concession to design, build, finance, and maintain the new Velindre Cancer Centre in Cardiff, Wales,. In this major award, Sacyr UK Limited
is appointed as the EPC Contractor in that scheme. Regarding the other ongoing contracts, the Edinburgh Tram was successfully finished and is now being operated by the Authority as of June 30, 2023. The Belfast Transportation Hub, another significant contract with Sacyr UK Limited
, is also progressing according to schedule and is anticipated to be finished by the middle of 2024.
Principal risk and uncertainties
Market and economic risk The majority of the company´s contracts are in the UK and Irish Market. As a result the company has limited exposure to exchange rate and associated risks. The main contract executed by the Company (Edinburgh Tram Extension and Belfast Transportation HUB) is a NEC4 Option C with ECI contract which is a "cost plus" contract in which the Client and the Contractor work in a fully collaborative way in order to reduce substantially the project financial risk. Economic factors affecting the industry The construction industry was affected by the recent recession. The recovery is ongoing, and the market is now returning to more positive conditions. Financial risk The principal financial assets are cash balances and trade receivables. The company´s customers are subject to credit checks and credit limits. The trade debtors’ figure is stated net of any bad debt provision which is not consider to be material. Parent company support Sacyr UK is fully owned by Sacyr Construccion SA, and ultimately by Sacyr SA. The Sacyr group has 35 years of experience and is a global leader in the development of P3 projects, infrastructure construction and services. Sacyr SA is fully committed to assisting Sacyr UK in the execution of its contracts taking into account that the UK and Ireland are considered strategic markets in the 2021-2025 Business Plan
.
Results for the year
Sales for the year have increased in comparison to 2021 due to the Belfast Transport Hub project which commenced during the year, which is expected to reach peak revenue during FY2023.
Development and performance of the company's business over the year
During 2022, Sacyr UK has consolidated its presence in the country, aligning its positions with strategic projects for Sacyr that will see the light of day in the coming years. In addition, SACYR UK has been awarded with its first project in Wales, which is also its first concession in the United Kingdom. It is a major milestone for the 2021-2025 Strategic Plan, which focuses on sustainability and P3 contracts to completely fulfil the company profile redefinition that Sacyr successfully carried out with the 2015-2020 Plan. Taking advantage of the synergy of the projects in execution, SACYR UK has continued to search for projects in the highway, tram and building sector, presenting EOI, PQ and Tenders to strengthen its position in the market.
Position at the year end
After the year ended, the company continued to expand, and the directors are optimistic that this trend will continue through 2023 and beyond. As previously mentioned, the company's intention is to continue looking for additional concessions in both the UK and Ireland after being chosen as the EPC contractor in a concession granted to Sacyr Concesiones.
Key performance indicators
The company used a number of appropriate key performance measures to monitor the performance of the business during the 12 month period to 31 December 2022. These KPI are listed below: Net profit / Turnover 2022 : (3.11)% 2021 : (8.47)% Gross Profit / Turnover 2022 : 15.37% 2021 : 10.04% Administrative expenses / Turnover 2022 : 19.61% 2021 : 16.62% Amounts recoverable on contracts / Turnover 2022 : 16.81% 2021 : 7.49%
Section 172 disclosure
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would be most likely to produce the success of the company for the benefit of its members as a whole. In doing this, Section 172 requires a director to have regard, among other matters to: - The likely consequences of any decision in the long term, the interests of the company’s employees; - The need to foster the company’s business relationships with suppliers, customers and others; - The impact of the company’s operations on the community and the environment; - The desirability of the company maintaining a reputation for high standards of business conduct; - And the need to act fairly with members of the company. Employees
Sacyr UK Limited
employees are crucial to the success of the company, and the company continues to make a significant investment in the recruitment, training, welfare and retention of its people. The business is dependent on the skills and expertise of our employees, and as such the company regularly engages with them through a number of forums where ideas and feedback are freely shared. Operating in locations across the UK, the company uses many communication channels for employees to engage with line managers, senior management, and The People Team via informal, formal, group and personal meetings. We invest heavily in training our employees, both for general job-related competence and for discipline specific skills with the objective of ensuring safe delivery of services to clients, and to embrace and enhance the skills and competence of our employees. The company has expanded the learning channels over the last year, utilising technology to increase ways to learn which reach all the employees and accommodate employees learning styles and preferences. The company is committed to the welfare of its employees, both in terms of physical and metal health and in living a healthy and balanced life. Investments in learning, tools and resources, such as online and GP appointments, unlimited counselling support and nutrition advice have seen a significant improvement in employee feedback over the last year and this feedback continues to help shape the wellbeing strategy for the future. Business relationships We work closely to manage the important relationships we have with our customers - regularly engaging with them and delivering high quality services to exacting standards of safety and reliability to consistently meet their requirements. The company also collaborates closely with its suppliers to ensure standards of ethical behaviour that are consistent with our own. We work with suppliers and their supply chains to provide fully compliant, sustainable, cost-effective goods, services and solutions. Community and the environment The company continues to be committed to operating its business in an environmentally responsible, sustainable way. This has included eliminating sources on non-recyclable waste in favour of recyclable alternatives. Reductions in the company's carbon footprint will be achieved through the reduction in non-essential travel through the utilisation of video conferencing technology and through a global Sustainability learning and action-based plan which is available to all employees to increase awareness and accountability across the entire Sacyr Group. Business conduct Responsible business conduct is fundamental to the long-term success of the company. We are committed to the highest standards of business ethics and corporate social responsibility towards our clients, our staff, our suppliers, and the communities in which we operate. Business ethics Integrity is one of the core principles and conducting our business honestly, lawfully and ethically is fundamental to our continued success. Integrity and a QHSE mindset drives everything that we do and is critical to upholding our reputation in the marketplace. The directors have a zero-tolerance approach to bribery and corruption. The directors expect and require that all our employees, suppliers, partners, and clients observe the highest standards of integrity when conducting business. Appropriate risk-based communications and training on bribery, corruption and our Code of Conduct is provided to employees as part of their on-boarding and ongoing development. Any incidents, breaches or suspected breaches of the Code of Conduct, other internal policies or laws and regulations can be reported through line management or by submitting a complaint through the whistle blowing hotline.
This report was approved by the board of directors on 29 September 2023 and signed on behalf of the board by:
Mr Alejandro Mendoza Monfort |
Director |
|
Registered office: |
1 Lyric Square (Office 2.13) |
Hammersmith |
London |
England |
United Kingdom |
W6 0NB |
|
Year ended 31 December 2022
The directors present their report and the financial statements of the company for the year ended
31 December 2022
.
Directors
The directors who served the company during the year were as follows:
Mr Luís Manuel De Almeida Cunha |
|
Mr Antonio Francis Belmonte Sánchez |
|
Mr Alejandro Mendoza Monfort |
|
Mr Roberto Gomez Blanco
|
(Appointed
15 February 2022) |
Mr Ovidio Javier Bartolomé De Miguel
|
(Resigned
27 September 2022) |
Mr Eduardo Campos Pozuelo
|
(Resigned
15 February 2022) |
Mr Félix Corral Fernández
|
(Resigned
15 February 2022) |
|
|
Dividends
The directors do not recommend the payment of a dividend.
Future developments
The company intends to continue to focus on the launch of potential future projects and does not envisage any significant changes to the operations of the company over the next 12 months.
Development and performance
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's Strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the Directors' report. It has done so in respect of information on the future developments in the business of the company.
Disclosure of information to the auditor
Each of the persons who is a director at the date of approval of this report confirms that: - so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. Auditor The auditor, Hall Morrice LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006
This report was approved by the board of directors on
29 September 2023
and signed on behalf of the board by:
Mr Alejandro Mendoza Monfort |
Director |
|
Registered office: |
1 Lyric Square (Office 2.13) |
Hammersmith |
London |
England |
United Kingdom |
W6 0NB |
|
Directors' Responsibilities Statement |
|
Year ended 31 December 2022
The directors are responsible for preparing the Strategic and Director's 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 the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments 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.
Independent Auditor's Report to the Member of
Sacyr UK Limited |
|
Year ended 31 December 2022
Opinion
We have audited the financial statements of Sacyr UK Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
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.
Other information
The other information comprises the information included in the Strategic Report and the Directors' Report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Strategic Report and the Directors' 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. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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.
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 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 the returns; or - certain disclosures of directors remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' 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. 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. In identifying and assessing the risk of material misstatement due to non-compliance with laws and regulations we have: - Ensured that the engagement team had the appropriate competence, capabilities and skills to identify or recognise non-compliance with laws and regulations; - Identified the laws and regulations applicable to the entity through discussions with directors and management and through our own knowledge of the sector; - Focused on the specific laws and regulations we consider may have a direct effect on the financial statements, including FRS 102 and the Companies Act 2006 and tax compliance regulations; - Focused on the specific laws and regulations we consider may have an indirect effect on the financial statements that are central to the entity's ability to trade including those relating to health and safety at work; - Reviewed the financial statement disclosures and tested to supporting documentation to assess compliance with applicable laws and regulations; - Made enquiries of management and inspected legal correspondence; - Reviewed minutes of meetings of those charged with governance; and - Ensured the engagement team remained alert to instances of non-compliance throughout the audit. We identified the greatest potential for fraud in the following areas, and our specific procedures performed to address it are described below: - Estimated costs to complete used in the recognition of revenue for open construction contracts at year end may be manipulated: - we assessed the design, determined the implementation and tested operating effectiveness of the relevant controls over how revenue was recognised in the period; - inquired of contract managers or project managers responsible for the construction contracts selected; - for a sample of contracts selected for testing obtained an understanding of the relevant terms of the contacts and evaluated the reasonableness of the methods and assumptions that management used to accounts for those contracts; - for selected construction contracts evaluated the reasonableness of the methods and assumptions management used to estimate the costs to complete; - performed testing to confirm contract details to independent supporting documentation; and - recalculated revenue for each selected contracts, and reconciled to the corresponding values recognised as revenue for the period. In identifying and assessing the risk of material misstatement due to irregularities, including fraud and how it may occur, and the potential for management bias and the override of controls we have: - Obtained an understanding of the entity's operations, including the nature of its revenue sources and of its objectives and strategies, to understand the classes of transactions, account balances, expected financial disclosures and business risks that may result in risk of material misstatement; - Obtained an understanding of the internal controls in place to mitigate risks of irregularities, including fraud; - Vouched balances and reconciling items in key control account reconciliations to supporting documentation; - Carried out detailed testing, on a sample basis, to verify the completeness, occurrence, existence and accuracy of transactions and balances; - Carried out detailed testing to verify the completeness, validity, existence and accuracy of income including cut-off testing and ensuring income recognition is in line with stated accounting policies; - Made enquiries of management as to where they consider there was a susceptibility to fraud, and their knowledge of any actual, suspected or alleged fraud; - Tested journal entries to identify any unusual transactions; - Performed analytical procedures to identify any significant or unusual transactions; - Investigated the business rationale behind any significant or unusual transactions; and - Evaluated the appropriateness of accounting policies and the reasonableness of accounting estimates. We did not identify any matters relating to non-compliance with laws and regulations, or relating to fraud. Because of the inherent limitations of an audit, there is an unavoidable risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk of not detecting a material misstatement due to fraud is inherently more difficult than detecting those that result from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. In addition, the further removed any 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. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: http:www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's member, 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 member 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 member as a body, for our audit work, for this report, or for the opinions we have formed.
Robert J C Bain MA CA CTA |
(Senior Statutory Auditor) |
|
For and on behalf of |
Hall Morrice LLP |
Chartered Accountants & statutory auditor |
6 & 7 Queens Terrace |
Aberdeen |
Scotland |
|
Statement of Comprehensive Income |
|
Year ended 31 December 2022
|
2022 |
2021 |
Note |
£ |
£ |
Turnover |
4 |
38,196,055 |
24,242,170 |
|
|
|
|
Cost of sales |
32,323,579 |
21,807,890 |
|
------------- |
------------- |
Gross profit |
5,872,476 |
2,434,280 |
|
|
|
Distribution costs |
(
455,108) |
458,963 |
Administrative expenses |
7,492,493 |
4,028,453 |
|
|
------------ |
------------ |
Operating loss |
5 |
(
1,164,909) |
(
2,053,136) |
|
|
|
|
Interest payable and similar expenses |
9 |
25,374 |
– |
|
------------ |
------------ |
Loss before taxation |
(
1,190,283) |
(
2,053,136) |
|
|
|
|
Tax on loss |
10 |
– |
(
150,424) |
|
------------ |
------------ |
Loss for the financial year and total comprehensive income |
(
1,190,283) |
(
1,902,712) |
|
------------ |
------------ |
|
|
|
|
All the activities of the company are from continuing operations.
Statement of Financial Position |
|
31 December 2022
Fixed assets
Tangible assets |
11 |
|
24,566 |
26,501 |
|
|
|
|
|
Current assets
Debtors |
12 |
15,949,719 |
|
9,011,934 |
Cash at bank and in hand |
4,550,161 |
|
3,436,528 |
|
------------- |
|
------------- |
|
20,499,880 |
|
12,448,462 |
|
|
|
|
|
Creditors: amounts falling due within one year |
13 |
22,959,960 |
|
13,720,194 |
|
------------- |
|
------------- |
Net current liabilities |
|
2,460,080 |
1,271,732 |
|
|
------------ |
------------ |
Total assets less current liabilities |
|
(
2,435,514) |
(
1,245,231) |
|
|
------------ |
------------ |
Net liabilities |
|
(
2,435,514) |
(
1,245,231) |
|
|
------------ |
------------ |
|
|
|
|
|
Capital and reserves
Called up share capital |
15 |
|
1,000 |
1,000 |
Profit and loss account |
16 |
|
(
2,436,514) |
(
1,246,231) |
|
|
------------ |
------------ |
Shareholder deficit |
|
(
2,435,514) |
(
1,245,231) |
|
|
------------ |
------------ |
|
|
|
|
|
These financial statements were approved by the
board of directors
and authorised for issue on
29 September 2023
, and are signed on behalf of the board by:
Mr Alejandro Mendoza Monfort |
Director |
|
Company registration number:
11031255
Statement of Changes in Equity |
|
Year ended 31 December 2022
|
Called up share capital |
Profit and loss account |
Total |
|
£ |
£ |
£ |
At 1 January 2021 |
1,000 |
656,481 |
657,481 |
|
|
|
|
Loss for the year |
|
(
1,902,712) |
(
1,902,712) |
|
------- |
------------ |
------------ |
Total comprehensive income for the year |
– |
(
1,902,712) |
(
1,902,712) |
|
|
|
|
At 31 December 2021 |
1,000 |
(
1,246,231) |
(
1,245,231) |
|
|
|
|
Loss for the year |
|
(
1,190,283) |
(
1,190,283) |
|
------- |
------------ |
------------ |
Total comprehensive income for the year |
– |
(
1,190,283) |
(
1,190,283) |
|
|
|
|
|
------- |
------------ |
------------ |
At 31 December 2022 |
1,000 |
(
2,436,514) |
(
2,435,514) |
|
------- |
------------ |
------------ |
|
|
|
|
Notes to the Financial Statements |
|
Year ended 31 December 2022
1.
General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 1 Lyric Square (Office 2.13), Hammersmith, London, England, W6 0NB, United Kingdom.
2.
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3.
Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis.
The financial statements are prepared in sterling, which is the functional currency of the entity.
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity. Monetary amounts in these financial statements are rounded to the nearest £.
Going concern
The company has made a loss for the year to 31 December 2022 of £1,190,283 (2021 - loss of £1,902,712) and at the year end the company's balance sheet has a net liabilities position of £2,435,514 (2021 - net liabilities position of £1,245,231). During the year, as a result of the Covid 19 pandemic, the war in Ukraine and the inflation, the company had experienced temporary delays and supply chain bottlenecks. Due to strict Health and Safety measures taken by the company, the delays were able to be minimised and the impact on the trading of the company has therefore been limited. The Company is currently in discussions with all customers to make contract adjustments to ensure that all Covid 19 relief measures, published by the UK, Scottish and Northern Irish Governments are in place. Due to the nature of the contracts in which the company participates (NEC contracts) the above-mentioned risks and impacts are shared with the Client, and in the specific case of the inflation in the ongoing project of the Belfast Transportation HUB, the inflation is covered under the Contract. The management accounts for 2023 are showing the company is still in a loss making position, however, all forecasts for 2023 and subsequent years show the company has sufficient liquidity to meet its liabilities going forward. This is substantiated over an ongoing project -The Belfast Transportation HUB- which displays robust progress and profitability in FY2023, and a major award under a PPP scheme -The Velindre Cancer Research Centre- in which the company will be the contractor of an SPV where Sacyr Concesiones (related company) will design, finance, build and operate the asset over 25 years. Developing the design from the inception is a vital component of Sacyr Group's core business and a distinct competitive advantage that historically has contributed to projects being completed successfully. Sacyr Construcción S.A.U, the company's immediate parent undertaking, has confirmed that it will provide financial support to the company to enable it to meet its liabilities as they fall due for the foreseeable future. Accordingly, the directors consider that it is appropriate to prepare the financial statements on a going concern basis.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Sacyr Construccion S.A.U. which can be obtained from Calle Condesa de Venadito, 7, 28027, Madrid, Spain. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) No cash flow statement has been presented for the company. (b) Disclosures in respect of financial instruments have not been presented. (c) No disclosure has been given for the aggregate remuneration of key management personnel.
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:- Accounting convention We have audited the financial statements of
Sacyr UK Limited
(the 'company') for the period ended 31 December 2022 which comprise the profit and loss account, the balance sheet 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 FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102"). Key sources of estimation uncertainty The estimates and assumptions which have a significant risk of causing material adjustment to the carrying amount of assets and liabilities are as follows:- Long term contracts Management assess the stage of completion for each long term contract monthly in order to allocate an appropriate level of revenue within each given period. The estimate is calculated by comparing costs incurred as a proportion of total budgeted costs. Total budgeted costs are calculated by individuals with relevant experience to enable them to estimate such values and are reviewed against actual costs incurred on a regular basis.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the rendering of services is measured by reference to the state of completion of the service transaction at the end of the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probably the expenses recognised will be recovered. 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 probably 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.
Current tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
|
Equipment |
- |
25% straight line |
|
|
|
|
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. Investments in joint ventures The company's interest in the Sacyr Farrans Neopul and Farrans Sacyr Joint Ventures have been accounted for as Jointly Controlled Operations. The contractual arrangements establish joint control over these arrangements with each party holding rights over its net assets and having obligations with respect to its liabilities. The company includes its share of the assets, liabilities, income and expenses of the joint ventures, line by line, in its financial statements.
Construction contracts
Where the outcome of construction contracts can be reliably estimated, contract revenue and contract costs are recognised by reference to the stage of completion of the contract activity as at the period end. Where the outcome of construction contracts cannot be estimated reliably, revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable, and contract costs are recognised as an expense in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is expensed immediately, with a corresponding provision for an onerous contract being recognised. Where the collectability of an amount already recognised as contract revenue is no longer probable, the uncollectible amount is expensed rather than recognised as an adjustment to the amount of contract revenue. The entity uses the percentage of completion method to determine the amounts to be recognised in the period. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred for work performed to date do not include costs relating to future activity, such as for materials or prepayments.
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument
.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises. 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. Provisions Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
4.
Turnover
Turnover arises from:
|
2022 |
2021 |
|
£ |
£ |
Construction contracts |
38,196,055 |
24,242,170 |
|
------------- |
------------- |
|
|
|
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5.
Operating profit
Operating profit or loss is stated after charging/crediting:
|
2022 |
2021 |
|
£ |
£ |
Depreciation of tangible assets |
15,864 |
14,659 |
Foreign exchange differences |
369,044 |
(
343,661) |
Operating lease payments: Office rent |
49,313 |
117,600 |
|
--------- |
--------- |
|
|
|
6.
Auditor's remuneration
|
2022 |
2021 |
|
£ |
£ |
Fees payable for the audit of the financial statements |
12,000 |
14,575 |
|
-------- |
-------- |
|
|
|
7.
Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
|
2022 |
2021 |
|
No. |
No. |
Administrative staff |
69 |
76 |
|
---- |
---- |
|
|
|
The aggregate payroll costs incurred during the year, relating to the above, were:
|
2022 |
2021 |
|
£ |
£ |
Wages and salaries |
4,994,472 |
4,979,499 |
Social security costs |
444,903 |
248,159 |
Other pension costs |
88,986 |
6,448 |
|
------------ |
------------ |
|
5,528,361 |
5,234,106 |
|
------------ |
------------ |
|
|
|
8.
Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
|
2022 |
2021 |
|
£ |
£ |
Remuneration |
285,455 |
252,003 |
|
--------- |
--------- |
|
|
|
Remuneration of the highest paid director in respect of qualifying services:
|
2022 |
2021 |
|
£ |
£ |
Aggregate remuneration |
285,455 |
179,020 |
|
--------- |
--------- |
|
|
|
9.
Interest payable and similar expenses
|
2022 |
2021 |
|
£ |
£ |
Interest on banks loans and overdrafts |
25,374 |
– |
|
-------- |
---- |
|
|
|
10.
Tax on loss
Major components of tax income
Current tax:
UK current tax income |
– |
(
150,424) |
|
---- |
--------- |
Tax on loss |
– |
(
150,424) |
|
---- |
--------- |
|
|
|
Reconciliation of tax income
The tax assessed on the loss on ordinary activities for the year is higher than (2021: higher than) the
standard rate of corporation tax in the UK
of
19
% (2021:
19
%).
|
2022 |
2021 |
|
£ |
£ |
Loss on ordinary activities before taxation |
(
1,190,283) |
(
2,053,136) |
|
------------ |
------------ |
Loss on ordinary activities by rate of tax |
(
226,154) |
(
390,096) |
Effect of expenses not deductible for tax purposes |
– |
(
1,011) |
Effect of capital allowances and depreciation |
367 |
2,585 |
Utilisation of tax losses |
– |
(
150,424) |
Unused tax losses |
225,787 |
388,522 |
|
------------ |
------------ |
Tax on loss |
– |
(
150,424) |
|
------------ |
------------ |
|
|
|
Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2023 (on 10 January 2023). These changes included an increase in the main rate to 25% from April 2023. Deferred taxes at the balance sheet date, in relation to UK companies, are measured using tax rates enacted as at the balance sheet date (25%).
11.
Tangible assets
|
Equipment |
|
£ |
Cost |
|
At 1 January 2022 |
59,463 |
Additions |
13,929 |
|
-------- |
At 31 December 2022 |
73,392 |
|
-------- |
Depreciation |
|
At 1 January 2022 |
32,962 |
Charge for the year |
15,864 |
|
-------- |
At 31 December 2022 |
48,826 |
|
-------- |
Carrying amount |
|
At 31 December 2022 |
24,566 |
|
-------- |
At 31 December 2021 |
26,501 |
|
-------- |
|
|
12.
Debtors
|
2022 |
2021 |
|
£ |
£ |
Trade debtors |
224,066 |
– |
Amounts owed by group undertakings |
6,945,657 |
28,224 |
Amounts owed by participating interests |
1,970,164 |
6,620,758 |
Amounts owed by customers on construction contracts |
6,422,667 |
1,816,280 |
Prepayments and accrued income |
233,066 |
524,336 |
Corporation tax repayable |
150,434 |
– |
Other debtors |
3,665 |
22,336 |
|
------------- |
------------ |
|
15,949,719 |
9,011,934 |
|
------------- |
------------ |
|
|
|
13.
Creditors:
amounts falling due within one year
|
2022 |
2021 |
|
£ |
£ |
Bank loans and overdrafts |
3,861,609 |
– |
Trade creditors |
1,310,987 |
73,997 |
Amounts owed to group undertakings |
11,589,076 |
8,044,341 |
Amounts owed to participating interests |
1,777,710 |
644,379 |
Accruals and deferred income |
557,294 |
2,835,682 |
Social security and other taxes |
924,167 |
981,129 |
Other creditors |
2,939,117 |
1,140,666 |
|
------------- |
------------- |
|
22,959,960 |
13,720,194 |
|
------------- |
------------- |
|
|
|
14.
Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £
88,986
(2021: £
6,448
).
15.
Called up share capital
Issued, called up and fully paid
|
2022 |
2021 |
|
No. |
£ |
No. |
£ |
Ordinary shares of £ 1 each |
1,000 |
1,000 |
1,000 |
1,000 |
|
------- |
------- |
------- |
------- |
|
|
|
|
|
16.
Profit and loss reserves
The profit and loss account represents cumulative profit and losses net of dividends and other adjustments.
17.
Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
|
2022 |
2021 |
|
£ |
£ |
Not later than 1 year |
9,022 |
32,400 |
|
------- |
-------- |
|
|
|
18.
Related party transactions
During the year the company entered into the following transactions with related parties:
|
Transaction value |
Balance owed by/(owed to) |
|
2022 |
2021 |
2022 |
2021 |
|
£ |
£ |
£ |
£ |
Entities with control, joint control and significant influence over the company |
8,218,024 |
10,408,301 |
2,348,008 |
2,569,559 |
|
------------ |
------------- |
------------ |
------------ |
Entities with control, joint control and significant influence over the company |
– |
– |
(
1,262,010) |
(
553,157) |
|
------------ |
------------- |
------------ |
------------ |
|
|
|
|
|
The company has taken advantage of the exemption available in Section 33 of FRS 102 'Related Party Disclosures' not to disclose transactions entered into between two or more wholly owned members of a group.
19.
Controlling party
The company is under the control of Sacyr Construcción S.A.U, the immediate parent. The registered office and principal place of business for the parent entity is Calle Condesa de Venadito, 7, 28027, Madrid, Spain. The ultimate parent company is Sacyr S.A., Calle Condesa de Venadito, 7, 28027, Madrid, Spain. The ultimate parent company is registered in Spain with the group accounts publicly available in the country of origin and in accordance with Spanish regulations. The directors believe there are no beneficial owners of the ultimate parent company.