Company registration number 09293085 (England and Wales)
CAPPAGH BROWNE UTILITIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
CAPPAGH BROWNE UTILITIES LIMITED
COMPANY INFORMATION
Directors
Mr M J Ferncombe
Mr T A Ferncombe
Mr M S Guest
Mr P D McMahon
Mr J P Birtwhistle
Mr S R Williams
(Appointed 23 January 2023)
Mr M A Tarr
(Appointed 23 January 2023)
Company number
09293085
Registered office
Meelin House
Unit 2
Pavillion Business Centre
6 Kinetic Crescent
Enfield
United Kingdom
EN3 7FJ
Auditor
Ad Valorem (Audit) LLP
2 Manor Farm Court
Old Wolverton Road
Old Wolverton
Milton Keynes
MK12 5NN
CAPPAGH BROWNE UTILITIES LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 21
CAPPAGH BROWNE UTILITIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present the strategic report for the year ended 31 March 2023.

Fair review of the business

The Company is a utility contracting business, currently working solely for Southern Water. The Company is owned and supported jointly by J. Browne Construction Company Limited and Cappagh Contractors Construction (London) Limited.

The financial performance of the Company was as follows:

The Company achieved sales of £65,702,245 (2022: £47,533,325) and delivered a profit before tax of £48,086 (2022: £16,644). The net current assets were £245,263 (2022: £225,268). Cash in bank at 31st March 2023 was £567,592 (2022: £3,257,278).

Business environment

The Company operates in the U.K. water sector. Southern Water awarded the Company their React & Maintain Sewerage Operations contract in late 2014 and field activities under the contract commenced on 1st April 2015. The contract was subsequently extended by a further five years to 2025 and the Company aims to be awarded contract works past 2025 into the AMP8 regulatory period.

Under the contract, the Company provides sewerage network maintenance services across Southern Water's entire region - Sussex, Kent, Hampshire and the Isle of Wight.

Business model

The Company has the potential to undertake multiple contracts for different clients but was specifically established to deliver the R&M Sewerage Operations contract for Southern Water. We continue to ensure that we deliver that contract well, providing exceptional customer focus, frontier safety performance, resilient solutions for the environment and excellent value for money.

We continue to innovate and drive performance. We are continuing to invest both directly and jointly with Southern Water in technology, process improvement, and in our people to continue development.

Development and performance

Our principal focus in the year has been to further enhance the customer experience, to reduce our cost base and to further improve our delivery processes and efficiency. We continue to innovate, improving our performance in each area.

We have also met the challenges of an extreme winter event through increasing resources materially in the year. Workload coming through both reactive and planned procurement routes has increased significantly.

The Company continually monitors customer and operational performance which has a significant impact on the performance of Southern Water. The Contract between the Company and Southern Water includes incentive payments based on performance.

The Company has seen key indicators such as Customer Service continue an upward trend. We are working closely with Southern Water to increase the Customer Measure of Experience (C-MeX) and improve Environmental outcomes.

Social responsibility

We continue to support the work of the Living Wage Foundation and the Company has been accredited as a Real Living Wage employer. This means everyone working at the Company will receive a minimum hourly wage which is significantly higher than the national minimum wage and the new minimum wage premium for over 25’s.

 

We are looking to bring new people into the industry through our supervisor and operative apprenticeship and training programmes, our graduate engagement scheme with local colleges and universities, and though employment of ex-services personnel. Working with the Civil Engineering Technical College (CETC) in particular we have increased our intake of apprentices in the year.

The Company has fully supported Southern Water's corporate charity events as well as sponsored a number of employees in their charitable efforts.

We have a diverse workforce and provide equal opportunities for all.

CAPPAGH BROWNE UTILITIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -

Health Safety and Wellbeing

The Company has a dedicated Health, Safety, Quality and Environment (HSQE) and compliance team.

All levels of management are required to undertake SHE monitoring activities, from SHE tours by directors to SHE surveys by senior managers and SHE inspections by site and workplace management.

It is the Company’s policy to report all accidents regardless of severity. Accident and incident reports are assessed to identify their main cause and analysed to identify trends and areas for improvement in the same way as for findings of inspection, tours and surveys.

We are very focused on continuous improvement. We invest in our frontline managers through training and development, investing in our support systems, and in wider management information tools to drive performance and in Health and Safety related applications to help our workforce to stay safe and improve their personal wellbeing.

Key performance indicators

The directors have established a number of key performance indicators which they use to measure and monitor the performance of the Company in a number of different areas during monthly reviews.

The target range for gross profit as a percentage of turnover is set out below.

 

 

2023

2022

Gross Profit Margin

 

 

 

Upper range target

12.0%

12.0%

 

Actual performance

11.2%

10.8%

 

Lower range target

10.0%

10.0%

The Company’s safety record is monitored using the Accident Frequency Rate (ARF) on reportable accidents. The rate of 0.00 was measured for the year to 31 March 2023 (2022: 0.25).

Principal risks and uncertainties

Risks are captured in the Company's risk register which is supported by various plans, policies and procedures to mitigate the consequences of those risks.

As well as the risks associated with undertaking the Company's routine operational activities; health, safety, environmental, streetworks, public interaction, the Company's more general principal risks are fluctuating workload, operational performance, cost increases and resource availability.

In particular, since the beginning of 2022, due to global events and national inflation pressures, we have been working with our client and supply chain partners to manage the effects of material supply shortages, volatility of fuel, energy and materials costs as well as facing a challenging labour market in relation to recruiting and retaining our workforce and support staff.

The Company has a good understanding of its exposure in respect of these ongoing risks and has plans in place to mitigate and manage them.

Liquidity risk

The Company monitors and manages its liquidity closely and pays particular attention to its cash flow. Adequate reserves are maintained by continuously reviewing actual and forecast cash flow movements.

 

Credit Risk

The Company currently works solely for Southern Water under contractual agreements which include clearly defined payment terms. Staff work closely with the client to minimise the risk of financial loss due to late payments.

CAPPAGH BROWNE UTILITIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

Promoting the success of the company - Section 172 Companies Act 2006 statement

The directors confirm that, during the year, they continued to act in good faith to promote the success of the company for the benefit of its members as a whole and confirm their commitment to ensuring due consideration of, amongst other matters:

 

Likely long-term consequences of any decision

The directors meet on a monthly basis throughout the year supported by senior management providing detailed, timely information to assist any necessary decision making. As well as utilising a wide range of technical and industrial experience, the directors aim to make informed, fact/data based strategic and operational decisions, where possible backed up by thorough research, in-depth deliberation and careful consideration of likely long-term consequences.

 

Employees

The directors recognise the value of the people employed by the company. As our employees are key to our success, we invest in training and development to enable them to grow their skills and maintain their motivation. We respect the rights and dignity of every employee and treat them fairly and without discrimination; team working and sharing of knowledge are encouraged with individual/team contributions being rewarded appropriately.

 

Relationships with suppliers, customers and others

The company continually works towards maintaining and further developing the strong working relationship established with its sole customer and aims to build strong relationships with suppliers which then foster loyalty, mutual success and facilitate sustainable, safe, and efficient operations.

 

Community and the environment

The company aims to be responsive to the needs of the communities in which it works and to be aware of and minimise the impact of its operations on the environment.

 

Business conduct

The directors always make decisions with the highest standard of business conduct in mind so the risk of reputational damage to the company and its stakeholders is minimised.

 

Shareholders

The directors recognise their role in overseeing the strategy of the business and acting fairly between shareholders.

Outlook

Whilst the volume of work is variable, the nature of the contract means that Southern Water's reactive work flows to us and there is a significant volume of capital delivery and Network Development work to be undertaken as well. We are well placed to continue to deliver an increased volume of this work.

 

The Company is preparing to tender ahead of the AMP8 regulatory period from 2025 to 2030 and continues to develop the business to resecure principal contracts. This includes significant investment in plant and equipment to support the business in the years ahead. We are also continuing to develop our service offering for our customers, through collaboration, innovative thinking and action, and through increasing efficiency. We always look for more innovative ways of carrying out our work through technology and smarter working methods, and this will continue.

 

CAPPAGH BROWNE UTILITIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -

On behalf of the board

Mr P D McMahon
Director
2 October 2023
CAPPAGH BROWNE UTILITIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Principal activities

The principal activity of the company continued to be that of supplying services to utilities companies.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J M Dodd
(Resigned 23 January 2023)
Mr M J Ferncombe
Mr T A Ferncombe
Mr M S Guest
Mr P D McMahon
Mr J P Birtwhistle
Mr K G Biss
(Resigned 23 January 2023)
Mr S R Williams
(Appointed 23 January 2023)
Mr M A Tarr
(Appointed 23 January 2023)
Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Future developments

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 Companies and Groups (Accounts and Reports) Regulation 2008, Sch.7 to be contained in the directors' report. It has done so in respect of Future Developments.

Auditor

The auditor, Ad Valorem (Audit) LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr P D McMahon
Director
2 October 2023
CAPPAGH BROWNE UTILITIES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 6 -

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:

 

 

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.

CAPPAGH BROWNE UTILITIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAPPAGH BROWNE UTILITIES LIMITED
- 7 -
Opinion

We have audited the financial statements of Cappagh Browne Utilities Limited (the 'company') for the year ended 31 March 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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:

CAPPAGH BROWNE UTILITIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPPAGH BROWNE UTILITIES LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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.

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.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK taxation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management override of controls. Audit procedures performed by the engagement team included:

 

- Reviewing minutes of meetings of those charged with governance;

- Enquiry of management and those charged with governance around actual and potential litigation and claims;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations, and

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness and testing accounting estimates (because of the risk of management bias).

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentation, or through collusion.

CAPPAGH BROWNE UTILITIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPPAGH BROWNE UTILITIES LIMITED
- 9 -

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jackie Wilding (Senior Statutory Auditor)
for and on behalf of Ad Valorem (Audit) LLP
5 October 2023
Chartered Accountants
Statutory Auditor
2 Manor Farm Court
Old Wolverton Road
Old Wolverton
Milton Keynes
MK12 5NN
CAPPAGH BROWNE UTILITIES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
65,702,245
47,533,325
Cost of sales
(58,342,651)
(42,399,593)
Gross profit
7,359,594
5,133,732
Administrative expenses
(7,329,491)
(5,117,088)
Other operating income
17,983
-
0
Profit before taxation
48,086
16,644
Tax on profit
7
(28,091)
(38,293)
Profit/(loss) for the financial year
19,995
(21,649)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CAPPAGH BROWNE UTILITIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
2023
2022
£
£
Profit/(loss) for the year
19,995
(21,649)
Other comprehensive income
-
-
Total comprehensive income for the year
19,995
(21,649)
CAPPAGH BROWNE UTILITIES LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 12 -
2023
2022
Notes
£
£
£
£
Current assets
Stocks
8
452,902
313,375
Debtors
9
21,538,591
12,354,886
Cash at bank and in hand
567,592
3,257,278
22,559,085
15,925,539
Creditors: amounts falling due within one year
10
(22,313,822)
(15,700,271)
Net current assets
245,263
225,268
Capital and reserves
Called up share capital
12
1,000
1,000
Profit and loss reserves
244,263
224,268
Total equity
245,263
225,268
The financial statements were approved by the board of directors and authorised for issue on 2 October 2023 and are signed on its behalf by:
Mr M S  Guest
Director
Company Registration No. 09293085
CAPPAGH BROWNE UTILITIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2021
1,000
245,917
246,917
Year ended 31 March 2022:
Loss and total comprehensive income for the year
-
(21,649)
(21,649)
Balance at 31 March 2022
1,000
224,268
225,268
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
19,995
19,995
Balance at 31 March 2023
1,000
244,263
245,263
CAPPAGH BROWNE UTILITIES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
16
(2,648,485)
2,918,097
Income taxes paid
(41,201)
(12,589)
Net cash (outflow)/inflow from operating activities
(2,689,686)
2,905,508
Net (decrease)/increase in cash and cash equivalents
(2,689,686)
2,905,508
Cash and cash equivalents at beginning of year
3,257,278
351,770
Cash and cash equivalents at end of year
567,592
3,257,278
CAPPAGH BROWNE UTILITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 15 -
1
Accounting policies
Company information

Cappagh Browne Utilities Limited is a private company limited by shares incorporated in England and Wales. The registered office is Meelin House, Unit 2, Pavillion Business Centre, 6 Kinetic Crescent, Enfield, United Kingdom, EN3 7FJ.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and that the turnover can be measured reliably. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

 

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the value of work carried out during the year when all of the following conditions are satisfied:

1.4
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

CAPPAGH BROWNE UTILITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.5
Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

1.6
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.7
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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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 creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

1.8
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.

CAPPAGH BROWNE UTILITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable.
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

1.10
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.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Construction
65,702,245
47,533,325
CAPPAGH BROWNE UTILITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,250
12,250
For other services
Taxation compliance services
500
500
All other non-audit services
2,250
2,250
2,750
2,750
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was: 198 (2022; 173).

2023
2022
Number
Number
Monthly
79
69
Weekly
119
105
Total
198
174

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
8,601,917
6,732,025
Social security costs
991,840
738,110
Pension costs
194,289
160,742
9,788,046
7,630,877
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
220,298
237,640
Company pension contributions to defined contribution schemes
12,200
11,161
232,498
248,801
CAPPAGH BROWNE UTILITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Directors' remuneration
(Continued)
- 19 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
220,298
237,640
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
28,091
38,293

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
£
£
Profit before taxation
48,086
16,644
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
9,136
3,162
General provisions
18,955
35,131
Taxation charge for the year
28,091
38,293
8
Stocks
2023
2022
£
£
Raw materials and consumables
452,902
313,375
9
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
11,420
36,616
Gross amounts owed by contract customers
21,444,298
12,283,940
Other debtors
1,878
55
Prepayments and accrued income
80,995
34,275
21,538,591
12,354,886
CAPPAGH BROWNE UTILITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
10
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
6,057,643
4,207,581
Amounts owed to group undertakings
5,335,487
3,536,582
Corporation tax
25,183
38,293
Other taxation and social security
1,947,547
751,070
Other creditors
824,860
788,031
Accruals and deferred income
8,123,102
6,378,714
22,313,822
15,700,271
11
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
194,289
160,742

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.

12
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
500
500
500
500
Ordinary B shares of £1 each
500
500
500
500
1,000
1,000
1,000
1,000
13
Related party transactions

At the year end, included within amounts owed to group undertakings are the amounts of £2,653,487 (2022 : £1,791,537) and £2,682,000 (2022 : £1,745,045) due to Cappagh Contractors Construction (London) Limited and J Browne Construction Company Limited. Both of these companies are the equal immediate parent companies. There is no interest being charged on the balances owed and there is also no securities over the balances owed.

 

Included within the profit & loss are management charges of £3,250,000 (2022 : £2,190,000) and £3,250,000 (2022 : £2,190,000) to both Cappagh Contractors Construction (London) Limited and J Browne Construction Company Limited.

 

During the year, the company purchased services in the amount of £4,070,783 (2022 : £1,173,082) and £4,086,678 (2022 : £386,829) with Cappagh Contractors Construction (London) Limited and J Browne Construction Company Limited.

14
Events after the reporting date

There are no other post balance sheet events that have taken place between 31 March 2023 and the date of this report that are required to be brought to the attention of shareholders.

CAPPAGH BROWNE UTILITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
15
Controlling parties

The immediate controlling parties are J. Browne Construction Company Limited and Cappagh Contractors Construction (London) Limited. Both companies are registered in the United Kingdom.

16
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit/(loss) for the year after tax
19,995
(21,649)
Adjustments for:
Taxation charged
28,091
38,293
Movements in working capital:
Increase in stocks
(139,527)
(107,508)
Increase in debtors
(9,183,705)
(3,571,123)
Increase in creditors
6,626,661
6,580,084
Cash (absorbed by)/generated from operations
(2,648,485)
2,918,097
17
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
3,257,278
(2,689,686)
567,592
2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.200Mr J M DoddMr M J FerncombeMr T A FerncombeMr M S GuestMr P D McMahonMr J P BirtwhistleMr K G BissMr S R WilliamsMr M A Tarr19995092930852022-04-012023-03-3109293085bus:Director22022-04-012023-03-3109293085bus:Director32022-04-012023-03-3109293085bus:Director42022-04-012023-03-3109293085bus:Director52022-04-012023-03-3109293085bus:Director62022-04-012023-03-3109293085bus:Director82022-04-012023-03-3109293085bus:Director92022-04-012023-03-3109293085bus:Director12022-04-012023-03-3109293085bus:Director72022-04-012023-03-3109293085bus:RegisteredOffice2022-04-012023-03-31092930852023-03-31092930852021-04-012022-03-3109293085core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3109293085core:RetainedEarningsAccumulatedLosses2022-04-012023-03-31092930852022-03-3109293085core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3109293085core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3109293085core:CurrentFinancialInstruments2023-03-3109293085core:CurrentFinancialInstruments2022-03-3109293085core:ShareCapital2023-03-3109293085core:ShareCapital2022-03-3109293085core:RetainedEarningsAccumulatedLosses2023-03-3109293085core:RetainedEarningsAccumulatedLosses2022-03-3109293085core:ShareCapital2021-03-3109293085core:RetainedEarningsAccumulatedLosses2021-03-3109293085core:ShareCapitalOrdinaryShares2023-03-3109293085core:ShareCapitalOrdinaryShares2022-03-31092930852022-03-31092930852021-03-3109293085core:UKTax2022-04-012023-03-3109293085core:UKTax2021-04-012022-03-310929308512022-04-012023-03-310929308512021-04-012022-03-3109293085bus:PrivateLimitedCompanyLtd2022-04-012023-03-3109293085bus:FRS1022022-04-012023-03-3109293085bus:Audited2022-04-012023-03-3109293085bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP