Company registration number 06575759 (England and Wales)
H H Construction (Groundwork Contractors) Limited
Annual Report and
Financial Statements
for the year ended 28 February 2023
H H Construction (Groundwork Contractors) Limited
Company Information
Director
J Handforth
Company number
06575759
Registered office
12 Methley Road
Castleford
West Yorkshire
United Kingdom
WF10 1LX
Auditor
B M Howarth Ltd
West House
King Cross Road
Halifax
West Yorkshire
HX1 1EB
Bankers
Lloyds Bank PLC
PO Box 1000
Oldham
Greater Manchester
BX1 1LT
H H Construction (Groundwork Contractors) Limited
Contents
Page
Strategic report
1
Director's report
2
Independent auditor's report
3 - 5
Statement of income and retained earnings
6
Statement of financial position
7
Notes to the financial statements
8 - 14
H H Construction (Groundwork Contractors) Limited
Strategic Report
for the year ended 28 February 2023
- 1 -

The director presents the strategic report for the year ended 28 February 2023.

Fair review of the business

Following the economic upturn as the effect of the pandemic subsided, the company has maintained a level of turnover of £29m in both the current and prior years. As a result of strong project management and tight control over costs, the overall profit from these contracts has increased significantly.

 

Retention of profits in the business has been a significant factor in the success of the business. Net assets have increased from £7.6m to £9.6m.

 

The company continues to invest in top quality plant and equipment. Capital expenditure for the year was £1.5m and the repair and maintenance program for this equipment has continued with annual expenditure of £450,000.

 

Prospects for the current year look positive with a strong order book and continued demand from key customers.

Key performance indicators
2023
2022
£000
£000
Turnover
29,177
29,505
Net profit before tax
2,368
1,031
Net assets
9,611
7,590
Principal risks and uncertainties

The director is aware of the risks involved in long term contracting and this risk is mitigated by careful and prudent management of the whole contracting process, from tendering to agreeing the final accounts.

 

The company is also subject to the forces of competition and wider economic factors. These economic factors include workforce shortages affecting the sector, increasing interest rates and inflationary pressures on the supply chain.

 

All of these factors are managed by the close involvement of the director and the experienced project management team in the contracting process.

Environmental policy

The company recognises the importance of its environmental responsibilities and attempts to minimise its impact on the environment, including safe disposal of waste, recycling and reducing energy consumption.

Payment to creditors

It is the company's policy to ensure that suppliers are aware of the company's terms of payment, and that these terms are agreed at the commencement of business with each supplier. Payments are made in accordance with the payment terms and conditions agreed.

On behalf of the board

J Handforth
Director
18 October 2023
H H Construction (Groundwork Contractors) Limited
Director's Report
for the year ended 28 February 2023
- 2 -

The director presents his annual report and financial statements for the year ended 28 February 2023.

Principal activities

The principal activity of the company continued to be that of groundwork contractors.

Results and dividends

The results for the year are set out on page 6.

Ordinary dividends were paid amounting to £180,000. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was J Handforth.

Auditor

The auditor, B M Howarth Ltd, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of director's responsibilities

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

Strategic report

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.

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
J Handforth
Director
18 October 2023
H H Construction (Groundwork Contractors) Limited
Independent auditor's report
to the members of H H Construction (Groundwork Contractors) Limited
- 3 -
Opinion

We have audited the financial statements of H H Construction (Groundwork Contractors) Limited (the 'company') for the year ended 28 February 2023 which comprise the statement of income and retained earnings, the statement of financial position 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 director's 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 director 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 director is 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:

H H Construction (Groundwork Contractors) Limited
Independent auditor's report (continued)
to the members of H H Construction (Groundwork Contractors) Limited
- 4 -
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 director's 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 director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and the sector in which it operates, our audit work considers the risk of material misstatement on the financial statements as a result of non-compliance with laws and regulations, this includes fraud. These laws and regulations include, but are not limited to, those that relate to the form and content of the financial statements, such as the company accounting policies, the financial reporting framework and the UK Companies Act 2006.

 

We evaluated management incentives and opportunities for manipulation of the financial statements and determined that the principal risks related to management bias in accounting estimates and understatement or overstatement of revenue. Our audit procedures included, but were not limited to:

 

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error.

 

There are inherent limitations in audit procedures, the further removed non compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

H H Construction (Groundwork Contractors) Limited
Independent auditor's report (continued)
to the members of H H Construction (Groundwork Contractors) Limited
- 5 -

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.

Charles R Moorby
Senior Statutory Auditor
For and on behalf of B M Howarth Ltd
Chartered Accountants
Statutory Auditor
West House
King Cross Road
Halifax
West Yorkshire
HX1 1EB
18 October 2023
H H Construction (Groundwork Contractors) Limited
Statement of income and retained earnings
for the year ended 28 February 2023
- 6 -
2023
2022
Notes
£
£
Turnover
2
29,176,889
29,504,687
Cost of sales
(20,218,864)
(22,222,602)
Gross profit
8,958,025
7,282,085
Administrative expenses
(6,565,123)
(6,274,195)
Other operating income
18,201
73,509
Operating profit
3
2,411,103
1,081,399
Interest receivable
6
6,646
262
Interest payable
7
(49,943)
(50,818)
Profit before taxation
2,367,806
1,030,843
Tax on profit
8
(166,796)
(78,399)
Profit for the financial year
2,201,010
952,444
Retained earnings brought forward
7,589,577
6,882,133
Dividends
9
(180,000)
(245,000)
Retained earnings carried forward
9,610,587
7,589,577

The income statement has been prepared on the basis that all operations are continuing operations.

H H Construction (Groundwork Contractors) Limited
Statement of financial position
as at 28 February 2023
28 February 2023
- 7 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
6,413,074
5,975,144
Current assets
Stocks
11
160,000
94,000
Debtors
12
5,954,275
6,518,613
Cash at bank and in hand
3,018,448
953,306
9,132,723
7,565,919
Creditors: amounts falling due within one year
13
(3,755,253)
(3,558,681)
Net current assets
5,377,470
4,007,238
Total assets less current liabilities
11,790,544
9,982,382
Creditors: amounts falling due after more than one year
14
(981,724)
(1,335,689)
Provisions for liabilities
16
(1,198,133)
(1,057,016)
Net assets
9,610,687
7,589,677
Capital and reserves
Called up share capital
18
100
100
Profit and loss reserves
9,610,587
7,589,577
Total equity
9,610,687
7,589,677
The financial statements were approved and signed by the director and authorised for issue on 18 October 2023
J Handforth
Director
Company Registration No. 06575759
H H Construction (Groundwork Contractors) Limited
Notes to the Financial Statements
for the year ended 28 February 2023
- 8 -
1
Accounting policies
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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of the exemptions available to it.

 

The financial statements of the company are consolidated in the financial statements of HH Civil Holdings Limited. These consolidated financial statements are available from its registered office.

Going concern

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

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from contracts is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and equipment
10% straight line
Fixtures and fittings
25% straight line
Computers
25% straight line
Motor vehicles
25% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

H H Construction (Groundwork Contractors) Limited
Notes to the Financial Statements (continued)
for the year ended 28 February 2023
1
Accounting policies
(continued)
- 9 -
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.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated, but not reversed, at the balance sheet date. Timing differences represent accumulated differences between the company's taxable profit and its financial profit arise primarily from the differences between the accelerated capital allowances and depreciation.

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.

Retirement benefits

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

2
Turnover

All revenue is generated through the company's principal activity in the UK.

3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(48,326)
Audit fees
17,250
13,250
Depreciation of owned tangible fixed assets
599,616
402,352
Profit on disposal of tangible fixed assets
(95,307)
(13,378)
H H Construction (Groundwork Contractors) Limited
Notes to the Financial Statements (continued)
for the year ended 28 February 2023
- 10 -
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
40
36

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,704,254
1,501,801
Social security costs
184,324
149,588
Pension costs
65,993
62,678
1,954,571
1,714,067
5
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
8,060
8,060
Company pension contributions
40,000
40,000
48,060
48,060
6
Interest receivable
2023
2022
£
£
Interest on bank deposits
118
262
Interest on corporation tax refunds
6,528
-
0
Total income
6,646
262
7
Interest payable
2023
2022
£
£
Interest on hire purchase contracts
49,943
50,818
H H Construction (Groundwork Contractors) Limited
Notes to the Financial Statements (continued)
for the year ended 28 February 2023
- 11 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
69,928
(437,813)
Adjustments in respect of prior periods
(44,249)
(804)
Total current tax
25,679
(438,617)
Deferred tax
Origination and reversal of timing differences
141,117
515,614
Adjustment in respect of prior periods
-
0
1,402
Total deferred tax
141,117
517,016
Total tax charge
166,796
78,399

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
2,367,806
1,030,843
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
449,883
195,860
Tax effect of expenses that are not deductible in determining taxable profit
5,647
-
0
Adjustments in respect of prior years
(218,786)
-
0
Group relief
-
0
2,224
Deferred tax adjustments in respect of prior years
-
0
598
Permanent enhanced allowances
(69,948)
(120,283)
Taxation charge for the year
166,796
78,399
9
Dividends
2023
2022
£
£
Interim paid
180,000
245,000
H H Construction (Groundwork Contractors) Limited
Notes to the Financial Statements (continued)
for the year ended 28 February 2023
- 12 -
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 March 2022
6,219,215
38,254
66,600
1,119,255
7,443,324
Additions
1,123,262
18,483
22,006
376,152
1,539,903
Disposals
(474,812)
-
0
(337)
(168,517)
(643,666)
At 28 February 2023
6,867,665
56,737
88,269
1,326,890
8,339,561
Depreciation and impairment
At 1 March 2022
895,769
14,839
33,234
524,338
1,468,180
Depreciation charged in the year
429,586
8,488
14,976
146,566
599,616
Eliminated in respect of disposals
(104,523)
-
0
(7)
(36,779)
(141,309)
At 28 February 2023
1,220,832
23,327
48,203
634,125
1,926,487
Carrying amount
At 28 February 2023
5,646,833
33,410
40,066
692,765
6,413,074
At 28 February 2022
5,323,446
23,415
33,366
594,917
5,975,144
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
160,000
94,000
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,530,529
1,341,348
Gross amounts owed by contract customers
3,562,532
4,385,024
Corporation tax recoverable
313,528
437,813
Amounts owed by group undertakings
125,077
108,827
VAT recoverable
334,655
132,652
Prepayments and accrued income
87,954
112,949
5,954,275
6,518,613
H H Construction (Groundwork Contractors) Limited
Notes to the Financial Statements (continued)
for the year ended 28 February 2023
- 13 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
10,000
10,000
Obligations under hire purchase
15
514,921
538,390
Trade creditors
3,072,513
2,891,607
Corporation tax
69,928
-
0
Other taxation and social security
34,606
98,051
Director's loan account
8,107
3,603
Accruals and deferred income
45,178
17,030
3,755,253
3,558,681

Obligations under hire purchase are secured on the assets to which they relate.

 

Bank loans includes a bounce back loan secured by the government.

14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
23,333
33,333
Obligations under hire purchase
15
958,391
1,302,356
981,724
1,335,689

Obligations under hire purchase are secured on the assets to which they relate.

 

Bank loans includes a bounce back loan secured by the government.

15
Hire purchase obligations
2023
2022
Future minimum payments due:
£
£
Within one year
514,921
538,390
In two to five years
958,391
1,302,356
1,473,312
1,840,746

Hire purchase payments represent rentals payable by the company for certain items of plant and machinery. No restrictions are placed on the use of the assets. The average term is 5 years. All hire purchases are on a fixed repayment basis and no arrangements have been entered into for contingent payments. Hire purchases are secured against the assets to which they relate.

 

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