Company registration number 02708682 (England and Wales)
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
COMPANY INFORMATION
Directors
Dermot McDermott
John Devin
Tim Larkin F.C.C.A
Plamen Petkov
Cormac MacCrann
David Salmon
Secretary
John Tolan F.C.A
Company number
02708682
Registered office
McDermott House
South Crescent
Cody Road Business Park
London
E16 4TL
Auditor
Gravita II LLP
30 City Road
London
EC1Y 2AB
Bankers
Santander UK PLC
Santander House
100 Ludgate Hill
London
EC4M 7RE
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 11
Directors' report
12 - 18
Independent auditor's report
19 - 21
Statement of comprehensive income
22
Statement of financial position
23
Statement of changes in equity
24
Notes to the financial statements
25 - 36
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

The Directors present the Strategic Report for the year ended 30 June 2023.

 

Principal activity

Kilnbridge Construction Services Limited, is an award-winning engineering and construction business with advanced capabilities. Operating as a Tier 2 turnkey specialist structures contractor Kilnbridge specialises in reinforced concrete construction, along with enabling and civil engineering works, temporary works design and installation, structural steelwork and complex structural alterations. Its specialist businesses provide concrete cutting and controlled demolition, hydro demolition, waste management and passive fire protection services.

 

The business is supported by in-house capabilities that underpin the delivery of its works: including Engineering and Design service which assists projects with design, detailing, buildability, methodology, preconstruction support and multi-disciplinary advice and expertise; K PLANT, which supplies, manages and maintains a comprehensive range of plant, equipment and capabilities and K FAB, its specialist structural steelwork fabricator.

 

Capital expenditure is required each year in information technology systems, plant, equipment and vehicles to ensure that its subsidiary can work more efficiently and increase turnover and profits.

Our sectors

We work on national infrastructure projects such as major transport hubs, nuclear energy and defence facilities along with heritage buildings, public buildings and commercial offices.

 

Major Infrastructure and Rail Programmes

Kilnbridge has been involved in the delivery of many structures and civil engineering packages on major infrastructure and rail schemes. Recent and current projects include Crossrail, High Speed 2 (HS2) and the Gatwick Station Upgrade Project.

 

We have also successfully delivered a wide range of projects and construction services for customers including Network Rail, and TFL on London Underground and Overground stations and their infrastructure networks.

 

We have worked on major infrastructure and rail projects nationally for many years and continue to support the ongoing investment in infrastructure expansion and improvements that are of significant importance to the nation's economic growth and environmental sustainability.

 

The key to our success continues to be our ability to develop solutions to deliver complex and challenging projects safely. As such, we continually invest in performance improvement to meet the demands of this safety critical and highly regulated environment.

 

Major Commercial and Mixed-Use Projects

Our knowledge and expertise in these sectors have created long-standing relationships with many of the UK’s leading commercial and residential property developers and their professional teams and delivery partners who value Kilnbridge as a trusted contractor.

 

Over the past 30 years, we have successfully delivered our services on some of the largest and most prestigious developments across London and the South-east. These include the major Wood Wharf Development scheme for the Canary Wharf Group and the Stratford Waterfront Development for the London Legacy Development Corporation.

 

Aviation

Kilnbridge has a diverse portfolio of projects successfully delivered on many of the UK’s major airports, most notably Heathrow, Gatwick and London City. We understand the unique issues that our clients and all stakeholders face in these highly regulated environments. We therefore work closely at all stages of the project to deliver it safely and to the highest standards with minimal disruption and environmental impact.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -

Energy

Our diverse and innovative approach has complemented the needs of this highly challenging and regulated sector. Kilnbridge completed projects in the past at Sizewell B Nuclear Power Plant and more recently the construction of the intake and outfall head structures for the new Hinkley Point C Nuclear Power Plant.

 

Trading and operating review

Turnover increased 24% year on year to £120.1m (2022: £97.3m). This performance translated into a pre-tax profit of £3.8m profit, a 92% increase from £2.0m in the previous year. We are pleased with these results, especially considering the notable impact of escalated commodity, energy, and labour costs.

 

The pre-tax profit margin grew to 3.2% from 2.0% in 2022. This impressive margin underscores our ability to navigate challenges and effectively integrate inflation recovery mechanisms within contracts. Furthermore, it reflects the successful culmination of various final account agreements, all of which were concluded by year-end.

 

Order book

Our three-year order book at FY2023 stood at £60m, providing us with a strong foundation to build on. This order book excludes turnover generated by our specialist business units, which consistently generate around £25m in turnover each year through concrete cutting, hydro demolition, fire protection, and waste management services.

 

Major projects

Most notable amongst our projects during the year and ongoing are:

 

 

 

 

 

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -

Major new contracts awarded during the year included:

 

 

 

 

Measuring our performance

 

The Directors use the following financial KPIs as a measure of the Group's performance against its defined strategic priorities.

 

 

Year to

Year to

Variance

 

30/06/2023

30/06/2022

 

Turnover

£120.1m

£97.3m

24%

PBT

£3.8m

£2.0m

92%

Pre-tax profit margin

3.2%

2.0%

 

EBITDA

£4.1m

£2.6m

59%

Cash at Bank

£7.4m

£8.5m

-14%

 

Employee-Owned Trust "EOT" bonus scheme

 

Under the EOT bonus scheme all staff members who have served for six months or more are entitled to join the scheme, whereby all profits are divided equally amongst staff regardless of seniority or length of service. This profit-related bonus is a key recruitment tool for the Group in a highly competitive labour market. It is designed to attract and retain the best talent in a highly competitive labour market and is based on profit distribution after debt repayments.

 

We were very pleased to distribute our second EOT bonus shortly after the year end, through which every qualifying member of staff received £862 (FY2022: £545), distributing a total of £310,000 (FY2022: £160,000) under the scheme to qualifying staff members. The pay-out is in addition to other incentive and bonus schemes in place.

 

For more information on employee involvement, please see page 9.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -
Mitigating our risks

The Board has overall responsibility for identifying, managing and mitigating the Group's risks. The Board assesses the Group's exposure to its principal risks on a continuous basis, with day-to-day risk managed under delegated authorities by the operation leaders of the specialist business units.

 

The Group has robust risk controls and policies that are integrated at all levels of the business.

 

The principal risks that the Board believe are the most likely to affect the business operations, impact strategy, financial performance, and influence the Group's reputation are set out below.

 

Risk

Mitigating controls

Significant health, safety or environmental incident

Due to the nature of our work, there is the potential to cause significant harm to our employees, our business partners or members of the public, or to damage the environment. We are committed to safeguarding our people and protecting the environment wherever we operate.

 

  • Operating an integrated Health, Safety, Quality and Environment Management system, which is accredited to ISO 45001, ISO 9001 and ISO 14001 by an independent UKAS accredited third party.

 

  • Providing our own bespoke health and safety behavioural programme, Safety in Action. It has been delivered to all personnel, at all levels, within the business since 2015.

 

  • Requiring staff to report and log incidents immediately through a cloud-based safety reporting and observation App.

 

  • Discussing any incidents reported at weekly senior management meetings to identify any failings and instigating follow up actions.

 

  • Providing regular training to all staff to identify potential health and safety risks and ensure that Group policies and procedures are well understood.

 

  • Working with authorities and taking appropriate action as required.

 

Irrecoverable cost over-runs on individual contracts.

Delivering on our contractual obligations on time and on budget, and meeting and reporting against agreed service levels has a strong impact on our financial performance, reputation, and on our ability to win business.

The risk is increased during high inflationary periods as we are currently experiencing.

 

 

 

  • Applying pre-contractual procedures, to ensure that bids and tenders are priced appropriately.

 

  • Building inflation recovery mechanisms into contracts.

 

  • Employing good management procedures.

 

  • Maintaining strong lines of communication with clients throughout the duration of a project.

 

  • Rigorously pursuing contractual entitlements.

 

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 5 -

Risk

Mitigating controls

Cancellation or delays to major contracts

  • Monitoring government policy

 

  • Manage relationships with clients to manage work load or works programmes

 

  • Mixed work force of PAYEs and contractors to provide flexibility in cost base

 

  • Maintaining a strong balance sheet

 

  • Maintain relationships with suppliers to secure best prices in the event of delays

Safety regulation changes

The Building Safety Act has the potential to allow clients to make claims against historic works and that may require remedial action.

 

  • Monitoring legislation changes

 

  • Identifying current and historic projects that may be affected

 

  • Making provision for remedial works as required

 

  • Working closely with clients to resolve issues

Losing clients to cheaper competition.

Our industry faces strong competition, particularly for general construction works and non-specialist skills, which can lead to price-pressure from competitors.

 

  • Continuous monitoring and reviewing of the performance of our clients and competitors to ensure the quality and value of service that we provide remains competitive.

 

  • Continuous improvement and refinement of the bid and tender process.

 

  • Targeting business that requires specialist skills and infrastructure projects, which have higher barriers to entry and face less competition.

 

  • Driving improvement of our people and processes with our “Right First Time” culture to ensure our position and reputation as a leading engineering business.

 

Reputational management

Maintaining our reputation is vital to the success of our business. A loss in confidence from clients and our sector would affect our ability to win business. This can, in turn, adversely affect our financial performance and growth prospects.

 

  • Applying standard procedures and strong management to avoid reputational damage arising from failure to maintain the high quality

of service for which the group is recognised.

 

  • Fostering a positive working relationship underpinned by respect, trust and loyalty with our employees, clients and suppliers.

 

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 6 -

Risk

Mitigating controls

Price inflation

Inflationary pressures have an impact on input prices including labour, materials and energy.

 

  • Inflation recovery mechanisms are built into

contracts.

 

  • Front-line staff costs are directly related to

client contracts and are covered by price

adjustment factors.

 

  • Head office energy contracts are fixed

until September 2024.

 

  • The procurement department is responsible

for managing suppliers. During the year

the department focused on

  • bulk purchasing where possible to

benefit from preferential price, and

  • forward purchasing materials

and increasing the amount of stock held

in order to mitigate future price increases.

Increased competition for skilled labour

An ongoing shortage of skilled and semi-skilled labour in the construction industry has the potential to impact on the delivery of our contractual obligations.

 

  • Providing training and development to our

own staff to upskill employees and fill

roles internally

 

  • Sponsoring apprentices to create a

new generation of skilled workers

 

  • Reviewing and benchmarking our pay and

benefits packages to make them more

competitive

 

  • All staff who work at Kilnbridge join

the employee owners trust and are eligible

for a share of profit-related bonuses.

 

  • Using skilled worker licences to recruit

from overseas where required.

Financial controls

Failure to impose strong financial controls may result in a heightened risk of error in reporting, inaccurate financial forecasting, bad debts, a lack of liquidity, exposure to uninsured losses, and exposure to liabilities arising from inter-company guarantees.

 

  • Operating a central treasury function

with extensive control over working capital and

cash management.

 

  • Conducting monthly cost value

reconciliations on all projects to monitor

and measure expenditures against budgets.

 

  • Maintaining relationships with banks,

together with the continuing support of

its holding company, ensures the Group

has adequate liquidity and cash flow

for foreseeable needs.

 

  • Using the advice of insurance brokers, the

Group believes it has adequate

insurance in respect of foreseeable

and insurable risks.

  • Careful management and monitoring

of operations, with support from its banks, aims

to minimise the risk of exposure to liabilities

arising from inter-Company guarantees.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 7 -
In addition to the above, the Board would like to highlight an additional matter:
HSE Investigation
Following a fatal workplace incident on the Gatwick Rail Station project at the start of FY2023, the Company continues to work with the authorities and the client in the ongoing investigation to gain a complete understanding of the events that took place. the Company will continue to cooperate with the authorities, taking appropriate action as required.
Business Transformation - Vision 2025

The Group has made considerable progress in its business transformation programme, Vision 2025, since its launch in early 2022. The programme has involved all staff at all levels to shape the business and meet its vision.

 

“To deliver construction projects and services that have an enduring legacy on the UK’s infrastructure and built environment, transforming the way people live and work.”

 

The key priorities of Vision 2025 were to:

 

 

The business has made good progress across key financial indicators and has made improvement to internal communication, IT, and HR including recruitment, training and onboarding programmes, senior leadership development and succession planning. Internal reorganisation initiatives have enhanced operational efficiency and overhead effectiveness. Examples include:

 

 

One of the priorities for Vision 2025 was to set a long-term Business Strategy to replace Vision 2025 and set the tone for long-term, sustainable growth. This exercise began in 2023 involving the Board and senior leadership team in light of the current opportunities and risks. The business strategy was finalised post year-end.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
Section 172 Statement

Engaging with our stakeholders

 

The Board seeks to understand the expectations and interests of the Group's stakeholders, and to reflect these in the choices it makes in its efforts towards the long-term success of the business.

 

Engagement with our stakeholders, including employees, clients, contractors, suppliers, and banks forms a central part in our decision-making process. The Board tailors its engagement approach to each stakeholder group in order to foster effective, sustainable and mutually beneficial relationships.

 

The Board’s understanding of its stakeholder interests is taken into consideration within Boardroom discussions in relation to strategy and planning. The Board considers how stakeholder expectations may be addressed and how the Board’s decisions may impact stakeholder interests. Stakeholder expectations are determined through information gathered and provided by management and by direct engagement. The priority of each stakeholder group may increase or decrease, depending on the impact a decision may have on a particular stakeholder group.

 

This section of the report serves as our Section 172 Statement and should be read in conjunction with the Strategic Report. Section 172 of the Companies Act 2006 requires the Directors to act in a way that they consider, in good faith, would most likely promote the success of the Group for the benefit of its members as a whole, taking into account the factors listed in Section 172.

 

The table below set out the key stakeholder groups, their interests and how Kilnbridge has engaged with them over the reporting period.

 

Key decisions made in FY2023

  1. Review of business strategy – the Board made the decision to review the Group's strategy in light of the current opportunities and risks. The business strategy was finalised post year-end.

  2. Appointment of a full-time HR Director – to set the people strategy, manage training and development and recruitment.

  3. Appointment of a Head of Communications – appointed post year-end to manage internal and external communications with key stakeholders.

  4. Centralised procurement and appointed a Head of Procurement – to manage suppliers and procurement.

  5. Appointment of a Head of Sustainability – to refresh and drive the Group's sustainability agenda.

 

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -

Employees

 

Our employees are our primary asset, and the Board recognises that our employees are the key resource which enables delivery of the Group's vision and goals.

 

Their interests

  • Training, development and career

prospects

  • Health and safety

  • Working conditions

  • Fair pay and employee benefits

  • Diversity and inclusion

  • Human rights and modern slavery

 

How we engage

  • Employee benefits packages

  • Ongoing training and development

  • Formulation of career paths

  • Freely available Group policies and

procedures

  • Staff engagement surveys

  • Personal development reviews and work

appraisals

  • Vision 2025 change

management programme involving all

staff in the Group, including workshops

to identify key priorities, planning,

and regular meetings to provide updates on

progress and achievements.

 

 

Clients

 

The Board recognises that a strong reputation based around responsibility, integrity, teamwork and excellence is a vital part of the Group's growth.

 

Their interests

  • Safety and Wellbeing

  • Delivery of projects on time and within

budget

  • Working with organisations whose goals

and values are aligned to their own

  • Close working relationships based on trust

and quality of delivery

 

How we engage

  • Day-to-day working relationships and

project management

  • Progress reports

  • Client meetings

  • Marketing and communications

  • Group website

 

 

Suppliers and contractors

 

Our contractors provide additional resources and specialist skills when required to complete projects.

 

Their interests

  • Terms and conditions of contracts

  • Health and safety

  • Working conditions

  • Credit ratings

  • Prompt payment to agreed terms

 

How we engage

  • Seeking comparable business behaviours

to our own by applying the same values,

ethics and policies relevant to our own

staff

  • Ensuring prompt payment of invoices

  • Regular day-to-day communication by our

management team

 

 

 

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -

Banks and debt providers

 

The Group has access to lines of credit in order to satisfy working capital requirements with banks and HP providers.

 

Their interests

  • Review of financial performance, balance

sheet, net asset base, gearing and interest

cover

  • High standards of corporate governance

  • Ethical behaviour

  • Awareness of strategy and potential risks

How we engage

  • Regular meetings

  • Submission of management information

and reporting.

  • Presentations

  • Communication through briefings with

management

  • Annual report

  • Group website

 

 

Community and environment

 

The Group is committed to its social responsibility by actively embracing the communities in which it operates as well as the ongoing protection and enhancement of the environment.

 

Their interests

  • Sustainable and responsible business

  • Regulatory compliance

  • Health and safety

  • Protection and enhancement of the

environment

  • Commitment towards net-zero carbon

  • Positive impact on society, resulting in

mutually beneficial relationships

How we engage

  • Working with clients, staff, or with locally

supported bodies to provide charitable

support and assistance to local

communities.

  • Providing STEM ambassadors to schools

and colleges.

  • ISO 14001 Environmental Management

System accreditation.

  • Partners and Gold membership of the Supply Chain Sustainability School

  • Independently audited systems for waste

management.

  • Independently assessed energy and

carbon management systems.

 

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -

Outlook and future prospects

 

We started the year with an order book of approximately £60m through to 2025, providing us with a strong foundation. This order book excludes the turnover generated by our specialist business units, which consistently generate around £25m each year through concrete cutting, fire protection, and waste management services.

 

The cancellation of Phase 2 of HS2, announced in October 2023, put an immediate stop to tenders under development by the pre-construction team, although HS2 Phase 1 contracts will continue to FY2025. This announcement led the Board to evaluate what impact the HS2 cancellation would have on Kilnbridge’s future prospects, balancing this against other national infrastructure construction opportunities available.

 

The Board concluded that whilst the cancellation of HS2 is disappointing, there remain significant opportunities in major national infrastructure and energy projects. Our sector continues to benefit from a planned and projected £700-£775b of expected public and private investment over the next decade. The majority of this investment will be on transport, energy, utilities, and social infrastructure and are all areas where Kilnbridge has a strong track record and an established client base.

 

As a group that has successfully delivered complex projects, the Board is confident that the Group remains well-positioned to participate in a number of these schemes over the coming years. To target these opportunities we began developing our Group Strategy which will sit alongside the Vision 2025 business transformation programme. This strategy will bring clarity to the type and scale of projects we will pursue and how we will go about delivering them.

 

We continue to target approximately 80% of revenues towards infrastructure and energy with the remainder delivering commercial projects such as complex structural alterations.

 

While inflation stabilises we continue to maintain strong cost control measures and forward procurement planning to secure the best prices for materials and major plant investments.

 

In summary, we are focused on our core business activities and remain well-positioned to participate in major projects scheduled to take place in the UK over the coming years.

On behalf of the board

Dermot McDermott
Director
28 March 2024
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 12 -

The Directors present their annual report and financial statements for the year ended 30 June 2023.

Results and dividends

The results for the year are set out on page 22.

Ordinary dividends were paid amounting to £6,000,000 (2022: £2,240,000). The Directors do not recommend payment of a further dividend.

Directors

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

Dermot McDermott
John Devin
Tim Larkin F.C.C.A
Plamen Petkov
Cormac MacCrann
David Salmon

ISO 4001 certification

The business has successfully continued to maintain its accreditation to the ISO 45001 standard. There were no non-conformances identified during the two visits by our UKAS accredited third party auditors during the reporting period.

The Integrated Management System and our business operations have all been successfully audited against the Achilles Utility Vendors Database (UVDB) & Building Confidence Schemes as well as Rail Industry Safety Qualification Scheme (RISQS) to demonstrate compliance across the Utilities, Construction and Rail Sectors

 

Sustainability report - growing our business responsibly

Operating in a responsible manner is integral to our vision to create an enduring legacy, which defines us as a sustainable business providing the best service to our clients.

Sustainability sits at the forefront of the business agenda, and our strategy is aligned to addressing the key risks and expectations of the business, our workforce, and its stakeholders, with the aim of delivering and achieving sustainable growth, economically, environmentally, and socially.

We recognise that our people are our most valuable asset and, therefore, the protection of their health, safety and wellbeing extends beyond our moral and legal requirements, ensuring that they are fit for work. In addition, we acknowledge that by tackling climate change and reducing emissions, we will help to safeguard the health and wellbeing of our people and the environment both now and for future generations.

We are very proud to have won several prestigious industry awards, which acknowledge our achievements in delivering an excellent service to our clients and rewards the hard work of our dedicated and professional employees.

Our main focus remains linked to our vision and values and we are dedicated to embedding these into every aspect of our day-to-day operations and culture.

During the period we reviewed our sustainability strategy to reflect the continuing development and increasing importance of operating in a environmentally and socially responsible manner. These have been linked to the UN Sustainable Development Goals. During this exercise we expanded and set new targets to focus our activities and ensure that we make meaningful and impactful progress in our sustainability objectives. We have published a separate sustainability report for the first time, of which a summary is included below.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 13 -

Kilnbridge Sustainability Strategy – Shared goals pursued together

Strategic pillar

Our priorities

Alignment to UN Sustainable Development Goals

STRONGER COMMUNITIES

  •     Enhanced social outcome

  •     Responsible ethical sourcing

11

12

17

Sustainable cities and communities

Responsible consumption and production

Partnerships for the goals

OUTSTANDING WORKPLACES

  •     Thrive together

  •     Foster inclusive change

3

5

8

9

10

Good health and well-being

Gender equality

Decent work and economic growth

Industry, innovation and infrastructure

Reduced inequalities

ENHANCING THE ENVIRONMENT

  •     Accelerated Net Zero transition

  •     Pursue circular outcomes

13

15

Climate action

Life on land

 

 

Stronger communities

 

Enhanced social outcome

 

We aspire to leave a lasting legacy on our local communities, supporting and partnering with local charities to provide opportunities for local people. In FY2023, the Group donated £71,283 to local charities and raised a further £4,474.

 

A paid volunteering day initiative was introduced during the year, allowing all PAYE employees, both full-time and part-time, to lend their support to worthwhile causes. During the year Kilnbridge supported 100 volunteer days.

 

We are proud to have our own STEM ambassadors that are working with schools and colleges providing advice on the full range of construction careers, promoting our industry to find suitable candidates for future placements or employment. In total we reached out to 2,872 students. We also offered work experience to 14 individuals, and a total of 16 apprenticeships. Finally, we found jobs for 17 long-term unemployed people across our projects.

 

Responsible ethical sourcing

 

The sustainable sourcing of materials and products is key to delivering our procurement policy. Our supplier management system aligns us to the requirements of PAS 91 and the Common Assessment Standard. This is a “live” system which allows us to select which supplier is best placed to be used on a particular project, enabling us to deliver the most sustainable solution to our clients.

 

We acknowledge the importance of local procurement and responsible sourcing of materials required to meet our own and stakeholders’ expectations. 99% of the concrete used was responsibly sourced, and all timber and timber products were certified by either FSC or PEFC. Additionally, 67% of the reinforcement steel utilised was responsibly sourced, with the remaining portion procured through suppliers adhering to ISO 14001 standards.

 

Our subcontractors are fully vetted, selected and onboarded in accordance with our procurement procedures. We believe that in this fully collaborative, respectful, and open approach with our supply chain members, very little or nothing stands in the way of integrating them as fully effective members of our team.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 14 -

Outstanding workplaces

 

Thrive together

 

We encourage and support our people’s continuous personal and professional development and recognise that we operate in a highly competitive labour market and have strategies in place to encourage staff retention and develop our own talent from within.

 

In 2023, we enhanced our onboarding programme and extended our compliance inductions to include all staff across all sites. We also introduced a buddy scheme to support new joiners and apprentices in their first 90 days with us. We will be training new buddies in their responsibilities and how they can help smooth a new joiner’s entry into Kilnbridge. 

 

A key target is to see an increase in female representation at all levels of the business year on year, as we acknowledge that at Kilnbridge this sits below the industry norm of 14%. This goal was achieved at management and senior levels of the organisation with the recruitment of a permanent HR Director who sits on the Board, a Head of Communications, and a Head of Sustainability, Safety & Wellbeing Manager, Lifting Manager and two Senior Project Leaders.

 

Foster inclusive change

 

Kilnbridge is an equal opportunities employer committed to creating a diverse workplace where everyone is treated fairly and with respect.

 

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the Group continues and that the appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

 

To support our HR strategy, we have trained and appointed four FIRs ambassadors, five STEM ambassadors, and continue to provide EDI training to the workforce.

 

Enhancing the environment

We are committed to the ongoing protection and enhancement of the environment. This is achieved through education, knowledge, and practical applications.

Our policy and ISO 14001 accredited Environmental Management System seeks to minimise the negative environmental impacts of our operations through the efficient use of resources, energy and carbon management, and creating processes to deliver our services in a more sustainable way.

 

We are proud to be Partners and have maintained Gold membership of the Supply Chain Sustainability School, allowing us to collaborate with like-minded businesses in helping shape the sustainable agenda both within the industry and our supply chain

 

Accelerated net zero transition

As a group, we are actively working towards achieving a better future with a lower overall impact on the environment. Our immediate focus is on energy efficiency, investing in new carbon reducing technologies and waste reduction. With each project, product or service delivered we are becoming more and more environmentally conscious and collaborative with clients and industry partners who share our commitments. 

We are a Carbon Neutral Group, a Co2nstruct Zero Business Champion and have recently joined The Climate Group’s Concrete Zero and Steel Zero groups as part of our commitment to achieving Net Zero.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 15 -

We have established a near-term Science Based Targets Initiative (SBTi) target, aiming for a 46.2% reduction in Scope 1 & 2 greenhouse gas (GHG) emissions by 2030. Additionally, our target entails a 90% reduction in Scopes 1, 2, and 3 GHG emissions by 2040, based on the FY22 as the baseline year. At the end of 2023 we submitted our application to SBTi for our targets to be validated. 

We continue to invest in new plant and equipment technologies to meet the needs of the business’s innovative construction methods and to improve project performance in terms of sustainability, programme, and cost. This includes, use of electric plant to reduce CO2 emissions on our project sites, inclusion of electric vehicles in our group car fleet and using REGO-backed renewable energy sources.

In 2023, we set a Carbon Reduction Plan (PPN 06/21) which aims to reduce our carbon emission both in absolute terms and intensity. 

Kilnbridge’s carbon intensity has reduced by 30% since FY2021 but rose 21% between FY2022 and FY2023. The main reason for this is the Government’s reform of rebated fuels entitlement that came into effect from April 2022, which resulted in the price of HVO fuel averaging 10% to 20% more than standard diesel, impacting our direct impact carbon emissions data.

Our Head Office, Consolidation Centre (K PLANT) and the Northampton Steel Fabrication (K FAB) facilities use renewable energy. For the entire business in FY22, 91% of electricity consumption is derived from renewable sources. Furthermore, on our sites, 26% of the energy consumption is attributed to renewable diesel, specifically HVO D+. 

 

GHG Emissions Data

2023

2022

2021

 

 

 

 

Total energy consumed (kWh)

9,615,290

8,475,654

7,248,715

 

 

 

 

Scope 1 emissions from gas, transport and construction site fuel use (tCO2e)

2,088.54

1,311.32

1,755.26

Scope 2 emissions from electricity use (tCO2e)

17.96

115.75

117.03

Scope 3 emissions from vehicle business travel (tCO2e)

39.67

23.70

18.53

Total gross tCO2e

2,146.17

1,450.77

1,890.82

 

 

 

 

Intensity ratio: Tonnes CO2e per £m turnover

18.02

14.89

25.66

 

We have applied the most relevant emission factors sourced from DEFRA’s 2021 UK Greenhouse Gas (‘GHG’) Conversion Factors for Group Reporting.

 

Pursue circular outcomes

 

We achieve a lower overall impact on the environment by pursuing circular economy principles. We adopt recycle, reuse and repurpose approaches.

 

Our Waste Management Facility has successfully been audited against the requirements of PAS 402; which provides a standardised framework for the demonstration of performance against key areas for waste contractors.

 

Kilnbridge Waste Management Facility diverts 100% of waste from landfill and feeds it back into industry for reuse, ensuring the maximum use of resources whilst contributing towards a circular economy. The implementation of a trade waste collection software has enabled us to deliver an online customer portal with full electronic duty of care documentation; which improves workflows both within the business and for our customers whilst providing a sustainable and innovative solution.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -

Health, safety and wellbeing

Since its inception in 2015, our “Safety in Actionstrategy and behavioural programme has contributed to an improving and maturing culture for health, safety, and wellbeing. This is underpinned by our values and by working to a set of golden rules, to help create an environment where everyone understands the behaviours expected, the health and safety requirements for their task and where everyone believes accidents, incidents and ill health are preventable.

 

Leading indicators for our cultural development focused on improvements in leadership, confidence in competence, controls, health, and wellbeing. There has been a total of 101 Leadership Engagement Tours carried out during the reporting period, leadership representation at all our bi-annual Safety and Wellbeing stand-downs, with delivery of designated topics such as work at height, dust, musculoskeletal disorders, mental health & wellbeing: together with the development of supervisor assessment standards and the management of lifting operations.

 

Our Reportable Accident Frequency Rate during the year was 0.09, (2022: nil) 2021 (nil). Regrettably, shortly after the year's commencement, one of our colleagues lost their life in a workplace incident on the Gatwick Rail Station project. We are deeply saddened by this tragic occurrence and are working closely with the authorities and our client to conduct a thorough investigation to gain a complete understanding of the events that took place. Our utmost priority is to offer support to the bereaved family and ensure the wellbeing of our colleagues. This incident reminds us that, despite our unwavering emphasis on safety, the construction industry is still inherently hazardous. The Board is committed to driving improvements across the business to ensure the safety and protection of all who work within our operations

People

Health surveillance and medicals continue to be delivered by our approved Occupational Health Providers in line with the requirement of our clients. Safety critical medicals and drug and alcohol screening for workers on rail projects are also being undertaken in accordance with Network Rail requirements.

 

The mental health of our workforce and their families has never been more important. In line with our “Safety in Action” strategy, the business continues to provide Mental Health Awareness training for our workforce; to end the stigma surrounding mental health.

 

Modern slavery

 

We operate a zero-tolerance approach to modern slavery with our Anti-Slavery and Human Trafficking policy consistent with the requirements of the Modern Slavery Act 2015.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
Statement of directors' responsibilities

 

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.

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.

Auditor

 

The auditor, Gravita II 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 auditor of the Company 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 auditor of the company is aware of that information.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
Going concern

 

The financial information for the year to 30th June 2023 has been prepared assuming that the Company will continue as a going concern.

 

Under the going concern assumption, the Board of Directors is required to consider the Company's ability to continue as a going concern over a period of at least 12 months from the date of approval of the financial statements.

 

The Directors are confident that the Company can continue to trade successfully for the foreseeable future because we have a satisfactory order book from well-established clients, good liquidity and consistent profits.

 

 

On behalf of the board
Dermot McDermott
Director
28 March 2024
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KILNBRIDGE CONSTRUCTION SERVICES LIMITED
- 19 -
Opinion

We have audited the financial statements of Kilnbridge Construction Services Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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. However, because not all future events or conditions can be predicted this statement is not a guarantee as to the company's ability to continue as a going concern.

 

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:

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KILNBRIDGE CONSTRUCTION SERVICES LIMITED
- 20 -
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.

 

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. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

The extent to which the audit was considered capable of detecting irregularities including fraud.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KILNBRIDGE CONSTRUCTION SERVICES LIMITED
- 21 -

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment by for example forgery, or intentional misrepresentation or through collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: 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 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.

Ian Hughes ACA
Senior Statutory Auditor
For and on behalf of Gravita II LLP
29 March 2024
Chartered Accountants
Statutory Auditor
30 City Road
London
EC1Y 2AB
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
2023
2022
Notes
£
£
Turnover
3
120,099,133
97,260,214
Cost of sales
(112,254,173)
(92,108,920)
Gross profit
7,844,960
5,151,294
Administrative expenses
(4,119,359)
(3,177,316)
Other operating income
49,466
11,574
Operating profit
4
3,775,067
1,985,552
Interest receivable and similar income
8
52,282
5,441
Interest payable and similar expenses
9
(2,237)
(464)
Profit before taxation
3,825,112
1,990,529
Tax on profit
10
2,321,254
(473,452)
Profit for the financial year
6,146,366
1,517,077

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

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
30 June 2023
- 23 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
366,984
608,084
Current assets
Stocks
13
351,592
357,371
Debtors
14
26,221,943
26,960,240
Cash at bank and in hand
7,354,624
8,522,311
33,928,159
35,839,922
Creditors: amounts falling due within one year
15
(18,429,213)
(20,728,442)
Net current assets
15,498,946
15,111,480
Total assets less current liabilities
15,865,930
15,719,564
Provisions for liabilities
Deferred tax liability
16
28,821
28,821
(28,821)
(28,821)
Net assets
15,837,109
15,690,743
Capital and reserves
Called up share capital
18
5,000
5,000
Profit and loss reserves
19
15,832,109
15,685,743
Total equity
15,837,109
15,690,743
The financial statements were approved by the board of directors and authorised for issue on 28 March 2024 and are signed on its behalf by:
Dermot McDermott
Director
Company Registration No. 02708682
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2021
5,000
14,168,666
14,173,666
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
1,517,077
1,517,077
Balance at 30 June 2022
5,000
15,685,743
15,690,743
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
6,146,366
6,146,366
Dividends
11
-
(6,000,000)
(6,000,000)
Balance at 30 June 2023
5,000
15,832,109
15,837,109
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 25 -
1
Accounting policies
Company information

Kilnbridge Construction Services Limited ("the company") is a company limited by shares incorporated in England and Wales. The registered office is McDermott House, South Crescent, Cody Road Business Park, London, E16 4TL.

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.

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 exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Kilnbridge Group Limited. These consolidated financial statements are available from its registered office, McDermott House, South Crescent, Cody Road Business Park, London, E16 4TL.

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

The company recognises revenue when it transfers control over the product or service to its client. Revenue is measured at the fair value of the consideration received or receivable, net of sales tax.

 

Revenue recognition is based on the satisfaction of our performance obligations which are satisfied over the duration of a contract.  Therefore, contract revenue and costs are recognised by reference to the stage of completion of each contract, as measured by the proportion of total costs at the balance sheet date to the total expected costs for the contract.

 

Revenue from services and long term contracts is recognised by reference to the stage of completion of the contract, as set out in the accounting policy for construction contracts.

 

Where the consideration is not specified in the contract with a customer and is subject to variability, the company estimates the amount of consideration to be received from its clients.

 

Revenue is only recognised to the extent that it is highly probable and that a significant reversal in the amount of cumulative revenue will not occur.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 26 -

Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

1.4
Tangible fixed assets

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

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

Leasehold improvements
over the life of the lease
Plant and machinery
50% on cost per year
Fixtures and fittings
over the life of the lease
Computer equipment
50% on cost per year

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 in the income statement.

The assets' residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 27 -
1.6
Stock

Stock is stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises of 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.

Cost of raw materials is determined on a first in first out basis.

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.

1.7
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 costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.

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.

1.8
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand and at bank.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 28 -
Other financial assets

Other financial assets are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 and loans from fellow group companies, 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.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 29 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
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 liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
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.

1.13
Retirement benefits

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

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 30 -
1.14
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.16

Research and development

The company incurs expenditure on its research and development in order to solve problems in connection with the work for which it contracts or seeks to win. This includes solving technical problems, reducing risk and seeking to provide effective and efficient solutions to problems. Where higher tax relief is available, this is accounted for when quantified with a degree of confidence.

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.

Key sources of estimation uncertainty
Construction contracts

The company recognises revenue and costs by reference to stage of completion of the contract.  When assessing the value of construction contracts, management considers factors including final projected contract value, predicated final costs to complete, their assessment whether its receipt is probable and their historical experience

 

Estimates of the final outcome on each contract may include cost contingencies to take account of specific risks within each contract.  Cost contingencies are reviewed on a regular basis throughout the life of the contract and are adjusted where appropriate.  However, the nature of the risks on projects are such that they often cannot be resolved until the end of the project and therefore may not reverse until the end of the project. The estimated final outcomes on projects are continuously reviewed and adjustments are made where necessary.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 31 -
3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Construction, civil engineering and related services
120,099,133
97,260,214

The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.

4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
450
-
0
Government grants
-
(7,001)
Depreciation of owned tangible fixed assets
290,183
578,973
5
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
24,075
27,500
For other services
Taxation compliance services
203,575
6,319
Accountancy
5,732
-
0
209,307
6,319
6
Employees

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

2023
2022
Number
Number
Technical and Management
99
91
Site based
254
235
Total
353
326
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
6
Employees
(Continued)
- 32 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
25,662,995
23,226,482
Social security costs
2,488,177
2,263,355
Pension costs
455,496
324,689
28,606,668
25,814,526
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
1,131,789
1,130,850
Company pension contributions to defined contribution schemes
22,027
15,963
1,153,816
1,146,813

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
311,507
314,087
Company pension contributions to defined contribution schemes
1,321
1,321
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
52,282
5,441
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
1,191
464
Other interest
1,046
-
0
2,237
464
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 33 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
836,483
473,452
Other tax reliefs
(3,157,737)
-
0
Total current tax
(2,321,254)
473,452

The actual (credit)/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
3,825,112
1,990,529
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
784,148
378,201
Tax effect of expenses that are not deductible in determining taxable profit
232,361
7,397
Permanent capital allowances in excess of depreciation
197,231
97,002
Research and development tax credit
(3,481,190)
-
0
Lease asset deduction
2,321
-
0
Other
(56,125)
(9,148)
Taxation (credit)/charge for the year
(2,321,254)
473,452
11
Dividends
2023
2022
£
£
Interim paid
6,000,000
-
0
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 34 -
12
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures and fittings
Computer equipment
Total
£
£
£
£
£
Cost
At 1 July 2022
2,511,029
33,858
436,953
51,771
3,033,611
Additions
-
0
-
0
32,833
16,250
49,083
At 30 June 2023
2,511,029
33,858
469,786
68,021
3,082,694
Depreciation and impairment
At 1 July 2022
2,044,688
29,615
304,222
47,002
2,425,527
Depreciation charged in the year
201,178
4,243
79,316
5,446
290,183
At 30 June 2023
2,245,866
33,858
383,538
52,448
2,715,710
Carrying amount
At 30 June 2023
265,163
-
0
86,248
15,573
366,984
At 30 June 2022
466,341
4,243
132,731
4,769
608,084
13
Stocks
2023
2022
£
£
Raw materials and consumables
351,592
357,371

 

14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,682,396
1,480,736
Gross amounts owed by contract customers
14,789,943
14,217,454
Corporation tax recoverable
2,597,512
-
0
Amounts owed by group undertakings
3,219,110
8,318,220
Other debtors
1,496,467
1,445,013
Prepayments and accrued income
1,436,515
1,498,817
26,221,943
26,960,240
KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 35 -
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
5,875,173
12,379,617
Corporation tax
10,063
240,016
Other taxation and social security
852,831
702,053
Other creditors
199,822
231,242
Accruals and deferred income
11,491,324
7,175,514
18,429,213
20,728,442

The group bank facilities are secured by a fixed and floating charge over the assets of the company and group by intercompany guarantees.

16
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
28,821
28,821
There were no deferred tax movements in the year.
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
455,496
324,689

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.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
5000 Ordinary of £1 each
5,000
5,000
5,000
5,000
19
Reserves
Profit and loss reserves

Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid.

KILNBRIDGE CONSTRUCTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 36 -
20
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
761,157
775,266
Between two and five years
1,394,345
2,626,379
In over five years
-
0
34,167
2,155,502
3,435,812

 

21
Financial commitments, guarantees and contingent liabilities

As at 30 June 2023, the company has performance bonds in place totalling £316,659 (2022: £829,147).

22
Related party transactions
Transactions with related parties

The company has taken advantage of the exemption available in FRS 102 section 33 "Related party disclosures" whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.

The company occupies properties comprising its head office, manufacturing base and plant depot which are owned by the Directors Pension Fund at a current rental based on an independent professional valuation. A director and close family member are trustees and beneficiaries of that fund. The total rent payment was £716,950 (2022: £718,742).

23
Ultimate controlling party

The immediate parent undertaking is Kilnbridge Group Limited. The ultimate parent undertaking is NG Investments Limited.

 

The smallest group to consolidate these financial statements is that headed by Kilnbridge Group Limited. Copies of the accounts can be obtained from its registered office, McDermott House, South Crescent, Cody Road Business Park, London, E16 4TL.

 

The largest group to consolidate these financial statements is that headed by NG Investments Limited. Copies of the accounts can be obtained from its registered office, McDermott House, South Crescent, Cody Road Business Park, London, E16 4TL.

 

The ultimate controlling party is Kilnbridge Trustees Limited on behalf of the Kilnbridge Employee Ownership Trust.

2023-06-302022-07-01falseCCH SoftwareCCH Accounts Production 2023.300No description of principal activityDermot McDermottJohn DevinTim Larkin F.C.C.APlamen PetkovCormac MacCrannDavid SalmonJ Tolan F.C.A.false027086822022-07-012023-06-3002708682bus:Director12022-07-012023-06-3002708682bus:Director22022-07-012023-06-3002708682bus:Director32022-07-012023-06-3002708682bus:Director42022-07-012023-06-3002708682bus:Director52022-07-012023-06-3002708682bus:Director62022-07-012023-06-3002708682bus:CompanySecretary12022-07-012023-06-3002708682bus:RegisteredOffice2022-07-012023-06-30027086822023-06-30027086822021-07-012022-06-3002708682core:RetainedEarningsAccumulatedLosses2021-07-012022-06-3002708682core:RetainedEarningsAccumulatedLosses2022-07-012023-06-30027086822022-06-3002708682core:LeaseholdImprovements2023-06-3002708682core:PlantMachinery2023-06-3002708682core:FurnitureFittings2023-06-3002708682core:ComputerEquipment2023-06-3002708682core:LeaseholdImprovements2022-06-3002708682core:PlantMachinery2022-06-3002708682core:FurnitureFittings2022-06-3002708682core:ComputerEquipment2022-06-3002708682core:CurrentFinancialInstrumentscore:WithinOneYear2023-06-3002708682core:CurrentFinancialInstrumentscore:WithinOneYear2022-06-3002708682core:CurrentFinancialInstruments2023-06-3002708682core:CurrentFinancialInstruments2022-06-3002708682core:ShareCapital2023-06-3002708682core:ShareCapital2022-06-3002708682core:RetainedEarningsAccumulatedLosses2023-06-3002708682core:RetainedEarningsAccumulatedLosses2022-06-3002708682core:ShareCapital2021-06-3002708682core:RetainedEarningsAccumulatedLosses2021-06-3002708682core:FurnitureFittings2022-07-012023-06-3002708682core:PlantMachinery2022-07-012023-06-3002708682core:ComputerEquipment2022-07-012023-06-300270868212022-07-012023-06-300270868212021-07-012022-06-3002708682core:UKTax2022-07-012023-06-3002708682core:UKTax2021-07-012022-06-300270868222022-07-012023-06-300270868222021-07-012022-06-3002708682core:LeaseholdImprovements2022-06-3002708682core:PlantMachinery2022-06-3002708682core:FurnitureFittings2022-06-3002708682core:ComputerEquipment2022-06-30027086822022-06-3002708682core:LeaseholdImprovements2022-07-012023-06-3002708682core:WithinOneYear2023-06-3002708682core:WithinOneYear2022-06-3002708682core:BetweenTwoFiveYears2023-06-3002708682core:BetweenTwoFiveYears2022-06-3002708682core:MoreThanFiveYears2023-06-3002708682core:MoreThanFiveYears2022-06-3002708682bus:PrivateLimitedCompanyLtd2022-07-012023-06-3002708682bus:FRS1022022-07-012023-06-3002708682bus:Audited2022-07-012023-06-3002708682bus:FullAccounts2022-07-012023-06-30xbrli:purexbrli:sharesiso4217:GBP