The director presents the strategic report for the year ended 30 September 2023.
Cablesheer Group Limited functions as a non-trading holding company. We wholly own the share capital of Cablesheer (Asbestos) Limited and Cablesheer Construction Limited, which were acquired on 20th January 2016.
During this fiscal year, we have made significant investment in tendering and expansion of our business. We have also invested in marketing and a new website to reflect the current business. These factors have affected our bottom line for this year however should set us up in good steed going forward.
Principal risks and uncertainties
We constantly evaluate and address significant risks that could impact our business. The primary risk factors currently include skilled labour, materials, material prices, strategic, commercial, operational, reputational, and financial risks. Our directors actively oversee these areas and we continue to strategise to mitigate these risks.
Development and performance
Efforts to streamline commercial finctions, embrace AI technology, and leverage data analytics through Power BI have enhanced operational efficiency and decision-making capabilities.
However, challenges such as contract issues, recruitment costs, under-pricing of asbestos work, and delays in project commencements have impacted profitability.
Cablesheer Construction have completely reduced the overhead cost and are in the final parts of closing down the last two projects. This has allowed us to make a clear break ready for the new financial year to go again.
We continue to assess our business processes and operations to ensure efficiency, introduce new IT systems for business optimisation, and explore new business strategies to increase our market share. We are also continually exploring new services to elevate our business level and reviewing construction methods/materials for improved efficiency.
Strategy for future
We will be looking to consolidate at a slightly lower turnover than last year (current £14m) £10-12 million.
This allows us to streamline our operation, drive efficiency and push up the profit margin.
As per our last year commitment we have decided to divest from the new builds division due to the inherent risks associated with it. While this division contributed to our turnover, the associated risks were high and did not align with our risk management principles.
We remain committed to sectors such as Housing Associates, Local Authorities, Property Management Companies, Private Dwellings, and Commercial Properties. These sectors consistently receive substantial government funding, making them stable and promising areas for our continued operation.
Our decision to reconsolidate and divest from high-risk areas signifies our commitment to long-term sustainability over short-term gains. We are confident that these strategic decisions will not only reduce risk but also establish a robust platform for future growth and profitability.
We use industry Key Performance Indicators (KPIs) to assess our performance, focusing on Time, Cost, Defects, Health & Safety, and Client/Resident Satisfaction.
CAG commitment to ongoing investment in operational improvements has proven effective in driving business growth and maintaining healthy profit margins. These efforts encompass continual IT upgrades including new servers, equipment improvements, regular staff training, and fleet enhancement.
Equally, CAG's strategic business diversification, in response to potential policy changes, demonstrates its adaptability and resilience in a changing industry environment.
As we continue to adapt to an evolving market, CAL is prepared for several exciting developments in the near future. Despite current challenges posed by high inflation and the increasing cost of material, we are actively taking steps to ensure the financial robustness of our company.
We will also continue to drive operational efficiency across all levels of our business, employing strategies that promote productivity, optimise resources, and ultimately, increase our profit margin. This focus on efficiency, coupled with our ongoing commitment to offering a diversified portfolio of services, represents our strategic vision for the future.
CAL is set to expand further into fire safety solutions and building services, with a dedicated focus on professional development and training to ensure that our team is equipped to deliver top-notch service. Alongside this, we intend to continuously invest in our IT infrastructure, plant equipment, and personnel, underlining our commitment to quality and customer satisfaction.
We remain confident in our ability to navigate these future developments and are excited about the opportunities they represent. Our commitment to our clients, our team, and the standards of service we provide will continue to guide our operations as we move into this next phase of our growth.
Cablesheer Asbestos - will continue to pick up frameworks for our Housing Association clients and Local Authorities. We continue to add to our existing team to ensure that we facilitate the works to the levels of quality that our clients have come to expect. Long-term contracts and frameworks contribute to our stability and simplify the process of future forecasting.
Cablesheer Fire, our established Fire Division, is primed for further growth, in line with the array of services we previously outlined. As the government amplifies its efforts to ensure fire compliance in all buildings, we are poised to expand our capabilities by adding Fire Risk Assessment (FRA) surveying, recognizing the substantial demand for this expertise.
Cablesheer Construction – we will be divesting from the risk-prone new builds division and instead concentrating on refurbishments, maintenance, cladding, and planned projects through Cablesheer Construction. We're also undergoing a reconsolidation process aimed at reducing overheads and fostering a leaner, more agile business structure. Despite the short-term reduction in turnover, these changes are designed to enhance long-term profitability.
The Directors are confident that all of the above will bring growth in terms of turnover, but also healthy profit margins.
Training,
Maintaining, reviewing and pushing Quality,
Maintaining, reviewing and pushing Efficiencies throughout the business,
Promotion and corporate structures, Integration of Senior Line Managers
Constantly assessing our overhead to ensure efficiently,
Introducing new IT systems and new IT methods to create efficiencies within the business,
Reviewing new business strategies to win more work,
Reassessing our accounting and commercial operations to match the requirements of a business of our scale.
Introduction of new services (as previously mentioned) that take the business onto the next level,
Constantly review different methods of construction/materials to create efficiencies and assist with reducing outgoings
This report has been prepared in accordance with the requirements of the UK Companies Act 2006. As directors, we confirm that to the best of our knowledge, the information provided accurately represents the strategic direction and performance of Cablesheer Group Limited.
On behalf of the board
The director presents his annual report and financial statements for the year ended 30 September 2023.
The results for the year are set out on page 10.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
CGL always try to utilise new methods and processes to assist R&D. As a business we always try to look at the problems in hand, then assess whether there is an ‘industry technique’ that could be used to address the problem. In usual circumstances, we have to come up with a bespoke solution which is often added to our R&D claim. The activity generally revolves around pushing the limitations of new products and trying to simplify what they do. Both assist CCL & CAL in improving the service to their clients. CCL & CAL employ an external consultant to assist their R&D claims.
Refer to the Strategic Report for information on Future Developments.
The auditor, Crossley Financial Accounting Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Cablesheer Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2023 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 group and parent 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 group's and parent 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their 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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent 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 parent company or to cease operations, or has no realistic alternative but to do so.
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.
Risks
Based on our understanding of the company and industry, we identified that the principle risks of non-compliance with laws and regulations related to compliance with health and safety and the control of asbestos and we considered the extent to which non-compliance might have a material effect on the financial statements of the company.
We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
In addition, we considered provisions of other laws and regulations that do not have a direct impact on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These include data protection, employment and environmental regulations.
We evaluated managements incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to revenue recognition, posting inappropriate journals entries to increase turnover or reduce expenditure, and management bias in accounting estimates and judgemental areas of the financial statements such as work in progress.
Audit response
Audit procedures performed by the engagement team included:
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud, and review of the reports made by management
Understanding of management’s internal controls designed to prevent and detect irregularities.
Review of tax compliance
Designing audit procedures to incorporate unpredictability around the nature, timing or extent of testing of expenses
System walkthroughs are used to develop an in depth understanding of the entity’s control environment, however, minimal reliance is placed on control within the audit approach. Substantive test of details are carried out, with a broad scope, in order to adequately explore all aspects of revenue recognition.
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risk of material misstatement due to fraud
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, by for example, forgery, or intentional misrepresentation, or though collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £859,787 (2022 - £246,179 loss).
Cablesheer Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 3, Fitzroy Business Park, Sandy Lane, Sidcup, Kent, DA14 5NL.
The group consists of Cablesheer Group Limited and all of its subsidiaries.
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.
The consolidated group financial statements consist of the financial statements of the parent company Cablesheer Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 September 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the director has a reasonable expectation that the group 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 is recognised at the fair value of the consideration received or receivable for goods and 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision of professional services 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.
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 recognised in the income statement.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Research and development
Expenditure on research and development is written off in the year in which it is incurred.
In the application of the group’s accounting policies, the director is 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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales tax. The directors made key assumptions and estimates regarding the stage of completion, value of income, of future costs and collectability of income.
Goodwill, being the amount paid in connection with the acquisition of the business in 2016, is being amortised evenly over its estimated useful life of ten years.
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 30 September 2023 are as follows:
NSS Trustees Limited, D Brown & A Brown, as Trustees of a retirements benefit scheme, hold fixed and floating charges which cover all the property or undertakings of the company of Cablesheer Construction Limited and Cablesheer (Asbestos) Limited. It contains a negative pledge.
Cablesheer (Asbestos) Limited has paid rent into the pension scheme of £90,000 (2022 - £90,000).
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
From 1 April 2023, the corporation tax rate will be 25% where profits exceed £250,000; or at the marginal rate if profits are expected to fall between £50,001 and £250,000.
As deferred tax timing differences are expected to reverse on or after 1 April 2023 and forecasted profits are expected to exceed £250,000, the deferred tax has been measured at 25% at the year end.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.
During the year, the group made repayments to the directors amounting to £244,801 (2022 - £608,276), and the group received loans from the directors amounting to £540,670 (2022 - £714,624).
The amounts due to the director at the year end was £344,507 (2022 - £48,646). The loans were interest free and are repayable on demand.
A prior year adjustment was made to correct an overstatement of income in prior periods. Opening reserves reduced by £519,748. Profit for 2022 was reduced by £321,701.