Company registration number 07406469 (England and Wales)
WREN CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
WREN CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
R Bradbury
J Wilson
N Skundric
Company number
07406469
Registered office
17 Pennine Parade
Pennine Drive
London
NW2 1NT
Auditor
Goldblatts
4th Floor
4 Tabernacle Street
London
EC2A 4LU
Business address
Hille Business Centre
132 St Albans Road
Watford
WD24 4AE
WREN CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1 - 5
Directors' report
6 - 7
Independent auditor's report
8 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 25
WREN CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

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

Review of the business

Wren Construction is a well-established construction company and acts as a main contractor across all industry sectors. Since it was founded in 2010, Wren Construction has grown in strength within the Commercial, Retail, Industrial, Education, Residential and Health sectors.

 

The company's head office is based at Watford with several satellite offices enabling the company to service all regions in London, the M4 corridor and the South of England.

 

Performance

The Directors are pleased to report that overall, it has been another successful year for the business, despite a reduction in turnover due to general market uncertainties and investment programmes from our clients. However, all our projects were built safely and delivered to the same high standard expected by our clients, strengthening our position as a leader in our industry.

Strategic decisions made during the year have helped the Board to successfully navigate the effects of high inflation without suffering debilitating damage to the underlying business.

During the year we have continued our strategy of both widening our existing client base as well as the type of work we undertake for our existing clients. This has seen us deliver some complex projects which whilst challenging are a real credit to the teams involved.

Health & Safety is at the forefront of what we do and part of our business ethics, our stringent monitoring and measurements, helps maintain our continued improvement and excellent record.

We are committed to our environmental responsibilities and continue to support and work with our clients with the overall aim of reducing emissions, unnecessary waste and increase recycling amongst others.

 

Principal risks and uncertainties

Economic uncertainty remains the single biggest risk within the construction sector and we manage these risks through robust systems and procedures. We have a strong forward order book for 2023/24 and beyond and continue to expand our key client list through our reputation of delivery and relationships within the sector.

The impact from high inflation on labour levels and supply chain is being closely monitored and managed as is the effect on materials.

The company is continuing to expand its customer base both within and outside the current sectors and firmly believe it has a good foundation to survive any unforeseen outcomes in the near future.

With the strength of our balance sheet and our business model, we are confident that we can keep the ongoing impact of those challenges to a minimum.

WREN CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

Principal risks and uncertainties continued

There are a number of potential risks and uncertainties which could impact the Company’s performance, and these are considered by the Board on a regular basis. The Board of Directors and the relevant management teams consider the risks of all significant business decisions and changes in the external environment and in the company’s operations. The key risks affecting the business are as follows:

Operating Risk - the company manages this risk by providing added value services to its clients, having fast response times not only in supplying products and services but also in handling all client queries and by maintaining strong relationships with clients. The company's operating risk is reduced due to the market share of their clients as many of the company's clients are long standing market leaders in their field. The company has spread its operating risk by not only actively seeking to widen its client base but also through continued expansion of its activities in the South of England.

 

Market Risk - the company seeks to maintain a competitive advantage by offering an appropriate and relevant service range and providing a high level of customer service from professional and dedicated staff. The company keeps abreast of developments in the market through maintaining strong relationships with its clients and monitoring the wider economic environment.

 

Personnel Risk – the Company is a privately-owned business and places great emphasis on recruiting, training, rewarding and retaining high quality people. The Directors consider staff resourcing and on a regular basis. We promote from within whenever we can to maintain the company culture. We also embrace new people from elsewhere as they bring fresh ideas and the benefits of their experience. The Board have tried to ensure that the knowledge base of the operational management team is shared as much as possible throughout the company.

 

Taxation risk -the company is exposed to financial risks from increases in tax rates and changes to the basis of taxation including corporation tax and VAT. Principal controls to mitigate this risk include regular monitoring of legislative proposals and the engagement of experienced executives and the use of experienced sector-specific professional advisers to mitigate the impact of any changes and ensure compliance.

 

Financial Risk- the company finances its operation through the generation of cash from operating activities. The financial risk management objectives of the company in relation to financial instruments are set by the board of directors with a view to minimising exposure to price risk, credit risk, liquidity risk and cash flow risk. Financial monitoring, forecasting, and planning are ever present processes with the care taken to achieve a reasonable profit margin and investment in resources whilst maintaining delivery of a high-quality service to its clients - see also Financial instruments.

 

Information Technology – the Company relies heavily on systems to operate its business, ordering goods, paying suppliers, ensuring health and safety records are accurate, accounting and payroll. The risk of Cyber-attacks is ever present and an increasing risk to every business. Ensuring we have robust and up to date Cyber security measures and vigilant users is critical to the successful running of these systems, as well as employing appropriately skilled and experienced staff and external specialist support as required.

Economic risk - the directors have identified and evaluated risks and uncertainties and have controls in place to mitigate these. Responsibility for management of each key risk is identified and delegated. The company is exposed to the economic risks that could lower the company's revenues and operating results in the future. However, actions continue to be taken to maximise the company's performance in all aspects of the business.

Development and performance

The balance sheet on page 12 of the financial statements shows that the company's financial position at the year end is, in terms of both net assets and liquidity, an improvement over the previous year.

WREN CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
Key performance indicators

The company regularly reviews a number of financial and non-financial key performance indicators at both board and operational levels. The company carries out monthly detailed reviews of each operational and support function at which all aspects of each business and key performance indicators are reviewed. The key financial and non financial performance indicators used to determine the progress and performance of the company are set out below:

     2023                   2022

 

Turnover                             £21,836,968            £29,740,200

 

Gross profit                          £1,937,083             £2,364,503

 

Gross margin                          8.87%             7.95%

 

Operating profit                          £518,588         £1,129,688

 

Operating profit as a % of sales                 2.4%              3.8%

 

Net assets                      £2,159,979         £3,440,034

 

Net cash balance                      £2,107,170             £3,306,730

 

Market Share

The company is a medium-sized privately owned construction company based in England. Although difficult to quantify the company is estimated to have a strong market share.

 

Cash measure

The net cash balance (cash and cash equivalents less borrowings) is a measure of the strength of the balance sheet and to confirm that the group has the funds necessary to continue to fund its operations and to continue to grow organically.

 

At the year end, the company had a net cash balance of £2,107,170 (2022: £3,306,730), a decrease of £1,199,560 on the previous year.

 

WREN CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
Other performance indicators

The company reviews non-financial KPIs on a regular basis in a number of areas:

Health & Safety

The importance of Health & Safety is at the forefront of everything that we do in terms of our moral and legal duty and of course, the potential of any breach. The company aims to achieve year-on-year improvement in accident incidence rate and remain below the Health and Safety Executive benchmark for the UK. We continue to maintain an excellent health and safety record.

Customer Experience

The company aspires to deliver a high level of customer satisfaction which is key to supporting sustainable long-term growth in the sectors in which we operate. Feedback received demonstrated that all of our customers are totally or mostly satisfied with our services.

Directors remain in direct contact with all our principal customers and have developed relationships to ensure we have full understanding of their objectives and our part in delivering those. Regular internal team meetings are held to discuss all aspects of these ongoing relationships.

Environment

The company recognizes the importance of its environmental responsibilities, monitors its impact on the environment and designs and implements policies to reduce any damage that might be caused by the company’s activities. Initiatives designed to minimize the company’s impact on the environment include safe disposal of any product waste, recycling and reducing energy consumption.

The directors are taking steps to expand its environmental department and are continually striving to improve their environmental policies. In so doing, they have implemented a series of initiatives to minimize the company’s carbon footprint, ranging from the fitting of carbon reduction filters on plant, ensuring that timber used only comes from sustainable sources to waste reduction methods and improved efficiency of deliveries of materials to site.

Accreditations and memberships

The company has been assessed and has achieved the following accreditations for Building Contracting including Design and Build:

 

The directors are of the opinion that these certifications and accreditations will ensure the continued efficiency of its internal and external processes, and aid the company's commitment to working towards health, safety and environmental best practice across the business.

Other key performance indicators continued

Staff turnover – employees who leave and the reasons thereto.

Tenders - enquiry success rate for tenders and price estimates.

WREN CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -

On behalf of the board

R Bradbury
Director
30 July 2024
WREN CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 6 -

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

Principal activities

The principal activity of the company continued to be that of a company operating in the construction sector, primarily as a main contractor.

Results and dividends

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £1,674,023. The directors do not recommend payment of a final dividend.

Directors

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

R Bradbury
J Wilson
N Skundric
Financial instruments
Treasury operations and financial instruments

Objectives and policies

The company's principal financial instruments comprise bank balances, trade creditors, trade debtors and loans to related companies. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations. The company's approach to managing other risks applicable to the financial instruments concerned is shown below.

 

Cash flow and liquidity risk

In respect of bank balances the liquidity risk is managed by maintaining a balance between continuity of funding and flexibility through and agreed payment policy. Strict payment terms are negotiated with the company's customers which enables it to ensure that it is paid promptly once an application has been issued. This policy ensures that sufficient funds are available to meet amounts due to trade creditors.

 

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding and the timely chasing of outstanding debt.

 

In respect of loans to related companies, these are unsecured, at an agreed rate of interest, with no fixed date for repayment. Loans to group companies are unsecured, interest-free and repayable on demand, with no fixed date for repayment.

Future developments

The company is focused on securing profitable work and to continuing to increase its market share by expanding its customer base and is working towards securing more work as principal contractor in the future. The directors believe that the company is well positioned to respond to trading conditions and to profit from the opportunities in newer markets.

Our strategy of diversification in commercial, retail, healthcare and leisure projects continues and the directors are seeking to consolidate on the new business acquired.

Auditor

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

WREN CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
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.

Statement of disclosure to auditor

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

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
R Bradbury
Director
30 July 2024
WREN CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WREN CONSTRUCTION LIMITED
- 8 -
Opinion

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

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

WREN CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WREN CONSTRUCTION LIMITED (CONTINUED)
- 9 -
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.

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

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:

WREN CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF WREN CONSTRUCTION LIMITED (CONTINUED)
- 10 -

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 the financial transactions, the less likely it is that we would become aware or any possible non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of directors and other management and the inspection of regulatory and legal correspondence, if any.

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

Lawrence Issacharoff FCA
Senior Statutory Auditor
For and on behalf of Goldblatts
30 July 2024
Chartered Accountants
Statutory Auditor
4th Floor
4 Tabernacle Street
London
EC2A 4LU
WREN CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 11 -
2023
2022
Notes
£
£
Turnover
3
21,836,968
29,740,200
Cost of sales
(19,899,885)
(27,375,697)
Gross profit
1,937,083
2,364,503
Administrative expenses
(1,418,495)
(1,234,815)
Operating profit
4
518,588
1,129,688
Interest receivable and similar income
7
18
30,872
Interest payable and similar expenses
8
(6,511)
-
0
Profit before taxation
512,095
1,160,560
Tax on profit
9
(118,127)
(221,460)
Profit for the financial year
393,968
939,100

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

WREN CONSTRUCTION LIMITED
BALANCE SHEET
AS AT 31 OCTOBER 2023
31 October 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
124,951
65,774
Current assets
Debtors
12
3,028,535
6,275,528
Cash at bank and in hand
2,107,170
3,306,730
5,135,705
9,582,258
Creditors: amounts falling due within one year
13
(3,094,917)
(6,202,725)
Net current assets
2,040,788
3,379,533
Total assets less current liabilities
2,165,739
3,445,307
Provisions for liabilities
Deferred tax liability
14
5,760
5,273
(5,760)
(5,273)
Net assets
2,159,979
3,440,034
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
2,159,879
3,439,934
Total equity
2,159,979
3,440,034

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
R Bradbury
Director
Company registration number 07406469 (England and Wales)
WREN CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 November 2021
100
2,700,834
2,700,934
Year ended 31 October 2022:
Profit and total comprehensive income
-
939,100
939,100
Dividends
10
-
(200,000)
(200,000)
Balance at 31 October 2022
100
3,439,934
3,440,034
Year ended 31 October 2023:
Profit and total comprehensive income
-
393,968
393,968
Dividends
10
-
(1,674,023)
(1,674,023)
Balance at 31 October 2023
100
2,159,879
2,159,979
WREN CONSTRUCTION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
770,772
2,111,483
Interest paid
(6,511)
-
0
Income taxes paid
(213,071)
(117,445)
Net cash inflow from operating activities
551,190
1,994,038
Investing activities
Purchase of tangible fixed assets
(81,637)
(31,250)
Proceeds from disposal of tangible fixed assets
4,892
-
0
Interest received
18
30,872
Net cash used in investing activities
(76,727)
(378)
Financing activities
Dividends paid
(1,674,023)
(200,000)
Net cash used in financing activities
(1,674,023)
(200,000)
Net (decrease)/increase in cash and cash equivalents
(1,199,560)
1,793,660
Cash and cash equivalents at beginning of year
3,306,730
1,513,070
Cash and cash equivalents at end of year
2,107,170
3,306,730
WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 15 -
1
Accounting policies
Company information

Wren Construction Limited is a private company limited by shares incorporated in England and Wales. The registered office is 17 Pennine Parade, Pennine Drive, London, NW2 1NT.

1.1
Accounting convention

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

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

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

As from 31 January 2023, Wren Construction Limited is a wholly owned subsidiary of Wren (Holdings) Limited and the results of Wren Construction Limited are included in the consolidated financial statements of Wren (Holdings) Limited which are available from Hille Business Centre, 132 St Albans Road, Watford, WD24 4AE.

1.2
Going concern

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

1.3
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Income is recognised on the basis of work measured, valued and certified at the year end. The policies adopted for the recognition of turnover are as follows:

 

Construction contracts

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

 

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

 

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

 

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

1.4
Tangible fixed assets

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

WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 16 -

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

Fixtures and fittings
20% Straight line
Motor vehicles
25% Reducing Balance

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

1.5
Cash and cash equivalents

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

1.6
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet 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.

1.7
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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.

 

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 profit and loss account, 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.

WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 17 -
1.8
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.

1.9
Retirement benefits

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

1.10
Leases

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 leases asset are consumed.

WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Revenue recognition - Long term Contracts

Revenue recognition is a key area of judgement especially in companies operating in the construction industry. Recognition of turnover and profit on long term contracts requires management judgement regarding the anticipated final outcome of individual contracts and of the proportion of works completed at the balance sheet date. Management undertakes detailed reviews on a monthly basis in order to exercise judgement over the outcome of each contract and the associated risks and opportunities.

 

The value of work completed at the balance sheet date is assessed by undertaking surveys and completing internal valuations on each element of works and in progress. Regular management reviews of contract work in progress are undertaken.

 

The age, nature and recoverability of all debtors and amounts recoverable on long term contracts are reviewed regularly by management and provisions made where appropriate.

 

The directors have ensured that generally accepted industry practices and methodologies are followed by all relevant personnel and that accounting and quality management systems are regularly evaluated. Consistent procedures and management tools are in place to ensure that estimates are applied and results determined on a consistent basis.

Recoverability of intercompany balances

Management regularly review intercompany balances for recoverability.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Construction income
21,806,968
29,740,200
Management charges
30,000
-
21,836,968
29,740,200
2023
2022
£
£
Other revenue
Interest income
18
30,872

All turnover arose in the United Kingdom.

WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
31,000
24,500
Depreciation of owned tangible fixed assets
18,904
19,118
(Profit)/loss on disposal of tangible fixed assets
(1,336)
734
Operating lease charges
252,441
245,459
5
Employees

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

2023
2022
Number
Number
Construction
11
11
Administration
8
9
Total
19
20

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,152,256
1,216,351
Social security costs
146,748
145,794
Pension costs
36,994
34,519
1,335,998
1,396,664
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
180,302
170,258
Company pension contributions to defined contribution schemes
5,906
5,663
186,208
175,921

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
18
30,872
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
6,511
-
0
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
117,640
217,486
Deferred tax
Origination and reversal of timing differences
487
3,974
Total tax charge
118,127
221,460

From 1st April 2023, the rate of corporation tax increased from 19% to 25%,

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
512,095
1,160,560
Expected tax charge based on the standard rate of corporation tax in the UK of 22.50% (2022: 19.00%)
115,221
220,506
Tax effect of expenses that are not deductible in determining taxable profit
2,848
1,608
Permanent capital allowances in excess of depreciation
(35)
(654)
Other tax adjustments
93
-
0
Taxation charge for the year
118,127
221,460
WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
10
Dividends
2023
2022
2023
2022
Per share
Per share
Total
Total
£
£
£
£
Ordinary Shares
Interim paid
16,740.23
2,000.00
1,674,023
200,000
11
Tangible fixed assets
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 November 2022
130,456
62,788
193,244
Additions
81,637
-
0
81,637
Disposals
(26,728)
(31,538)
(58,266)
At 31 October 2023
185,365
31,250
216,615
Depreciation and impairment
At 1 November 2022
92,591
34,879
127,470
Depreciation charged in the year
12,129
6,775
18,904
Eliminated in respect of disposals
(26,728)
(27,982)
(54,710)
At 31 October 2023
77,992
13,672
91,664
Carrying amount
At 31 October 2023
107,373
17,578
124,951
At 31 October 2022
37,865
27,909
65,774
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,416,673
2,882,546
Gross amounts owed by contract customers
446,521
1,940,302
Other debtors
58,028
1,395,435
Prepayments and accrued income
107,313
57,245
3,028,535
6,275,528

Included in other debtors are amounts due from related parties that are unsecured, interest-free and with no fixed repayment dates.

WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,997,141
3,078,705
Amounts owed to group undertakings
12,910
-
0
Corporation tax
121,755
217,186
Other taxation and social security
377,734
826,896
Other creditors
7,204
22,584
Accruals and deferred income
578,173
2,057,354
3,094,917
6,202,725

The amounts owed to group undertakings are unsecured, interest-free, have no fixed date of repayment and are repayable on demand.

14
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
5,760
5,273
2023
Movements in the year:
£
Liability at 1 November 2022
5,273
Charge to profit or loss
487
Liability at 31 October 2023
5,760

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
36,994
34,519

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.

WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
100
100
100
100

The company has one class of ordinary share which carry no rights to fixed income.

17
Operating lease commitments
Lessee

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
171,551
191,372
Between two and five years
223,729
246,109
395,280
437,481
18
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities over which the entity has control, joint control or significant influence
30,000
30,634
1,612,608
22,000

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
12,910
-

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
21,828
1,392,573
Key management personnel
-
2,462
WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
18
Related party transactions
(Continued)
- 24 -
Other information

The amounts outstanding are unsecured and will be settled in cash.

19
Directors' transactions

Loans have been granted by the company to its directors as follows:

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Director's loan
2.00
(15,391)
70,625
(55,234)
-
(15,391)
70,625
(55,234)
-

The maximum outstanding during the year was £11,090. The loan is unsecured and repayable on demand. Interest of £18 was charged at a rate of 2%

20
Ultimate controlling party

From 31 January 2023, the ultimate parent company of Wren Construction Limited is Wren (Holdings) Limited.

The ultimate controlling party is R Bradbury who owns the majority of the issued share capital of Wren (Holdings) Limited, the ultimate parent company. Prior to 31 January 2023, the ultimate controlling party was R Bradbury who owned the majority of the issued share capital of Wren Construction Limited.

21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
393,968
939,100
Adjustments for:
Taxation charged
118,127
221,460
Finance costs
6,511
-
0
Investment income
(18)
(30,872)
(Gain)/loss on disposal of tangible fixed assets
(1,336)
734
Depreciation and impairment of tangible fixed assets
18,904
19,118
Movements in working capital:
Decrease in stocks
-
0
332,894
Decrease/(increase) in debtors
3,246,993
(1,519,563)
(Decrease)/increase in creditors
(3,012,377)
2,148,612
Cash generated from operations
770,772
2,111,483
WREN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 25 -
22
Analysis of changes in net funds
1 November 2022
Cash flows
31 October 2023
£
£
£
Cash at bank and in hand
3,306,730
(1,199,560)
2,107,170
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