Company Registration No. 11151734 (England and Wales)
FAIRCLOTH HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
FAIRCLOTH HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Darren Stephen Faircloth
David Stuart Faircloth
(Appointed 29 August 2023)
Company number
11151734
Registered office
The Old Library
Dudley Road
Tunbridge Wells
Kent
United Kingdom
TN1 1LE
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
FAIRCLOTH HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 7
Independent auditor's report
8 - 10
Group profit and loss account
11
Group statement of comprehensive income
12
Group balance sheet
13
Company balance sheet
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Notes to the financial statements
18 - 39
FAIRCLOTH HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -

The directors present the strategic report for the Group for the year ended 30 November 2023.

Review of the business

The Group has experienced a notable increase in turnover compared to the previous year, which can be attributed to several factors. These include the Group's ability to retain valued clients, successful negotiations, and winning new tenders. Despite facing strong competition in the UK marketplace, rising construction costs, and the economic challenges posed by the COVID-19 pandemic and Brexit, the Group has managed to maintain strong trading levels and secure new tenders for the upcoming accounting periods.

 

During the year, the Group's gross profit margin has shown a positive growth of 4.43%. This improvement can be attributed to effective pricing strategies and diligent cost management. As a result, the Group finds itself in a robust position to maximise its gross profit. The directors and management team consistently review pricing, costing, and projects to enhance the costing models. Consequently, the Group is well-positioned to continue maximising gross profit while effectively managing cost reduction.

 

Overhead costs of the group have improved by £0.03. This improvement is primarily due to the group's restructuring efforts. Resources were strategically redirected by the directors to optimise costs, including discontinuing certain subsidiaries as part of this initiative. The Group has also made strategic investments in its people, procedures, and information technology. These investments aim to secure profitable contract work in the coming years.

 

The Group's financial health is on the upswing, as evidenced by the improvement in its working capital. The net current assets have gone up by £2.5 million, reaching £9.8 million in 2023, compared to £7.4 million in the previous year, 2022. Moreover, the Group's cash balance has experienced a boost of £3.2 million, now standing at £6.9 million in 2023, as opposed to £3.7 million in 2022.

 

The construction industry has faced numerous challenges, including global supply chain disruptions and rising inflation. The Group has successfully navigated these issues by maintaining flexibility in sourcing materials, adopting innovative construction technologies, and optimising operational efficiencies.

 

The Group places great importance on ensuring the health and safety of all employees. A dedicated health and safety manager closely monitors and oversees the well-being of everyone working for the Group.

Principal risks and uncertainties

The Group has recognised inflation, the ongoing conflict in Ukraine, and escalating energy costs as major factors driving up expenses, which present substantial risks to its operations. To mitigate these risks, the Group has implemented a strategic plan that includes engaging in transparent and thoughtful discussions with clients to recover the increased costs over both short and long periods. Through these proactive measures, the Group is focused on preserving its financial resilience and ensuring the sustainability of its business operations.

 

Financial Risk

The Directors have identified that the Group’s financial risk is that of increased construction costs, inflation and energy costs, and the general economic turmoil in the aftermath of the Covid-19 pandemic, Brexit and the war in Ukraine.

 

Reputational Risk

The Directors are aware of the ongoing reputational risk to the Group arising from customer claims. The Group promptly responds to these claims and settles them when necessary. To mitigate the occurrence of future claims, the Group diligently records all claims and implements procedures aimed at prevention.

 

Economic Risk

The Group places a strong emphasis on cultivating close relationships with its key customers to identify early signs of potential financial difficulties. Regular reviews of sales trends in major markets provide insights that allow the Group to take proactive actions in the event of declining sales. By conducting regular contract reviews and fostering strong relationships with key customers, the Group minimizes the risk of disputes and ensures continued financial stability.

 

FAIRCLOTH HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Development and performance

Safety and People

Safety remains a core priority for the Group, and all employees, including the Director, are deeply committed to ensuring a safe working environment. Given the inherent hazards associated with the Group's activities, regular meetings of key management are held to monitor health, safety, and environmental aspects. Compliance reviews conducted by a trusted third party, combined with rigorous ongoing training for all staff, further reinforce the Group's commitment to maintaining high safety standards.

 

The Group recognises that its success hinges on a skilled and motivated executive team and workforce. To foster excellence, the Group places strong emphasis on providing comprehensive training and development opportunities. Investing in its team's growth and professional development is essential to sustaining the Group's continued success.

Key performance indicators

The Group's key financial performance indicators during the year were as follows:

 

Unit

2023

2022

Turnover

£

55,078,068

49,723,730

Gross profit

%

15.19

10.76

Administrative expenses

£

4,186,180

3,829,473

Profit before taxation

£

4,185,731

1,467,820

Net current assets

£

9,817,340

7,357,655

The directors believe there are no non-financial KPIs that are of strategic importance to the group.

Other information and explanations

Future developments

 

The Group's future growth will be fueled by its commitment to innovation, the adoption of cutting-edge technologies, and a willingness to embrace novel approaches that enhance workforce safety, ensure operational continuity, and deliver completed projects to customers. The Group's unwavering dedication to research and development of innovative construction methods and techniques will remain a top priority, with a strong focus on enhancing safety, streamlining project delivery, incorporating new materials and working methods, improving energy efficiency, and utilising information modeling.

 

Environmental sustainability is a cornerstone of the Group's growth strategy, as it seeks to reduce its carbon footprint and integrate green building practices into its operations. By the conclusion of 2024, the Group sets a goal to achieve ISO14001 certification, demonstrating its firm commitment to environmental responsibility and underscoring its dedication to maintaining a safe and healthy work environment for all employees.

 

To ensure sustained growth, the Group recognises the importance of mitigating supply chain risks. It will actively work on diversifying its supplier base, thereby establishing a more resilient and dependable procurement process that minimises potential disruptions. By proactively addressing supply chain challenges, the Group aims to create a solid foundation for future growth.

FAIRCLOTH HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
Section 172 statement

 

The Directors of Faircloth Holdings Limited are aware of their duty under Section 172 of the Companies Act 2006 to act in a manner that they believe, in good faith, would promote the success of the Company for the benefit of its members as a whole. In doing so, the Directors take into consideration the likely long-term consequences of their decisions, the interests of the Company’s employees, the need to foster business relationships with suppliers, customers, and others, and the impact of the Company’s operations on the community and the environment.

General confirmation of Directors’ duties:

When making decisions, each Director ensures that he acts in the way he considers, in good faith, would most likely promote the Company’s success for the benefit of its members as a whole, and in doing so have regard (among other matters) to:

 

 

Conclusion

 

The directors of Faircloth Holdings Limited believe that we have fulfilled our duties under Section 172 of the Companies Act 2006 during the financial year. We will continue to consider the interests of our stakeholders in our decision-making process to promote the long-term success of the company.

 

On behalf of the board

Darren Stephen Faircloth
Director
21 August 2024
FAIRCLOTH HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -

The Director presents his annual report and financial statements of the Company and the Group for the year ended 30 November 2023.

Principal activities

The principal activity of the Company is of a holding company. The principal activities of its subsidiaries are as follows:

 

Faircloth Construction Limited – Construction of commercial buildings and related works.

 

Fox Holdings Sussex Limited – Hiring of equipment and a holding company.

 

Faircloth Limited – Construction of commercial buildings and related works.

Results and dividends

The results for the year after taxation are shown on the profit and loss account of the financial statements. Further commentary is given in the Strategic Report.

Ordinary dividends were paid amounting to £194,638. 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:

Darren Stephen Faircloth
David Stuart Faircloth
(Appointed 29 August 2023)
Financial instruments
Objectives and Policies

The Group's principal financial instruments comprise of bank and loan balances. The main purpose of its financial instrument is to finance the Group's operations.

 

The financial risk management objectives & policies and information on exposure to various risks are described in detail in Principal risks and uncertainties section in the Strategic Report.

Price risk, credit risk, liquidity risk and cash flow risk.

The most significant risk identified by the Group is an increase in costs as a result of inflation, the Ukrainian war, and rising energy costs. To reduce risk, a deliberate and controlled negotiation with Clients was carried out to recover increased costs in the short and long term.

 

In respect of bank balances, the liquidity risk is managed by managing working capital between payment to suppliers and receipts from debtors. Funds are maintained to maximise cash whilst not impacting on the immediate financial needs of the Group.

 

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 for both time and credit limits.

 

Liquidity risk in respect of creditors is managed by ensuring sufficient funds are available to meet amounts due.

Statement of engagement with suppliers, customers, and others in a business relationship with the Group

The Group's strengths, credit, and relationships with suppliers and subcontractors are all growing. In negotiating ongoing and future contracts, the Directors continue to prioritise customer relationships. The Directors' primary responsibilities include the interests of all employees, their health and safety, workplace safety, and well-being.

FAIRCLOTH HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 5 -
Post reporting date events

As part of the group restructuring, one of the subsidiary companies, Faircloth Limited, was dissolved on 7 May 2024.

Future developments

Future developments are described in detail in Future developments section in the Strategic Report.

Auditor

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

Streamlined Energy and Carbon Reporting

 

During the year the Group engaged with a RICS regulated property energy consultancy firm to prepare a report for the Company’s SECR reporting requirements. Base data was provided to the consultancy firm and Defra (2023) Conversion Factors were used in line with Environmental Reporting Guidelines (2019) to calculate the Group's energy usage. Gas usage data was collated from invoices totalling 64,996 KwH and the 2023 Defra conversion factor used (0.182928926kgCO2e/kWh) for natural gas supplied by the UK grid. Electricity usage data was collated for all sites from invoices, which totalled 4,916.3 KwH and the 2023 Defra conversion factor used (0.207074289 kgCO2e/ kWh). Business mileage from Group and employee-owned vehicles over the year was provided to the consultancy firm in the form of a data requirements spreadsheet (business mileage – Group pool car and employee car sheets). Carbon emissions were calculated from ‘litres used’ data. Defra 2023 conversion for “Diesel (average biofuel blend)” is 2.512063885 kgCO2e /litre and there are 10.607 kWh/litre. Defra 2023 conversion for “Petrol (average fuel blend)” is 2.16185 kgCO2e /litre and there are 9.515 kWh/litre. Other fuels were collected through supplier invoices. Other fuels purchased for use on site included diesel, Sulphur free gas oil (SFGO (red diesel)) and kerosine (burning oil). Defra 2023 conversion for “Diesel (average biofuel blend)” is 2.512063885 kgCO2e /litre and there are 10.607 kWh/litre. Defra 2023 conversion for “SFGO" is 2.75857 kgCO2e /litre and there are 10.625 kWh/litre. Defra 2023 conversion for “kerosine" is 2.54013 kgCO2e /litre and there are 10.276 kWh/litre. The relevant ratios are detailed after the table below.

 

A substantial proportion of our emissions are generated from road travel. As there are projects across the Southeast and beyond, van sharing is promoted/encouraged. When practical, overnight accommodation is provided. Driver awareness training is provided to encourage safer, more efficient driving. The Group has deployed the latest EURO 6 vehicles with start-stop fuel saving. We promote environmental awareness, including information posters on all sites. All welfare units on site have PIR controlled heating systems to reduce energy usage, and all machinery is regularly serviced to maintain maximum efficiency.

Emissions are analysed as follows:

 

 

FAIRCLOTH HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 6 -
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
64,996
640
- Fuel consumed for transport
3,337,182
3,334,692
- Electricity purchased
4,916
20,024
3,407,094
3,355,356
2023
2022
Emissions of CO2 equivalent
kgCO2e
kgCO2e
Scope 1 - direct emissions
- Fuel consumed for owned transport
813,400
828,200
Scope 2 - indirect emissions
- Electricity purchased
1,000
3,870
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
207,900
21,210
Total gross emissions
1,022,300
853,280
Intensity ratio
Tonnes CO2e per £100,000 turnover (includes Transmission and distribution)'
1.86
1.74
Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per 100,000, the recommended ratio for the sector.

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 group and company, and of the profit or loss of the group 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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

FAIRCLOTH HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
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 director individually has taken all the necessary steps that they ought to have taken as director 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.

On behalf of the board
Darren Stephen Faircloth
Director
21 August 2024
FAIRCLOTH HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FAIRCLOTH HOLDINGS LIMITED
- 8 -
Opinion

We have audited the financial statements of Faircloth Holdings Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 November 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, 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 group 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 FRS 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 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 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 group’s or the 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 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:

FAIRCLOTH HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FAIRCLOTH HOLDINGS LIMITED
- 9 -
Matters on which we are required to report by exception

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 and the directors' report.

 

We have nothing to report in respect of the following matters where 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 group’s and 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 directors either intend to liquidate the parent 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.

Detection of irregularities, including fraud

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.

As part of our planning process:

FAIRCLOTH HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FAIRCLOTH HOLDINGS LIMITED
- 10 -

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

 

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.

Simon Mott-Cowan (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
21 August 2024
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
FAIRCLOTH HOLDINGS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 11 -
2023
2022
Notes
£
£
Turnover
3
55,078,068
49,723,730
Cost of sales
(46,712,343)
(44,374,840)
Gross profit
8,365,725
5,348,890
Administrative expenses
(4,186,180)
(3,829,473)
Other operating income
16,395
14,247
Operating profit
4
4,195,940
1,533,664
Interest receivable and similar income
8
26,526
4,423
Interest payable and similar expenses
9
(36,735)
(70,267)
Profit before taxation
4,185,731
1,467,820
Tax on profit
10
(979,267)
(428,694)
Profit for the financial year
24
3,206,464
1,039,126
Profit for the financial year is all attributable to the owner of the parent company.

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

FAIRCLOTH HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 12 -
2023
2022
£
£
Profit for the year
3,206,464
1,039,126
Other comprehensive income
-
-
Total comprehensive income for the year
3,206,464
1,039,126
Total comprehensive income for the year is all attributable to the owners of the parent company.
FAIRCLOTH HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
4,324,119
5,210,199
Negative goodwill
12
(532,181)
(532,181)
Net goodwill
3,791,938
4,678,018
Tangible assets
13
1,744,579
972,081
5,536,517
5,650,099
Current assets
Debtors
16
15,968,582
14,741,368
Cash at bank and in hand
6,969,047
3,723,145
22,937,629
18,464,513
Creditors: amounts falling due within one year
17
(13,120,289)
(11,106,858)
Net current assets
9,817,340
7,357,655
Total assets less current liabilities
15,353,857
13,007,754
Creditors: amounts falling due after more than one year
18
-
(264,492)
Provisions for liabilities
Provisions
20
272,431
637,164
Deferred tax liability
21
101,302
137,800
(373,733)
(774,964)
Net assets
14,980,124
11,968,298
Capital and reserves
Called up share capital
23
200
200
Merger relief reserves
24
5,305,263
5,305,263
Profit and loss reserves
24
9,674,661
6,662,835
Total equity
14,980,124
11,968,298
The financial statements were approved by the board of directors and authorised for issue on 21 August 2024 and are signed on its behalf by:
21 August 2024
Darren Stephen Faircloth
Director
FAIRCLOTH HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 14 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
1,685,148
-
0
Investments
14
20,509,417
20,905,654
22,194,565
20,905,654
Current assets
Debtors
16
3,615,671
2,059,990
Cash at bank and in hand
5,054
-
0
3,620,725
2,059,990
Creditors: amounts falling due within one year
17
(12,939,337)
(13,100,537)
Net current liabilities
(9,318,612)
(11,040,547)
Total assets less current liabilities
12,875,953
9,865,107
Provisions for liabilities
Deferred tax liability
21
88,960
-
0
(88,960)
-
Net assets
12,786,993
9,865,107
Capital and reserves
Called up share capital
23
200
200
Merger relief reserves
24
5,305,263
5,305,263
Profit and loss reserves
24
7,481,530
4,559,644
Total equity
12,786,993
9,865,107

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £3,116,524 (2022 - £1,054,729 profit).

The financial statements were approved by the board of directors and authorised for issue on 21 August 2024 and are signed on its behalf by:
21 August 2024
Darren Stephen Faircloth
Director
Company registration number 11151734 (England and Wales)
FAIRCLOTH HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 15 -
Share capital
Merger relief reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
200
5,305,263
5,723,709
11,029,172
Year ended 30 November 2022:
Profit and total comprehensive income
-
-
1,039,126
1,039,126
Dividends
11
-
-
(100,000)
(100,000)
Balance at 30 November 2022
200
5,305,263
6,662,835
11,968,298
Year ended 30 November 2023:
Profit and total comprehensive income
-
-
3,206,464
3,206,464
Dividends
11
-
-
(194,638)
(194,638)
Balance at 30 November 2023
200
5,305,263
9,674,661
14,980,124
FAIRCLOTH HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 16 -
Share capital
Merger relief reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
200
5,305,263
3,604,914
8,910,377
Year ended 30 November 2022:
Profit and total comprehensive income for the year
-
-
1,054,730
1,054,730
Dividends
11
-
-
(100,000)
(100,000)
Balance at 30 November 2022
200
5,305,263
4,559,644
9,865,107
Year ended 30 November 2023:
Profit and total comprehensive income
-
-
3,116,524
3,116,524
Dividends
11
-
-
(194,638)
(194,638)
Balance at 30 November 2023
200
5,305,263
7,481,530
12,786,993
FAIRCLOTH HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 17 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
5,841,356
1,284,670
Interest paid
(36,735)
(70,267)
Income taxes paid
(119,302)
(550,430)
Net cash inflow from operating activities
5,685,319
663,973
Investing activities
Purchase of tangible fixed assets
(1,134,006)
(571,732)
Proceeds from disposal of tangible fixed assets
127,193
92,750
Interest received
26,526
4,423
Net cash used in investing activities
(980,287)
(474,559)
Financing activities
Proceeds from new bank loans
-
2,000,000
Repayment of bank loans
(1,264,492)
(735,508)
Dividends paid to equity shareholders
(194,638)
(100,000)
Net cash (used in)/generated from financing activities
(1,459,130)
1,164,492
Net increase in cash and cash equivalents
3,245,902
1,353,906
Cash and cash equivalents at beginning of year
3,723,145
2,369,239
Cash and cash equivalents at end of year
6,969,047
3,723,145
FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
1
Accounting policies
Company information

Faircloth Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Old Library, Dudley Road, Tunbridge Wells, Kent, United Kingdom, TN1 1LE.

 

The group consists of Faircloth Holdings Limited and all of its subsidiaries. The nature of the group’s principal activities and its operations are set out in the Director's Report and Strategic Report.

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.

Basis of preparation

These financial statements have been prepared using the historical cost convention. The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these revised financial statements are rounded to the nearest £1.

 

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2.

 

In these financial statements, the Group has applied the exemptions available under FRS102 in respect of the following disclosures:

 

  1. The Parent Company has taken advantage of the exemption in section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures.

     

  2. Related party transaction notes - The Company and the Group only discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with its parent or with members of the same group that are wholly owned.

     

  3. Disclosures in respect of the compensation of key management personnel – The Company and the Group have taken the advantage of the exemption from the requirements to disclose key management personnel when the key management personnel and directors are the same.

 

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 19 -

The 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 for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Faircloth Holdings Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 30 November 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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.3
Going concern

The financial statements have been prepared on a going concern basis. When making their assessment, the director considered the current economic conditions, which included supply chain constraints, price inflation, an increase in the cost of living, and wider uncertainties resulting from the effects of Brexit and European hostilities. The director will continue to monitor all of these issues and, where possible, take action to mitigate their effects. The Director has a reasonable expectation that the Group will have adequate resources to continue in the foreseeable future at the time of approving the financial statements for the following reasons:

  1. The Group has a strong and growing order book which will provide a pipeline of secured work over the going concern assessment period.

  2. There continues to be strong underlying demand in commercial constructions in the UK.

  3. Sufficient internal generated cash resources to meet its liabilities as they fall due for the next 12 months from the date of approval of these financial statements.

Thus, the Director continues to adopt the going concern basis of accounting in preparing the financial statements.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.4
Turnover

Turnover represents the value of work done during the year net of value added tax. The value of work done is calculated as the certified work, plus the amount anticipated to be certified, adjusted for over and under measure. As described in more detail in the Construction contract note 1.9, revenue and costs are recognised by reference to the stage of completion of construction contracts where it can be reliably measured.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of a business combination over the fair value of the group’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition.

 

It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life of 10 years.

 

Estimates of the useful economic life of goodwill are based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Where the cost of the business combination exceeds the fair value of the group’s interest in the assets, liabilities and contingent liabilities acquired, negative goodwill arises. The group, after consideration of the assets, liabilities and contingent liabilities acquired and the cost of the combination, recognises negative goodwill on the balance sheet and releases this to profit and loss, up to the fair value of non-monetary assets acquired, over the periods in which the non-monetary assets are recovered and any excess over the fair value of non-monetary assets in the income statement over the period expected to benefit.

1.6
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:

Plant and equipment
15% Straight line
Fixtures and fittings
20% reducing balance method
Computers
20% reducing balance method
Motor vehicles
25% Straight line

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.

1.7
Fixed asset investments

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 21 -

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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 group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

1.9
Construction contracts

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date (“percentage-of-completion method”). When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

The stage of completion is measured by completed Quantity Surveyors reports of work done.

Contract revenue comprises of the initial amount of revenue agreed in the contract and variations in the contract work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it is probable that the customer will approve the variation or negotiations have reached an advanced stage such that it is probable that the customer will accept the claim.

Contract cost is measured by reference to the ratio of contract work certified during the year to the amount of revenue agreed in the contract over the total estimated cost for the contract. When it is not probable that contract costs are recoverable from the customers, in which case, such costs are recognised as an expense immediately.

At the balance sheet date, the amount recoverable on contracts within ‘Debtors’ are the accumulative recoverable costs incurred to date less recoverable costs charged to the profit and loss account. Where the recoverable costs charged to the profit and loss account exceeds the accumulative recoverable cost incurred to date, the balance is presented as amount payable on contracts within ‘Creditors’.

Progress billings not yet paid by customers and retentions by customers are included within 'Debtors'. Advances received are included within trade creditors.

The accrued income is measured by reference to the ratio of contract work certified during the period of work to amount of labour cost incurred before the year end over total labour cost for the duration of the work carried out.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.10
Financial instruments

Financial assets and liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.

All financial assets and liabilities are initially measured at transaction price.

 

Non-current debt instruments, which meet the conditions set out in paragraph 11.9 of FRS 102, are subsequently measured at amortised cost using the effective interest method.

Debt instruments that have no stated interest rate and are classified as payable or receivable within one year and which meet the above conditions are initially measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

 

Impairment of financial assets

 

Financial assets

Financial assets 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 the profit and loss account. 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 value does not exceed what the carrying value would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.

 

Financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

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.

1.11
Equity instruments

Equity instruments issued by the group 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 group.

1.12
Taxation

The tax expense for the period comprises of current and deferred tax and is recognised in the profit & loss account.

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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 23 -
Deferred tax

Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and tax on acquisition. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

 

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences. Deferred tax on revalued non-depreciable tangible fixed assets and investment properties is measured using the rates and allowances that apply to the sale of the asset.

1.13
Provisions

Provisions are recognised when the Group has an obligation at the reporting date as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

Provisions include the cost of anticipated remedial and warranty work based on the status of the site at year end and other claims against the group. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

 

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

1.14
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 leased asset are consumed.

1.15
Government grants

Grants are accounted for under the accruals model as permitted by FRS 102.

Grants of a revenue nature are recognised in ‘other income’ within profit or loss account in the same period as the related expenditure. This includes the Government Coronavirus Job Retention Scheme (Furlough).

1.16
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.

1.17

Retention

Retention income is recognised once there is sufficient certainty over the probability it will be received and the amount to be received can be measured reliably.

 

Retention expense is recognised when it is paid.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 24 -
1.18

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 25 -
2
Judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The judgements estimates and assumptions that have a significant risk of causing a material adjustment to the income and expenses and the carrying amounts of assets and liabilities within the next financial year are addressed below.

Accounting for contract and margin recognition

The Group’s accounting for contract and margin recognition policies, which are set out in note 1, are central to how the Group values the work it has carried out in each financial year. Contract accounting requires estimates to be made and in many cases these contractual obligations span more than one financial period.

These policies require forecast to be made of the outcome of the construction obligations which require both estimates and judgements to be made of both cost and income recognition on each contract. No margin is recognised until the outcome of the contract can be estimated with reasonable certainty. On the cost side, estimates of budgeted and irrecoverable costs are made on each contract in addition to potential costs to be incurred for any maintenance and defects liabilities. On the income side, estimates and judgements are made on variations to consideration which typically include variations due to changes in scope of work, recoveries of claim income from customers, and potential liquidated damages that may be levied by the customers.

These income and costs may be affected by a number of uncertainties that depend on the outcome of future events and may need to be revised as events unfold and uncertainties are resolved.

Recoverable value of recognised debtors

The recoverability of debtors especially trade debtors and retentions are regularly reviewed in the light of the available economic information specific to each receivable and specific provisions are recognised for balances considered to be irrecoverable.

Provisions

Provisions are liabilities of uncertain timing or amount; therefore in making a reliable estimate of the quantum and timing of liabilities, judgement is applied and re-revalued at each reporting date. The range of potential outcomes as the result of uncertain future events could result in a materially positive or negative impact on profit or loss and cash flow.

More specifically on the Group’s provision for onerous contract, a provision is made for all known or expected losses on individual contracts once such losses are foreseen.

The Group also sets aside provisions for remedial and warranty work for any liabilities arising due to defects over the latent defect period stated in the contract. The provision for remedial work reflects the present obligation to rectify the work defects on completed contracts in order to recover retentions withheld by customers. In the year ended 30 November 2023, the provision for remedial works has been estimated to be 10% of total retentions outstanding (2022: 10%). The provision for warranty work reflects the present obligation to rectify the work defects on completed contracts within the warranty period, which can be up to 12 years after completion. A provision for warranty work is only recognised when a reliable estimate can be made.

 

The Group recognised provisions of £272,431 (2022 £637,164). Please refer to Provisions for liabilities note 20.

Going concern

The Group also considers Going Concern as a significant area of judgement and has included specific disclosure in relation this within note 1.3.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 26 -
3
Turnover and other revenue

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

2023
2022
£
£
Turnover analysed by class of business
Construction
55,078,068
49,723,730
2023
2022
£
£
Other significant revenue
Grants received
-
720
Management Charges receivable
16,395
13,527
16,395
14,247

All turnover arose from trading activities within the United Kingdom.

4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
-
(720)
Depreciation of owned tangible fixed assets
299,549
230,075
(Profit)/loss on disposal of tangible fixed assets
(65,235)
14,785
Amortisation of intangible assets
886,080
886,080
Operating lease charges
32,000
29,000
5
Auditor's remuneration
2023
2022
Fees payable to the group's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
7,410
10,400
Audit of the financial statements of the company's subsidiaries
61,250
54,600
68,660
65,000
FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 27 -
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Production
26
27
-
-
Administation and support
18
18
1
1
Total
44
45
1
1

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,082,750
2,617,588
-
0
-
0
Social security costs
337,895
330,546
-
-
Pension costs
281,766
51,636
-
0
-
0
3,702,411
2,999,770
-
0
-
0
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
153,370
177,750
Company pension contributions to defined contribution schemes
-
1,211
153,370
178,961

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

 

There is no director's remuneration paid by the Company.

8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
26,526
4,423
FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 28 -
9
Interest payable and similar expenses
2023
2022
£
£
Other interest on financial liabilities
36,735
70,267
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,025,641
402,540
Adjustments in respect of prior periods
(9,876)
2,490
Total current tax
1,015,765
405,030
Deferred tax
Origination and reversal of timing differences
(36,498)
23,664
Total tax charge
979,267
428,694

 

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
4,185,731
1,467,820
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
963,123
278,887
Tax effect of expenses that are not deductible in determining taxable profit
110,744
7,796
Gains not taxable
(19,226)
2,809
Adjustments in respect of prior years
(9,876)
2,490
Permanent capital allowances in excess of depreciation
(141,713)
(55,307)
Amortisation on assets not qualifying for tax allowances
112,714
168,355
Deferred Tax
(36,499)
23,664
Taxation charge
979,267
428,694

The rate of tax increased from 19% to 25% on 1 April 2023.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 29 -
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Dividend payable
194,638
100,000
12
Intangible fixed assets
Group
Goodwill
Negative goodwill
Total
£
£
£
Cost
At 1 December 2022 and 30 November 2023
10,295,062
(1,008,024)
9,287,038
Amortisation and impairment
At 1 December 2022
5,084,863
(475,843)
4,609,020
Amortisation charged for the year
886,080
-
0
886,080
At 30 November 2023
5,970,943
(475,843)
5,495,100
Carrying amount
At 30 November 2023
4,324,119
(532,181)
3,791,938
At 30 November 2022
5,210,199
(532,181)
4,678,018
The Company had no intangible fixed assets at 30 November 2023 or 30 November 2022.

Goodwill arising on consolidation is being amortised over the Director's estimate of its useful life of 10 years.

 

This estimate is based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 30 -
13
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 December 2022
1,432,141
1,244
15,029
657,815
2,106,229
Additions
797,060
15,105
26,241
295,600
1,134,006
Disposals
(301,852)
-
0
-
0
(169,160)
(471,012)
At 30 November 2023
1,927,349
16,349
41,270
784,255
2,769,223
Depreciation and impairment
At 1 December 2022
768,978
217
744
364,209
1,134,148
Depreciation charged during the period
169,127
1,718
7,781
120,923
299,549
Eliminated in respect of disposals
(243,850)
-
0
-
0
(165,203)
(409,053)
At 30 November 2023
694,255
1,935
8,525
319,929
1,024,644
Carrying amount
At 30 November 2023
1,233,094
14,414
32,745
464,326
1,744,579
At 30 November 2022
663,163
1,027
14,285
293,606
972,081
Company
Plant and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 December 2022
-
0
-
0
-
0
Additions
1,238,860
475,469
1,714,329
At 30 November 2023
1,238,860
475,469
1,714,329
Depreciation and impairment
At 1 December 2022
-
0
-
0
-
0
Depreciation charged in the year
18,039
11,142
29,181
At 30 November 2023
18,039
11,142
29,181
Carrying amount
At 30 November 2023
1,220,821
464,327
1,685,148
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
20,509,417
20,905,654
FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
14
Fixed asset investments
(Continued)
- 31 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 December 2022 and 30 November 2023
20,905,654
Impairment
At 1 December 2022
-
Impairment losses
396,237
At 30 November 2023
396,237
Carrying amount
At 30 November 2023
20,509,417
At 30 November 2022
20,905,654
15
Subsidiaries

Details of the company's subsidiaries at 30 November 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Fox Holdings Sussex Limited
The Old Library, Dudley Road, Tunbridge Wells, Kent, United Kingdom TN1 1LE
Ordinary share capital
100.00
-
Faircloth Limited
As above
Ordinary share capital
-
100.00
Faircloth Construction Limited
As above
Ordinary share capital
-
100.00

Fox Holdings Sussex Limited has taken advantage of the exemption from the requirement to have an audit of its individual accounts under Section 479A of the Companies Act 2006.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 32 -
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,459,880
4,389,621
-
0
-
0
Corporation tax recoverable
-
0
238,266
-
0
-
0
Amounts owed by group undertakings
-
-
1,986,003
791,365
Other debtors
3,919,255
4,116,409
1,629,668
1,268,625
Prepayments and accrued income
6,210,095
4,650,128
-
0
-
0
13,589,230
13,394,424
3,615,671
2,059,990
Amounts falling due after more than one year:
Other debtors
2,379,352
1,346,944
-
0
-
0
Total debtors
15,968,582
14,741,368
3,615,671
2,059,990

Included in other debtors is amount due from customers for contract work of £871,803 (2022: £1,258,940).

 

17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
19
-
0
1,000,000
-
0
-
0
Trade creditors
6,816,281
5,595,506
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
12,871,503
12,897,280
Corporation tax payable
658,197
-
0
-
0
-
0
Other taxation and social security
1,541,158
1,789,194
-
-
Other creditors
2,430,676
1,076,097
56,433
166,448
Accruals and deferred income
1,673,977
1,646,061
11,401
36,809
13,120,289
11,106,858
12,939,337
13,100,537

Included in other creditors is amount due to customers for contract work of £1,637,023 (2022 £627,035).

18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
-
0
264,492
-
0
-
0

 

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 33 -
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
-
0
1,264,492
-
0
-
0
Payable within one year
-
0
1,000,000
-
0
-
0
Payable after one year
-
0
264,492
-
0
-
0

The group currently has an outstanding secured loan of £Nil (2022 £1,264,492) with a fixed interest rate of 1.56%. The group has paid off the outstanding loan full during the year .

 

20
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Provision for litigation
5,750
51,499
-
-
Provision for remedial work
209,141
185,665
-
-
Provision for warranty work
57,540
400,000
-
-
272,431
637,164
-
-
Movements on provisions:
Provision for litigation
Provision for remedial work
Provision for warranty work
Total
Group
£
£
£
£
At 1 December 2022
51,499
185,665
400,000
637,164
Additional provisions in the year
5,750
166,056
57,540
229,346
Reversal of provision
-
(1,679)
-
(1,679)
Utilisation of provision
(51,499)
(140,901)
(400,000)
(592,400)
At 30 November 2023
5,750
209,141
57,540
272,431

Provision for litigation

 

The directors have raised an additional provision for litigation costs relating to the retention of a completed contract. In June 2023 the full brought forward provision was utilised as the dispute was settled.

 

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
20
Provisions for liabilities
(Continued)
- 34 -

Provision for onerous contract

 

When it is probable that the total contract costs will exceed the total contract revenue on construction contracts, the Group recognises the expected losses as an expense immediately with a corresponding provision for losses. These provisions are expected to be utilised within one year after the balance sheet date. The provision for onerous contracts was £Nil (2022 £Nil) as at the balance sheet date.

Provision for remedial work

 

The Group has a present obligation to rectify the work defects on completed contracts in order to recover retention withheld by customers. These provisions are expected to be utilised within two years after the balance sheet date.

Provision for warranty

 

The directors have provided for an additional warranty provision for works covered under warranty required on two contracts. The brought forward provision was settled in June 2023.

The above provisions are made when a reliable estimate can be made based on the management's best estimate of known loss making contracts, remedial work, defects and warranty on contracts and legal actions.

21
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
101,302
137,800
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
88,960
-
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 December 2022
137,800
-
(Credit)/charge to profit or loss
(36,498)
88,960
Liability at 30 November 2023
101,302
88,960
FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 35 -
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
281,766
51,636

The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. At the year end £21,826 (2022 £10,034) was payable to the scheme and is included in creditors.

 

23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Share of £1 each
200
200
200
200
24
Reserves
Merger relief reserves

The merger relief reserves have arisen on a past business combination that was accounted under section 612 of the Companies Act 2006 when shares were issued in consideration for the shares of the acquired subsidiary.

Share capital

Called up share capital reserve represents the nominal value of the shares issued.

Profit and loss reserves

Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 36 -
25
Financial commitments, guarantees and contingent liabilities

Company:

 

The Company has granted a fixed and floating charge over all assets of the Company to its bankers in respect of a loan granted to a fellow group company.

 

Group:

 

Financial commitments and guarantees

 

Performance guarantees were provided by the bank to customers covered by indemnities given to the bank. The amount of the financial guarantee contract is £3,237,950 (2022 £1,546,211).

 

Contingent liabilities

 

The Group's provisions have been made for the Director's best estimate of known legal claims, remedial & warranty for any defects work and contract losses. No provision is made where the Director considers, based on legal advice and past practice that the claims or action are unlikely to succeed or that the Group can not make a sufficiently reliable estimate of the potential obligations.

 

Charges

 

The Group's bankers also hold a fixed and floating charge over the undertaking and all property and assets present and future, including goodwill, uncalled capital, buildings, fixtures, fixed plant and machinery.

 

26
Operating lease commitments

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:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
32,000
29,000
-
-
32,000
29,000
-
-

There are no operating lease commitments for the Company.

27
Events after the reporting date

As part of the group restructuring, one of the subsidiary companies, Faircloth Limited, was dissolved on 7 May 2024.

 

On 7 August 2024 the company issued 2 Ordinary B shares with a nominal value of £1. Following the allotment, the company had a total of 202 shares with a nominal value of £1 in issue, amounting to an aggregate total value of £202.

28
Related party transactions
Transactions with related parties
FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
28
Related party transactions
(Continued)
- 37 -

 

Company:

 

Related Party's Limited Liability Partnership

 

At the end of the year there was an amount of £1,156,710 (2022 £1,156,710) owed by a limited liability partnership (LLP) of which the Director is also a Member of the LLP. The loan is interest free and repayable on demand.

 

Family Members of the Director

 

At the end of the year there was a total amount of £111,916 (2022 £111,916) owed from the family members of the Director. The loans are interest free and repayable on demand.

 

Director

 

During the year the Company declared a dividend payment of £194,638 (2022 £100,000) to the Director who is also the ultimate controlling party of the Company and the Group as explained in Controlling party note 28. The amount due to the Director at the year end is £Nil (2022 £160,054). The loan is interest free and repayable on demand.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
28
Related party transactions
(Continued)
- 38 -

Group:

 

Related Party's Group

 

  1. During the year the Group invoiced construction work of £69,750 (2022 £62,534) and received services amounting to £119,348 (2022 £144,981) to and from a company owned by a family member of the Directors. At the end of the previous year the long outstanding amount due to the Group of £62,534 was deemed irrecoverable and therefore was written off. At the current year no such amount noted off.

     

  2. At the end of the year an outstanding amount due to the Group of £437,201 (2022 £244,924) was from a company of which a Director is also a director and the ultimate controlling party of that company. There was an increase in the amount due to new advance in the year. The loan is interest free and repayable on demand.

     

  3. During the year the Group invoiced construction work of £4,546 (2022 £15,992) to a company of which some of the Directors and their family are also the directors and the ultimate controlling party of that company. At the end of the year the outstanding amount due to the Group was £1,183,504 (2022 £683,126). The loan is interest free and repayable on demand.

     

  4. At the end of the year there was an amount of £1,156,710 (2022 £1,156,710) owed by a limited liability partnership (LLP) of which the Director is also a Member of the LLP. The loan is interest free and repayable on demand.

     

  5. At the end of the year there was a total amount of £111,916 (2022 £111,916) owed from the family members of the Director. The loan is interest free and repayable on demand.

     

  6. During the year the parent company declared a dividend payment of £194,638 (2022 £100,000) to the Director who is also the ultimate controlling party of the Group as explained in Controlling party note 28. The amount due from the Director at the year end is £5,360 (2022 £160,054). The loan is interest free and repayable on demand.

 

 

Pension Scheme

 

The Directors who are members of the Faircloth family are the Trustees and the Members of an independent administered Pension Scheme. During the year the Group invoiced interest on a loan of £2,427 (2022 £2,060) to the Pension Scheme. The Pension Scheme charged office rent of £32,000 (2022 £29,000) to the Group. At the end of the year the amount due to the Group was £57,575 (2022 £49,016). The loan is repayable on demand.

 

29
Controlling party

The ultimate controlling party is the Director, Darren Stephen Faircloth, who owns all the shares of the Company.

FAIRCLOTH HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 39 -
30
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
3,206,464
1,039,126
Adjustments for:
Taxation charged
979,267
428,694
Finance costs
36,735
70,267
Investment income
(26,526)
(4,423)
(Gain)/loss on disposal of tangible fixed assets
(65,235)
14,785
Amortisation and impairment of intangible assets
886,080
886,080
Depreciation and impairment of tangible fixed assets
299,549
230,075
Decrease in provisions
(364,733)
(469,665)
Movements in working capital:
Increase in debtors
(1,465,479)
(3,358,923)
Increase in creditors
2,355,234
2,448,654
Cash generated from operations
5,841,356
1,284,670

There are no restrictions over the use of the cash and cash equivalents balances which comprises cash at bank and in hand.

 

31
Analysis of changes in net funds
1 December 2022
Cash flows
30 November 2023
£
£
£
Group:
Cash at bank and in hand
3,723,145
3,245,902
6,969,047
Borrowings excluding overdrafts
(1,264,492)
1,264,492
-
2,458,653
4,510,394
6,969,047
2023-11-302022-12-01falseCCH SoftwareCCH Accounts Production 2024.100Darren Stephen FairclothDavid Stuart Fairclothfalse111517342022-12-012023-11-3011151734bus:Director12022-12-012023-11-3011151734bus:Director22022-12-012023-11-3011151734bus:RegisteredOffice2022-12-012023-11-3011151734core:OtherMiscellaneousReserve2021-11-3011151734core:ShareCapitalbus:Consolidated2023-11-3011151734core:ShareCapitalbus:Consolidated2022-11-3011151734core:SharePremiumbus:Consolidated2023-11-3011151734core:SharePremiumbus:Consolidated2022-11-3011151734core:ShareCapital2023-11-3011151734core:ShareCapital2022-11-3011151734core:SharePremium2023-11-3011151734core:SharePremium2022-11-3011151734core:RetainedEarningsAccumulatedLosses2023-11-3011151734core:ShareCapitalbus:Consolidated2021-11-3011151734core:SharePremiumbus:Consolidated2021-11-3011151734core:RetainedEarningsAccumulatedLossesbus:Consolidated2021-11-3011151734core:RetainedEarningsAccumulatedLossesbus:Consolidated2022-11-3011151734core:RetainedEarningsAccumulatedLossesbus:Consolidated2023-11-3011151734core:ShareCapital2021-11-3011151734core:SharePremium2021-11-3011151734core:RetainedEarningsAccumulatedLosses2021-11-3011151734core:RetainedEarningsAccumulatedLosses2022-11-30111517342023-11-3011151734bus:Consolidated2023-11-3011151734bus:Consolidated2022-12-012023-11-3011151734bus:Consolidated2021-12-012022-11-30111517342021-12-012022-11-3011151734core:Goodwillbus:Consolidated2023-11-3011151734core:Goodwillbus:Consolidated2022-11-3011151734core:NegativeGoodwillbus:Consolidated2023-11-3011151734core:NegativeGoodwillbus:Consolidated2022-11-3011151734bus:Consolidated2022-11-30111517342022-11-3011151734core:PlantMachinerybus:Consolidated2023-11-3011151734core:FurnitureFittingsbus:Consolidated2023-11-3011151734core:ComputerEquipmentbus:Consolidated2023-11-3011151734core:MotorVehiclesbus:Consolidated2023-11-3011151734core:PlantMachinerybus:Consolidated2022-11-3011151734core:FurnitureFittingsbus:Consolidated2022-11-3011151734core:ComputerEquipmentbus:Consolidated2022-11-3011151734core:MotorVehiclesbus:Consolidated2022-11-3011151734core:PlantMachinery2023-11-3011151734core:MotorVehicles2023-11-3011151734bus:Consolidated2021-11-3011151734core:Goodwill2022-12-012023-11-3011151734core:PlantMachinery2022-12-012023-11-3011151734core:MotorVehicles2022-12-012023-11-3011151734core:UKTaxbus:Consolidated2022-12-012023-11-3011151734core:UKTaxbus:Consolidated2021-12-012022-11-3011151734bus:Consolidated12022-12-012023-11-3011151734bus:Consolidated12021-12-012022-11-3011151734bus:Consolidated22022-12-012023-11-3011151734bus:Consolidated22021-12-012022-11-3011151734core:Goodwillbus:Consolidated2022-11-3011151734core:NegativeGoodwillbus:Consolidated2022-11-3011151734bus:Consolidated2022-11-3011151734core:Goodwillbus:Consolidated2022-12-012023-11-3011151734core:NegativeGoodwillbus:Consolidated2022-12-012023-11-3011151734core:PlantMachinerybus:Consolidated2022-11-3011151734core:FurnitureFittingsbus:Consolidated2022-11-3011151734core:ComputerEquipmentbus:Consolidated2022-11-3011151734core:MotorVehiclesbus:Consolidated2022-11-3011151734core:PlantMachinery2022-11-3011151734core:MotorVehicles2022-11-30111517342022-11-3011151734core:PlantMachinerybus:Consolidated2022-12-012023-11-3011151734core:FurnitureFittingsbus:Consolidated2022-12-012023-11-3011151734core:ComputerEquipmentbus:Consolidated2022-12-012023-11-3011151734core:MotorVehiclesbus:Consolidated2022-12-012023-11-3011151734core:Subsidiary12022-12-012023-11-3011151734core:Subsidiary22022-12-012023-11-3011151734core:Subsidiary32022-12-012023-11-3011151734core:CurrentFinancialInstruments2023-11-3011151734core:CurrentFinancialInstruments2022-11-3011151734core:Non-currentFinancialInstrumentsbus:Consolidated2023-11-3011151734core:Non-currentFinancialInstrumentsbus:Consolidated2022-11-3011151734core:Non-currentFinancialInstruments2023-11-3011151734core:Non-currentFinancialInstruments2022-11-3011151734core:CurrentFinancialInstrumentsbus:Consolidated2023-11-3011151734core:CurrentFinancialInstrumentsbus:Consolidated2022-11-3011151734core:WithinOneYearbus:Consolidated2023-11-3011151734core:WithinOneYearbus:Consolidated2022-11-3011151734core:CurrentFinancialInstrumentscore:WithinOneYear2023-11-3011151734core:CurrentFinancialInstrumentscore:WithinOneYear2022-11-3011151734core:Non-currentFinancialInstrumentscore:AfterOneYearbus:Consolidated2023-11-3011151734core:Non-currentFinancialInstrumentscore:AfterOneYearbus:Consolidated2022-11-3011151734core:Non-currentFinancialInstrumentscore:AfterOneYear2023-11-3011151734core:Non-currentFinancialInstrumentscore:AfterOneYear2022-11-3011151734core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2023-11-3011151734core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2022-11-3011151734bus:PrivateLimitedCompanyLtd2022-12-012023-11-3011151734bus:FRS1022022-12-012023-11-3011151734bus:Audited2022-12-012023-11-3011151734bus:ConsolidatedGroupCompanyAccounts2022-12-012023-11-3011151734bus:FullAccounts2022-12-012023-11-30xbrli:purexbrli:sharesiso4217:GBP