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Registration number: 11983830

Adstone Construction Group Ltd

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2023

 

Adstone Construction Group Ltd

Contents

Company Information

1

Strategic Report

2

Directors' Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 7

Consolidated Profit and Loss Account and Retained Earnings

8

Consolidated Balance Sheet

9

Balance Sheet

10

Consolidated Statement of Cash Flows

11

Statement of Cash Flows

12

Notes to the Financial Statements

13 to 26

 

Adstone Construction Group Ltd

Company Information

Directors

Mrs J A Young

Mr I Young

Mrs T J Smith

Mrs J L Tipping

Registered office

Adstone House, Wassage Way
Hampton Lovett Industrial Estate
Droitwich
Worcestershire
WR9 0NX

Auditors

Bissell & Brown Midlands Ltd
Statutory auditor
Charter House
56 High Street
Sutton Coldfield
West Midlands
B72 1UJ

 

Adstone Construction Group Ltd

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the group is that of a holding company for Adstone Construction Ltd

Fair review of the business

The trading companies profit before tax for the year ended 31 December 2023 of £841,492 compared to a profit for the year ended 31 December 2022 of £1,654,221

The significant improvement in results was due to a reduction in costs incurred to contracts being delayed, and improvements in factory processes to increase output. The introduction of new machinery has increased Fabrication output.

The company has maintained adequate cash resources and retained profits to continue to support its future trading activities.

The group's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2023

2022

Turnover - Adstone Construction Limited full 12 months

£

13,215,143

17,702,719

Gross Profit - Adstone Construction Limited full 12 months

£

2,948,069

3,311,649

Cash in Hand

£

2,581,319

2,663,090

Principal risks and uncertainties

The director's consider that the principal risk to the operations of the group to be exposures arising from working on substantial contracts and the fluctuations in the timing of cash flows relating to these contracts. Care is taken during the negotiation of contract payment terms to alleviate working capital pressures as much as possible.

A further risk is the exposure to fluctuations in steel prices, particularly given many of the contracts are on a fixed price basis. Where possible pre-agreed prices and terms are negotiated with the main steel suppliers for contracted work.

There is a credit risk arising from exposure to customers defaulting on trade debts. The risk is minimised through tight credit control procedures and in only dealing with reputable clients.

The group meets its day to day working capital requirements primarily through significant cash held.

The group's forecasts and projections, taking account of reasonable potential changes in trading performance, show that the group should be able to operate within its current cash held for the foreseeable future.

Approved and authorised by the Board on 21 May 2024 and signed on its behalf by:
 

.........................................
Mrs J A Young
Director

 

Adstone Construction Group Ltd

Directors' Report for the Year Ended 31 December 2023

The directors present their report and the for the year ended 31 December 2023.

Directors of the group

The directors who held office during the year were as follows:

Mrs J A Young

Mr I Young

Mrs T J Smith

Mrs J L Tipping

Information included in the Strategic Report

The Company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Director's Report) Regulations 2013 to set out in the Company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

This includes a summary of the principal risks and uncertainties and an indication of future events.

Going concern

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, thus they continued to adopt the going concern basis of accounting in the preparation of annual financial statements.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

The auditors Bissell & Brown Midlands Ltd are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 21 May 2024 and signed on its behalf by:
 

.........................................
Mrs J A Young
Director

 

Adstone Construction Group Ltd

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Adstone Construction Group Ltd

Independent Auditor's Report to the Members of Adstone Construction Group Ltd

Opinion

We have audited the financial statements of Adstone Construction Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account and Retained Earnings, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Cash Flows, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of 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:

give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2023 and of the group's profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

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 responsibilities for the audit of the financial statements section of our report. We are independent of the group 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

 

Adstone Construction Group Ltd

Independent Auditor's Report to the Members of Adstone Construction Group Ltd (continued)

Matters on which we are required to report by exception

In the light of our 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 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:

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 4], 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 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:

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:

 

Based on our understanding of the Company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK and European regulatory principles, and we considered the extent to which non-compliance might have a material effect on the financial statements of the Company.

 

We also considered those laws and regulations that have a direct impact on the financial statements of the Company, such as the Companies Act 2006 and UK tax legislation and equivalent local laws and regulations applicable to in-scope components.

 

We have also evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements including the risk of override of controls and determined that the principal risks are related to management bias in accounting estimates and judgemental areas of the financial statements.

 

Audit procedures performed by the engagement team included:

discussions with the Board of Directors and management, regarding consideration of known or suspected instances of non-compliance with laws and regulation and fraud

 

Adstone Construction Group Ltd

Independent Auditor's Report to the Members of Adstone Construction Group Ltd (continued)

evaluation and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities;

reviewing relevant meeting minutes including those of the Board of Directors;

identifying and testing journal entries based on risk criteria;

 

We designed our audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and testing transactions entered into outside of the normal course of the Company's business specifically in respect of acquisitions and disposals.

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control;

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

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

......................................
John James Taheny (Senior Statutory Auditor)
For and on behalf of Bissell & Brown Midlands Ltd, Statutory Auditor

Charter House
56 High Street
Sutton Coldfield
West Midlands
B72 1UJ

31 May 2024

 

Adstone Construction Group Ltd

Consolidated Profit and Loss Account and Statement of Retained Earnings for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

13,215,143

17,702,719

Cost of sales

 

(10,087,074)

(14,211,070)

Gross profit

 

3,128,069

3,491,649

Administrative expenses

 

(2,505,102)

(1,921,216)

Other operating income

4

-

2,000

Operating profit

6

622,967

1,572,433

Other interest receivable and similar income

7

12,407

951

Interest payable and similar charges

8

(31,609)

(31,273)

 

(19,202)

(30,322)

Profit before tax

 

603,765

1,542,111

Taxation

12

(115,175)

(424,564)

Profit for the financial year

 

488,590

1,117,547

Profit/(loss) attributable to:

 

Owners of the company

 

488,590

1,117,547

Retained earnings brought forward

 

5,139,095

4,092,972

Dividends paid

 

(107,865)

(71,424)

Retained earnings carried forward

 

5,519,820

5,139,095

 

Adstone Construction Group Ltd

(Registration number: 11983830)
Consolidated Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

13

4,649,717

4,877,234

Current assets

 

Inventories

15

106,124

131,424

Debtors

16

2,177,872

3,369,771

Cash at bank and in hand

 

2,581,319

2,663,090

 

4,865,315

6,164,285

Creditors: Amounts falling due within one year

18

(1,801,503)

(3,427,381)

Net current assets

 

3,063,812

2,736,904

Total assets less current liabilities

 

7,713,529

7,614,138

Creditors: Amounts falling due after more than one year

18

(262,413)

(507,380)

Provisions for liabilities

20

(495,843)

(532,210)

Net assets

 

6,955,273

6,574,548

Capital and reserves

 

Called up share capital

22

9,500

9,500

Other reserves

1,425,953

1,425,953

Retained earnings

5,519,820

5,139,095

Equity attributable to owners of the company

 

6,955,273

6,574,548

Shareholders' funds

 

6,955,273

6,574,548

Approved and authorised by the Board on 21 May 2024 and signed on its behalf by:
 

.........................................
Mrs J A Young
Director

 

Adstone Construction Group Ltd

(Registration number: 11983830)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

13

4,514,146

4,689,845

Investments

14

4,750

4,750

 

4,518,896

4,694,595

Current assets

 

Debtors

16

1,312,556

1,712,222

Cash at bank and in hand

 

80,951

36,389

 

1,393,507

1,748,611

Creditors: Amounts falling due within one year

18

(140,086)

(119,360)

Net current assets

 

1,253,421

1,629,251

Total assets less current liabilities

 

5,772,317

6,323,846

Creditors: Amounts falling due after more than one year

18

(185,413)

(409,206)

Provisions for liabilities

20

(485,155)

(506,494)

Net assets

 

5,101,749

5,408,146

Capital and reserves

 

Called up share capital

22

9,500

9,500

Retained earnings

5,092,249

5,398,646

Shareholders' funds

 

5,101,749

5,408,146

The company made a loss after tax for the financial year of £198,532 (2022 - profit of £956,585).

Approved and authorised by the Board on 21 May 2024 and signed on its behalf by:
 

.........................................
Mrs J A Young
Director

 

Adstone Construction Group Ltd

Consolidated Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

488,590

1,117,547

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

227,517

310,791

Profit on disposal of tangible assets

5

-

(11,852)

Finance income

7

(12,407)

(951)

Finance costs

8

31,518

31,273

Income tax expense

12

115,175

424,564

 

850,393

1,871,372

Working capital adjustments

 

Decrease in inventories

15

25,300

61,669

Decrease/(increase) in trade debtors

16

1,191,899

(1,136,020)

(Decrease)/increase in trade creditors

18

(1,570,846)

1,094,942

Cash generated from operations

 

496,746

1,891,963

Income taxes paid

12

(173,228)

-

Net cash flow from operating activities

 

323,518

1,891,963

Cash flows from investing activities

 

Interest received

12,407

951

Acquisitions of tangible assets

-

(269,001)

Proceeds from sale of tangible assets

 

-

64,699

Net cash flows from investing activities

 

12,407

(203,351)

Cash flows from financing activities

 

Interest paid

8

(31,518)

(31,273)

Repayment of other borrowing

 

(207,058)

(23,018)

Payments to finance lease creditors

 

(71,255)

(89,753)

Dividends paid

(107,865)

(71,424)

Net cash flows from financing activities

 

(417,696)

(215,468)

Net (decrease)/increase in cash and cash equivalents

 

(81,771)

1,473,144

Cash and cash equivalents at 1 January

 

2,663,090

1,189,946

Cash and cash equivalents at 31 December

 

2,581,319

2,663,090

 

Adstone Construction Group Ltd

Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

(Loss)/profit for the year

 

(198,532)

956,585

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

175,699

260,987

Finance costs

17,411

17,879

Income tax expense

12

(21,339)

503,119

 

(26,761)

1,738,570

Working capital adjustments

 

Decrease/(increase) in trade debtors

16

399,666

(1,599,142)

Increase in trade creditors

18

54,290

10,700

Net cash flow from operating activities

 

427,195

150,128

Cash flows from investing activities

 

Acquisitions of tangible assets

-

(219,197)

Cash flows from financing activities

 

Interest paid

(17,411)

(17,879)

Repayment of other borrowing

 

(207,058)

231,016

Payments to finance lease creditors

 

(50,299)

(50,298)

Dividends paid

(107,865)

(71,424)

Net cash flows from financing activities

 

(382,633)

91,415

Net increase in cash and cash equivalents

 

44,562

22,346

Cash and cash equivalents at 1 January

 

36,389

14,043

Cash and cash equivalents at 31 December

 

80,951

36,389

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
Adstone House, Wassage Way
Hampton Lovett Industrial Estate
Droitwich
Worcestershire
WR9 0NX
United Kingdom

These financial statements were authorised for issue by the Board on 21 May 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

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

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2023.

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

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

Going concern

The financial statements have been prepared on the going concern basis. In adopting the going concern basis for preparing the financial statements, the Directors have prepared cash flow forecasts for a period of 14 months from the date of approval of these financial statements which indicate that taking account of possible downsides, the company will have sufficient funds to meet its liabilities as they fall due for that period.

The Company holds significant cash reserves.

The consolidated Adstone group maintains a strong statement of financial position including a substantial bank balance and limited external finance.

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Contract revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services under construction contracts

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the Company will receive the consideration due under the contract;
• the stage of completion of the contract at the end of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the contract can be measured reliably.
• judgements in applying this policy are outlined in note 3.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the Company will receive the consideration due under the contract;
• the stage of completion of the contract at the end of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the contract can be measured reliably.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when 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 reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold Land and Buildings

Open Market Valuation

Plant & Machinery

10% Straight Line

Fixtures & Fittings

15% Reducing balance

Motor Vehicles

20% Reducing balance

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.


Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Inventories

The cost of stock and work in progress comprises direct materials and, where direct labour costs and those overheads that have been incurred on a contract and charged to the profit at each stage of the contract completion.

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Financial instruments

Classification
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.

 Recognition and measurement
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently measured at amortised cost.

Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment.

Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

3

Turnover

The analysis of the group's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

41,861

-

Rendering of services

13,173,282

17,702,719

13,215,143

17,702,719

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

4

Other operating income (continued)

2023
£

2022
£

Miscellaneous other operating income

-

2,000

5

Other gains and losses

The analysis of the group's other gains and losses for the year is as follows:

2023
£

2022
£

Gain on disposal of Tangible assets

-

11,852

6

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

227,517

310,791

Profit on disposal of property, plant and equipment

-

(11,852)

7

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

12,407

951

8

Interest payable and similar expenses

2023
£

2022
£

Interest on obligations under finance leases and hire purchase contracts

26,054

25,341

Interest expense on other finance liabilities

5,464

5,932

Foreign exchange gains

91

-

31,609

31,273

9

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

1,691,483

1,731,844

Social security costs

187,137

198,823

Pension costs, defined contribution scheme

196,372

295,682

Other employee expense

2,636

808

2,077,628

2,227,157

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

9

Staff costs (continued)

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

47

44

Administration and support

12

12

59

56

10

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

273,889

253,530

Contributions paid to money purchase schemes

170,609

267,387

444,498

520,917

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
No.

2022
No.

Accruing benefits under money purchase pension scheme

4

4

11

Auditors' remuneration

2023
£

2022
£

Audit of these financial statements

18,997

20,000


 

12

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

154,785

176,471

UK corporation tax adjustment to prior periods

(3,243)

-

151,542

176,471

Deferred taxation

Arising from origination and reversal of timing differences

(36,367)

248,093

Tax expense in the income statement

115,175

424,564

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

12

Taxation (continued)

Deferred tax

Group

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Excess Capital allowances

-

75,122

Property Revaluation

-

420,721

-

495,843

2022

Asset
£

Liability
£

Excess Capital allowances

-

111,489

Property Revaluation

-

420,721

-

532,210

Company

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Accelerated depreciation

-

64,434

Property revaluation

-

420,721

-

485,155

2022

Asset
£

Liability
£

Accelerated depreciation

-

85,774

Property revaluation

-

420,721

-

506,495

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

13

Tangible assets

Group

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Plant & machinery
£

Total
£

Cost or valuation

At 1 January 2023

3,522,464

54,106

370,366

1,345,008

5,291,944

At 31 December 2023

3,522,464

54,106

370,366

1,345,008

5,291,944

Depreciation

At 1 January 2023

34,989

21,151

28,011

330,559

414,710

Charge for the year

17,613

15,338

74,065

120,501

227,517

At 31 December 2023

52,602

36,489

102,076

451,060

642,227

Carrying amount

At 31 December 2023

3,469,862

17,617

268,290

893,948

4,649,717

At 31 December 2022

3,487,475

32,955

342,355

1,014,449

4,877,234

Included within the net book value of land and buildings above is £3,469,862 (2022 - £3,487,475) in respect of freehold land and buildings.
 

Revaluation

The fair value of the group's Land and Building was revalued on 31 December 2019 by an independent valuer.
The freehold land and building was independently valued at Open Market Value by Fisher German LLP,
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £Nil (2022 - £Nil).
 

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

 

2023
£

2022
£

Motor vehicles

122,337

154,434

Plant & machinery

286,736

322,579

 

409,073

477,013

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

13

Tangible assets (continued)

Company

Land and buildings
£

Motor vehicles
 £

Plant & machinery
£

Total
£

Cost or valuation

At 1 January 2023

3,522,464

187,921

1,345,008

5,055,393

At 31 December 2023

3,522,464

187,921

1,345,008

5,055,393

Depreciation

At 1 January 2023

34,989

-

330,559

365,548

Charge for the year

17,613

37,585

120,501

175,699

At 31 December 2023

52,602

37,585

451,060

541,247

Carrying amount

At 31 December 2023

3,469,862

150,336

893,948

4,514,146

At 31 December 2022

3,487,475

187,921

1,014,449

4,689,845

Included within the net book value of land and buildings above is £3,469,862 (2022 - £3,487,475) in respect of freehold land and buildings.
 

Revaluation

The fair value of the company's Land & Buildings Limited was revalued on 31 December 2019 by an independent valuer.
The freehold property independently valued at Open Market Value by Fisher German LLP.
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £Nil (2022 - £Nil).
 

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

14

Investments

Company

2023
£

2022
£

Investments in subsidiaries

4,750

4,750

Subsidiaries

£

Cost or valuation

At 1 January 2023

4,750

Provision

Carrying amount

At 31 December 2023

4,750

At 31 December 2022

4,750

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Adstone Construction Limited

Adstone House, Wassage Way
Hampton Lovett Industrial Estate
Droitwich
Worcestershire
WR9 0NX

England

Ordinary

100%

100%

Subsidiary undertakings

Adstone Construction Limited

The principal activity of Adstone Construction Limited is design, fabrication, shot blasting, painting and erection of structural steelwork for the construction industry.

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

15

Inventories

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Raw materials and consumables

106,124

131,424

-

-

16

Debtors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Trade debtors

 

788,880

2,123,922

-

-

Amounts owed by related parties

23

-

-

1,312,556

1,712,072

Other debtors

 

108,733

260,056

-

150

Prepayments

 

122,723

120,071

-

-

Gross amount due from customers for contract work

 

1,157,536

865,722

-

-

 

2,177,872

3,369,771

1,312,556

1,712,222

17

Cash and cash equivalents

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Cash at bank

1,983,882

40,417

80,951

36,389

Short-term deposits

597,437

2,622,673

-

-

2,581,319

2,663,090

80,951

36,389

18

Creditors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Due within one year

 

Loans and borrowings

19

94,917

128,263

74,256

107,820

Trade creditors

 

1,353,936

2,828,734

-

1,740

Social security and other taxes

 

146,407

77,052

55,630

-

Other payables

 

7,337

144,825

-

-

Accruals

 

44,121

72,036

10,200

9,800

Corporation tax liability

12

154,785

176,471

-

-

 

1,801,503

3,427,381

140,086

119,360

Due after one year

 

Loans and borrowings

19

262,413

507,380

185,413

409,206

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

19

Loans and borrowings

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Non-current loans and borrowings

Hire purchase contracts

262,413

333,886

185,413

235,712

Other borrowings

-

173,494

-

173,494

262,413

507,380

185,413

409,206

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Current loans and borrowings

Hire purchase contracts

70,959

70,741

50,298

50,298

Other borrowings

23,958

57,522

23,958

57,522

94,917

128,263

74,256

107,820

Company

Other borrowings

Legal mortgage is denominated in GBP with a nominal interest rate of base rate plus 4%. The carrying amount at year end is £23,958 (2022 - £222,092).

The loan is secured on the freehold property at Wassage Way, Droitwich, Worcestershire.

20

Provisions for liabilities

Group

Deferred tax
£

Total
£

At 1 January 2023

532,210

532,210

Additional provisions

(36,367)

(36,367)

At 31 December 2023

495,843

495,843

Company

Deferred tax
£

Total
£

At 1 January 2023

506,494

506,494

Additional provisions

(21,339)

(21,339)

At 31 December 2023

485,155

485,155

 

Adstone Construction Group Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

21

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £196,372 (2022 - £295,682).

22

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

9,500

9,500

9,500

9,500

         

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
Holders of the ordinary share capital have a right to vote and receive dividends.

23

Related party transactions

Company

Summary of transactions with other related parties

At the balance sheet date the company owed £23,958 (2022 £222,092) to Adstone Group SSAS. a pension scheme in which two directors of the company are also the trustees, for market value. This is repayable with an interest rate of 4% above the base rate at Lloyds Bank plc. The loan was repaid after the year end.

The freehold property at Wassage Way, Droitwich, Worcestershire is security for the above loan.