Company registration number 05635308 (England and Wales)
HUGHES BROS CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
HUGHES BROS CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
Mr G D Hughes
Mr J Hughes
Mr I T Pallas
Company number
05635308
Registered office
Hughes Group
Plantation Cottage
Middleton St George
Darlington
DL2 1RJ
Auditor
Davies Tracey
Swan House
Westpoint Road
Teesdale Business Park
Stockton on Tees
TS17 6BP
HUGHES BROS CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
HUGHES BROS CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 November 2023.
Review of the business
Hughes Bros Construction Ltd is a civil engineering, roads, sewers and plotwork specialist which operates throughout the Northeast and Yorkshire. Our client list is made up of multiple national plc housebuilders.
During the period, as expected with the country in recession, turnover fell to £34.5M (2022 £56.3M).
Despite this, the company achieved a profit after tax of £0.54M (2022 £1.01M).
Gross profits remained consistent with prior years at 43.01% (2022 42.46%).
Principal risks and uncertainties
Continuity of work
Planning issues contributed to schemes not starting as envisaged, alongside regulation changes which often disrupted the continuity of work. In turn this effected our net profit for the year.
Going forward the change in Government, its plan to build more homes and relaxing of planning regulations has resulted in Hughes Bros Construction Ltd being awarded more schemes and the directors have secured a forward order book north of £64M.
Market risk
Interest rates are still high which effects the affordability in the private sector. The directors have mitigated this risk by securing schemes on social housing projects alongside our private sector work. Current split 50% social/50% private (2022 85%/15%)
Health and safety
The company continues to invest in its health and safety department. We ensure all staff have adequate training, qualifications and are sufficiently supervised. All sites are audited monthly and reported to the directors for review.
Key performance indicators
2023 2022
Turnover £34.5M £56.3M
Gross profit 43.01% 42.46%
Reporting
We run a site-by-site P&L monthly alongside our management accounts which is reviewed by the directors and commercial department.
Results thus far for 2024 show the company is achieving prerecession profit margins and we forecast the rest of 2024 to produce further improved results.
Mr G D Hughes
Director
29 August 2024
HUGHES BROS CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 November 2023.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr G D Hughes
Mr J Hughes
Mr I T Pallas
Future developments
The directors' aim is continued growth, increased market share, diversifying revenue streams and maximising profit by reduction of direct and operating costs where possible, without effecting the company's high standards.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
HUGHES BROS CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
On behalf of the board
Mr G D Hughes
Director
29 August 2024
HUGHES BROS CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUGHES BROS CONSTRUCTION LIMITED
- 4 -
Opinion
We have audited the financial statements of Hughes Bros Construction Limited (the 'company') for the year ended 30 November 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 November 2023 and of its 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HUGHES BROS CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUGHES BROS CONSTRUCTION LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is the extent to which an audit conducted under ISAs (UK) is capable of detecting irregularity, including fraud. Our procedures include:
obtaining an understanding of the legal and regulatory frameworks applicable to the company, such as the Companies Act 2006;
obtaining an understanding of how the company complies with the applicable legal and regulatory frameworks;
assessing the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, with audit procedures including reviewing internal controls, testing supporting documentation, enquiring of company management and obtaining written confirmation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
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.
HUGHES BROS CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUGHES BROS CONSTRUCTION LIMITED (CONTINUED)
- 6 -
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.
Craig Davies (Senior Statutory Auditor)
For and on behalf of Davies Tracey
Chartered Accountants and Statutory Auditors
Swan House
Westpoint Road
Teesdale Business Park
Stockton on Tees
TS17 6BP
29 August 2024
HUGHES BROS CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
34,513,841
56,364,972
Cost of sales
(19,668,513)
(32,431,050)
Gross profit
14,845,328
23,933,922
Administrative expenses
(15,149,542)
(22,520,173)
Other operating income
297,700
131,571
Operating (loss)/profit
3
(6,514)
1,545,320
Interest receivable and similar income
6
13,529
2,216
Interest payable and similar expenses
7
(84,135)
(108,479)
Amounts written off investments
8
-
(124,485)
(Loss)/profit before taxation
(77,120)
1,314,572
Tax on (loss)/profit
9
617,930
(300,924)
Profit for the financial year
540,810
1,013,648
HUGHES BROS CONSTRUCTION LIMITED
BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
696,232
641,010
Current assets
Stocks
13
391,586
784,495
Debtors
14
8,175,367
9,977,440
Cash at bank and in hand
1,057,297
1,220,821
9,624,250
11,982,756
Creditors: amounts falling due within one year
15
(8,067,418)
(10,926,680)
Net current assets
1,556,832
1,056,076
Total assets less current liabilities
2,253,064
1,697,086
Creditors: amounts falling due after more than one year
16
(244,541)
(243,978)
Provisions for liabilities
Deferred tax liability
19
169,182
154,577
(169,182)
(154,577)
Net assets
1,839,341
1,298,531
Capital and reserves
Called up share capital
21
40
40
Profit and loss reserves
1,839,301
1,298,491
Total equity
1,839,341
1,298,531
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
Mr G D Hughes
Director
Company registration number 05635308 (England and Wales)
HUGHES BROS CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 December 2021
40
684,843
684,883
Year ended 30 November 2022:
Profit and total comprehensive income
-
1,013,648
1,013,648
Dividends
10
-
(400,000)
(400,000)
Balance at 30 November 2022
40
1,298,491
1,298,531
Year ended 30 November 2023:
Profit and total comprehensive income
-
540,810
540,810
Balance at 30 November 2023
40
1,839,301
1,839,341
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
1
Accounting policies
Company information
Hughes Bros Construction Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hughes Group, Plantation Cottage, Middleton St George, Darlington, DL2 1RJ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. 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.
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.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
25% on reducing balance/25% on cost
Motor vehicles
25% on cost
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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
23,600
22,750
Depreciation of owned tangible fixed assets
71,481
94,430
Depreciation of tangible fixed assets held under finance leases
75,915
121,883
Profit on disposal of tangible fixed assets
(47,124)
(31,886)
Amortisation of intangible assets
-
320,000
Operating lease charges
795,150
1,035,243
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 15 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Direct
111
135
Indirect
27
35
Directors
3
3
Total
141
173
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
12,149,597
17,783,887
Social security costs
533,201
827,645
Pension costs
158,391
151,148
12,841,189
18,762,680
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
19,212
999,001
Company pension contributions to defined contribution schemes
32,000
24,000
51,212
1,023,001
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
333,000
Company pension contributions to defined contribution schemes
n/a
24,000
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 16 -
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
6
Other interest income
13,529
2,210
Total income
13,529
2,216
7
Interest payable and similar expenses
2023
2022
£
£
Other interest on financial liabilities
71,310
96,168
Interest on finance leases and hire purchase contracts
14,085
10,582
Other interest
(1,260)
1,729
84,135
108,479
8
Amounts written off investments
2023
2022
£
£
Amounts written back to/(written off) current loans
-
(124,485)
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
327,976
Adjustments in respect of prior periods
(632,535)
Total current tax
(632,535)
327,976
Deferred tax
Origination and reversal of timing differences
14,605
(27,052)
Total tax (credit)/charge
(617,930)
300,924
The standard rate of corporation tax has changed form the previous period which reflects the increase in the main rate of corporation tax enacted by the United Kingdom Government.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
9
Taxation
(Continued)
- 17 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(77,120)
1,314,572
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.00% (2022: 19.00%)
(17,738)
249,769
Tax effect of expenses that are not deductible in determining taxable profit
6,190
66,225
Effect of change in corporation tax rate
1,168
(6,492)
Group relief
23,144
Permanent capital allowances in excess of depreciation
1,841
(8,578)
Under/(over) provided in prior years
(632,535)
Taxation (credit)/charge for the year
(617,930)
300,924
10
Dividends
2023
2022
£
£
Interim paid
400,000
11
Intangible fixed assets
Goodwill
£
Cost
At 1 December 2022 and 30 November 2023
320,000
Amortisation and impairment
At 1 December 2022 and 30 November 2023
320,000
Carrying amount
At 30 November 2023
At 30 November 2022
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 18 -
12
Tangible fixed assets
Plant and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 December 2022
1,009,183
502,260
1,511,443
Additions
360,000
360,000
Disposals
(195,388)
(168,875)
(364,263)
At 30 November 2023
1,173,795
333,385
1,507,180
Depreciation and impairment
At 1 December 2022
686,518
183,915
870,433
Depreciation charged in the year
84,455
62,941
147,396
Eliminated in respect of disposals
(104,586)
(102,295)
(206,881)
At 30 November 2023
666,387
144,561
810,948
Carrying amount
At 30 November 2023
507,408
188,824
696,232
At 30 November 2022
322,665
318,345
641,010
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
376,041
101,109
Motor vehicles
158,163
291,761
534,204
392,870
13
Stocks
2023
2022
£
£
Raw materials and consumables
391,586
784,495
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
6,949,796
8,431,141
Gross amounts owed by contract customers
116,235
Corporation tax recoverable
292,109
Amounts owed by group undertakings
268,209
395,209
Other debtors
511,867
1,114,764
8,138,216
9,941,114
2023
2022
Amounts falling due after more than one year:
£
£
Corporation tax recoverable
37,151
36,326
Total debtors
8,175,367
9,977,440
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
87,093
87,967
Obligations under finance leases
18
181,859
149,260
Other borrowings
17
1,194,516
1,051,129
Trade creditors
6,112,976
7,770,351
Amounts owed to group undertakings
9,000
Corporation tax
575,289
Other taxation and social security
111,763
203,933
Other creditors
215,252
243,628
Accruals and deferred income
163,959
836,123
8,067,418
10,926,680
Obligations under finance leases are secured against the assets to which they relate.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
34,631
114,774
Obligations under finance leases
18
209,910
129,204
244,541
243,978
Obligations under finance leases are secured against the assets to which they relate.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 20 -
17
Loans and overdrafts
2023
2022
£
£
Bank loans
121,724
202,741
Other loans
1,194,516
1,051,129
1,316,240
1,253,870
Payable within one year
1,281,609
1,139,096
Payable after one year
34,631
114,774
The bank loan is repayable in monthly instalments by April 2025 and attracts interest at 7.95% per annum.
Other loans are repayable on demand and attract interest at rates between Nil and 0.5% per calendar month.
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
215,665
161,829
In two to five years
262,162
141,524
477,827
303,353
Less: future finance charges
(86,058)
(24,889)
391,769
278,464
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
170,174
156,121
Other timing differences
(992)
(1,544)
169,182
154,577
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
19
Deferred taxation
(Continued)
- 21 -
2023
Movements in the year:
£
Liability at 1 December 2022
154,577
Charge to profit or loss
14,605
Liability at 30 November 2023
169,182
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
158,391
151,148
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
40
40
40
40
22
Financial commitments, guarantees and contingent liabilities
Grants receivable may be repayable in part or in full if certain conditions associated with the grants are not met.
The company has given guarantees in respect of certain hire purchase agreements which were formally assigned to Hughes Bros Plant Hire Limited during previous years.
A bank loan advanced to the company's parent undertaking, Hughes Bros Construction (Holdings) Limited, during the year is secured against certain of the company's assets. The balance outstanding on the loan as at 30 November 2023 was £386,630.
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
19,965
14,460
Between two and five years
10,125
19,965
24,585
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Other related parties
828,412
263,688
4,082,992
6,927,756
Interest receivable
2023
2022
£
£
Key management personnel
(2,444)
(2,210)
2023
2022
Amounts due to related parties
£
£
Key management personnel
(21,717)
(21,717)
Other related parties
(2,244,297)
(1,566,546)
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Key management personnel
114,131
111,687
Other related parties
768,046
671,500
Other information
HUGHES BROS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
24
Related party transactions
(Continued)
- 23 -
In addition to the above:
During the year the company made payments totalling £Nil on behalf of Hughes Bros Plant Hire Limited (2022 : £25,000).
During the year the company sold tangible fixed assets to other related parties for total consideration of £64,833 (2022 : £Nil)
During the year the company received advances of £75,000 from, and made repayments of £345,000 to, Hughes Bros Investments Unlimited, a company under common control. At 30 November 2023 the company owed Hughes Bros Investments Unlimited £839,516 (2022 : £1,051,129). Interest payable in respect of the year ended 30 November 2023 relating to this loan amounted to £58,387 (2022 : £88,629).
During the year the company received advances of £250,000 from, and made repayments of £35,000 to, Joseph Hughes Investments Unlimited, a company under common control. At 30 November 2023 the company owed Joseph Hughes Investments Unlimited £215,000 (2022 : £Nil). The advances were interest free.
A director has given a personal guarantee in respect of the company's obligations under a lease for land and buildings. As at 30 November 2023 the annual rent payable in respect of these land and buildings was £13,500 plus VAT.
The company has given a guarantee limited to £150,000 in respect of a bank loan advanced to its parent undertaking, Hughes Bros Construction (Holdings) Limited. The guarantee is secured against the assets of the company.
25
Directors' transactions
During the year the company made advances to directors of £2,444 and £Nil was repaid by the directors (2022 : £2,210 and £Nil respectively). Interest was charged at 2% and 2.25% per annum. All amounts were repayable on demand.
26
Ultimate controlling party
The only group in which the results are consolidated is that headed by the company's immediate and ultimate parent undertaking, Hughes Bros Construction (Holdings) Limited, whose registered office is:
Plantation Cottage
Sadberge Road
Middleton St. George
Darlington
England
DL2 1RJ
Consolidated financial statements are available to the public and can be obtained from Companies House.
2023-11-302022-12-01falseCCH SoftwareCCH Accounts Production 2024.200No description of principal activityMr G D HughesMr J HughesMr I T Pallasfalsefalse056353082022-12-012023-11-3005635308bus:Director12022-12-012023-11-3005635308bus:Director22022-12-012023-11-3005635308bus:Director32022-12-012023-11-3005635308bus:RegisteredOffice2022-12-012023-11-30056353082023-11-30056353082021-12-012022-11-3005635308core:ContinuingOperations2022-12-012023-11-3005635308core:RetainedEarningsAccumulatedLosses2021-12-012022-11-3005635308core:RetainedEarningsAccumulatedLosses2022-12-012023-11-30056353082022-11-3005635308core:PlantMachinery2023-11-3005635308core:MotorVehicles2023-11-3005635308core:PlantMachinery2022-11-3005635308core:MotorVehicles2022-11-3005635308core:CurrentFinancialInstrumentscore:WithinOneYear2023-11-3005635308core:CurrentFinancialInstrumentscore:WithinOneYear2022-11-3005635308core:Non-currentFinancialInstrumentscore:AfterOneYear2023-11-3005635308core:Non-currentFinancialInstrumentscore:AfterOneYear2022-11-3005635308core:CurrentFinancialInstruments2023-11-3005635308core:CurrentFinancialInstruments2022-11-3005635308core:Non-currentFinancialInstruments2023-11-3005635308core:Non-currentFinancialInstruments2022-11-3005635308core:ShareCapital2023-11-3005635308core:ShareCapital2022-11-3005635308core:RetainedEarningsAccumulatedLosses2023-11-3005635308core:RetainedEarningsAccumulatedLosses2022-11-3005635308core:ShareCapital2021-11-3005635308core:RetainedEarningsAccumulatedLosses2021-11-3005635308core:Goodwill2022-12-012023-11-3005635308core:PlantMachinery2022-12-012023-11-3005635308core:MotorVehicles2022-12-012023-11-3005635308dpl:Item12022-12-012023-11-3005635308dpl:Item12021-12-012022-11-3005635308dpl:Item22022-12-012023-11-3005635308dpl:Item22021-12-012022-11-300563530812022-12-012023-11-300563530812021-12-012022-11-3005635308core:UKTax2022-12-012023-11-3005635308core:UKTax2021-12-012022-11-3005635308core:Goodwill2022-11-3005635308core:Goodwill2023-11-3005635308core:Goodwill2022-11-3005635308core:PlantMachinery2022-11-3005635308core:MotorVehicles2022-11-30056353082022-11-3005635308core:WithinOneYear2023-11-3005635308core:WithinOneYear2022-11-3005635308core:BetweenTwoFiveYears2023-11-3005635308core:BetweenTwoFiveYears2022-11-3005635308core:OtherRelatedPartiescore:SaleOrPurchaseGoods2022-12-012023-11-3005635308core:OtherRelatedPartiescore:SaleOrPurchaseGoods2021-12-012022-11-3005635308bus:PrivateLimitedCompanyLtd2022-12-012023-11-3005635308bus:FRS1022022-12-012023-11-3005635308bus:Audited2022-12-012023-11-3005635308bus:FullAccounts2022-12-012023-11-30xbrli:purexbrli:sharesiso4217:GBP