Company registration number 12361699 (England and Wales)
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
GROUP ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
COMPANY INFORMATION
Directors
Mr G D Hughes
Mr J Hughes
Mr I T Pallas
Company number
12361699
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 (HOLDINGS) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 33
HUGHES BROS CONSTRUCTION (HOLDINGS) 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

The group is primarily 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 £34.6M (2022 £56.5M).

 

Despite this, the group achieved a profit after tax of £0.59M (2022 £1.10M)

 

Gross profits remained consistent with prior years at 43.22% (2022 42.59%)

 

 

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 group 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            £34.6M        £56.5M

Gross profit        43.22%        42.59%

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 group is achieving prerecession profit margins and we forecast the rest of 2024 to produce further improved results.

On behalf of the board

Mr G D Hughes
Director
29 August 2024
HUGHES BROS CONSTRUCTION (HOLDINGS) 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.

Ordinary dividends were declared amounting to £Nil. Dividends amounting to £Nil were declared in respect of the Redeemable shares. 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 group'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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the 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 auditor of the company is aware of that information.

HUGHES BROS CONSTRUCTION (HOLDINGS) 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 (HOLDINGS) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
- 4 -
Opinion

We have audited the financial statements of Hughes Bros Construction (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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:

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 (HOLDINGS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
- 6 -

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.

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 (HOLDINGS) LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
34,641,408
56,494,633
Cost of sales
(19,668,513)
(32,431,050)
Gross profit
14,972,895
24,063,583
Administrative expenses
(15,280,837)
(22,686,654)
Other operating income
297,700
131,571
Operating (loss)/profit
3
(10,242)
1,508,500
Interest receivable and similar income
7
13,529
2,216
Interest payable and similar expenses
8
(84,135)
(528,479)
Amounts written off investments
9
-
(124,485)
Fair value gains and losses on investment properties
14
-
0
729,922
(Loss)/profit before taxation
(80,848)
1,587,674
Tax on (loss)/profit
10
671,573
(486,430)
Profit for the financial year
28
590,725
1,101,244
Other comprehensive income
Revaluation of tangible fixed assets
-
0
1,224,820
Tax relating to other comprehensive income
-
0
(306,205)
Total comprehensive income for the year
590,725
2,019,859
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
GROUP BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
3,331,256
3,272,010
Investment property
14
1,401,307
2,793,719
4,732,563
6,065,729
Current assets
Stocks
17
391,586
784,495
Debtors
18
8,015,537
9,692,481
Cash at bank and in hand
1,386,691
1,239,016
9,793,814
11,715,992
Creditors: amounts falling due within one year
19
(9,669,679)
(13,408,310)
Net current assets/(liabilities)
124,135
(1,692,318)
Total assets less current liabilities
4,856,698
4,373,411
Creditors: amounts falling due after more than one year
20
(835,345)
(836,948)
Provisions for liabilities
Deferred tax liability
23
541,281
647,116
(541,281)
(647,116)
Net assets
3,480,072
2,889,347
Capital and reserves
Called up share capital
25
640
640
Revaluation reserve
26
918,615
918,615
Other reserves
(3,299,960)
(3,299,960)
Profit and loss reserves
28
5,860,777
5,270,052
Total equity
3,480,072
2,889,347
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:
29 August 2024
Mr G D Hughes
Director
Company registration number 12361699 (England and Wales)
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
COMPANY BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
2,635,024
2,631,000
Investment property
14
1,401,307
2,793,719
Investments
15
3,300,000
3,300,000
7,336,331
8,724,719
Current assets
Debtors
18
178,201
119,250
Cash at bank and in hand
329,394
18,195
507,595
137,445
Creditors: amounts falling due within one year
19
(1,940,293)
(2,885,840)
Net current liabilities
(1,432,698)
(2,748,395)
Total assets less current liabilities
5,903,633
5,976,324
Creditors: amounts falling due after more than one year
20
(590,804)
(592,970)
Provisions for liabilities
Deferred tax liability
23
372,099
492,539
(372,099)
(492,539)
Net assets
4,940,730
4,890,815
Capital and reserves
Called up share capital
25
640
640
Revaluation reserve
26
918,615
918,615
Profit and loss reserves
28
4,021,475
3,971,560
Total equity
4,940,730
4,890,815

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £49,915 (2022 - £487,596 profit).

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:
29 August 2024
Mr G D Hughes
Director
Company registration number 12361699 (England and Wales)
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
Share capital
Revaluation reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 December 2021
640
-
0
(3,299,960)
4,808,807
1,509,487
Year ended 30 November 2022:
Profit for the year
-
-
-
1,101,245
1,101,245
Other comprehensive income:
Revaluation of tangible fixed assets
-
1,224,820
-
-
1,224,820
Tax relating to other comprehensive income
-
(306,205)
-
-
0
(306,205)
Total comprehensive income for the year
-
918,615
-
1,101,245
2,019,860
Dividends
11
-
-
-
(640,000)
(640,000)
Balance at 30 November 2022
640
918,615
(3,299,960)
5,270,052
2,889,347
Year ended 30 November 2023:
Profit and total comprehensive income for the year
-
-
-
590,725
590,725
Balance at 30 November 2023
640
918,615
(3,299,960)
5,860,777
3,480,072
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 11 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
640
-
0
4,123,964
4,124,604
Year ended 30 November 2022:
Profit for the year
-
-
487,596
487,596
Other comprehensive income:
Revaluation of tangible fixed assets
-
1,224,820
-
1,224,820
Tax relating to other comprehensive income
-
(306,205)
-
0
(306,205)
Total comprehensive income
-
918,615
487,596
1,406,211
Dividends
11
-
-
(640,000)
(640,000)
Balance at 30 November 2022
640
918,615
3,971,560
4,890,815
Year ended 30 November 2023:
Profit and total comprehensive income
-
-
49,915
49,915
Balance at 30 November 2023
640
918,615
4,021,475
4,940,730
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
3,601
1,693,202
Interest paid
(84,135)
(528,479)
Income taxes paid
(235,688)
(49,999)
Net cash (outflow)/inflow from operating activities
(316,222)
1,114,724
Investing activities
Purchase of intangible assets
-
(320,000)
Purchase of tangible fixed assets
(40,024)
-
Proceeds from disposal of tangible fixed assets
204,506
77,500
Purchase of investment property
-
(1,213,207)
Proceeds from disposal of investment property
1,316,878
-
Interest received
11,085
6
Net cash generated from/(used in) investing activities
1,492,445
(1,455,701)
Financing activities
Proceeds from borrowings
660,000
2,000,000
Repayment of borrowings
(1,202,724)
(1,548,871)
Proceeds from new bank loans
-
208,325
Repayment of bank loans
(275,129)
(253,238)
Payment of finance leases obligations
(210,695)
(293,802)
Net cash (used in)/generated from financing activities
(1,028,548)
112,414
Net increase/(decrease) in cash and cash equivalents
147,675
(228,563)
Cash and cash equivalents at beginning of year
1,239,016
1,467,579
Cash and cash equivalents at end of year
1,386,691
1,239,016
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 13 -
1
Accounting policies
Company information

Hughes Bros Construction (Holdings) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Hughes Group, Plantation Cottage, Middleton St George, Darlington, DL2 1RJ.

 

The group consists of Hughes Bros Construction (Holdings) Limited and all of its subsidiaries.

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, modified to include the revaluation of freehold properties and to include investment properties fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

Acquisitions are accounted for using merger accounting where appropriate.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Hughes Bros Construction (Holdings) Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 30 November 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

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

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

1.5
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.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business 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.

1.7
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:

Freehold land and buildings
not depreciated
Plant and equipment
25% on reducing balance
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 recognised in the profit and loss account.

1.8
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

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

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

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.10
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.

1.11
Financial instruments

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

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.

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 group 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 group 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.

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

Derecognition of financial liabilities

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

1.12
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.13
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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 if, and only if, there is 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.

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.14
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.

1.15
Retirement benefits

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

1.16
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 leased asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the group’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):
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)
Loss on disposal of investment property
75,534
-
0
Amortisation of intangible assets
-
320,000
Operating lease charges
699,150
939,243
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
3,350
3,250
Audit of the financial statements of the company's subsidiaries
23,600
22,750
26,950
26,000
5
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Direct
111
135
-
-
Indirect
27
35
-
-
Directors
3
3
-
-
Total
141
173
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
12,149,597
17,783,887
-
0
-
0
Social security costs
533,201
827,645
-
-
Pension costs
158,391
151,148
-
0
-
0
12,841,189
18,762,680
-
0
-
0
6
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
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
6
Directors' remuneration
(Continued)
- 20 -
Remuneration disclosed above includes 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.

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
-
0
6
Other interest income
13,529
2,210
Total income
13,529
2,216
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Dividends on redeemable shares not classified as equity
-
0
420,000
Other interest on financial liabilities
71,310
96,168
71,310
516,168
Other finance costs:
Interest on finance leases and hire purchase contracts
14,085
10,582
Other interest
(1,260)
1,729
Total finance costs
84,135
528,479
9
Amounts written off investments
2023
2022
£
£
Amounts written back to/(written off) current loans
-
(124,485)
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
66,797
331,001
Adjustments in respect of prior periods
(632,535)
-
0
Total current tax
(565,738)
331,001
Deferred tax
Origination and reversal of timing differences
(105,835)
155,429
Total tax (credit)/charge
(671,573)
486,430

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.

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
(80,848)
1,587,674
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.00% (2022: 19.00%)
(18,595)
301,658
Tax effect of expenses that are not deductible in determining taxable profit
6,477
146,025
Tax effect of utilisation of tax losses not previously recognised
(20,346)
-
0
Unutilised tax losses carried forward
-
0
10,021
Effect of change in corporation tax rate
(8,415)
37,304
Permanent capital allowances in excess of depreciation
1,841
(8,578)
Under/(over) provided in prior years
(632,535)
-
0
Taxation (credit)/charge
(671,573)
486,430

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Revaluation of property
-
306,205
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
-
640,000
12
Intangible fixed assets
Group
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
-
0
At 30 November 2022
-
0
The company had no intangible fixed assets at 30 November 2023 or 30 November 2022.
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 December 2022
2,631,000
1,009,183
502,260
4,142,443
Additions
4,024
360,000
-
0
364,024
Disposals
-
0
(195,388)
(168,875)
(364,263)
At 30 November 2023
2,635,024
1,173,795
333,385
4,142,204
Depreciation and impairment
At 1 December 2022
-
0
686,518
183,915
870,433
Depreciation charged in the year
-
0
84,455
62,941
147,396
Eliminated in respect of disposals
-
0
(104,586)
(102,295)
(206,881)
At 30 November 2023
-
0
666,387
144,561
810,948
Carrying amount
At 30 November 2023
2,635,024
507,408
188,824
3,331,256
At 30 November 2022
2,631,000
322,665
318,345
3,272,010
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
13
Tangible fixed assets
(Continued)
- 23 -
Company
Freehold land and buildings
£
Cost or valuation
At 1 December 2022
2,631,000
Additions
4,024
At 30 November 2023
2,635,024
Depreciation and impairment
At 1 December 2022 and 30 November 2023
-
0
Carrying amount
At 30 November 2023
2,635,024
At 30 November 2022
2,631,000

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
376,041
101,109
-
0
-
0
Motor vehicles
158,163
291,761
-
0
-
0
534,204
392,870
-
-

Land and buildings with a carrying amount of £2,631,000 were revalued at November 2022 by Addisons Surveyors LLP, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

The revaluation surplus is disclosed in note 26.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Freehold buildings
2023
2022
£
£
Group
Cost
1,410,204
1,403,900
Company
Cost
1,410,204
1,403,900
Carrying value
1,410,204
1,403,900
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 24 -
14
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 December 2022
2,793,718
2,793,718
Disposals
(1,392,411)
(1,392,411)
At 30 November 2023
1,401,307
1,401,307

Where materially different from cost, the fair value of the investment properties has been arrived at on the basis of valuations carried out Chartered Surveyors, who are not connected with the company. The valuations were made on an open market value basis by reference to market evidence of transaction prices for similar properties.

15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
3,300,000
3,300,000
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 December 2022 and 30 November 2023
3,300,000
Carrying amount
At 30 November 2023
3,300,000
At 30 November 2022
3,300,000
16
Subsidiaries

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

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Hughes Bros Construction Limited
Plantation Cottage, Middleton St George, Darlington DL2 1RJ
Ordinary
100.00
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 25 -
17
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
391,586
784,495
-
-
18
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
7,087,997
8,501,341
138,201
70,200
Gross amounts owed by contract customers
116,235
-
0
-
0
-
0
Corporation tax recoverable
222,287
-
0
-
0
-
0
Amounts owed by group undertakings
-
-
-
9,000
Other debtors
551,867
1,154,814
40,000
40,050
7,978,386
9,656,155
178,201
119,250
Amounts falling due after more than one year:
Corporation tax recoverable
37,151
36,326
-
0
-
0
Total debtors
8,015,537
9,692,481
178,201
119,250
19
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
21
91,244
284,064
4,151
196,097
Obligations under finance leases
22
181,859
149,260
-
0
-
0
Other borrowings
21
1,508,627
2,051,351
314,111
1,000,222
Trade creditors
6,112,975
7,773,742
-
0
3,392
Amounts owed to group undertakings
-
0
-
0
268,209
395,209
Corporation tax payable
-
0
578,314
69,822
3,025
Other taxation and social security
111,763
203,933
-
-
Dividends payable
1,280,000
1,280,000
1,280,000
1,280,000
Other creditors
215,252
243,628
-
0
-
0
Accruals and deferred income
167,959
844,018
4,000
7,895
9,669,679
13,408,310
1,940,293
2,885,840
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 26 -
20
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
21
625,435
707,744
590,804
592,970
Obligations under finance leases
22
209,910
129,204
-
0
-
0
835,345
836,948
590,804
592,970
Amounts included above which fall due after five years are as follows:
Payable by instalments
360,481
355,800
360,481
355,800
Payable other than by instalments
208,325
208,325
208,325
208,325
568,806
564,125
568,806
564,125
21
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
716,679
991,808
594,955
789,067
Redeemable shares
222
222
222
222
Other loans
1,508,405
2,051,129
313,889
1,000,000
2,225,306
3,043,159
909,066
1,789,289
Payable within one year
1,599,871
2,335,415
318,262
1,196,319
Payable after one year
625,435
707,744
590,804
592,970

Security

Bank loans of £121,724 are unsecured. The remaining bank loans are secured by way of fixed and floating charges over the assets of the company.

 

The directors have given personal guarantees in respect of the bank loans.

 

Other loans of £118,888 are secured against certain of the group's investment properties. The remaining other loans are unsecured.

Repayment

Bank loans are repayable as follows:

 

 

Other loans are repayable on demand and attract interest at rates of between Nil and 12% per annum.

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 27 -
22
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
215,665
161,829
-
0
-
0
In two to five years
262,162
141,524
-
0
-
0
477,827
303,353
-
-
Less: future finance charges
(86,058)
(24,889)
-
0
-
0
391,769
278,464
-
0
-
0

Obligations under finance leases are secured against the assets to which they relate.

23
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
174,027
159,974
Revaluations
368,246
488,686
Other timing differences
(992)
(1,544)
541,281
647,116
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
3,853
3,853
Revaluations
368,246
488,686
372,099
492,539
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
23
Deferred taxation
(Continued)
- 28 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 December 2022
647,116
492,539
Credit to profit or loss
(105,835)
(120,440)
Liability at 30 November 2023
541,281
372,099
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
158,391
151,148

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

25
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
40
40
40
40
A Ordinary shares of £1 each
600
600
600
600
640
640
640
640
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Redeemable shares of £1 each
222
222
222
222
Preference shares classified as liabilities
222
222
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
25
Share capital
(Continued)
- 29 -

The shares rank pari passu other than in the following respects:

 

Ordinary shares

 

A Ordinary shares

 

Redeemable shares

26
Revaluation reserve
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
918,615
-
0
918,615
-
0
Revaluation surplus arising in the year
-
0
1,224,820
-
0
1,224,820
Deferred tax on revaluation of tangible assets
-
(306,205)
-
(306,205)
At the end of the year
918,615
918,615
918,615
918,615
27
Merger reserve
2023
2022
Group
£
£
At the beginning and end of the year
(3,299,960)
(3,299,960)
2023
2022
Company
£
£
At the beginning and end of the year
-
-
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 30 -
28
Profit and loss reserves
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
5,270,052
4,808,808
3,971,560
4,123,964
Profit for the year
590,725
1,101,244
49,915
487,596
Dividends
-
(640,000)
-
(640,000)
At the end of the year
5,860,777
5,270,052
4,021,475
3,971,560
Group
Company
2023
2022
2023
2022
£
£
£
£
Non-distributable profits included above
At the beginning of the year
547,441
-
547,441
-
Non distributable profits in the year
(361,316)
547,441
(361,316)
547,441
At the end of the year
186,125
547,441
186,125
547,441
Distributable profits
5,674,652
4,722,611
3,835,350
3,424,119
29
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.

 

Hughes Bros Construction Limited has given guarantees in respect of certain hire purchase agreements which were formally assigned to Hughes Bros Plant Hire Limited during the year.

30
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
19,965
14,460
-
-
Between two and five years
-
10,125
-
-
19,965
24,585
-
-
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 31 -
31
Related party transactions
Transactions with related parties

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

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Group
Other related parties
936,412
370,688
4,082,992
6,927,756
Company
Other related parties
108,000
107,000
-
-
Interest receivable
2023
2022
£
£
Group
Key management personnel
(2,444)
(2,210)

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Key management personnel
(19,541,717)
(1,301,717)
Other related parties
(2,439,297)
(1,566,546)
Company
Key management personnel
(1,280,000)
(1,280,000)
Other related parties
(195,000)
-

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group
Key management personnel
114,131
111,687
Other related parties
946,246
781,700
Company
Other related parties
178,200
110,200
HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
31
Related party transactions
(Continued)
- 32 -
Other information

In addition to the above:

 

During the year the group 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 group 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 group made payments totalling £Nil on behalf of Hughes Bros Plant Hire Limited (2022 : £25,000).

 

During the year the group sold tangible fixed assets to other related parties for total consideration of £64,833 (2022 : £Nil).

 

During the year the group 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 group owed Joseph Hughes Investments Unlimited £215,000 (2022 : £Nil). The advances were interest free.

 

During the year the group paid dividends of £Nil to Hughes Bros Investments Unlimited (2022 : £420,000).

 

A director has given a personal guarantee in respect of the group'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.

32
Directors' transactions

Dividends totalling £0 (2022 - £640,000) were payable in the year in respect of shares held by the company's directors.

During the year the group 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.

HUGHES BROS CONSTRUCTION (HOLDINGS) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 33 -
33
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
590,725
1,101,245
Adjustments for:
Taxation (credited)/charged
(671,573)
486,430
Finance costs
84,135
528,479
Investment income
(13,529)
(2,216)
Gain on disposal of tangible fixed assets
(47,124)
(31,886)
Loss on disposal of investment property
75,534
-
0
Fair value gain on investment properties
-
0
(729,922)
Amortisation and impairment of intangible assets
-
320,000
Depreciation and impairment of tangible fixed assets
147,396
216,313
Other gains and losses
-
124,485
Movements in working capital:
Decrease/(increase) in stocks
392,909
(379,372)
Decrease/(increase) in debtors
1,902,500
(2,805,384)
(Decrease)/increase in creditors
(2,457,372)
2,865,030
Cash generated from operations
3,601
1,693,202
34
Analysis of changes in net debt - group
1 December 2022
Cash flows
New finance leases
30 November 2023
£
£
£
£
Cash at bank and in hand
1,239,016
147,675
-
1,386,691
Borrowings excluding overdrafts
(3,043,159)
817,853
-
(2,225,306)
Obligations under finance leases
(278,464)
210,695
(324,000)
(391,769)
(2,082,607)
1,176,223
(324,000)
(1,230,384)
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