Company registration number 01230435 (England and Wales)
C.L.C. CONTRACTORS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
C.L.C. CONTRACTORS LIMITED
COMPANY INFORMATION
Directors
Mr P I Armitage
Mr R Boal
Mr L Elliott
Mr M S Hilton
Mr N A Hilton
Mr A J McDonald
Mr C P Pritchard
Mr S Reeve
Mr J Ryder
Mr M J Triner
Company number
01230435
Registered office
Unit 2 Northbrook Industrial Estate
Vincent Avenue
Southampton
Hampshire
SO16 6PB
Auditor
Moore (South) LLP
City Gates
2 - 4 Southgate
Chichester
West Sussex
PO19 8DJ
C.L.C. CONTRACTORS LIMITED
CONTENTS
Page
Strategic report
1 - 6
Directors' report
7 - 9
Independent auditor's report
10 - 13
Statement of comprehensive income
14
Balance sheet
15
Statement of changes in equity
16
Notes to the financial statements
17 - 31
C.L.C. CONTRACTORS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
Who we are
C.L.C Contractors Limited ("CLC"), the "Company", is one of the UK's leading property maintenance and refurbishment companies. It is a subsidiary of the CLC group of companies (the “Group”).
What we do
Since our early days as specialist painting contractors, we have grown into a multi trade business, expanding our services across multiple sectors with a skilled and experienced workforce of over 900 employees based across 13 branch offices throughout the UK. Our 55 years' experience in the industry and commitment to using in-house resources makes us a safe and reliable contractor who consistently provides clients with a high quality service.
At CLC, we help our clients transform and maintain their buildings, homes or infrastructure through a variety of refurbishment and maintenance services. We work for a significant number of clients across a variety of business sectors including; Leisure, Education, Utility, Healthcare, Social Housing and Commercial sectors, providing the following services:
Planned maintenance
Passive fire protection installations and upgrades
Internal/external decoration and repairs
Refurbishment works
Kitchen and bathroom replacements
Disability adaptations
Small building works
Electrical installation and maintenance
Roof upgrades and repairs
Net zero carbon reduction works
What makes us different
We believe that what makes us different from our competitors is our people, our values and our commitments.
Our people
Our workforce largely consists of directly employed trades people from the local areas in which we operate. We believe that investing in a directly employed team and providing them with training and progression opportunities leads to committed trades people with a passion for what they do.
Our Directors, across our group structure, are responsible for the successful delivery of each and every contract. With Directors and branch managers spread throughout our branches, our staff, supply chain and most importantly our clients can walk into a branch and speak directly to a Director or branch manager.
We are a national contractor with a management structure in each branch, allowing us to be 'small enough to care but big enough to cope'.
Our Values
Our Values form the promises we make to our employees, clients and their customers and what we set out to achieve on every project we undertake. Our values include:
Delight our customers - By exceeding our clients' expectations, we aim to create long standing relationships with our customers.
Deliver on our commitments - We do what we say we will, for our customers, staff and suppliers.
Dare to change - Our culture is based on continuous improvement and we are always seeking new ways in which we can enhance service delivery.
Develop our people – We believe success comes from motivating people and maximising their potential.
Drive for results - Through empowering our staff and working in partnership with our supply chain and clients, we can work together to ensure an excellent service and value for money is achieved.
C.L.C. CONTRACTORS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Our Commitments
Our clients trust us to deliver a safe, efficient and reliable service built on quality workmanship. To achieve this, we commit to:
Providing a high quality service to our clients and building a strong relationship built on mutual trust and honesty.
Providing our people with training and development opportunities to allow them to maximise their potential.
Encouraging long lasting relationships with our supply chain based on openness, fair payment and offers of repeat business.
Contributing socially and economically to our communities through community initiatives, employment prospects and training opportunities.
Business review
The Company traded very well during 2023, when it continued to outstrip historical levels of work serving our customers. The effects of the pandemic had been overcome by the beginning of the year, although the invasion of the Ukraine by Russia in February 2022 and the resultant sanctions applied continued to affect the global economy causing inflationary pressures, which in turn lead central banks to increase interest rates. The shocks to the debt markets following the Liz Truss/Kwasi Kwarteng budget in September 2022 created further problems and uncertainties for the UK economy which continued into 2023. The construction labour market remained tight, which has meant that recruitment throughout the year has been challenging. Where we have had requirements to fill key management roles, our strong business and clear commitments and values act as a differentiator from our competitors, allowing us to attract talented people into the business, and we move into 2024 with a very strong management team. Recruitment of skilled trades continues to be challenging in the market currently.
On 23 June 2023, the Group was acquired by HIG Capital LLC through a new corporate entity, Repair Bidco UK Limited, when this entity acquired the entire share capital of Hilbre Holdings Ltd, the ultimate holding company of the Company. A new group structure was put in place at the same time. As part of this deal, the funding structure of the Group was changed, and details of these arrangements are noted in the accounts of the relevant new group companies.
This change in ownership of the Group allows the Company to access new lines of funding and to consider other areas of growth. The management team of the Company remains the same as it was before the transaction.
The trading results for 2023 were above budgeted levels of turnover and profit. The Directors are pleased with the results for the year given the geopolitical and macroeconomic backdrop. The outlook for 2024 is discussed in the Directors' report.
C.L.C. CONTRACTORS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Principal risks and uncertainties
The Company uses various financial instruments. These include cash and various items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations. The existence of these financial instruments exposes the Company to a number of financial risks, which are described in more detail below.
The main risks arising from the Company's financial instruments are credit risk, liquidity risk and contract risk. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years. The Company is not exposed to significant translation and transaction foreign exchange risk.
Credit risk
The Company's principal financial assets are work in progress and trade debtors. The principal credit risk arises therefore from its work in progress and trade debtors. Over 50% of the work is carried out for public sector or quasi public sector organisations which pose little or no credit risk.
In order to manage credit risk the credit manager sets limits for customers based on a combination of payment history, third party credit references and an assessment of market conditions. Credit limits are reviewed by the Directors on a regular basis in conjunction with debt ageing and collection history.
Liquidity risk
The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Budgets and forecasts are prepared and updated and the arrangement of sufficient banking facilities are managed to meet the needs of the Company on an annual basis.
Contract risk
The Company enters into contracts with customers and its supply chain, each priced in accordance with the Company's profitability targets and in line with the general market. There is a risk that prices are set and agreed at incorrect levels, and the profitability targets are missed. Large tenders are reviewed internally before submission and our oversight through our financial key performance indicators means that any pricing errors are quickly identified and, where possible, mitigated.
Covid-19 pandemic
The UK Government ended self isolation restrictions relating to the pandemic as of 24 February 2022 in England following its publication of its Plan for Living with Covid on 19 February. We consider that our Balance Sheet and cash position is sufficiently strong to enable us to continue through 2024 and beyond with no further support from either Government or stakeholders given the current state of the pandemic and the Government's current plans.
C.L.C. CONTRACTORS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Financial key performance indicators
We monitor the business using a number of key performance indicators including:
Activity levels
Workload is reviewed by the Board and the Branch management team on a monthly basis and tracked against annual budgeted and forecasted revenue. Through this review any shortfalls in individual branch revenues can be identified in advance and rectified through a focus on alternative works and through the increased focus on such branches by our business development managers.
Operating margins
Contract margins are reviewed on a monthly basis at a contract, branch and group level to identify areas of under performance and possible improvement. This enables the management team to identify issues on a timely basis and implement rectification plans accordingly.
During 2023, gross profit margins were 21.4% (2022: 19.4%).
Working capital levels
Debtors and work in progress are reviewed and monitored each month. The management team identifies where improvements in operational performance can be made and how better cash collection can be achieved through this review process. Working capital management is a fundamental part of our business and is integral to our reward and recognition processes.
Debtor days (including amounts recoverable on contracts) at year end were 53 days (2022: 55 days).
Other key performance indicators
In addition to the financial KPl's, we also monitor the business through a number of non-financial key performance indicators, including:
Customer Satisfaction
The Company conducts surveys of customer satisfaction of completed contracts and longer term ongoing contracts to ensure we are maintaining our high levels of client satisfaction. We take customer satisfaction extremely seriously and our aim is to exceed client expectations at all times.
Customer satisfaction KPl's are reviewed each month at Board level and action is taken where shortfalls in our performance are identified. Board involvement in this process helps to reinforce our client focused culture.
In the year to 31 December 2023, we achieved an overall customer satisfaction of 95.9%.
Health and Safety
The Company monitors incidents and accidents with a focus on accident prevention and maintaining safety of our staff, clients and the general public. We provide "tool box talks" for our operatives each month on pertinent areas such as Working at Height and Slips, Trips and Falls. The Board and branch management reviews attendance and scores at these training sessions to ensure that all operatives are appropriately trained.
Additionally, our Health and Safety team reports on accident statistics each month and this is closely reviewed.
C.L.C. CONTRACTORS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Section 172(1) of the Companies Act 2006
The Directors of the Company, as those of all UK companies, must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows:
A Director of a Company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so, have regard (amongst other matters) to:
The likely consequences of any decisions in the long-term;
The interests of the Company's employees;
The need to foster the Company's business relationships with suppliers, customers and others;
The impact of the Company's operations on the community and environment;
The desirability of the Company maintaining a reputation for high standards of business conduct; and
The need to act fairly as between shareholders of the Company.
The following paragraphs summarise how the Directors fulfil their duties:
Risk management
We provide building refurbishment and maintenance services to our clients. Most of the work that we undertake falls into the Construction market sector, which is highly regulated by various bodies, most notably through the Health and Safety at Work Act 1974 via the Health and Safety Executive, which creates a framework within which we manage operational and safety risk. The Company, through its Board, its quality assurance systems and its branch management structure, operates a proven methodology for effectively identifying, evaluating, managing and mitigating the risks we face. For details of our principal risks and uncertainties, please see page 3.
Our people
The Company is committed to being a responsible business and our behaviour is aligned with the expectations of our people, our clients, our shareholders and the communities we serve and society as a whole. People are at the heart of our service delivery and our success flows from our management of our people's performance and development of their talent while ensuring we operate as efficiently as possible. We ensure that we share common values that inform and guide our behaviour so we achieve our goals in the right way. For further details, see "Our Values" and "Our Commitments" above.
Business relationships
Our strategy prioritises organic growth through consistent high quality service and strong client relationships. We value all our suppliers and have strong ongoing relationships with our key suppliers.
Community and environment
The Company's approach is to utilise its recruitment of its workforce to promote local people in the communities in which we work. We support our clients, many of whom are very active in social housing and social care, to promote the local community. We also actively promote recycling of building products and the reduction of our carbon emissions through various initiatives driven through our management teams.
Shareholders
The Board actively engages with the Group's shareholders, whether they are members of the immediate management team, who are automatically aligned to the Company's values and aspirations, or the management of HIG Capital LLC, in order to maintain an effective dialogue.
C.L.C. CONTRACTORS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
This report was approved by the board and signed on its behalf.
Mr S Reeve
Director
22 May 2024
C.L.C. CONTRACTORS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activities of the Company are building and asset maintenance and building refurbishment.
Results and dividends
The results for the year are set out on page 14.
No dividends were paid during the year (2022: £nil).
Inter-company balances with the holding company totalling £12,000,000 (2022: £10,500,000) were waived during the year. This has been treated as a distribution.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr P I Armitage
Mr R Boal
Mr L Elliott
Mr M S Hilton
Mr N A Hilton
Mr A J McDonald
Mr C P Pritchard
Mr S Reeve
Mr J Ryder
Mr M J Triner
Financial instruments
The Company uses various financial instruments. These include loans, cash, and various items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations. The existence of these financial instruments exposes the Company to a number of financial risks, which are described in more detail in the strategic report.
Disabled persons
The Directors give special attention to the health and safety of their employees. If an employee becomes disabled whilst employed by the Company then whenever possible that person will be employed in the same job. If this is not possible then every effort will be made to find suitable alternative employment. If retraining is necessary this will be provided using Company resources and the facilities offered by the Government retraining centres.
Employee involvement
Appropriate action has been taken to develop arrangements aimed at providing the Company's employees with information on matters of concern to them; consulting with employees or their representatives; encouraging their involvement in the Company's performance; and achieving an awareness on the part of employees of financial and economic factors affecting the Company's performance.
C.L.C. CONTRACTORS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Statement of engagement with suppliers, customers and others in a business relationship with the Company
As stated in our Strategic Report, our strategy prioritises organic growth through consistent high quality service and strong client relationships. We value all our suppliers who support us in this strategy, and have strong ongoing relationships with our key subcontractors and suppliers. The creation and support of teams who work together with both clients and suppliers is integral to our service delivery.
Post reporting date events
There have been no post balance sheet events after the year end.
Future developments
The Company has responded well to the challenges created by the UK economy in 2023, with higher general inflation, material and labour shortages all experienced throughout the year. The directors are optimistic about the Company’s ability to deliver growth in the coming years given the Company’s track record of agility in the marketplace. The forthcoming General Election later in 2024 will also bring new challenges and opportunities to the Company.
Going concern
The Company has a strong Balance Sheet at 31 December 2023 with total net assets of £54M and cash of £15M. The Directors have reviewed forecasts for the Group to 31 December 2025, along with the current funding arrangements available to the Group and concluded that the Group has adequate liquidity headroom and mitigation strategies to continue to operate for at least the next 12 months from approval of these financial statements and meet its liabilities as they fall due. The Directors therefore have a reasonable expectation that the Group and therefore the Company has adequate resources to continue in operational existence for the foreseeable future.
The Company has access to the facilities of the Group and therefore management consider the Group assessment to be aligned with that of the Company for going concern purposes.
Auditor
In accordance with the company's articles, a resolution proposing that Moore (South) LLP be reappointed as auditor of the company will be put at a General Meeting.
Streamlined energy and carbon reporting
The Company is large and is therefore required to report in respect of Streamlined Energy and Carbon Reporting (SECR). Disclosures are made in the accounts of Hilbre Holdings Limited.
C.L.C. CONTRACTORS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
Matters covered in the strategic report
The business review and information on financial risk management objectives and policies and principal risks and uncertainties is shown in the strategic report.
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.
Qualifying third party indemnity provisions
The Company purchased and throughout the year maintained appropriate insurance cover in respect of Directors' and Officers' liabilities.
On behalf of the board
Mr S Reeve
Director
22 May 2024
C.L.C. CONTRACTORS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF C.L.C. CONTRACTORS LIMITED
- 10 -
Opinion
We have audited the financial statements of C.L.C. Contractors Limited (the 'company') for the year ended 31 December 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 31 December 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.
C.L.C. CONTRACTORS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF C.L.C. CONTRACTORS LIMITED
- 11 -
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.
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
C.L.C. CONTRACTORS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF C.L.C. CONTRACTORS LIMITED
- 12 -
Our approach was as follows:
We assessed the risk of irregularities as part of our audit planning, and ongoing review, including due to fraud, management override was identified as a significant fraud risk from our assessment.
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, UK taxation legislation.
We assessed the control environment, documenting the systems, controls and processes adopted. The audit approach incorporated a combination of analytical review and substantive procedures involving tests of transactions and balances. Any irregularities were discussed with management and additional corroborative evidence was obtained as required.
To address the risk of fraud through management override we:
Performed analytical procedures to identify any unusual or unexpected relationships
Tested journal entries to identify any unusual transactions
Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias, in particular in respect
Reviewed transactions with related parties, in particular transactions with group entities.
Reviewed the disclosures within the financial statements to ensure that they meet the requirements of the accounting standards and relevant legislation.
In response to the risk of irregularities with regards to the recognition of revenue, we:
Reviewed accounting policies adopted for consistency of application and compliance with applicable practices.
Undertook analytical procedures including comparisons with prior years and budgets, and considered the results in association with wider economic trends.
Tested transactions and balances with reference to contracts and work in progress.
Tested cut off procedures including a review of transactions both sides of the balance sheet date.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
C.L.C. CONTRACTORS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF C.L.C. CONTRACTORS LIMITED
- 13 -
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.
Matthew Bather
Senior Statutory Auditor
For and on behalf of Moore (South) LLP
22 May 2024
Chartered Accountants
Statutory Auditor
City Gates
2 - 4 Southgate
Chichester
West Sussex
PO19 8DJ
C.L.C. CONTRACTORS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£'000
£'000
Turnover
3
200,386
173,449
Cost of sales
(157,556)
(139,860)
Gross profit
42,830
33,589
Administrative expenses
(23,643)
(19,857)
Operating profit
4
19,187
13,732
Interest receivable and similar income
8
2,884
51
Interest payable and similar expenses
9
(64)
(42)
Profit before taxation
22,007
13,741
Tax on profit
10
(3,663)
(2,631)
Profit for the financial year
18,344
11,110
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There were no recognised gains and losses for 2023 or 2022 other than those included in the Statement of Comprehensive Income.
There was no other comprehensive income for 2023 (2022: £nil).
The notes on pages 17 to 31 form part of these financial statements.
C.L.C. CONTRACTORS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 15 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible assets
12
2,232
1,629
Current assets
Stocks
13
249
145
Debtors
14
69,332
49,473
Cash at bank and in hand
15,184
22,453
84,765
72,071
Creditors: amounts falling due within one year
15
(32,091)
(25,555)
Net current assets
52,674
46,516
Total assets less current liabilities
54,906
48,145
Creditors: amounts falling due after more than one year
16
(938)
(532)
Provisions for liabilities
Deferred tax liability
18
305
56
(305)
(56)
Net assets
53,663
47,557
Capital and reserves
Called up share capital
21
1
1
Other reserves
238
Profit and loss reserves
53,662
47,318
Total equity
53,663
47,557
The notes on pages 17 to 31 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 22 May 2024 and are signed on its behalf by:
Mr S Reeve
Director
Company registration number 01230435 (England and Wales)
C.L.C. CONTRACTORS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
Share capital
Capital contribution reserve
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
£'000
Balance at 1 January 2022
1
155
46,708
46,864
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
11,110
11,110
Distribution to parent company
11
-
-
(10,500)
(10,500)
Transfers
-
83
83
Balance at 31 December 2022
1
238
47,318
47,557
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
18,344
18,344
Distribution to parent company
11
-
-
(12,000)
(12,000)
Other movements
-
(238)
-
(238)
Balance at 31 December 2023
1
-
53,662
53,663
The notes on pages 17 to 31 form part of these financial statements.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information
C.L.C. Contractors Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 2 Northbrook Industrial Estate, Vincent Avenue, Southampton, Hampshire, SO16 6PB.
The principal activities during the year were building and asset maintenance and building refurbishment.
1.1
Accounting convention
The financial statements have been prepared under the historic cost convention unless otherwise specified within these accounting policies and 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 £'000.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 2).
The principal accounting policies are set out below.
Financial reporting standard 102 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a) (iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and12.29A;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Hilbre Holdings Limited as at 31 December 2023 and these financial statements may be obtained from Companies House.
1.2
Going concern
The Company has a strong Balance Sheet at 31 December 202true3 with total net assets of £54M and cash of £15M. The Directors have reviewed forecasts for the Group to 31 December 2025, along with the current funding arrangements available to the Group and concluded that the Group has adequate liquidity headroom and mitigation strategies to continue to operate for at least the next 12 months from approval of these financial statements and meet its liabilities as they fall due. The Directors therefore have a reasonable expectation that the Group and therefore the Company has adequate resources to continue in operational existence for the foreseeable future.
The Company has access to the facilities of the Group and therefore management consider the Group assessment to be aligned with that of the Company for going concern purposes.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.3
Turnover
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Long term contracts
Long term contracts are assessed on a contract by contract basis and reflected in the Statement of comprehensive income by recording turnover and related costs as contract activity progresses. Turnover is ascertained in a manner appropriate to the stage of completion of the contract measured using the revenue basis and credit taken for profit earned to date when the outcome of the contract can be assessed with reasonable certainty. Provision is made for any losses that are foreseen.
Amounts recoverable on contracts
Amounts recoverable on contracts are included in debtors and represent the value of work done in excess of amounts invoiced to the customer.
Payments on account
Payments on account are included in creditors and represent amounts received from the customer in excess of the Company's valuation of work done.
1.4
Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Plant and equipment
20% straight-line
Fixtures and fittings
20-33% straight-line
Motor vehicles
25% straight-line
The assets' residual values, useful lives and depreciation method are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Leases
Operating leases: the Company as lessee
Rentals paid under operating leases are charged to the Statement of comprehensive income on a straightline basis over the lease term.
Leased assets: the Company as a lessee
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.6
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
1.7
Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
1.8
Financial instruments
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.
Debtors
Short term debtors are measured at transaction price, less any impairment.
Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Other financial assets
Other financial assets 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 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.
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.
The company does not currently hold any 'other financial liabilities' as defined by FRS 102, section 12.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Current tax
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the Balance sheet date.
1.10
Provisions
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
1.11
Employee benefits
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.
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.
1.12
Retirement benefits
Defined contribution pension plan
The Company operates two defined contribution plans for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
Defined benefit pension plan
The Company recognises a cost equal to the contributions payable to the defined benefit pension plan operated by CLC Group Limited. The Company is not contractually required to settle any deficit within the pension plan. Disclosures required under FRS 102 in respect of the defined benefit pension plan can be found in the accounts of CLC Group Limited.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.13
Share-based payments
The Group has historically issued equity-settled share-based payments to certain employees. Equity-settled share based payments are measured at fair value at the date of grant, using observable market data. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of the shares that will eventually vest, with a corresponding entry in equity as a contribution from the parent company.
1.14
Borrowing costs
All borrowing costs are recognised in the Statement of comprehensive income in the year in which they are incurred.
1.15
Government grants
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure. The accruals model is adopted for grants received.
1.16
Foreign exchange
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
1.17
Distribution to equity holders
Dividends and other distributions to the Company's shareholders are recognised as a liability in the financial statements in the period in which the dividends and other distributions are approved by the shareholders. These amounts are recognised in the Statement of changes in equity.
1.18
Interest income is recognised in the Statement of comprehensive income using the effective interest method.
1.19
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
2
Judgements and key sources of estimation uncertainty
In the process of applying the Company's accounting policies, which are described in Note 1 above, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements.
Revenue and margin recognition
Revenue is recognised for certain long term contracts based on the level of completion of the contract activity. This is ascertained by undertaking a valuation of the works carried out on a contract by contract basis. Costs attributable to the revenue shown in the accounts are calculated by estimating the true costs of delivering the revenue earned. The margin is calculated by taking the attributable costs from the revenue recognised. Particular judgement is required in evaluating the level of revenue completed and the attributable costs by the year end. However, management carefully considers the accuracy of these valuations by reviewing the recoverability of work in progress balances and actual costs incurred on completed or part completed works by reference to the post balance sheet event period.
Measurement of contract provisions for loss making contracts
Where contract delivery is more costly than originally estimated, margin recognition may show that contracts are loss making, and provisions are required to consider the full cost of contract completion to be included in the accounts. Management may need to estimate the cost of completion of the contract based on commercial, contractual and practical construction parameters. Management are confident that they have reasonable and appropriate methods in making these estimates.
Recoverability of intercompany debtors
Management assess the recoverability of intercompany debtors by considering the forecasted cash flows and profitability of intragroup entities considering their ability to repay the balances on demand. Where impairment losses are identified, management consider the need for an impairment loss to be recognised.
3
Turnover
2023
2022
£'000
£'000
Turnover analysed by class of business
Contract revenue
200,386
173,449
All turnover arose within the United Kingdom.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£'000
£'000
Exchange losses/(gains)
2
(5)
Depreciation of owned tangible fixed assets
185
168
Depreciation of tangible fixed assets held under finance leases
701
795
Profit on disposal of tangible fixed assets
(121)
(104)
Share-based payments
(238)
83
Operating lease charges
902
718
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
65
50
For other services
All other non-audit services
16
10
Fees paid to the Group's auditors for the statutory audit of the Company are paid by C.L.C. Contractors Limited on behalf of the Group. The balances disclosed above relate to the total audit fee for the Group as it is impractical to split this by company. The cost of the Company audit is included within this total.
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
876
784
Administration
58
59
Management
19
21
Total
953
864
Their aggregate remuneration comprised:
2023
2022
£'000
£'000
Wages and salaries
37,614
33,726
Social security costs
3,838
3,467
Pension costs
1,014
926
42,466
38,119
Included within wages and salaries above are share based payment (credits)/charges totalling £(238)k (2022: £83k).
7
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
182
1,115
Company pension contributions to defined contribution schemes
25
161
207
1,276
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 25 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2022 - 7).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£'000
£'000
Remuneration for qualifying services
n/a
201
Company pension contributions to defined contribution schemes
n/a
38
During the year, all the directors of the Company were transferred to other group companies, and their remuneration is disclosed in those other group companies through which they were paid if they are directors of those other companies. The first disclosure above shows the remuneration paid by the Company to the directors before their transfer to other group companies.
Upon the transfer to other group companies, where the services provided by the directors was for the benefit of the Company, their costs were then recharged to the Company, and this is shown in the second part of the disclosure below
Remuneration for directors services is also paid through other group entities and recharged on a service basis. Including total amounts paid through other group entities and recharged to CLC Contractors Limited, directors' remuneration totalled:
£2,242k Remuneration for qualifying services
£206k Pension contributions to defined contribution schemes
Factoring in recharges above, amounts paid to the highest paid director are as follows:
£399k Remuneration
£0k Pension contributions to defined benefit contribution schemes
8
Interest receivable and similar income
2023
2022
£'000
£'000
Interest income
Interest on bank deposits
323
51
Interest receivable from group companies
2,561
Total income
2,884
51
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
9
Interest payable and similar expenses
2023
2022
£'000
£'000
Other interest payable
-
2
Interest on finance leases and hire purchase contracts
64
40
64
42
10
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
3,440
2,611
Adjustments in respect of prior periods
(26)
(168)
Total current tax
3,414
2,443
Deferred tax
Origination and reversal of timing differences
249
188
Total tax charge
3,663
2,631
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£'000
£'000
Profit before taxation
22,007
13,741
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
5,176
2,611
Tax effect of expenses that are not deductible in determining taxable profit
115
56
Adjustments in respect of prior years
(26)
(168)
Group relief
(1,642)
(13)
Deferred tax adjustments in respect of prior years
34
195
Fixed asset differences
(6)
(48)
Remeasurement of deferred tax for changes in tax rates
12
(2)
Taxation charge for the year
3,663
2,631
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 27 -
Factors affecting the tax charges
Effective from 1 April 2023, the standard rate of corporation tax has increased from 19% to 25% on profits in excess of £250,000. A small profits rate of 19% applies to profits of £50,000 or less. Companies with profits between £50,000 and £250,000 pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective corporation tax rate.
For the purposes of deferred tax, the closing provisions are based on a rate of 25%.
11
Dividends
2023
2022
£'000
£'000
Distribution to ultimate parent company
12,000
10,500
12
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£'000
£'000
£'000
£'000
Cost
At 1 January 2023
503
1,385
5,632
7,520
Additions
42
175
1,283
1,500
Disposals
(170)
(292)
(657)
(1,119)
At 31 December 2023
375
1,268
6,258
7,901
Depreciation and impairment
At 1 January 2023
444
1,041
4,406
5,891
Depreciation charged in the year
36
149
701
886
Eliminated in respect of disposals
(164)
(287)
(657)
(1,108)
At 31 December 2023
316
903
4,450
5,669
Carrying amount
At 31 December 2023
59
365
1,808
2,232
At 31 December 2022
59
344
1,226
1,629
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
£'000
£'000
Motor vehicles
1,755
1,217
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
13
Stocks
2023
2022
£'000
£'000
Raw materials and consumables
249
145
14
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
15,479
10,667
Gross amounts owed by contract customers
16,135
15,400
Corporation tax recoverable
300
Amounts owed by group undertakings
35,318
21,436
Other debtors
577
138
Prepayments and accrued income
1,823
1,532
69,332
49,473
Amounts owed from group companies are repayable on demand with interest being charged at a range of 8-10% per annum. No interest was charged during the prior year ended 31 December 2022.
15
Creditors: amounts falling due within one year
2023
2022
Notes
£'000
£'000
Obligations under finance leases
17
595
492
Payments received on account
514
301
Trade creditors
8,584
7,821
Amounts owed to group undertakings
455
Corporation tax
191
Other taxation and social security
4,957
4,223
Other creditors
722
603
Accruals and deferred income
16,073
12,115
32,091
25,555
Amounts owed to group companies are repayable on demand with interest being charged at a range of 8-10% per annum. No interest was charged during the prior year ended 31 December 2022.
Assets held under finance leases are secured against the asset to which they relate.
A fixed and floating charge is held over investments; intellectual property; debts due from third parties; bank accounts and related rights; and all goodwill and uncalled capital.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£'000
£'000
Obligations under finance leases
17
938
532
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£'000
£'000
Within one year
647
514
In two to five years
1,047
572
1,694
1,086
Less: future finance charges
(161)
(62)
1,533
1,024
The finance leases primarily relate to motor vehicles used in the Company's operations. There are no contingent rental, renewal or purchase option clauses.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£'000
£'000
£'000
£'000
Accelerated capital allowances
353
144
-
-
Short term timing differences
-
-
48
88
353
144
48
88
2023
Movements in the year:
£'000
Liability at 1 January 2023
56
Charge to profit or loss
249
Liability at 31 December 2023
305
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
19
Retirement benefit schemes
The Company is a member of two group defined contribution pension schemes, the assets of which are held separately from those of the Company in independently administered funds. The pension charge represents contributions payable by the Company to the funds and amounted to £1,014k (2022: £926k). At the year end, contributions of £194k (2022: £208k) payable to the fund were included within creditors.
The Company made contributions of £145k (2022: £155k) to the defined benefit pension scheme administered by CLC Group Limited, the immediate parent company.
20
Share-based payment transactions
Equity settled options previously held under split-interest scheme arrangements with certain employees over shares in the parent company, Hilbre Holdings Limited, have been reversed in the period. The number of share options outstanding as at 31 December 2022 where 23,495 (of which 12,555 were exercisable). The weighted average price per share outstanding at 31 December 2022 was 103.16p. A total of £238k has been reversed from the capital contribution reserve against wages and salaries during the period. No balance was carried forward at the year end in respect of equity settled options.
During the prior year the company recognised total share-based payment expenses of £83k which related to equity settled share based payment transactions.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary of £1 each
1,000
1,000
1
1
Called-up share capital represents the nominal value of the shares that have been issued.
There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.
22
Reserves
Profit & loss account
Includes all current and prior period retained profits and losses.
Capital contribution reserve
Reserve included the cumulative charge to date for shares held under joint ownership, issued by Hilbre Holdings Limited in relation to employees of the Company.
23
Contingent liabilities
The Company has, in the ordinary course of business, given guarantees to its bankers in respect of fellow group companies. Similarly, fellow group companies have given guarantees to third parties in respect of this Company.
The Directors consider it to be highly improbable that any liability will crystallise for the Company as a result of these guarantees.
C.L.C. CONTRACTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
24
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
£'000
£'000
Within one year
778
520
Between two and five years
1,452
823
2,230
1,343
25
Related party transactions
Transactions with related parties
The company undertook a series of contracts relating to external painting works for Morrison Energy Services Ltd, a company within the M Group of companies, during the year. The total value of the work was £1,169k. Mr J M Arnold was a director of Morrison Energy Services Ltd until 1 January 2023, and remains a director of holding company of the M Group of companies, Minerva Equity Limited. The contracts were entered into before Mr Arnold became a director of the CLC Group of companies and all contracts were entered into on an arms length basis with normal commercial terms.true
At 31 December 2023, there were no balances outstanding relating to the contracts, and no sums were written off in the year.
The company has taken advantage of the exemption available within FRS 102, whereby it has not disclosed transactions with its parent company or any subsidiaries that are wholly owned within the group.
26
Controlling party
CLC Group Limited is the company's immediate parent company. CLC Group Limited is incorporated in England and Wales and registered at Unit 2 Northbrook Industrial Estate, Vincent Avenue, Southampton, England, SO16 6PB.
Tribus Holdings 1 Sarl is the company's ultimate parent company. The company is incorporated in Luxembourg and registered at 8, rue Lou Hemmer, 1748 Senningerberg, Luxembourg.
In the opinion of the directors the company has no controlling party.
The ultimate parent company does not produce publically available consolidated financial statements. The smallest group in which the results of the company are consolidated is that headed by Hilbre Holdings Limited. The largest group in which the results of the company are consolidated is that headed by Repair Topco UK Limited. The consolidated financial statements are available to the public and may be obtained from Companies House.
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