Who we are
Hilbre Holdings Limited and its subsidiaries, CLC Group Limited, C.L.C Contractors Limited and C.L.C Contractors (Ireland) Limited, collectively "CLC" or the "Group", form one the UK's leading property maintenance and refurbishment companies.
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.
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.
The Group 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 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 Group to access new lines of funding and to consider other areas of growth.
The trading results of the Group 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.
The Group 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 Group's operations. The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below.
The main risks arising from the Group'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 Group is not exposed to significant translation and transaction foreign exchange risk.
Credit risk
The Group'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 Group 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 Group on an annual basis.
Contract risk
The Group enters into contracts with customers and its supply chain, each priced in accordance with the Group'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.
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).
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 Group 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 Group 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.
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 Group 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 Group'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 management team, who are automatically aligned to the Group's values and aspirations, or the management of HIG Capital LLC, in order to maintain an effective dialogue.
This report was approved by the board and signed on its behalf.
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 15.
Dividends of £972k (2022: £675k) have been paid to C shareholders in the year.
Dividends of £nil (2022: £1,377k) have been declared to C shareholders and are included within liabilities. The prior year dividends declared were paid during the year.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Group 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 Group's operations. The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail in the strategic report.
Appropriate action has been taken to develop arrangements aimed at providing the Group's employees with information on matters of concern to them; consulting with employees or their representatives; encouraging their involvement in the Group's performance; and achieving an awareness on the part of employees of financial and economic factors affecting the Group's performance.
Statement of engagement with suppliers, customers and others in a business relationship with the group
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.
There have been no post balance sheet events after the year end.
The Group 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 Group’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.
In accordance with the company's articles, a resolution proposing that Moore (South) LLP be reappointed as auditor of the group will be put at a General Meeting.
The Directors set out below the UK energy usage and greenhouse gas emissions for the year.
Scope 1 consumption and emissions relate to direct combustion of natural gas, and fuels utilised for transportation operations, such as company vehicles.
Scope 2 consumption and emissions relate to indirect emissions relating to the consumption of purchased electricity in day-to-day business operations.
| UK Consumption | UK Consumption |
| Carbon Emissions | Carbon Emissions |
| (kWh) | (kWh) |
| (tC02e) | (tc02e) |
| 2023 | 2022 |
| 2023 | 2022 |
|
|
|
|
|
|
Scope 1 - Direct emissions |
|
|
|
|
|
Transportation | 15,857,749 | 15,325,170 |
| 3,776 | 3,684 |
Gaseous and other fuels | 174,184 | 48,420 |
| 32 | 9 |
|
|
|
|
|
|
Scope 2 - Indirect emissions |
|
|
|
| |
Grid-supplied electricity | 326,212 | 393,449 |
| 67 | 76 |
Total | 16,358,145 | 15,767,039 |
| 3,875 | 3,769 |
|
|
|
|
|
|
|
|
|
|
|
|
Intensity metrics | tCO2e per FTE | tCO2e per FTE |
|
|
|
| 2023 | 2022 |
|
|
|
|
|
|
|
|
|
Gas and fuel | 0.03 | 0.01 |
|
|
|
Electricity | 0.07 | 0.08 |
|
|
|
Transport | 3.94 | 3.88 |
|
|
|
Total | 4.04 | 3.97 |
|
|
|
96.9% (2022: 97.2%) of our energy consumption relates to transportation. Similarly, 97.4% (2022: 97.7%) of our greenhouse gas emissions come from transportation. In order to reduce our carbon footprint, we have developed a plan to move away from vans with diesel engines which we currently use. These are to be replaced with either hybrids or fully electric vehicles. We will be dependent on the infrastructure of the nation to make this succeed, and charging points will need to be far more prevalent than currently, to allow the free movement of our workforce from site to site.
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.
The Group purchased and throughout the year maintained appropriate insurance cover in respect of Directors' and Officers' liabilities.
We have audited the financial statements of Hilbre Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 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).
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:
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.
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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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.
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 and group.
Our approach was as follows:
The engagement partner selected a team for the audit, led by persons who had sufficient experience of the industry and who had the required competence and skills to be able to identify or recognise non-compliance with laws and regulations.
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. This is due to the ability to bypass controls and disclosure requirements.
Occurrence and cut off of income and valuation of work in progress was identified as a significant risk to the audit, there is a risk that revenue is not recognised within the correct accounting period.
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 considered how the company complies with these requirements by discussions with management and those charged with governance.
We enquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations. Consideration was also made of the internal controls in place to mitigate the identified risks.
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.
The consolidated financial statements of the group incorporate the results of subsidiary entities. Moore (South) LLP are auditors to the significant subsidiaries that are included in the financial statements and the approach adopted is consistent across the group entities.
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 of valuations of investments and goodwill.
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.
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.
The notes on pages 22 to 48 form part of these financial statements.
The notes on pages 22 to 48 form part of these financial statements.
The notes on pages 22 to 48 form part of these financial statements.
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 after tax for the year was £10,407k (2022: £10,026k profit).
The notes on pages 22 to 48 form part of these financial statements.
The notes on pages 22 to 48 form part of these financial statements.
The notes on pages 22 to 48 form part of these financial statements.
Hilbre Holdings Limited is a Company limited by shares incorporated in England and Wales. The registered address is Unit 2, Northbrook Industrial Estate, Vincent Avenue, Southampton, SO16 6PB.
The principal activities of the Group are building refurbishment, building maintenance and asset maintenance.
The principal activity of the Company is that of a holding company.
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 £'000.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 2).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Group and its own subsidiaries ('the Group') as if they form a single entity. Intercompany transactions and balances between Group companies, below Hilbre Holdings Limited, are therefore eliminated in full.
The consolidated financial statements incorporate the results of the business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of the acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The Group has established an employee benefit trust ('EBT') and is the sponsoring entity and, notwithstanding the legal duties of the trustees, the Group considers that it has 'de facto' control of the EBT. The assets and liabilities of the EBT are included in the consolidated financial statements as appropriate. The Company's equity instruments held by the EBT are accounted for as it they were the Company's own equity and are treated as treasury shares in the 'Own Shares' reserve. No gain or loss is recognised in the profit or loss or other comprehensive income on the purchases, sale or cancellation of the Company's own equity held by the EBT.
The Group has a strong Balance Sheet at 31 December 2023 with total net assets of £68M and cash of £17M. 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 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.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Long term contracts
Long term contracts are assessed on a contract by contract basis and reflected in the profit and loss account 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 Group's valuation of work done.
Other intangible assets
Intangible assets are stated at cost less amortisation and any impairment losses. An intangible asset acquired in a business combination is deemed to have a cost to the Group of its fair value at acquisition date.
Amortisation
Amortisation is charged so as to allocate the cost of intangibles less their residual values over their estimated useful lives, using the straight-line method.
In view of the Group's trading history, established market position, geographic and sector diversity and stable and experienced management and work force, the intangible assets are amortised over the following useful economic lives:
Goodwill 20 years
Brand names 20 years
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Operating leases: the Group as lessee
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Investments in subsidiaries are measured at cost less accumulated impairment plus the share-based payment in the individual statements.
Debtors
Short term debtors are measured at transaction price, less any impairment.
The Group 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, loans to related parties and investments in ordinary shares.
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 Consolidated 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 Group 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.
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.
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Finance costs are charged to the profit and 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.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when declared.
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.
The Group has also issued cash-settled share-based payments to certain employees. The Group measures the services acquired over the vesting period and the liability incurred at the fair value of the liability. Until the liability is settled, the Group remeasures the fair value of the liability at each reporting date and at the date of settlement, with any changes in fair value recognised in the profit of loss for the period.
Defined contribution pension plan
The Group operates two defined contribution plans for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the consolidated 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 Group in independently administered funds.
Defined benefit pension plan
The Group operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.
The liability recognised in the Balance Sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the balance sheet date less the fair value of plan assets at the balance sheet date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Group's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.
The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:
a ) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.
Group pension plan
Where the risks of a defined benefit plan are shared between entities under common control, the net defined benefit cost is recognised in the financial statements of the Group entity which is legally responsible for the plan and all other Group entities recognise a cost equal to their contribution payable for the period. CLC Group Limited is the company legally responsible for the plan and they recognise the liability in full.
Interest income is recognised in profit or loss using the effective interest method.
Provisions for liabilities
Provisions are made where an event has taken place that gives the Group 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 Group 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.
The tax expense for the year comprises current 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.
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 and the Group operate and generate income.
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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
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.
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.
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure. The accruals model is adopted for grants received.
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 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.
Management have considered whether there are any indications that goodwill and other intangible assets may have been impaired at the reporting date. The Directors have assessed the present value of future cashflows of the group and have satisfied themselves that there is sufficient headroom between this and the carrying value of goodwill and other intangible assets to indicate that these assets have not been impaired.
The Group has implemented a share based payment scheme which is deemed to be cash-settled. The Group measures services acquired over the vesting period and the liability incurred at the fair value of the liability. The fair value has been assessed using the probability-weighted expected return method (PWERM) with amounts discounted for marketability by 59%. At the year end, the directors' have a reasonable expectation that all employees in the scheme will remain in employment over the 4 year vesting period.
The Group has obligations to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends. For details of assumptions adopted, see note 22.
The measurement of intangible assets other than goodwill arising on acquisition involves estimation of future cash flows and the selection of suitable discount rates. The amortisation period of goodwill and intangible assets arising on a business combination also requires an estimate to be made of the useful economic life of such assets. Management are confident that they have set a reasonable and appropriate useful economic life of such assets.
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.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Included within wages and salaries above are share-based payment (credits) / charges totalling £(227)k (2022: £83k).
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:
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:
Factors that may affect future 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%.
Dividends declared in the year amounted to £972k (2022: £675k). Dividends declared in year and included in year end liabilities amounted to £nil (2022: £1,377k). Dividends reclassified to the capital redemption reserve during the year amounted to £2,350k.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Included within freehold property is £324k (2022: £333k) of assets over which the Group has granted a legal charge in favour of the Trustees of CLC Group Limited Retirement and Death Benefit Scheme.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Group amounts receivable related to parent holding companies. Amounts due 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.
Assets held under finance leases are secured against the asset to which they relate.
Amounts due 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.
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.
Assets held under finance leases are secured against the asset to which they relate.
The finance leases primarily relate to motor vehicles used in the Group's operations. There are no contingent rental, renewal or purchase option clauses.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The Group operates two group defined contribution pension schemes, the assets of which are held separately from those of the Group in independently administered funds. The pension charge represents contributions payable by the Group to the funds and amounted to £1,295k (2022: £1,082k). At the year end, contributions of £212k (2022: £208k) payable to the fund were included within creditors.
The Group operates a Defined Benefit Pension Scheme.
The assets of the scheme are held separately from those of the group in an independently administered fund. On 26 July 2005 the scheme was closed for future accrual and current members transferred to one of the above defined contribution schemes. A full valuation of the defined benefit scheme was carried out on 31 December 2020 and updated as of 31 December 2023 by a qualified independent actuary. Payments into the fund in year amounts to £145k (2022: £155k).
Assumed life expectations on retirement at age 65:
The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:
Amounts recognised in the profit and loss account
Amounts taken to other comprehensive income
Movements in the present value of defined benefit obligations
Movements in the fair value of plan assets
Under FRS 102, an entity shall recognise a plan surplus as a defined benefit plan asset only to the extent that it is able to recover the surplus either through reduced contributions in the future or through refunds from the plan. The directors acknowledge their responsibilities requiring them to make judgements and estimates that are reasonable and prudent. As such, the directors deem it prudent not to recognise a defined benefit plan asset at the year end on the basis that the extent of future contributions cannot be reliably quantified.
During the year 53,300,000 A1 ordinary shares of £0.01 each, 74,655 A2 ordinary shares of £0.01 each, 140,000,000 B1 ordinary shares of £0.01 each, 189,000 B2 ordinary shares of £0.01 each and 1,709,811,000 C ordinary shares of £0.01 each have been re-designated into 1,903,374,655 ordinary shares of £0.01 each. Ordinary shares carry entitlement to dividends and voting rights.
Information included below relates to the prior year and is included for comparative purposes only.
The balance on the share capital account shown above represents the aggregate nominal value of all shares in issue. This figure includes 7,500,000 A 1 shares and 30,780 A2 shares held in treasury at 31 December 2022, which are treated as a deduction from equity in the financial statements. 23,495 of the A2 shares held by the CLC Group Employee Trust are under the split interest share scheme.
A1 Ordinary shares
A1 Ordinary shares have no voting rights. Holders of these shares are entitled to receive dividends once dividends of the C Ordinary shares together with all arrears on the dividends of the C Ordinary shares has been paid. In respect of capital, the holders of the A1 Ordinary Shares are entitled to an amount equal to the nominal value of the shares after an amount equal to the Nominal Value (as defined in the Articles at 31 December 2022) of the C Ordinary shares together with all arrears due to the C Ordinary shares has been paid. These shares are not redeemable.
A2 Ordinary shares
A2 Ordinary shares carry one vote each. Holders of these shares are entitled to receive dividends once dividends of the C Ordinary shares together with all arrears on the dividends of the C Ordinary shares has been paid. In respect of capital, the holders of the A2 Ordinary Shares are entitled to an amount equal to the nominal value of the shares after an amount equal to the Nominal Value (as defined in the Articles at 31 December 2022) of the C Ordinary shares together with all arrears due to the C Ordinary shares has been paid, and after all other amounts has been paid, they are entitled to receive a payment for the balance of such surplus assets and retained profits together with the B2 Ordinary Shares as if together they constituted one class. These shares are not redeemable.
B1 Ordinary shares
B1 Ordinary shares have no voting rights. Holders of these shares are entitled to receive dividends once dividends of the C Ordinary shares together with all arrears on the dividends of the C Ordinary shares has been paid. In respect of capital, the holders of the B1 Ordinary Shares are entitled to an amount equal to the nominal value of the shares after an amount equal to the Nominal Value (as defined in the Articles at 31 December 2022) of the C Ordinary shares together with all arrears due to the C Ordinary shares has been paid. These shares are not redeemable.
B2 Ordinary shares
B2 Ordinary shares carry one vote each. Holders of these shares are entitled to receive dividends once dividends of the C Ordinary shares together with all arrears on the dividends of the C Ordinary shares has been paid. In respect of capital, the holders of the B2 Ordinary Shares are entitled to an amount equal to the nominal value of the-shares after an amount equal to the Nominal Value (as defined· in the Articles at 31 December 2022) of the C Ordinary shares together with all arrears due to the C Ordinary shares has been paid and after all other amounts has been paid, they are entitled to receive a payment for the balance of such surplus assets and retained profits together with the A2 Ordinary Shares as if together they constituted one class. These shares are not redeemable.
C Ordinary shares
C Ordinary shares have no voting rights. Holders of these shares are entitled to receive an annual fixed cumulative cash dividend at the rate of 12% of the Nominal Value (as defined in the Articles at 31 December 2022) of the C Ordinary Shares, together with all arrears due to the holders of the C Ordinary Shares. This is paid before any balance of dividends declared is paid to any other shareholder. In respect of capital, the holders of the C Ordinary Shares are entitled to an amount equal to the Nominal Value (as defined in the Articles at 31 December 2022) of the shares. These shares are not redeemable. These shares are held as equity on the basis that the Directors of the Company have discretion whether to pay a dividend and the Company is only obliged to pay C shareholders their accrued dividends upon liquidation.
Called up share capital
Represents the nominal value of the shares that have been issued.
Share premium account
Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from the share premium.
Own shares
Details of own shares held are given in note 24. The own shares reserve represents the cumulative cost of shares in Hilbre Holdings Limited held by the CLC Group Employee Trust.
Share based payment reserve
Includes the cumulative charge to date for shares issued to employees under the split interest share scheme arrangement.
Profit and loss account
Includes all current and prior period retained profits and losses.
Capital contribution reserve
Amounts held in the capital contribution reserve relate to a post acquisition capital contribution to cover historic accrued dividends waived following the investment from the immediate parent company, Repair Bidco UK Limited.
A composite guarantee and debenture exists between group companies, including Hilbre Holdings Limited, in respect of bank loans held in Repair Bidco UK Limited.
The Directors consider it to be highly improbable that any liability will crystallise for the Company as a result of these guarantees.
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:
Key management personnel are deemed to be the Directors of the Group.
The ultimate parent company does not produce publically available consolidated financial statements. The smallest and largest group in which the results of the company are consolidated is that headed by