Company registration number 00667598 (England and Wales)
CLEGG CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CLEGG CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
K Anderson
R Crowcroft
M Sims
(Appointed 8 March 2023)
D Chapman
(Appointed 9 January 2023)
Secretary
G J Russell
Company number
00667598
Registered office
Bishops House
42 High Pavement
The Lace Market
Nottingham
NG1 1HN
Auditor
UHY Hacker Young
14 Park Row
Nottingham
NG1 6GR
Solicitors
Browne Jacobson
Mowbray House
Castle Meadow Road
Nottingham
NG2 1BJ
CLEGG CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 6
Independent auditor's report
7 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 25
CLEGG CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

 

Principal activity

The principal activity of the company during the year was that of the builders and civil engineering contractors.

Review of the business

2023 saw a 7% increase in turnover (2022: 36%) resulting in a profit before tax of £327,361 (2022 £3,103,441 loss).

Strong trading through 2023 was held back by the completion of remaining fixed-price contracts secured in earlier years which had been affected by external factors that exerted unavoidable pressures on the cost of work and supply chain resources.

These final challenging projects had a cost base from 2020 and included student accommodation, care and residential projects and had been affected by market pressures throughout, including subcontractor failures.

However, with a focus on negotiated and repeat business tendering, along with selective supply-chain procurement, the business has generated a pipeline of well-performing contracts trading through 2023, 2024 and extending into 2025.

This pipeline of projects has been secured from a number of sectors providing resilience in the supply of work and funding streams; defence, education, residential, care, leisure and commercial with values ranging from £5m to £35m.

Principal risks and uncertainties

The company aims to minimise risks and uncertainties to the level of the market place in which it operates and achieve this through its internal controls and review procedures.

 

The company makes sales and application for payment on normal credit terms and managers relates risks through its credit control procedures. The company does not hedge interest payments on any of its borrowings.

Other performance indicators

The directors use a range of key performance indicators to evaluate the performance of the business. Of these, the level of sales and gross profit are the key factors. The prior year gross loss margin (2022: 1.1%) has improved to a 3.8% gross profit relative to sales.

Future developments

Improvements and efficiencies have also been implemented across operational and commercial functions of the business including an investment in new common data environment/BIM management tools with greater functionality and controls over previous systems.

Internal departments were further strengthened at the end of 2023 in readiness to deliver a larger order book in 2024 and beyond.

The design management department has been expanded to a team of seven with the position of Head of Design created to lead continuous improvement and process development and impart necessary protocols to deliver schemes following the changes brought about by the Building Safety Act.

 

CLEGG CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Section 172 statement

As required by Section 172 of the Companies Act, a Director of a company must act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard, amongst other matters, to:

 

The Company's engagement with its stakeholders and consideration of their respective interests is as follows:

Employees

The directors ensured all employees were aware of the objectives and results of the company through presentations and meetings. It has also been their focus to provide a positive work environment for all employees with opportunities for all to grow and achieve their potential.

Customers and suppliers

The company collaborates with a variety of customers and our success depends on having the resources and skills necessary to guarantee a superior service level and product quality. The company has a longstanding relationship with local and international suppliers ensuring conformance of quality, cost competiveness and sourcing guarantee.

Community and environment

Clegg Construction is an important job contributor in our regions and invest in solutions to reduce our impact on the environment.

By order of the board

G J Russell
Secretary
13 September 2024
CLEGG CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

K Anderson
S J Blackburn
(Resigned 31 December 2023)
R Crowcroft
M Sims
(Appointed 8 March 2023)
D Chapman
(Appointed 9 January 2023)
M Driscoll
(Resigned 28 February 2023)
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Auditor

The auditor, UHY Hacker Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

The UK Government's Streamline Energy and Carbon Reporting (SECR) policy was implemented on 1 April 2019, this is the fourth time adoption of disclosures on energy and carbon. The table below represents the company's energy use and associated greenhouse gas (GHG) emissions from electricity and fuel in the UK for the year ended 31 December 2023.

2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
1,103,047
1,356,776
CLEGG CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
7.70
8.00
- Fuel consumed for owned transport
37.00
54.00
44.70
62.00
Scope 2 - indirect emissions
- Electricity purchased
99.00
72.00
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
99.00
172.00
Total gross emissions
242.70
306.00
Intensity ratio
Tonnes CO2e per £m turnover
3.19
4.25
Quantification and reporting methodology

The boundaries of this report are based on operational control. We report our emissions with reference to the latest Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol). In accordance with the 2018 Regulations, the energy use and associated greenhouse gas emissions are for those within the UK only that come under the operational control boundary. The 2023 UK Government GHG Conversion Factors for Company Reporting published by the UK Department for Environment Food & Rural Affairs (DEFRA) are used to convert energy use in our operations to emissions of CO2e. Carbon emission factors for purchased electricity calculated according to the ‘location-based grid average’ method.

 

This reflects the average emission of the grid where the energy consumption occurs. Data sources include billing, invoices and the internal systems. For the Cambridge and London offices, utilities are included in the rent, so benchmarking based on floor area against industry benchmarks has been used to provide estimated energy consumption at these sites. The Nottingham site is shared between all 3 companies so the energy use at this site is split evenly between them. For transport data where actual usage data (e.g. litres) was unavailable conversions were made using average fuel consumption factors to estimate the usage.

Intensity measurement

We have chosen to report our gross emissions against £m turnover. The value for the intensity ratio was 3.19 tCO2e per £m turnover (2022: 4.25).

CLEGG CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Measures taken to improve energy efficiency

We are committed to responsible energy management and will practice energy efficiency throughout our organisation, wherever it is cost effective. We recognise that climate change is one of the most serious environmental challenges currently threatening the global community and we understand we have a role to play in reducing greenhouse gas emissions.

 

Energy efficiency actions taken in 2023 include:

• Further upgrades for LED & PIR light systems for the main office in Nottingham;

• Review of supply chain to commit to carbon reduction initiatives and become more sustainable;

• Increase the use of TEAMs meetings to help reduce emissions and energy use;

• Encourage the use of public transport where practicable;

• Encourage car share where practicable; and

• Introduce software systems across the Group, which reduces the need for paper and storage requirements.

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:

 

 

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

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

CLEGG CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
By order of the board
G J Russell
Secretary
13 September 2024
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLEGG CONSTRUCTION LIMITED
- 7 -
Opinion

We have audited the financial statements of Clegg Construction 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:

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 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.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLEGG CONSTRUCTION LIMITED
- 8 -

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:

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:

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.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLEGG CONSTRUCTION LIMITED
- 9 -
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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and The Building Regulations 2010.

 

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inflated revenue on the long term construction contracts and recognition of the profit on this work.

Audit procedures performed included:

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLEGG CONSTRUCTION LIMITED
- 10 -

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.

Chris McKain (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
13 September 2024
Chartered Accountants
Statutory Auditor
CLEGG CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
Turnover
3
77,344,372
71,970,719
Cost of sales
(74,385,850)
(72,790,565)
Gross profit/(loss)
2,958,522
(819,846)
Administrative expenses
(2,638,328)
(2,319,071)
Other operating income
7,167
36,925
Operating profit/(loss)
4
327,361
(3,101,992)
Interest payable and similar expenses
8
-
0
(1,449)
Profit/(loss) before taxation
327,361
(3,103,441)
Tax on profit/(loss)
9
(32,589)
47,931
Profit/(loss) for the financial year
294,772
(3,055,510)
Other comprehensive income
Revaluation of tangible fixed assets
27,236
-
0
Total comprehensive income for the year
322,008
(3,055,510)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

 

 

CLEGG CONSTRUCTION LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,473,032
1,481,023
Investments
11
1
1
1,473,033
1,481,024
Current assets
Debtors
13
18,077,031
16,369,652
Cash at bank and in hand
1,673,679
2,000,207
19,750,710
18,369,859
Creditors: amounts falling due within one year
14
(16,274,603)
(15,194,014)
Net current assets
3,476,107
3,175,845
Total assets less current liabilities
4,949,140
4,656,869
Provisions for liabilities
Deferred tax liability
(96,417)
(126,154)
Net assets
4,852,723
4,530,715
Capital and reserves
Called up share capital
30,870
30,870
Share premium account
17
178
178
Revaluation reserve
17
930,497
903,261
Capital redemption reserve
17
81,000
81,000
Profit and loss reserves
17
3,810,178
3,515,406
Total equity
4,852,723
4,530,715
The financial statements were approved by the board of directors and authorised for issue on 13 September 2024 and are signed on its behalf by:
K Anderson
Director
Company Registration No. 00667598
CLEGG CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 January 2022
30,870
178
903,261
81,000
6,570,916
7,586,225
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
-
(3,055,510)
(3,055,510)
Balance at 31 December 2022
30,870
178
903,261
81,000
3,515,406
4,530,715
Year ended 31 December 2023:
Profit for the year
-
-
-
-
294,772
294,772
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
27,236
-
-
27,236
Total comprehensive income for the year
-
-
27,236
-
294,772
322,008
Balance at 31 December 2023
30,870
178
930,497
81,000
3,810,178
4,852,723
CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Clegg Construction Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bishops House, 42 High Pavement, The Lace Market, Nottingham, NG1 1HN.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of eexemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Clegg Holdings Limited. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources, to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Revenue comprises of the value of contracting work executed during the year plus the invoiced value of other sales. The value of contracted work is based on measured valuations, incorporating profit earned to the valuation date, taking into account cost to completion and any anticipated losses.

 

The amount by which recorded revenue on uncompleted contracts is in excess of payments on account is classified as amounts recoverable on contracts and separately disclosed in debtors.

 

Cash received on account of contracts is deducted from amounts recoverable on contracts, Such amounts which have been received and exceed amounts recoverable are included in creditors.

CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, or valuation for freehold properties, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
50 years
Plant and equipment
3 to 5 years
Motor vehicles
4 years

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.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in profit or loss.

1.5
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.7
Financial instruments

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

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.

CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.8
Share Capital

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

1.9
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

1.10
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.11
Retirement benefits

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

1.12
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease.

CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Long term contracts

The company uses the percentage-of-completion method in accounting for its construction contracts. Use of the percentage of completion method requires the Company to estimate the construction performed to date as a proportion of the total construction to be performed. The estimation of the revenue and profit recognition by reference to the stage of completion can involve considerable judgement around future margins. The percentage of completion is determined using stage valuations provided by third party chartered surveyors and therefore provides an independent reliable valuation.

 

The company reviews these estimates and assumptions as each contract progresses. To the extent that the amounts receivable on the contracts are different to the amounts recorded such differences will impact revenue and cost of sales in the period in which such determination is made.

Recoverability of retentions

The retentions held due from customers in respect of long term construction contracts are included within trade debtors. Retention balances are regularly reviewed by the directors to assess their recoverability. Whilst the retention balances recognised at the year end are all considered to be recoverable, there is a degree of judgement regarding the customer's ability to pay.

Ongoing long term contract claims

A small number of contracts have ongoing claims against the subcontractors and or the customer, whilst legal advice has been taken on the majority of these claims there is still a degree of judgement on the recoverability of these claims. The directors believe the claims recognised as at the year end to be fully recoverable.

 

CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Turnover and other revenue

The whole of the turnover is attributable to one class of business.

 

All turnover arose within the United Kingdom.

2023
2022
£
£
Turnover
77,344,372
71,970,719
Other operating income
Group Management charges
-
36,925
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
45,313
43,242
Profit on disposal of tangible fixed assets
-
(3,454)
Operating lease charges
172,929
148,425
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,500
19,200
6
Employees

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

2023
2022
Number
Number
Building
52
53
Administration
11
11
Total
63
64
CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,967,444
3,852,779
Social security costs
509,459
509,600
Pension costs
234,439
206,071
4,711,342
4,568,450
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
433,260
360,413
Company pension contributions to defined contribution schemes
21,476
21,166
454,736
381,579

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
149,764
149,089
Company pension contributions to defined contribution schemes
7,394
19,780
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
-
1,449
CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(23,740)
(50,000)
Adjustments in respect of prior periods
86,066
-
0
Total current tax
62,326
(50,000)
Deferred tax
Origination and reversal of timing differences
(29,737)
2,069
Total tax charge/(credit)
32,589
(47,931)

The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit/(loss) before taxation
327,361
(3,103,441)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
76,995
(589,654)
Tax effect of expenses that are not deductible in determining taxable profit
6,924
3,113
Adjustments in respect of prior years
86,066
-
0
Group relief
(35,898)
587,185
Depreciation on assets not qualifying for tax allowances
-
0
928
Research and development tax credit
(100,000)
(50,000)
Remeasurement of deferred tax for changes in tax rates
(1,498)
497
Taxation charge/(credit) for the year
32,589
(47,931)
CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 January 2023
1,680,460
183,540
17,320
1,881,320
Additions
-
0
10,086
-
0
10,086
Revaluation
(270,460)
-
0
-
0
(270,460)
At 31 December 2023
1,410,000
193,626
17,320
1,620,946
Depreciation and impairment
At 1 January 2023
295,063
102,708
2,526
400,297
Depreciation charged in the year
14,595
26,388
4,330
45,313
Revaluation
(297,696)
-
0
-
0
(297,696)
At 31 December 2023
11,962
129,096
6,856
147,914
Carrying amount
At 31 December 2023
1,398,038
64,530
10,464
1,473,032
At 31 December 2022
1,385,397
80,832
14,794
1,481,023

The Bishop's House property was valued at £1,000,000 on 14 September 2023 by independent valuers, Knight Frank, who are not connected with the company. The valuation conforms to International Valuation Standards.

 

The Bloomsgrove Road property was valued at £410,000 on 4 December 2023 by independent valuers, Knight Frank, who are not connected with the company. The valuation conforms to International Valuation Standards.

Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately £478,976 (2022 - £482,136), being cost £777,119 (2022 - £777,119) and depreciation £298,223 (2022 - £295,063).

11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
1
1
CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Subsidiaries

Details of the company's subsidiary at 31 December 2023 is as follows:

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Clegg Accommodation Solutions Limited
England and Wales
Builders and Civil Engineering Contractors
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

1
Bishops House, 42 High Pavement, The Lace Market, Nottingham, NG1 1HN
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
9,414,934
6,898,089
Gross amounts owed by contract customers
8,491,844
5,662,217
Corporation tax recoverable
38,017
85,497
Amounts owed by group undertakings
122,626
3,723,301
Other debtors
113
548
Prepayments and accrued income
9,497
-
0
18,077,031
16,369,652

Included within trade debtors is an amount of £1,217,351 (2022 - £1,159,574) relating to retentions due over 1 year.

14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
9,966,264
12,448,962
Amounts owed to group undertakings
5,092,790
2,105,699
Taxation and social security
811,728
569,161
Other creditors
385,966
52,394
Accruals and deferred income
17,855
17,798
16,274,603
15,194,014

Included within other creditors is an amount of £295,103 (2022 - £nil) relating to supply chain finance.

CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
15
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
60,574
69,811
Revaluations
35,843
56,343
96,417
126,154
2023
Movements in the year:
£
Liability at 1 January 2023
126,154
Credit to profit or loss
(29,737)
Liability at 31 December 2023
96,417

The deferred tax liability set out above relating to accelerated capital allowances is expected to reverse within 12 months.

16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
234,439
206,071

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. At the balance sheet date, there were pension contributions due of £29,467 (2022 - £24,791).

CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
17
Reserves
Share premium

Includes the premium on issue of equity shares, net of any issue costs.

Revaluation reserve

The revaluation reserve arose on past revaluations of properties that were accounted for under UK GAAP, as applied at that time.

Capital redemption reserve

The capital redemption reserve contains the nominal value of own shares that have been acquired by the company and cancelled.

Profit and loss reserves

Profit and loss account represents cumulative profit or losses, net of dividends paid and other adjustments.

18
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
146,488
54,070
Between two and five years
187,104
76,934
333,592
131,004
Lessor

The operating leases wholly represents leases to third parties. The leases are negotiated over terms of 5 years and rentals are fixed for 1 year. There are no options in place for either party to extend the lease terms.

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
21,500
21,500
Between two and five years
21,500
43,000
43,000
64,500
CLEGG CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
19
Financial commitments, guarantees and contingent liabilities

The company has made a cross guarantee of a loan held by Clegg Group Limited, there is a fixed and floating charge over the assets of the company.

20
Related party transactions

The company has taken advantage of the exemption available under section 1AC.35 of FRS 102, from disclosing transactions entered into between two or more wholly-owned members of the group.

21
Ultimate controlling party

The company is subsidiary of Clegg Group Limited.

 

The parent undertaking of the smallest group for which consolidated accounts are prepared is Clegg Group Limited. Consolidated accounts are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

 

The parent undertaking of the largest group for which consolidated accounts are prepared is Clegg Holdings Limited. Consolidated accounts are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

 

In the opinion of the directors Clegg Holdings Limited is the company's ultimate controlling company. Clegg Holdings Limited is controlled by its directors. The ultimate parent company is Clegg Employee Ownership Trust.

 

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