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COMPANY REGISTRATION NUMBER: NI057830
SPE Contracts Limited
Filleted Financial Statements
31 December 2023
SPE Contracts Limited
Statement of Financial Position
31 December 2023
2023
2022
Note
£
£
Fixed assets
Tangible assets
5
124,629
178,775
Current assets
Stocks
592,782
468,103
Debtors
6
2,265,081
3,379,168
Cash at bank and in hand
7,059
8,443
------------
------------
2,864,922
3,855,714
Creditors: amounts falling due within one year
7
2,549,480
3,344,434
------------
------------
Net current assets
315,442
511,280
---------
---------
Total assets less current liabilities
440,071
690,055
Creditors: amounts falling due after more than one year
8
306,342
632,713
Provisions
13,854
43,347
---------
---------
Net assets
119,875
13,995
---------
---------
Capital and reserves
Called up share capital
100
100
Profit and loss account
119,775
13,895
---------
--------
Shareholders funds
119,875
13,995
---------
--------
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with Section 1A of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
In accordance with section 444 of the Companies Act 2006, the income statement has not been delivered.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
These financial statements were approved by the board of directors and authorised for issue on 20 November 2024 , and are signed on behalf of the board by:
Mr S Parr
Director
Company registration number: NI057830
SPE Contracts Limited
Notes to the Financial Statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in Northern Ireland. The address of the registered office is Suites 3 & 4, Fortwilliam House, Edgewater Road, Belfast, BT3 9JQ.
2. Statement of compliance
These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The company returned pre-tax profits of £76,387 (2022: pre-tax losses of £570,937) from continuing operations and ended the period in a net asset position of £119,875 (2022: £13,995). The return to profitability underlines the strides made by the leadership team in establishing worthwhile processes and procedures with regard to monitoring, resourcing, purchasing, and the careful selection of contracts and engagements. In addition, the finance team have implemented a rigorous routine to include 3-times weekly billing meetings using live information, weekly debtor and creditor meetings, and the production of daily cash flow for the company. The company's current overdraft facilities are due for renewal at the time of writing, and the Directors have taken into consideration the existing relationship with their financiers and the strength of the security provided - accordingly, it is envisaged that renewal should not be an issue (non-committal assurance has been provided by the bank). In addition, the reduction in long term debtors and debtor queries; resolutions with regard to other known material creditors; the changes made at senior leadership and the subsequent financial and non-financial improvements that have resulted; the quality of the company's customer base; and, assurances made by shareholders with regard to the imminent introduction of additional equity and debt funding (per the Strategic Report above) have also been factored in. Taking account of the above, in conjunction with possible changes in trading performance, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company, therefore, continues to adopt the going concern basis in preparing its financial statements.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Parr Group Limited which can be obtained from Companies House. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) No cash flow statement has been presented for the company. (b) Disclosures in respect of financial instruments have not been presented. (c) Disclosures in respect of share-based payments have not been presented. (d) No disclosure has been given for the aggregate remuneration of key management personnel.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of assets. Going concern In order to assess whether it is appropriate for the company to be reported as a going concern, the directors apply judgement, having undertaken appropriate enquiries and having considered the business activities and the company's principal risks and uncertainties. In arriving at this judgement there are a large number of assumptions and estimates involved. This includes management's expectations of revenue, EBITDA, timing and quantum of future capital expenditure and estimates and cost of future funding. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Provision for bad or doubtful debts The company has significant trade debtor balances from a large number of customers at any given point in time and further to that, significant debtor balances from related party entities. Consequently estimating the required provision for debtors requires a regular review to identify those entities where events (either historical or current) give management an indication that future collectability may be uncertain. Construction contract revenue Recognised amounts of construction contract revenues and related receivables reflect management's best estimate of each contract's outcome and stage of completion. This includes the assessment of the probability of ongoing construction contracts and the order backlog. For more complex contracts in particular, costs to complete and contract profitability are subject to significant estimation uncertainty.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Turnover on long term contracts is recognised based on the stage of completion of the transaction at the end of the reporting period after making an estimate of costs to complete and risks associated with the contract. Full provision is made for any losses in the year in which they are first forseen.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
20% reducing balance
Fixtures and fittings
-
20% reducing balance
Motor vehicles
-
20% reducing balance
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. In respect of work in progress and finished goods, cost includes all direct costs of production and the appropriate proportion of production overheads. Cost comprises expenditure incurred in the normal course of business in bringing stocks to the present location and condition. Full provision is made for obsolete and slow moving items. Net realisable value comprises actual or estimated selling price (net of trade discounts) less all further costs to completion or to be incurred in marketing and selling.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Employee numbers
The average number of persons employed by the company during the year amounted to 23 (2022: 29 ).
5. Tangible assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
86,583
310,000
349,830
746,413
Disposals
( 85,878)
( 85,878)
--------
---------
---------
---------
At 31 December 2023
86,583
310,000
263,952
660,535
--------
---------
---------
---------
Depreciation
At 1 January 2023
76,873
269,191
221,574
567,638
Charge for the year
1,942
8,162
21,054
31,158
Disposals
( 62,890)
( 62,890)
--------
---------
---------
---------
At 31 December 2023
78,815
277,353
179,738
535,906
--------
---------
---------
---------
Carrying amount
At 31 December 2023
7,768
32,647
84,214
124,629
--------
---------
---------
---------
At 31 December 2022
9,710
40,809
128,256
178,775
--------
---------
---------
---------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 31 December 2023
59,877
--------
At 31 December 2022
80,941
--------
6. Debtors
2023
2022
£
£
Trade debtors
1,034,438
1,031,350
Amounts owed by group undertakings and undertakings in which the company has a participating interest
898,855
1,499,827
Other debtors
331,788
847,991
------------
------------
2,265,081
3,379,168
------------
------------
7. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
701,302
541,421
Trade creditors
1,532,718
2,400,899
Amounts owed to group undertakings and undertakings in which the company has a participating interest
116,646
Social security and other taxes
81,611
169,800
Other creditors
117,203
232,314
------------
------------
2,549,480
3,344,434
------------
------------
Security has been provided to Danske Bank in relation to the company's borrowings and bank facilities as follows; - A first and only all monies debenture in favour of the bank over all the borrower's assets and undertaking to incorporate a first and only legal charge over property situated at Unit 1, Tamar Commercial Centre, Chater Street, Belfast, BT4 1BL. - An all monies composite guarantee in favour of the Bank from each of Parr Group Limited, Parr FM Limited and SPE Contracts Limited collateralised by first and only all monies debentures over the property, assets and undertaking of each company. - A fixed charge over all that property situate at and known as Unit 10, Tamar Commercial Centre, Tamar Street, Belfast, BT4 1HR.
8. Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
271,697
577,046
Other creditors
34,645
55,667
---------
---------
306,342
632,713
---------
---------
9. Financial instruments
The carrying amount for each category of financial instrument is as follows:
2023
2022
£
£
Financial assets that are debt instruments measured at amortised cost
Financial assets that are debt instruments measured at amortised cost
2,213,349
3,328,772
------------
------------
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
2,774,211
3,807,347
------------
------------
10. Limitation of auditors liability
The company has entered into a liability limitation agreement with its auditor, Aubrey Campbell and Company, on the following basis:
(a) the maximum aggregate amount of the auditor's liability to the company shall not exceed the sum of seven times the fees payable (excluding expenses and value added tax) under the engagement letter agreed for the financial period, or £30,000, whichever is the lesser amount.
(b) the agreement was passed by a resolution of the company's shareholders on 19th November 2024.
11. Summary audit opinion
The auditor's report dated 20 November 2024 was unqualified .
The senior statutory auditor was John Magee , for and on behalf of Aubrey Campbell & Company .
12. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company:
2023
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
Mr S Parr
82,874
90,660
( 180,000)
( 6,466)
--------
--------
---------
-------
2022
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
Mr S Parr
443,104
218,012
( 578,242)
82,874
---------
---------
---------
--------
13. Related party transactions
The company is owed £539,673 (2022: £516,366) by its parent undertaking at the balance sheet date. Similarly, the company was owed £ 352,858 (2022: £ 398,433 ) by Parr Projects Limited , a fellow subsidiary, at the balance sheet date. Conversely, the company owed £ 116,459 to Parr Facilities Management Limited (2022: the company was owed £ 20,675 from Parr Facilities Management Limited), another fellow subsidiary. During the 2022 year the company paid management charges to its fellow subsidiary Parr Facilities Management Limited of £ 106,908 . The company is also owed £ 6,324 by Co Parr Limited (2022: £ 564,353 ), which is an entity under common control of key management. During the 2022 year the company charged £10,000 of management income and sales of £776,853 to this entity under common control of key management. The company is also owed £ 123,813 by Hargan Homes Limited (2022: £nil), which is an entity under common control of key management. During the year the company charged sales of £177,322 to this entity under common control of key management (2022: £2,050 of management income). The company is also owed £ 40,000 by Prometheus No. 1 Limited (2022: £nil), which is an entity under common control of key management. During the year the company charged sales invoices of £105,612 to this entity under common control of key management (2022:£nil). All amounts are repayable on demand. Note that key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the company, either directly or indirectly. Compensation paid to key management personnel, which includes all employee benefits, in the period was £287,537 (2022: £407,464).
14. Controlling party
The company regards Parr Group Limited as its parent company . The company's ultimate parent undertaking is Parr Group Limited. The address of Parr Group Limited is Suites 3 & 4, Fortwilliam House, Edgewater Road, Belfast, BT3 9JQ. Parr Group Limited is the controlling party. Stephen Parr is the ultimate controlling party by virtue of his shareholding in Parr Group Limited. The parent of the largest group in which the results are consolidated is Parr Group Limited. Parr Group Limited is registered in Northern Ireland .