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Churngold Holdings Limited

Annual Report and Consolidated Financial Statements
Period from 1 December 2023 to 31 May 2024

Registration number: 15321919

 

Churngold Holdings Limited

Contents

Company Information

1

Strategic Report

2

Directors' Report

3 to 4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 9

Consolidated Profit and Loss Account

10

Consolidated Balance Sheet

11

Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Financial Statements

16 to 31

 

Churngold Holdings Limited

Company Information

Directors

M G Best

A R Brown

S R J Dyke

R D Martin

R N V Mead

J P Rivers

T S Ross

R J Roughley

G A Trujillo

Registered office

Unit 4a
Severn View Industrial Estate
Central Avenue
Hallen
Bristol
BS10 7SD

Auditors

PKF Francis Clark
Statutory Auditor
90 Victoria Street
Bristol
BS1 9DP

 

Churngold Holdings Limited

Strategic Report

period from 1 December 2023 to 31 May 2024

The directors present their strategic report for the period from 1 December 2023 to 31 May 2024.

Principal activity

The principal activity of the company is that of a holding company. The principal activity of the group is ground works, enabling works and civil engineering services.

Fair review of the business

The business has performed well in the period and in line with the board’s expectations and the Directors will continue to ensure that a strong cash backed balance sheet is maintained going forward.

The company was incorporated on 1 December 2023 as part of a management buy-out of the Churngold group of companies. Further details is provided in note 23.

The group's key financial and other performance indicators during the period were as follows:

Financial KPIs

Unit

2024

Revenue

£'000

1,768

Gross profit margin

%

10

Operating profit

£'000

94

Profit after tax

£'000

72

Cash

£'000

11,316

Net assets

£'000

526

The average number of employees during the period was 148.

The Directors note that the KPI’s are acceptable and show a good performance for the period, given the continuing challenging market conditions. Contracts for the period have been carefully selected, allowing profitability to remain strong. Gross profit margin has achieved the target of 10% due to the mix of contracts undertaken during the period. Cash and net assets are in line with the Directors’ targets.

Future Developments
The construction industry continues to be challenging, however the level of work in hand and the number of contracts coming up for tender leaves the business well placed for the next financial year.

Principal risks and uncertainties

The Directors recognise that the outlook for the group is based upon a number of key assumptions, some of which are outside the group’s control. The main risks are liquidity, credit and interest rate risks. The Directors review and agree policies for managing each of these risks and they are summarised within the Directors Report.

Approved and authorised by the Board on 14 November 2024 and signed on its behalf by:
 

.........................................
R N V Mead
Director

 

Churngold Holdings Limited

Directors' Report

Period from 1 December 2023 to 31 May 2024

The directors present their report and the for the period from 1 December 2023 to 31 May 2024.

Incorporation

The company was incorporated on 1 December 2023.

Directors of the group

The directors who held office during the period were as follows:

M G Best (appointed 22 May 2024)

A R Brown (appointed 22 May 2024)

S R J Dyke (appointed 22 May 2024)

R D Martin (appointed 22 May 2024)

R N V Mead (appointed 1 December 2023)

J P Rivers (appointed 22 May 2024)

T S Ross (appointed 22 May 2024)

R J Roughley (appointed 22 May 2024)

G A Trujillo (appointed 22 May 2024)

Financial instruments

Price risk, credit risk, liquidity risk and cash flow risk

LIQUIDITY

The group uses hire purchase facilities provided by major high street lenders and overdraft facilities provided by Bank of Scotland. At the year end the group had access to undrawn borrowing facilities of £500,000 (2023: £500,000). The maturity profile of banking facilities is regularly reviewed and such facilities are extended or replaced well in advance of their expiry.

CREDIT RISK

The group’s principal financial assets are cash, trade debtors and amounts recoverable on contracts. The group limits deposits to short term deposits with its bankers. The principal credit risk arises therefore from its debtors or amounts recoverable on contracts. In order to manage this risk all jobs and customers are credit checked at contract stage and credit insurance arranged on the majority of debts.

INTEREST RATE RISK

The group reduces exposure to interest rates through a mixture of hire purchase arrangements and variable rates for overdraft facilities.

CONTRACT RISK

The group uses contracts for their services and to reduce the risk of miss-pricing, the group normally operates fixed price contracts, but includes variations for factors such as price rises in materials and labour. To reduce the risk of failure to manage individual contracts the group splits out the contracts between senior staff members.

 

Churngold Holdings Limited

Directors' Report

Period from 1 December 2023 to 31 May 2024

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

The auditors PKF Francis Clark are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 14 November 2024 and signed on its behalf by:
 

.........................................
R N V Mead
Director

 

Churngold Holdings Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Churngold Holdings Limited

Independent Auditor's Report to the Members of Churngold Holdings Limited

Opinion

We have audited the financial statements of Churngold Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period from 1 December 2023 to 31 May 2024, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the group's and the parent company's affairs as at 31 May 2024 and of the group's profit for the period then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

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 responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 and parent company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

 

Churngold Holdings Limited

Independent Auditor's Report to the Members of Churngold Holdings Limited

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

We have nothing to report in respect of the following matters where 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 5, 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 group’s and 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

 

Churngold Holdings Limited

Independent Auditor's Report to the Members of Churngold Holdings Limited

Auditor’s responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory framework applicable to the holding company and group and the industry in which the group operates. We identified the principal risks of non-compliance with laws and regulations as relating to breaches around health and safety and waste management regulations. We also considered other laws and regulations that have a direct impact on the preparation of the financial statements, such as The Companies Act 2006 and relevant tax legislation. We considered the extent to which any non-compliance with these laws and regulations may have on the group’s ability to continue trading and the risk of a material misstatement in the financial statements. We also evaluated the risk of misstatement of profit, including management bias for long term contracts and accounting estimates.

Based on this understanding we designed our audit procedures to identify irregularities. Our procedures involved the following:

• We made enquiries of senior management as to their knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the financial statements. As part of these enquiries we also discussed with management whether there have been any known instances of fraud.
• We identified the individuals with responsibility for ensuring the group complies with laws and regulations and discussed with them the procedures and policies in place.
• We obtained the current Waste Carrier's license under the Waste (England and Wales) Regulations 2011.
• We obtained the latest Health and Safety accreditations.
• We reviewed minutes of meetings of senior management and those charged with governance.
• We challenged the assumptions and judgements made by management in its significant accounting estimates, in particular around contract work in progress, provisions and accruals.
• We audited the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. 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, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

Churngold Holdings Limited

Independent Auditor's Report to the Members of Churngold Holdings Limited

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.

......................................
Paul Putnam (Senior Statutory Auditor)
PKF Francis Clark, Statutory Auditor

90 Victoria Street
Bristol
BS1 9DP

21 November 2024

 

Churngold Holdings Limited

Consolidated Profit and Loss Account

Period from 1 December 2023 to 31 May 2024

Note

2024
£ 000

Turnover

3

1,768

Cost of sales

 

(1,586)

Gross profit

 

182

Administrative expenses

 

(114)

Other operating income

28

Operating profit

4

96

Other interest receivable and similar income

8

4

Interest payable and similar expenses

9

(14)

   

(10)

Profit before tax

 

86

Tax on profit

10

(24)

Profit for the financial period

 

62

Profit/(loss) attributable to:

 

Owners of the company

 

62

The above results were derived from continuing operations.

 

Churngold Holdings Limited

Consolidated Balance Sheet

31 May 2024

Note

2024
£ 000

Fixed assets

 

Intangible assets

11

6,478

Tangible assets

12

2,959

 

9,437

Current assets

 

Debtors

14

10,251

Cash at bank and in hand

 

11,316

 

21,567

Creditors: Amounts falling due within one year

16

(25,995)

Net current liabilities

 

(4,428)

Total assets less current liabilities

 

5,009

Creditors: Amounts falling due after more than one year

16

(3,997)

Provisions for liabilities

19

(571)

Net assets

 

441

Capital and reserves

 

Called up share capital

21

5

Share premium reserve

449

Other reserves

(75)

Profit and loss account

62

Equity attributable to owners of the company

 

441

Shareholders' funds

 

441

Approved and authorised by the Board on 14 November 2024 and signed on its behalf by:
 

.........................................
R N V Mead
Director

Company Registration Number: 15321919

 

Churngold Holdings Limited

Balance Sheet

31 May 2024

Note

2024
£ 000

Fixed assets

 

Investments

13

9,311

Current assets

 

Debtors

14

120

Creditors: Amounts falling due within one year

16

(6,063)

Net current liabilities

 

(5,943)

Total assets less current liabilities

 

3,368

Creditors: Amounts falling due after more than one year

16

(3,000)

Net assets

 

368

Capital and reserves

 

Called up share capital

21

5

Share premium reserve

449

Other reserves

(75)

Profit and loss account

(11)

Shareholders' funds

 

368

The company has taken the exemption in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account. The company made a loss after tax for the financial period of £11,000.

Approved and authorised by the Board on 14 November 2024 and signed on its behalf by:
 

.........................................
R N V Mead
Director

Company Registration Number: 15321919

 

Churngold Holdings Limited

Consolidated Statement of Changes in Equity

Period from 1 December 2023 to 31 May 2024

Share capital
£ 000

Share premium
£ 000

Other reserves
£ 000

Profit and loss account
£ 000

Total
£ 000

Profit for the period

-

-

-

62

62

Other comprehensive income

-

-

(75)

-

(75)

Total comprehensive income

-

-

(75)

62

(13)

New share capital subscribed

5

449

-

-

454

At 31 May 2024

5

449

(75)

62

441

 

Churngold Holdings Limited

Statement of Changes in Equity

Period from 1 December 2023 to 31 May 2024

Share capital
£ 000

Share premium
£ 000

Other reserves
£ 000

Profit and loss account
£ 000

Total
£ 000

Loss for the period

-

-

-

(11)

(11)

Other comprehensive income

-

-

(75)

-

(75)

Total comprehensive income

-

-

(75)

(11)

(86)

New share capital subscribed

5

449

-

-

454

At 31 May 2024

5

449

(75)

(11)

368

 

Churngold Holdings Limited

Consolidated Statement of Cash Flows

Period from 1 December 2023 to 31 May 2024

Note

2024
£ 000

Cash flows from operating activities

Profit for the period

 

62

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

18

Finance income

8

(4)

Finance costs

9

14

Income tax expense

10

24

 

114

Working capital adjustments

 

Decrease in debtors

14

3,630

Decrease in creditors

16

(1,024)

Net cash flow from operating activities

 

2,720

Cash flows from investing activities

 

Interest received

4

Cash paid to acquire subsidiaries

 

(3,086)

Cash acquired with subsidiaries

 

11,596

Net cash flows from investing activities

 

8,514

Cash flows from financing activities

 

Interest paid

9

(3)

Proceeds from issue of ordinary shares, net of issue costs

 

109

Payments to finance lease creditors

 

(24)

Net cash flows from financing activities

 

82

Net increase in cash and cash equivalents

 

11,316

Cash and cash equivalents at 1 December

 

-

Cash and cash equivalents at 31 May

 

11,316

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

1

General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
Unit 4a
Severn View Industrial Estate
Central Avenue
Hallen
Bristol
BS10 7SD
United Kingdom

These financial statements were authorised for issue by the Board on 14 November 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. There are no material departures from FRS 102.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The financial statements are presented in sterling which is also the functional currency of the Group. Monetary amounts in these financial statements are rounded to the nearest £000, except where otherwise indicated.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 May 2024.

As a consolidated profit and loss account is published, a separate profit and loss account for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

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

The results of subsidiaries acquired or disposed of during the period are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Going concern

The Group has preared detailed forecasts, based upon on going contracts, known contract wins and possible contract wins.

These forecasts have been sensitised to take into consideration current economic pressures, including increase energy and material costs.

The forecasts consider the current level of available bank facilites. The forecasts show sufficient headroom within these facilites, even when sensitised.

The Directors, having reviewed the Group's facilities and likely trading forecasts, have concluded that there is no material uncertainty in relation to this matter. The Group and Company are able to meet their liabilities as they fall due for a period of not less than 12 months following the date of approval of these financial statements, and therefore these financial statements continue to be prepared on a going concern basis.

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

Key accounting judgements and sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of furture events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Long term contracts

The directors are required to make certain estimates and judgements as to how the company's long term contracts will complete, and the value of recoverable work to be agreed with customers, the estimate of income recognition timing and the costs to be incurred to generate revenues. This involves an inherent degree of uncertainty which the directors mitigate via the use of staff experienced in the management of such contracts.

Revenue recognition

Turnover is recognised at the fair value of the consideration received or receivable for the delivery of contracts to external customers in the ordinary nature of the business. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. Turnover is shown net of Value Added Tax.

The recognition of turnover from construction contracts is set out below.

Contract revenue recognition

When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profitable, turnover and costs are recognised over the period of the contract.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

When the outcome of a contract cannot be estimated reliably, contract turnover is recognised only to the extent of contract costs that are recoverable and the contract costs are expensed as incurred.

The group used the value of certified work derived by its surveyors to determine the appropriate amount of income and costs to recognise in a given period. The value of the work is adjusted where there is deemed to be uncertainty over whether the full level will be recovered from its customers.

Tax

Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

Deferred tax is recognised on all timing differences at the balance sheet date unless indicated below. Timing differences are differences between taxable profits and the results as stated in the consolidated profit and loss account and other comprehensive income. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant & machinery

over 2 to 7 years (straight line)

Motor vehicles

over 2 to 7 years (straight line)

Leasehold improvements

over 40 years or period of lease if shorter than 40 years

Goodwill

Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10 years straight line

Investments

Investments in subsidiaries are held at cost less impairment

Leases

Finance Leases
An asset and corresponding liability are recognised for leasing agreements that transfer to the Group substantially all of the risks and rewards incidental to ownership ("finance leases"). The amount capitalised is the fair value of the leased asset or, if lower, the present value of the minimum lease payments payable during the lease term, both determined at inception of the lease. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

The Group as Lessee
All other leases are operating leases and the annual rental are charged to profit or loss on a straight line basis over the lease term.

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Classification
The company holds the following financial instruments:

• Short term trade and other debtors and creditors;
• Other loans; and
• Cash and bank balances.

All financial instruments are classified as basic.

 Recognition and measurement
The company has chosen to apply the recognition and measurement principles in FRS102.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company’s obligations are discharged, expire or are cancelled.

Except for long term loans, such instruments are initially measured at transaction price, including transaction costs, and are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.

Long term loans are initially measured at transaction price, including transaction costs, and are subsequently carried at amortised cost using the effective interest method.

 

3

Turnover

The analysis of the group's Turnover for the period from continuing operations is as follows:

2024
£ 000

Construction contracts

1,768

The analysis of the group's Turnover for the period by market is as follows:

2024
£ 000

UK

1,768

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

4

Operating profit

Arrived at after charging/(crediting)

2024
£ 000

Depreciation expense

18

Operating lease expense - plant and machinery

136

Operating lease expense - other

3

5

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2024
£ 000

Wages and salaries

245

Social security costs

26

Pension costs, defined contribution scheme

8

279

The average number of persons employed by the group (including directors) during the period, analysed by category was as follows:

2024
No.

Operatives

105

Administration and managerial

47

152

6

Directors' remuneration

The directors' remuneration for the period was as follows:

2024
£ 000

Remuneration

30

Contributions paid to money purchase schemes

3

33

During the period the number of directors who were receiving benefits and share incentives was as follows:

2024
No.

Accruing benefits under money purchase pension scheme

7

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

7

Auditor's remuneration

2024
£ 000

Audit of these financial statements

8

Other fees to auditors

Taxation compliance services

2

All other assurance services

5

7


 

8

Other interest receivable and similar income

2024
£ 000

Other finance income

4

9

Interest payable and similar expenses

2024
£ 000

Interest on bank overdrafts and borrowings

11

Interest on obligations under finance leases and hire purchase contracts

3

14

10

Taxation

Tax charged/(credited) in the profit and loss account

1 December 2023 to 31 May 2024
 £ 000

Deferred taxation

Arising from origination and reversal of timing differences

36

Arising from changes in tax rates and laws

(12)

Total deferred taxation

24

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

The tax on profit before tax for the period is lower than the standard rate of corporation tax in the UK of 25%.

The differences are reconciled below:

2024
£ 000

Profit before tax

86

Corporation tax at standard rate

22

Effect of expense not deductible in determining taxable profit (tax loss)

14

Deferred tax credit from unrecognised temporary difference from a prior period

(12)

Total tax charge

24

Deferred tax

Group

Deferred tax assets and liabilities

2024

Asset
£ 000

Liability
£ 000

Fixed asset timing differences

-

714

Short term timing differences

3

-

Losses and other deductions

140

-

143

714

11

Intangible assets

Group

Goodwill
 £ 000

Total
£ 000

Cost or valuation

Additions

6,478

6,478

At 31 May 2024

6,478

6,478

Amortisation

Carrying amount

At 31 May 2024

6,478

6,478

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

12

Tangible assets

Group

Land and buildings
£ 000

Motor vehicles
 £ 000

Plant and machinery
£ 000

Total
£ 000

Cost or valuation

Acquired through business combinations

82

101

2,794

2,977

At 31 May 2024

82

101

2,794

2,977

Depreciation

Charge for the period

-

2

16

18

At 31 May 2024

-

2

16

18

Carrying amount

At 31 May 2024

82

99

2,778

2,959

Included within the net book value is £2,558,000 relating to assets held under finance lease agreements. The depreciation charged to the financial statements in respect of these assets is £14,000.

13

Investments

Company

2024
£ 000

Investments in subsidiaries

9,311

Subsidiaries

£ 000

Cost or valuation

Additions

9,311

Provision

Carrying amount

At 31 May 2024

9,311

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2024

Subsidiary undertakings

Churngold Construction Group Limited

Same as parent

A ordinary and B ordinary

100%

Churngold Construction Holdings Limited

Same as parent

Ordinary

100%

Churngold EBT Trustee Limited

Same as parent

Ordinary

100%

Churngold Construction Limited

Same as parent

Ordinary

100%

Subsidiary undertakings

Churngold Construction Group Limited

The principal activity of Churngold Construction Group Limited is that of a holding company.

Churngold Construction Holdings Limited

The principal activity of Churngold Construction Holdings Limited is that of a holding company.

Churngold EBT Trustee Limited

The principal activity of Churngold EBT Trustee Limited is acting as trustee of the Churngold Employee Benefit Trust.

Churngold Construction Limited

The principal activity of Churngold Construction Limited is groundworks and civil engineering.

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

14

Debtors

 

Group

Company

2024
£ 000

2024
£ 000

Trade debtors

2,701

-

Other debtors

1,784

120

Prepayments

484

-

Amounts recoverable on contracts

5,282

-

10,251

120

15

Cash and cash equivalents

 

Group

Company

2024
£ 000

2024
£ 000

Cash at bank

11,316

-

16

Creditors

   

Group

Company

Note

2024
£ 000

2024
£ 000

Due within one year

 

Loans and borrowings

17

3,796

3,011

Trade creditors

 

6,140

-

Amounts due to group undertakings

25

-

3,052

Social security and other taxes

 

281

-

Outstanding defined contribution pension costs

 

11

-

Other creditors

 

3,064

-

Accrued expenses

 

12,703

-

 

25,995

6,063

Due after one year

 

Loans and borrowings

17

3,997

3,000

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

17

Loans and borrowings

 

Group

Company

2024
£ 000

2024
£ 000

Non-current loans and borrowings

Hire purchase contracts

997

-

Other borrowings

3,000

3,000

3,997

3,000

 

Group

Company

2024
£ 000

2024
£ 000

Current loans and borrowings

Hire purchase contracts

785

-

Other borrowings

3,011

3,011

3,796

3,011

Group and Company

Other borrowings

Loan notes are denominated in sterling with a nominal interest rate of 2% above base rate, and the final instalment is due on 1 June 2028. The carrying amount at year end is £6,011,000.

18

Obligations under leases and hire purchase contracts

Group

Finance leases

Group obligations under hire purchase agreements are secured by the related assets and bear finance charges at rates ranging from 2.5% to 6.0% per anum.

The total of future minimum lease payments is as follows:

2024
£ 000

Not later than one year

785

Later than one year and not later than five years

997

1,782

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

Operating leases

The total of future minimum lease payments is as follows:

2024
£ 000

Not later than one year

252

Later than one year and not later than five years

269

521

19

Provisions for liabilities

Group

Deferred tax
£ 000

Total
£ 000

Additional provisions

12

12

Increase through business combinations

559

559

At 31 May 2024

571

571

20

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the group to the scheme and amounted to £8,000.

Contributions totalling £11,000 were payable to the scheme at the end of the period and are included in creditors.

21

Share capital

Allotted and called up shares

 

31 May 2024

 

No. 000

£ 000

Ordinary of £0.01 each

500

5.00

     

On 1 December 2023, on incorporation, 1 Ordinary share of £1 was issued. The amount is unpaid.

On 22 May 2024, the Ordinary share was sub-divided into 1,000 Ordinary shares of £0.01 each.

On 22 May 2024, 499,900 Ordinary shares of £0.01 were issued.

The premium on issues has been credited to the share premium account.

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

22

Commitments

Group - Capital commitments

Items of plant and equipment, acquired under hire purchase pre year end, were not delivered until post year end. The total amount contracted for but not provided in the financial statements was £96,000.

23

Business combinations

On 22 May 2024, Churngold Holdings Limited (The principal activity of the group is ground works, enabling works and civil engineering services.) acquired 100% of the issued share capital of Churngold Construction Group Limited (The principal activity of the group is ground works, enabling works and civil engineering services.), obtaining control.

Churngold Construction Group Limited contributed £1,768,000 revenue and £62,000 to the group's profit for the period between the date of acquisition and the Balance Sheet date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
 

Book value
2024
£ 000

Revaluation adjustments
2024
£ 000

Fair value
2024
£ 000

Assets and liabilities acquired

Financial assets

25,477

-

25,477

Tangible assets

2,976

-

2,976

Financial liabilities

(25,620)

-

(25,620)

Total identifiable assets

2,833

-

2,833

Goodwill

6,478

-

6,478

Total consideration

9,311

-

9,311

Satisfied by:

Cash

3,086

-

3,086

Equity instruments

225

-

225

Debt instruments

6,000

-

6,000

Total consideration transferred

9,311

-

9,311

Cash flow analysis:

Cash consideration

(3,086)

-

(3,086)

Less: cash and cash equivalent balances acquired

11,596

-

11,596

Net cash inflow arising on acquisition

8,510

-

8,510

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

The useful life of goodwill is 10 years.

24

Analysis of changes in net debt

Group

Financing cash flows
£ 000

Acquisition of subsidiaries
£ 000

Other non-cash changes
£ 000

At 31 May 2024
£ 000

Cash and cash equivalents

Cash

(280)

11,596

-

11,316

Borrowings

Other borrowings

-

-

(6,011)

(6,011)

Lease liabilities

24

(1,806)

-

(1,782)

24

(1,806)

(6,011)

(7,793)

 

(256)

9,790

(6,011)

3,523

25

Related party transactions

Group

The group has taken advantage of the exemption in FRS 102 from disclosing transactions with wholly owned subsidaires.

During the period the group undertook the following transactions and had amounts owing to or by entities that are considered related parties by virtue of common ownership.

Purchases

Sales

Owed to

Owed by

Provision against amounts owed by

£'000

£'000

£'000

£'000

£'000

2024

Total value of transactions and balances

76

8

8

1,493

800

 

Churngold Holdings Limited

Notes to the Financial Statements

Period from 1 December 2023 to 31 May 2024

26

Contingent liabilities

Group

Contingent liabilities in respect of performance guarantees entered into in the normal course of business amounted to £nil as at 31 May 2024.

There is a cross guarantee between Churngold Construction Group Limited and a related company, Churngold Remediation Holdings Limited relating to the bank overdraft facility. As at 31 May 2024, the bank borrowings in Churngold Remediation Holdings Limited group amounted to £nil.