Company registration number 06567705 (England and Wales)
CCN COMMUNICATIONS LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 APRIL 2024
3 Acorn Business Centre
Northarbour Road
Cosham
Portsmouth
Hampshire
PO6 3TH
CCN COMMUNICATIONS LTD
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 26
CCN COMMUNICATIONS LTD
COMPANY INFORMATION
- 1 -
Directors
Mr A Adams
Mr M Skilton
Company number
06567705
Registered office
F1 Daedalus Park
Daedalus Drive
Lee-on-the-Solent
Hampshire
PO13 9FX
Auditor
TC Group
3 Acorn Business Centre
Northarbour Road
Cosham
Portsmouth
Hampshire
PO6 3TH
CCN COMMUNICATIONS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
The directors present the strategic report for the year ended 30 April 2024.
Business Overview
CCN Communications is a utility contractor with a strong track record in the digital infrastructure sector, especially in constructing fibre-to-the-premise telecom networks in the southern UK. With over 16 years of experience in this field, the company provides comprehensive services ranging from network construction to technical operations. The current owners and leadership team have over 30 years of experience in this sector.
Markets and Trends
Digital Infrastructure and bringing gigabit broadband fibre services to every property in the UK is a fast-growing sector that will transform the UK's economy and infrastructure. The fibre to the premise market is worth c£5bn. Gigabit broadband is imperative as the UK still catches up on the OECD (Organisation for Economic Co-operation and Development) table for full-fibre connectivity. The key driver in recent years has been the demand for data services. The outlook for future demand is more capacity at faster rates. The UK economy, especially, is a services economy. A services economy runs on the internet and must run on fibre.
Over the past 12 months, the UK is now 60% connected, and intense government pressure to get to 80% by 2025 is fuelling domestic and foreign investment in Internet Service Providers (ISP) and Network Operators in both the mobile and fixed-line sectors. CCN is positioned as one of the few choices for building these networks in the south of the UK, and there is continued demand for our services.
Objectives
Our management team is resolute in its commitment to solidifying our dominance in the UK's southern region and sharpening our focus on digital infrastructure with just two key clients. We are poised for significant growth with two pivotal contracts secured and at the helm of the new government-backed BDUK project across Hampshire and Sussex, valued at £250 million. Anticipating a business consolidation of £40 million in the 2025 range, we are primed for expansion.
Our strategic imperative is establishing digital infrastructure across our operating region and positioning ourselves as the foremost long-term maintenance and build partner for new technologies and fibre requirements.
Strategy
Our strategy is firmly rooted in operational excellence as we expand, ensuring quality control. We are wholeheartedly committed to empowering our clients to market their products and drive their business models successfully. This steadfast commitment is pivotal to our ongoing investment and expansion. As a result, we persist in investing in building the capabilities of our workforce, with our established leadership and management program continuing to thrive across the entire organisation.
Our main challenge is to keep our company efficient as we grow without losing money due to complexity. It's important to simplify our processes so that we can make decisions and deliver quickly. Over the past year, we have spent much time and money improving our back-office systems and processes. This will help us grow without letting complexity reduce our profits.
CCN COMMUNICATIONS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
Risk
The significant foreign and domestic investment and the high-profile coverage of this sector by the central government have attracted interest from other sectors. We have observed a focus from large public corporations looking to enter this space. Additionally, foreign interest and several mergers and acquisitions have intensified competition within this opportunity. However, with other infrastructure projects in the UK flourishing and our established presence in our area, we have encountered very little regional competition. As a result, we anticipate minimal threat from new entrants in the foreseeable future, as we have secured most of the build.
Key Performance Indicators
Turnover decreased by 28% to £41.4m from £57.1m. This was expected as part of our strategy to consolidate to fewer customers.
Gross Profit up to £9.9m from £8.6m
Overhead increased to 20% of turnover, mainly due to reducing staff costs. As those savings materialise, we anticipate that it will be less than 9% next year.
Future order book £250m > 5 years turnover.
Staff Churn <10%
Financial Performance
Throughout 2023 and 2024, construction costs for materials and labour continued to rise due to the conflict in Ukraine and the cost-of-living crisis. Rate increases partially offset these cost increases. During this time, the company completed restructuring various contracts that were reaching their natural end.
In early 2024, we focused on two critical, profitable, long-term contracts. As part of this focus, we consolidated our operating depots from 6 locations to 3, which helped reduce operating costs and stock holding.
Recruitment was paused as we carefully managed staff numbers to reduce in line with depot closures.
The business implemented new technology to improve quality in the field, task administration, and communication, which resulted in cost savings.
Overall, 2023 to 2024 was a transformational year. The cost-saving efforts of the prior year delivered increased net profit with less turnover.
As we begin the new financial year, these technologies continue to improve. Our sole focus on two key contracts allows us to aim for increased efficiency and customer service.
The company is confident that focusing on developing central functions will ensure meeting customer demand and improving performance.
2 December 2024
Mr A Adams (Director)
CCN COMMUNICATIONS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 4 -
The directors present their annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company continued to be that of telecommunications and power utility contractor.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £1,101,961. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A Adams
Mr M Skilton
Auditor
TC Group were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CCN COMMUNICATIONS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 5 -
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.
Strategic report
In accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 the company has chosen to set out in the Strategic Report the information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
On behalf of the board
Mr A Adams
Director
2 December 2024
CCN COMMUNICATIONS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CCN COMMUNICATIONS LTD
- 6 -
Opinion
We have audited the financial statements of CCN Communications Ltd (the 'company') for the year ended 30 April 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
CCN COMMUNICATIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CCN COMMUNICATIONS LTD
- 7 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
CCN COMMUNICATIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CCN COMMUNICATIONS LTD
- 8 -
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.
CCN COMMUNICATIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CCN COMMUNICATIONS LTD
- 9 -
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.
James Blake FCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
2 December 2024
Office: Portsmouth
CCN COMMUNICATIONS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
2024
2023
£
£
Turnover
3
41,141,162
57,149,289
Cost of sales
(31,199,689)
(48,499,491)
Gross profit
9,941,473
8,649,798
Administrative expenses
(8,105,144)
(7,902,347)
Other operating income
67,500
250,000
Operating profit
4
1,903,829
997,451
Interest receivable and similar income
383
Interest payable and similar expenses
7
(206,709)
(102,267)
Profit before taxation
1,697,503
895,184
Tax on profit
8
(683,655)
(117,092)
Profit for the financial year
1,013,848
778,092
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 13 to 26 form part of these financial statements
CCN COMMUNICATIONS LTD
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
254,020
210,662
Current assets
Stocks
11
575,498
1,306,464
Debtors
12
7,088,480
11,144,845
Cash at bank and in hand
222,301
551,081
7,886,279
13,002,390
Creditors: amounts falling due within one year
13
(5,974,381)
(10,759,122)
Net current assets
1,911,898
2,243,268
Total assets less current liabilities
2,165,918
2,453,930
Creditors: amounts falling due after more than one year
15
(259,167)
(487,064)
Provisions for liabilities
Deferred tax liability
17
59,493
31,495
(59,493)
(31,495)
Net assets
1,847,258
1,935,371
Capital and reserves
Called up share capital
19
4
4
Profit and loss reserves
1,847,254
1,935,367
Total equity
1,847,258
1,935,371
The financial statements were approved by the board of directors and authorised for issue on 2 December 2024 and are signed on its behalf by:
Mr A Adams
Mr M Skilton
Director
Director
Company Registration No. 06567705
CCN COMMUNICATIONS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2022
4
2,332,055
2,332,059
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
778,092
778,092
Dividends
9
-
(1,174,780)
(1,174,780)
Balance at 30 April 2023
4
1,935,367
1,935,371
Year ended 30 April 2024:
Profit and total comprehensive income for the year
-
1,013,848
1,013,848
Dividends
9
-
(1,101,961)
(1,101,961)
Balance at 30 April 2024
4
1,847,254
1,847,258
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 13 -
1
Accounting policies
Company information
CCN Communications Ltd is a private company limited by shares incorporated in England and Wales. The registered office is F1 Daedalus Park, Daedalus Drive, Lee-on-the-Solent, Hampshire, PO13 9FX.
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. 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 exemptions from the following disclosure requirements:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Verevo Limited. These consolidated financial statements are available from its registered office, Unit 1 Daedalus Park, Daedalus Drive, Lee-On-The-Solent, Hampshire, PO13 9FX.
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
1.2
Going concern
As set out in the Directors’ Responsibilities Statement on page 3, in preparing these financial statements the directors are required to prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
In satisfaction of this responsibility the directors have reviewed in detail the business’ cash flow projections, and considered the company’s ability to meet its liabilities as they fall due. These cash flow forecasts are based upon existing contracts and customer orders, and show that over the next 12 months the company expects to generate a positive net inflow of cash. Further, the cash flow forecasts show that with careful management of the company's working capital, including utilising short-term financing facilities where necessary, the company expects to continue to meet its commitments as they fall due.
The directors are confident that they will have adequate resources to enable the company to continue to operate for the foreseeable future. Accordingly, the directors consider it appropriate to prepare these financial statements on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, 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:
Leasehold improvements
3 years straight line
Plant and machinery
4 years straight line
Fixtures, fittings & equipment
4 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell and any provision for impaired or obsolete items.
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
1.6
Amounts recoverable on contracts
Where the outcome of a contract for services can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a contract for services cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.7
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.
1.8
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.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are recognised initially at transaction price. 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.
1.9
Equity instruments
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.
1.10
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.
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 17 -
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.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified under hire purchase where the risks and rewards of ownership are substantially transferred to the Lessee by the terms of the agreement.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
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.
Estimation of revenues and amounts recoverable on contracts
In determining the amount of revenue and profits to be recognised for each of the contracted services which were in progress at the balance sheet date, the directors have made key estimates regarding the estimated stage of completion, the future costs expected to complete and the revenues which will ultimately be recovered from each of the contracted services. The directors use their experience and judgement when producing these estimates, which may differ from the future final outcome of the contracts, and it is possible that these differences could be material, when recognised within the profit and loss account in subsequent periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
41,141,162
57,149,289
2024
2023
£
£
Other revenue
Interest income
383
-
Management charges receivable from group undertakings
67,500
250,000
All of the company's turnover for the period was derived from the rendering of services in connection with the company's principal activity.
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,000
21,000
Depreciation of owned tangible fixed assets
67,607
83,379
Depreciation of tangible fixed assets held under finance leases
10,228
14,667
Profit on disposal of tangible fixed assets
(9,750)
(31,282)
Operating lease charges
593,749
815,734
5
Employees
The average monthly number of persons employed by the company during the year was:
2024
2023
Number
Number
Administrative
114
74
Engineers
51
53
Directors
2
2
Total
167
129
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
5,902,970
5,229,532
Social security costs
607,420
600,907
Pension costs
288,492
173,452
6,798,882
6,003,891
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 20 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
24,000
24,000
Company pension contributions to defined contribution schemes
80,000
33,333
104,000
57,333
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
123,134
58,112
Interest on finance leases and hire purchase contracts
2,460
5,697
Other interest
81,115
38,458
206,709
102,267
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 21 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
600,192
179,201
Adjustments in respect of prior periods
55,465
Total current tax
655,657
179,201
Deferred tax
Origination and reversal of timing differences
27,998
(62,109)
Total tax charge
683,655
117,092
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
1,697,503
895,184
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.49%)
424,376
174,500
Tax effect of expenses that are not deductible in determining taxable profit
195,703
46,102
Group relief
(89,830)
Under/(over) provided in prior years
55,465
Deferred tax adjustments in respect of prior years
8,111
Effect of deferred tax at future rate of tax
(13,680)
Taxation charge for the year
683,655
117,092
From 1 April 2023 the corporation tax rate increased to 25%.
9
Dividends
2024
2023
£
£
Final paid
1,101,961
1,174,780
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
10
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 May 2023
633,956
722,151
87,467
1,443,574
Additions
102,208
18,985
121,193
Disposals
(46,184)
(46,184)
At 30 April 2024
633,956
778,175
106,452
1,518,583
Depreciation and impairment
At 1 May 2023
630,249
533,492
69,171
1,232,912
Depreciation charged in the year
2,821
65,056
9,958
77,835
Eliminated in respect of disposals
(46,184)
(46,184)
At 30 April 2024
633,070
552,364
79,129
1,264,563
Carrying amount
At 30 April 2024
886
225,811
27,323
254,020
At 30 April 2023
3,707
188,659
18,296
210,662
The net carrying value of tangible fixed assets includes the following in respect of assets held under hire purchase contracts.
2024
2023
£
£
Plant and machinery
11,181
65,551
11
Stocks
2024
2023
£
£
Raw materials and consumables
575,498
1,306,464
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 23 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,174,675
4,138,484
Amounts recoverable on contracts
3,336,689
6,615,420
Amounts due from group undertakings
277,218
269,784
Other debtors
299,898
121,157
7,088,480
11,144,845
13
Creditors: amounts falling due within one year
2024
2023
£
£
Bank Loans and Overdrafts
14
599,882
448,239
Obligations under hire purchase agreements
16
1,041
10,243
Trade creditors
1,988,416
4,626,172
Amounts due to group undertakings
88,099
1,308,887
Corporation tax
840,862
896,319
Other taxation and social security
182,344
341,039
VAT
1,675,518
2,491,953
Other creditors
598,219
636,270
5,974,381
10,759,122
The hire purchase liabilities are secured on the assets to which they relate.
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 24 -
14
Loans and overdrafts
2024
2023
£
£
Bank loans
859,049
925,133
Payable within one year
599,882
448,239
Payable after one year
259,167
476,894
In the year ended 30 April 2020 the company obtained a £750,000 bank loan in accordance with the Coronavirus Business Interruption Loan Scheme. The bank loan is secured via an unlimited debenture on the company's assets, and is repayable in equal monthly instalments to April 2026. Interest is incurred on the loan at 2.37% above base.
In the year ended 30 April 2021 the company obtained an additional £350,000 bank loan in accordance with the Coronavirus Business Interruption Loan Scheme. The bank loan is secured via an unlimited debenture on the company's assets, and is repayable in equal monthly instalments to February 2026. Interest is incurred on the loan at 2.44% above base.
The company utilises a short term finance facility upon which interest is variable. The directors have provided a personal guarantee on these amounts.
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
14
259,167
476,894
Obligations under hire purchase agreements
16
10,170
259,167
487,064
The hire purchase liabilities are secured on the assets to which the relate.
16
Hire purchase obligations
2024
2023
Future minimum lease payments due under hire purchase agreements:
£
£
Within one year
1,041
10,243
In two to five years
10,170
1,041
20,413
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 25 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
62,070
42,338
Retirement benefit obligations
(2,577)
(10,843)
59,493
31,495
2024
Movements in the year:
£
Liability at 1 May 2023
31,495
Charge to profit or loss
27,998
Liability at 30 April 2024
59,493
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
288,492
173,452
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.
19
Share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
2 Ordinary shares of £1 each
2
2
2 Ordinary A shares of £1 each
2
2
4
4
CCN COMMUNICATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 26 -
20
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:
2024
2023
£
£
Within one year
63,394
550,323
Between two and five years
120,000
433,783
183,394
984,106
21
Related party transactions
In accordance with FRS 102 Section 33.1A the company has applied the exemption from disclosing transactions with fellow wholly owned group undertakings.
In respect of other group undertakings not wholly owned, during the year the company purchased services amounting to £916,470 (2023 - £7,867,258) and provided management services amounting to £67,500 (2023 - £250,000). At the balance sheet date the company was owed £nil (2023 - £1,220,890) from such group undertakings.
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