Company registration number 04496458 (England and Wales)
THOMAS CONTRACTING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
THOMAS CONTRACTING LIMITED
COMPANY INFORMATION
Directors
Mr W L Thomas
Mrs S E Thomas
Miss L L Thomas
Secretary
Mrs S E Thomas
Company number
04496458
Registered office
Tai Hirion
Lywybr Hir
Caerwys
Flintshire
United Kingdom
CH7 5BL
Auditor
Azets Audit Services
Alpha House
4 Greek Street
Stockport
United Kingdom
SK3 8AB
THOMAS CONTRACTING LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Notes to the financial statements
10 - 19
THOMAS CONTRACTING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -
The directors present the strategic report for the year ended 31 May 2024.
Review of the Business
During the year, the company saw a significant increase in contracting work of 32% to £25.7m, following the previous years 35% decrease. Margins increased sharply due to relief on materials and hire costs and general calming of inflation.
During the current financial year, the company incurred a significant bad debt of £894k due from the Buckingham Group relating to work on the new Liverpool Football Club stadium, Prior to the date of administration, the Buckingham Group had appropriate credit limits in place and were paying their account on time, so it was a huge disappointment and surprise to the Driectors when the Buckingham Group entered administration and were no longer able to pay amounts owing to the company.
Despite this disappointment the company achiveed a profit before tax of £2m and the overall net asset position of the company increased to £3.6 million.
In the period to December 2024 the company has continued to trade profitably with an order book of profitable contracts and a stronger margin.
Principal Risks and Uncertainties
As is the nature of the industry, there is always an inherent risk. However, the company aims to minimise it's exposure by a diversification of activity and a spread amongst customers, reducing reliance on any one area. The company implements regular credit control to further minimise exposure to finacial risk.
The future order book for the company remains strong, with £21.3m contracting work secured covering the next 15 months and £12.5m on quote.
External factors include the economic environment, however this appears to be strong with large numbers of high value projects both in progress and being planned for the future, as evidenced by the contracting forward order book.
The company has minimal exposure to foreign currencies.
Miss L L Thomas
Director
31 January 2025
THOMAS CONTRACTING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Principal activities
The principal activities of the company was that of contracting services.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr W L Thomas
Mrs S E Thomas
Miss L L Thomas
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
THOMAS CONTRACTING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
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.
Going Concern
Details of the Company's business activities and the factors likely to affect its future development, performance and financial position are set out in the Strategic Report. The Directors have undertaken a comprehensive review of the Company's forecasts for 2025 and 2026. As part of this review, the directors considered the potential impact of reasonable downside scenarios on the Company's base case forecast. Based on the current and expected trading patterns, the secured workload, and the support from the parent company, the outlook for the next 12 months and beyond remains positive. The Company meets its day-to-day working capital requirements through its cash reserves and support from the parent company.
In 2022, the parent Company secured an asset-based, lending facility to provide long-term financing for the Group and enables it to fund growth, investment opportunities and fluctuations in working capital. The directors' review of the Group forecasts and projections show that the Group and Company has sufficient headroom to support its operations for the period of assessment. At the time of approving the financial statements, the directors consider that the Company has adequate resources to remain in operation for the foreseeable future and have no reason to believe that a material uncertainty exists that may cast significant doubt about the Company's ability to continue as a going concern. Accordingly, the financial statements have been prepared on the going concern basis of accounting.
On behalf of the board
Miss L L Thomas
Director
31 January 2025
THOMAS CONTRACTING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF THOMAS CONTRACTING LIMITED
- 4 -
Opinion
We have audited the financial statements of Thomas Contracting Limited (the 'company') for the year ended 31 May 2024 which comprise the statement of income and retained earnings, the balance sheet 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 31 May 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.
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.
THOMAS CONTRACTING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF THOMAS CONTRACTING LIMITED
- 5 -
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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
THOMAS CONTRACTING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF THOMAS CONTRACTING LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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 or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Helen Davies
Senior Statutory Auditor
For and on behalf of Azets Audit Services
3 February 2025
Chartered Accountants
Statutory Auditor
Alpha House
4 Greek Street
Stockport
United Kingdom
SK3 8AB
THOMAS CONTRACTING LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MAY 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
25,664,071
19,461,083
Cost of sales
(22,333,263)
(19,718,766)
Gross profit/(loss)
3,330,808
(257,683)
Administrative expenses
(1,370,871)
(1,747,307)
Other operating income
136,399
15,998
Profit/(loss) before taxation
2,096,336
(1,988,992)
Tax on profit/(loss)
6
165,489
Profit/(loss) for the financial year
2,261,825
(1,988,992)
Retained earnings brought forward
1,323,500
3,312,492
Retained earnings carried forward
3,585,325
1,323,500
THOMAS CONTRACTING LIMITED
BALANCE SHEET
- 8 -
2024
2023
Notes
£
£
£
£
Current assets
Debtors
8
7,415,277
8,218,189
Cash at bank and in hand
296,898
49,878
7,712,175
8,268,067
Creditors: amounts falling due within one year
9
(4,126,849)
(6,944,566)
Net current assets
3,585,326
1,323,501
Capital and reserves
Called up share capital
12
1
1
Profit and loss reserves
14
3,585,325
1,323,500
Total equity
3,585,326
1,323,501
The financial statements were approved by the board of directors and authorised for issue on 31 January 2025 and are signed on its behalf by:
Miss L L Thomas
Director
Company Registration No. 04496458
THOMAS CONTRACTING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 June 2022
1
3,312,492
3,312,493
Year ended 31 May 2023:
Loss and total comprehensive income for the year
-
(1,988,992)
(1,988,992)
Balance at 31 May 2023
1
1,323,500
1,323,501
Year ended 31 May 2024:
Profit and total comprehensive income for the year
-
2,261,825
2,261,825
Balance at 31 May 2024
1
3,585,325
3,585,326
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 10 -
1
Accounting policies
Company information
Thomas Contracting Limited is a private company limited by shares incorporated in England and Wales. The registered office is Tai Hirion, Lywybr Hir, Caerwys, Flintshire, United Kingdom, CH7 5BL.
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 financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Thomas Holdings (North West) Limited. These consolidated financial statements are available from the registered office at Tai Hirion Lywybr Hir Caerwys Flintshire United Kingdom CH7 5BL
1.2
Going concern
The financial statements have been prepared on the going concern basis. The Directors have reviewed the Company's financial position, performance and future development and believe the Company has adequate resources to continue in operational existence for the foreseeable future. Details of this review are set out in the Directors' report.true
Whilst the company has gained additional contract funding, the nature of the industry holds a risk of further bad debts. To reduce this risk the company does engage with credit agencies and monitors the reports on their customer base.
The Directors acknowledge that if there are additional bad debts in the 2025 financial year and beyond to the level incurred this year would impact the company's ability to continue as a going concern without parent company support.
Further disclosure is made within note 2 to these financial statements.
1.3
Turnover
Turnover represents net invoiced sales of services, excluding VAT, except in respect of service contracts where turnover is recognised when the company obtains the right to consideration.
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 11 -
Revenue from contracts for the provision of 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 revenue and related costs incurred as contract activity progresses. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2003, was being amortised evenly over its estimated useful life. This has been fully amortised.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.6
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. As all financial assets are classified within one year, they are not amortised but carried at face value.
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 12 -
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 and bank loans, 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. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.7
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.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 13 -
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.12
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.
1.13
Retention are recognised upon certification.
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 14 -
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Amounts recoverable on contracts
The level of turnover recognised in respect of long term contracts is determined by reference to the proportion of work carried out at year end, as explained in note 1.3. Professional judgement is applied by the company's own quantity surveyors in order to assess the stage of completion and raise appropriate and reasonable applications for payment.
Provisions are made against applications for payment where the company believes there is reasonable doubt regarding the recoverability of amounts receivable.
In assessing overall profitability of a contract, upon which attributable profit is calculated, an estimate is made of the remaining costs to be incurred (including costs associated with variations to the customers original budget) in order to complete each long term contract. Judgement is also required in identifying loss making contracts in respect of which provision is made in full in the year in which they are first foreseen.
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 15 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Contracting
25,664,071
19,461,083
2024
2023
£
£
Other revenue
Grants received
81,495
15,998
4
Operating profit/(loss)
2024
2023
Operating profit/(loss) for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,600
20,000
Fees payable to the company's auditor for non-audit services
6,710
7,000
Operating lease charges
50,001
50,001
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production and Operational
8
7
Administration and Management
3
3
Total
11
10
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
223,850
246,072
Social security costs
11,360
9,949
Pension costs
2,243
707
237,453
256,728
An intercompany recharge is made in the year and included as part of subcontractor labour.
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 16 -
6
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(144,512)
Deferred tax
Origination and reversal of timing differences
(497,248)
Previously unrecognised tax loss, tax credit or timing difference
476,271
Total deferred tax
(20,977)
Total tax credit
(165,489)
The actual (credit)/charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit/(loss) before taxation
2,096,336
(1,988,992)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
524,084
(377,908)
Unutilised tax losses carried forward
377,908
Group relief
(47,813)
Deferred tax adjustments in respect of prior years
(497,248)
Prior year corporation tax adjustment
(144,512)
Taxation credit for the year
(165,489)
-
7
Intangible fixed assets
Goodwill
£
Cost
At 1 June 2023 and 31 May 2024
50,000
Amortisation and impairment
At 1 June 2023 and 31 May 2024
50,000
Carrying amount
At 31 May 2024
At 31 May 2023
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 17 -
8
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
458,192
995,337
Gross amounts owed by contract customers
5,326,437
3,956,617
Corporation tax recoverable
23,548
15,259
Amounts owed by group undertakings
225,928
2,055,684
Other debtors
1,340,604
1,176,195
Prepayments and accrued income
19,591
19,097
7,394,300
8,218,189
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 10)
20,977
Total debtors
7,415,277
8,218,189
Included within other debtors is an amount of £1,188,101 (2023: £1,006,681) of retention balances.
9
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
3,550,062
2,339,798
Amounts owed to group undertakings
266,803
4,275,975
Taxation and social security
281,674
199,227
Other creditors
74,662
Accruals and deferred income
28,310
54,904
4,126,849
6,944,566
10
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2024
2023
Balances:
£
£
Timing differences
20,977
-
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
10
Deferred taxation
(Continued)
- 18 -
2024
Movements in the year:
£
Liability at 1 June 2023
-
Credit to profit or loss
(20,977)
Asset at 31 May 2024
(20,977)
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
11
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
2,243
707
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.
12
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
13
Secured debts
There is a cross company guarantee accross the Group held within Thomas Holdings (North West) Limited, the balance of this facility as at 31 May 2024 was £104,632,169.
14
Profit and loss reserves
2024
2023
£
£
At the beginning of the year
1,323,500
3,312,492
Profit/(loss) for the year
2,261,825
(1,988,992)
At the end of the year
3,585,325
1,323,500
15
Related party transactions
The company has taken advantage of the exemption within FRS 102 Section 33.1A from the requirements to disclose transactions with other wholly owned companies within the same group.
All related party transactions are under the normal course of business.
THOMAS CONTRACTING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
16
Ultimate controlling party
Thomas Holdings (North West) Limited is regarded by the directors as being the comapny's ultimate parent company.
The controlling party is Mr W L Thomas.
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