The directors present the strategic report for the year ended 31 May 2024.
During the year, the group saw plant hire activity maintain income levels from the prior year. The strategic purchases and expansion of the Group in the prior year with Diggers (Bury) Limited and acquisition of Thomas Armco and Fencing Limited in the year has resulted in an increase in the turnover of the Group and has continued to expanded it's operating area and services provided.The consolidated group results show an increase in total group turnover of 34% to £83m, Group gross margins have reduced compared to the prior year, this highlighted by the increased fuel and energy costs together with fixed contract pricing.
EBITDA reached in excess of £31.3m (£31.1m previous year), with a profit before taxation of £1.4m (£581k loss before tax in the previous year).
The group continued to invest heavily in plant and machinery during the year, with acquisitions of £26.8m. This was as a result of strategic expansions, and a constant refreshment of fleet, and saw the overall net book value of plant increase by 9.6% on the prior year.
The overall net asset position of the company continued to strengthen with overall group net assets before deferred tax now standing at £33m.
As is the nature of the industry, there is always an inherent risk. However, the group aims to minimise its exposure by a diversification of activity and a spread amongst customers, reducing reliance on any one area. The group implements regular credit control to further minimise exposure to financial risk.
The majority of the groups borrowings are now at a variable rate, meaning the Group's exposure to the recent rises in interest rates have resulted in a significant increase in borrowing costs. The ABL facilty of just over £104m at the balance sheet date exposes the group to signiciant interest costs until the interest rates start to decerease, although any decreases are expected to be no more than 1% and not until later in 2025 if at all.
The future order book for the contracting company remains strong, with £21.3m of contracting work secured over the next 15 months, and the plant hire division continues to expand providing optimism for continued growth in future years. It is expected that as interest rates have stabilised, activity in the construction sector continue to grow in 2025.
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 Group has been able to factor in increased costs into these new contracts.
The group has minimal exposure to foreign currencies.
As in previous years, our focus during this reporting period continued to be the recruitment, retention and development of talent within the Group.
Systems
We are continuing to significantly invest in our Information Technology Infrastructure and Systems. This includes methods for recording real time fuel usage and performance of both fleet and plant & equipment.
Corporate Governance
Thomas Group defines corporate governance to include its management structure and supporting functions and systems which are implemented through an established framework of policies, procedures and processes that ensure effective business outcomes.
Strategies to review and improve organizational effectiveness are also in place to ensure effective resource allocation and quality business and customer support services.
Key challenges include attracting skilled staff, effectively equipping depot staff and regulatory compliance; and ensuring continuous improvement at a time of significant change within the utilities and construction sectors.
Key Performance Indicators The key indicators within the group relate to:
Indicator | 2024 | 2023 | Definition, calculation and analysis |
Increase in turnover | 33.8% | 34.5% | Turnover growth is expressed as a percentage. The increase is due to the industry recovering and strategic expansion. |
Hire fleet Utilisation | 62% | 61% | Utilisation is expressed as a percentage of overall machines hired to customers, averaged for the year. |
Loan to value | 86% | 87% | LTV is expressed as a percentage of secured lending against tangible assets. |
Thomas Plant Hire Ltd operates under ISO 45001 audited by NQA to certify Thomas Plant Hire Ltd with UKAS accreditation.
Thomas Group of Companies have been proud to enter a period of growth. both in offerings to Clients and winning major contracts across the business. We fully support our Managing Directors goal of a Quality focused company and we have maintained our UKAS Accredited quality standard (IOS 9001).
We have upgraded our FORS accreditation to Silver, demonstrating the goal of ensuring the safety of other road users from our HGV fleet and reducing fuel use by addressing driver behaviours (Idling, driving style, route planning).
Thomas Group of companies has continued to take steps to drive a behavioural based safety culture and in support of this have two senior managers who are trained for dealing with mental health issues.
Our risk assessment process and control measures are now communicated far more effectively whilst removing unnecessary wording to safety critical documentation. The apprenticeship scheme continues and has demonstrated the benefit of developing operatives from an early point.
Monthly management meetings are held and the minutes recorded to identify any risk to the business, demonstrate the key performance indicators and to feedback on the internal audit process to ensure continued compliance with our integrated ISO H&S, Quality and Environmental standards.
Employees are informed of information on matters of concern to them through various forms of communication with senior management, The orm of communication will be dependent on the scale and importance of the information being disseminated and examples of this include irmwide communication by email, conference calls and attaching notices to boards in communal arcas at our depots.
Employees are consulted on a regular basis through team and one-to-one meetings and risk assessment / method statement creation. All and senior management directly engage with employees and employ an open-door policy. This provides employees with an opportunity to ask questions or raise any concerns as they see fit and ensures employee engagement remains at the forefront of the business.
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
The Thomas Group of Companies continues to focus on the quality of its overall service to customers with account managers appointed to deliver to our major accounts.
Our suppliers are fundamental to the quality of our service offering and ensuring that as a business we meet the high standards of conduct we set ourselves.
Our bankers and lenders are key to supporting the ongoing growth of the group. Regular management information is shared and discussed, and we hold regular relationship meetings.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 May 2024.
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We are establishing our carbon footprint and following on from that will aim to reduce the footprint and demonstrate this in a quantifiable manner.
We monitor fuel use and performance through Scania Fleet Management Portal.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting
We have audited the financial statements of Thomas Holdings (North West) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent 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.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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.
In the light of the knowledge and understanding of the group and the parent company and their 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 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.
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 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 parent company or to cease operations, or have no realistic alternative but to do so.
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.
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 entity 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.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £3,033,601 (2023 - £3,022,138 loss).
Thomas Holdings (North West) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Tai Hirion, Lywybr Hir, Caerwys, Flintshire, United Kingdom, CH7 5BL.
The group consists of Thomas Holdings (North West) Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
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 consolidated group financial statements consist of the financial statements of the parent company Thomas Holdings (North West) Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 May 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The parent company has an ABL facility in place which is due for renewal in March 2025. The ABL facility provider have expressed a positive appetite to renew the facility subject to relevant credit approval and legal documentation, therefore the Directors consider it appropriate to prepare the accounts on the going concern basis. The Directors are also positive that there is sufficient appetite within the ABL market to renew the facility on positive terms.
The accounts do not reflect any adjustments should the facility not be renewed.
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 the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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 it is probable will be recovered.
Where the value of work done exceeds the amounts invoiced, the excess is accounted for as amounts recoverable on contracts and is included within debtors.
Turnover, derived from plant hire is calculated on the basis of the hire of machines during the period.
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 recognised in the profit and loss account.
Land and buildings comprise freehold properties occupied by the group. The directors consider that the freehold properties are maintained in such a state of repair that their residual value is at least equal to their carrying value. Accordingly no depreciation is charged on the grounds of immateriality. Annual impairment reviews are undertaken and provisions made at the end of each reporting period where necessary.
Non-depreciation of the property is a departure from the Companies Act 2006, but in the director's opinion is necessary to give a true and fair view.
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 or .
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
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 profit or loss 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 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 leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
Long term contracts
Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer. Full provision is made for losses on all contracts in the year in which they are first foreseen.
Retentions
Retention recognition policy follows that of BIM51520, whereby the recognition of retentions is deferred until their receipt becomes virtually certain.
Prior year restatement
There was an adjustment of £32.6m to Group turnover and Group cost of sales in the prior year due to a consolidation error. There was no effect on the gross profit or results reported in the year
In the application of the group’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.
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.
Thomas Contracting Limited
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 1.5. 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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of tangible fixed assets and the calculation of depreciation charges. The estimates and associated assumptions are based on the depreciation accounting policies that are set factoring in historical experience and other factors that are considered to be relevant.
There was an adjustment of £32.6m to Group turnover and Group cost of sales in the prior year due to a consolidation error. There was no effect on the gross profit or results reported in the year
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual 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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
During the prior year the decision was made to transfer motor vehicles to the plant and machinery pool. This decision was made as it is representitive of how management maintain registers, due to the nature of construction trade motor vehicals being most relevently classified as plant and machinery.
The fair value of the investment property has been arrived at on the basis of the director's valuation carried out at the balance sheet date. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the company's subsidiaries at 31 May 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Included in trade debtors is an amount of £8,801,789 (2023: £7,055,457) relating to trade debts processed through an invoice discounting facility provided by Barclays Bank plc. This facility together with the asset backed lending facility is secured over the assets of the Group.
There is a cross company guarantee across the Group held within Thomas Holdings (North West) Limited, the balance of this facility as at 31 May 2024 was £104,632,169 (2023 £102,174,851).
Also included in other creditors, held within Thomas Plant Hire Limited, is a balance of £4,170,987 (2023 £2,821,340), this confidential invoice discounting facility is secured against the debtors of the company.
The long-term loans are secured by fixed charges over freehold property.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. All liabilities are secured on the assets purchased.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
On 2 November 2023 the group acquired 100% percent of the issued capital of Mulholland Plant Services Limited.
On 13th June 2024 the Group entered into an agreement with the administrators of ECY Haulmark Limited to purchase the assets and licence of the company for a consideration of £189k.
On 22 July 2024 the Group entered into an agreement with John Nixon Limited to purchase the plant for a consideration of £15m.
The Group has committed to approximately £40m of plant purchases.
Included in debtors is a balance of £Nill (2023 £314,397) due from W & S Property & Land Limited. All loans are interest free and repayable on demand.
On 22 February 2024. W & S Property & Land Limited purchased the property from Thomas Armco and Fencing Limited for a consideration of £598k.
Throughout the year the Group rental charges totalling £1.05m (2023 £972k).
All transactions are completed at arms-length.
Other related parties comprise wholly owned group companies. Transactions with related parties are at arms-length agreed terms, conditions and prices. The group and company have taken advantage of the exemptio within FRS102 Section 33.1A from the requirements to disclose transactions with other wholly owned companies within the same group.
There was an adjustment of £32.6m to Group turnover and Group cost of sales in the prior year due to a consolidation error. There was no effect on the gross profit or results reported in the year