Company Registration No. 11359519 (England and Wales)
SPEC Projects Limited
Annual report and financial statements
for the year ended 31 March 2024
SPEC Projects Limited
Company information
Directors
Peter Hargreaves
Stephen Chant
Company number
11359519
Registered office
31 St Pauls Road
Clifton
Bristol
BS8 1LX
Independent auditor
Saffery LLP
St Catherine's Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
SPEC Projects Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
SPEC Projects Limited
Strategic report
For the year ended 31 March 2024
1
The directors present the strategic report for the year ended 31 March 2024.
Fair review of the business
The company has experienced a successful year in both turnover and profitability.
The directors are satisfied with the company’s overall performance despite market conditions remaining challenging. The current position combined with a strong order book provides them with reasonable confidence for the future.
The effort and commitment from our employees together with the continued collaboration with our supply chain and subcontractors to maintain goodwill and trust has been central to our success.
Our reputation is built on delivering high quality projects on time and on budget for our clients which has established the foundations of long-standing customer relationships that we strive to maintain.
Principal risks and uncertainties
Economic and political uncertainty are a major concern, and the longer-term prospects of the company are heavily linked to the wider UK economy.
Potential price increases in relation to raw materials and labour are always a concern as these can impact our competitive positions and increase the risk of customers delaying or abandoning projects.
To mitigate economic factors the company attempts to maintain a balanced mix of work and customers. Gearing remains low with little external finance, meaning that the business is less susceptible to any potential interest rate increases.
The company is always susceptible to credit and liquidity risks within the normal course of trading. The cashflow position is carefully monitored and they remain stable. The company’s main credit risk is attributable to its trade receivables of which the directors are constantly monitoring and assessing to mitigate this risk and reduce any potential adverse impact on the business.
Key performance indicators
Turnover
Turnover decreased significantly to £20.0m (2023: £32.0m) back in line with normal expected levels following an unprecedented prior year. We now expect turnover to be maintained at current levels for the foreseeable future. The company has already secured a strong order book for the following year with a healthy level of enquiries being received.
Gross profit
The gross profit margin for the year was 15.1% (2023: 15.2%). This was in line with the company’s objective and although this signified a slight decrease from the prior year, it was no cause for concern.
SPEC Projects Limited
Strategic report (continued)
For the year ended 31 March 2024
2
Peter Hargreaves
Director
4 February 2025
SPEC Projects Limited
Directors' report
For the year ended 31 March 2024
3
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company is that of the contracting work within the construction industry.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £812,500. 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:
Peter Hargreaves
Stephen Chant
Auditor
Saffery LLP have expressed their willingness to continue in office.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Peter Hargreaves
Director
4 February 2025
SPEC Projects Limited
Directors' responsibilities statement
For the year ended 31 March 2024
4
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.
SPEC Projects Limited
Independent auditor's report
To the members of SPEC Projects Limited
5
Opinion
We have audited the financial statements of SPEC Projects Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the 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).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 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.
SPEC Projects Limited
Independent auditor's report (continued)
To the members of SPEC Projects Limited
6
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.
SPEC Projects Limited
Independent auditor's report (continued)
To the members of SPEC Projects Limited
7
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
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.
SPEC Projects Limited
Independent auditor's report (continued)
To the members of SPEC Projects Limited
8
David Sedgwick
Senior Statutory Auditor
For and on behalf of Saffery LLP
4 February 2025
Statutory Auditors
St Catherine's Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
SPEC Projects Limited
Statement of comprehensive income
For the year ended 31 March 2024
9
Year
Year
ended
ended
31 March
31 March
2024
2023
Notes
£
£
Turnover
3
19,955,683
31,983,737
Cost of sales
(16,934,705)
(27,334,173)
Gross profit
3,020,978
4,649,564
Administrative expenses
(2,116,864)
(1,783,033)
Other operating income
3,627
Operating profit
4
904,114
2,870,158
Interest receivable and similar income
7
25,857
Interest payable and similar expenses
8
(105,299)
(33,811)
Profit before taxation
824,672
2,836,347
Tax on profit
9
(218,755)
(548,791)
Profit for the financial year
605,917
2,287,556
The income statement has been prepared on the basis that all operations are continuing operations.
SPEC Projects Limited
Statement of financial position
As at 31 March 2024
31 March 2024
10
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
549,740
594,323
Current assets
Debtors
12
7,523,430
8,588,485
Cash at bank and in hand
996,018
715,426
8,519,448
9,303,911
Creditors: amounts falling due within one year
13
(5,051,224)
(5,619,448)
Net current assets
3,468,224
3,684,463
Total assets less current liabilities
4,017,964
4,278,786
Creditors: amounts falling due after more than one year
14
(423,531)
(465,005)
Provisions for liabilities
Deferred tax liability
17
98,339
111,104
(98,339)
(111,104)
Net assets
3,496,094
3,702,677
Capital and reserves
Called up share capital
19
100
100
Profit and loss reserves
3,495,994
3,702,577
Total equity
3,496,094
3,702,677
The financial statements were approved by the board of directors and authorised for issue on 4 February 2025 and are signed on its behalf by:
Peter Hargreaves
Director
Company Registration No. 11359519
SPEC Projects Limited
Statement of changes in equity
For the year ended 31 March 2024
11
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2022
100
1,415,021
1,415,121
Period ended 31 March 2023:
Profit and total comprehensive income
-
2,287,556
2,287,556
Balance at 31 March 2023
100
3,702,577
3,702,677
Period ended 31 March 2024:
Profit and total comprehensive income
-
605,917
605,917
Dividends
10
-
(812,500)
(812,500)
Balance at 31 March 2024
100
3,495,994
3,496,094
SPEC Projects Limited
Statement of cash flows
For the year ended 31 March 2024
12
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
1,414,738
(613,981)
Interest paid
(105,299)
(33,811)
Income taxes (paid)/refunded
(29,788)
89,052
Net cash inflow/(outflow) from operating activities
1,279,651
(558,740)
Investing activities
Purchase of tangible fixed assets
(300,478)
(257,094)
Proceeds from disposal of tangible fixed assets
123,284
25,000
Interest received
25,857
Net cash used in investing activities
(151,337)
(232,094)
Financing activities
Repayment of bank loans
(10,000)
(10,000)
Payment of finance leases obligations
(25,222)
99,274
Dividends paid
(812,500)
Net cash (used in)/generated from financing activities
(847,722)
89,274
Net increase/(decrease) in cash and cash equivalents
280,592
(701,560)
Cash and cash equivalents at beginning of year
715,426
1,416,986
Cash and cash equivalents at end of year
996,018
715,426
SPEC Projects Limited
Notes to the financial statements
For the year ended 31 March 2024
13
1
Accounting policies
Company information
SPEC Projects Limited is a private company limited by shares incorporated in England and Wales. The registered office is 31 St Pauls Road, Clifton, Bristol, BS8 1LX.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation based on the order book that the company 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.
1.3
Turnover
Turnover represents amounts receivable on construction contracts net of VAT.
See accounting policy 1.6 regarding construction contracts for further detail.
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:
Plant and equipment
25% Straight line
Fixtures and fittings
25% Straight line
Motor vehicles
25% 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
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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).
Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
1
Accounting policies (continued)
14
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
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 statement of financial position 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, 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
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.
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.
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
1
Accounting policies (continued)
15
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, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
1.9
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 income statement 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.
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
1
Accounting policies (continued)
16
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
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 statement of financial position 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 leases asset are consumed.
1.13
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.
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
1
Accounting policies (continued)
17
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.15
Retentions may be provided on some construction contracts. This is calculated at between 3% and 5% of invoices raised until practical completion date. The retention debtor is then reduced by 50% after that date, with the remaining 50% being released between 6 and 12 months after the practical completion date.
1.16
An accrual for subcontractor retentions is recognised by the directors. This is typically based on between 2% and 5% of amounts certified in relation to long term contracts, in accordance with subcontractor agreements.
2
Critical accounting 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue recognition on long term contracts
Revenue is recognised based on the cost of completion method and requires management's best estimate of the expected total costs to complete and the overall outcome of each contract in place. Related amounts due to or from long term contracts is included in the financial statements based on the agreed contract and management's knowledge of variations and modifications as the contract progresses, reflecting all available knowledge at each year end date.
Included within the accounts is a debtor balance of £1,077,675 (2023: £1,896,864) and a creditor balance of £469,504 (2023: £111,185) which arise in relation to estimations made on the margins achievable on long term contracts.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Rendering of services
19,955,683
31,983,737
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
3
Turnover and other revenue (continued)
18
2024
2023
£
£
Other revenue
Interest income
25,857
-
Grants received
-
3,627
All income is derived in the UK.
4
Operating profit
2024
2023
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
-
(3,627)
Fees payable to the company's auditor for the audit of the company's financial statements
21,850
19,650
Depreciation of owned tangible fixed assets
261,239
201,384
Profit on disposal of tangible fixed assets
(39,462)
(14,149)
Operating lease charges
25,200
25,200
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
20
18
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,381,540
1,198,028
Social security costs
104,227
88,467
Pension costs
122,196
18,515
1,607,963
1,305,010
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
19
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
271,030
278,672
Company pension contributions to defined contribution schemes
68,643
2,643
339,673
281,315
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
152,075
137,787
Company pension contributions to defined contribution schemes
34,347
1,321
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
25,857
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
25,857
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
699
949
Other finance costs:
Interest on finance leases and hire purchase contracts
43,993
32,862
Other interest
60,607
105,299
33,811
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
20
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
246,405
535,005
Adjustments in respect of prior periods
(14,885)
Total current tax
231,520
535,005
Deferred tax
Origination and reversal of timing differences
(25,032)
13,786
Adjustment in respect of prior periods
12,267
Total deferred tax
(12,765)
13,786
Total tax charge
218,755
548,791
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
824,672
2,836,347
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
206,168
538,906
Tax effect of expenses that are not deductible in determining taxable profit
15,205
13,047
Permanent capital allowances in excess of depreciation
(6,469)
Under/(over) provided in prior years
(14,885)
Deferred tax adjustments in respect of prior years
12,267
Deferred tax - timing differences
3,307
Taxation charge for the period
218,755
548,791
10
Dividends
2024
2023
£
£
Final paid
812,500
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
21
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023
472,895
38,665
494,037
1,005,597
Additions
8,092
1,041
291,345
300,478
Disposals
(183,639)
(183,639)
At 31 March 2024
480,987
39,706
601,743
1,122,436
Depreciation and impairment
At 1 April 2023
220,606
14,188
176,480
411,274
Depreciation charged in the year
103,059
9,099
149,081
261,239
Eliminated in respect of disposals
(99,817)
(99,817)
At 31 March 2024
323,665
23,287
225,744
572,696
Carrying amount
At 31 March 2024
157,322
16,419
375,999
549,740
At 31 March 2023
252,289
24,477
317,557
594,323
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. Depreciation in the year on these assets totalled £241,134 (2023: £176,468).
2024
2023
£
£
Plant and equipment
133,193
228,371
Motor vehicles
225,246
316,839
358,439
545,210
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,185,457
4,869,345
Gross amounts owed by contract customers
1,077,674
1,896,864
Other debtors
2,188,269
1,746,819
Prepayments and accrued income
72,030
75,457
7,523,430
8,588,485
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
22
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
15
10,000
10,000
Obligations under finance leases
16
152,302
146,050
Trade creditors
2,013,900
3,757,134
Corporation tax
1,199,357
997,625
Other taxation and social security
837,146
239,312
Other creditors
838,519
469,327
5,051,224
5,619,448
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
12,500
22,500
Obligations under finance leases
16
411,031
442,505
423,531
465,005
15
Loans and overdrafts
2024
2023
£
£
Bank loans
22,500
32,500
Payable within one year
10,000
10,000
Payable after one year
12,500
22,500
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
152,302
146,050
In two to five years
411,031
442,505
563,333
588,555
Finance lease payments represent rentals payable by the company 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
23
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
98,339
111,104
2024
Movements in the year:
£
Liability at 1 April 2023
111,104
Credit to profit or loss
(12,765)
Liability at 31 March 2024
98,339
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
122,196
18,515
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.
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
24
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
The company has one class of ordinary share which carries no right to fixed income.
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
25,200
18,900
Between two and five years
100,800
In over five years
18,900
144,900
18,900
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
25
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2023
£
£
Aggregate compensation
502,162
412,420
Other information
During the previous year the company had a number of transactions with Chant & Hargreaves Partnership, a partnership owned by the directors of the company. The company paid rent of £nil (2023: £6,300) for which no balance is outstanding at the year end.
During the year the company had a number of transactions with Ikonic Holdings Limited, a company connected by virtue of common control. The company paid rent of £25,200 (2023: £18,900) for which no balance is outstanding at the year end. Included within other debtors is £623,091 (2023: £201,100) owed to the company by Ikonic Holdings Limited, relating to various inter-company loans.
During the year services were provided to the company by close family members of the directors. The aggregate cost of services provided during the year provided by close family of the directors totalled £121,448 (2023: £110,189). At the year end the company owed £nil (2023: £nil) in respect of services provided.
During the year services were provided to the company by close family members of the key management personnel who are not directors. The aggregate cost of services provided during the year provided by close family of key management personnel totalled £25,916 (2023: £900). At the year end the company owed £nil (2023: £nil) in respect of services provided.
At the year end the company was owed £1,017,348 (2023: £1,017,348) by Rengen The Foundry Limited, a company with whom the directors have a profit share agreement, in respect of sales provided in prior years, of which the company has a bad debt provision of £385,000 (2023: £185,000).
During the year services were provided by the company to Rengen Colston Ltd, a company whereby the directors had an agreement in place to purchase the share capital of the company through Ikonic Holdings Ltd once works had been completed. The value of services provided were £559,911 (2023: £Nil).
22
Directors' transactions
At 31 March 2024 a total of £789,304 (2023: £904,383) was owed by Directors of the company, included within other debtors. The loan is interest free and carries no fixed term of repayment.
Description
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Director 1
484,540
271,603
(325,000)
431,143
Director 2
419,843
263,318
(325,000)
358,161
904,383
534,921
(650,000)
789,304
SPEC Projects Limited
Notes to the financial statements (continued)
For the year ended 31 March 2024
26
23
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
605,917
2,287,556
Adjustments for:
Taxation charged
218,755
548,791
Finance costs
105,299
33,811
Investment income
(25,857)
Gain on disposal of tangible fixed assets
(39,462)
(14,149)
Depreciation and impairment of tangible fixed assets
261,239
201,384
Movements in working capital:
Decrease/(increase) in debtors
1,065,055
(2,555,503)
Decrease in creditors
(776,208)
(1,115,871)
Cash generated from/(absorbed by) operations
1,414,738
(613,981)
24
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
715,426
280,592
996,018
Borrowings excluding overdrafts
(32,500)
10,000
(22,500)
Obligations under finance leases
(588,555)
25,222
(563,333)
94,371
315,814
410,185
2024-03-312023-04-01falseCCH SoftwareCCH Accounts Production 2024.210Peter HargreavesStephen Chantfalsefalse113595192023-04-012024-03-3111359519bus:Director12023-04-012024-03-3111359519bus:Director22023-04-012024-03-3111359519bus:RegisteredOffice2023-04-012024-03-31113595192024-03-31113595192022-04-012023-03-3111359519core:RetainedEarningsAccumulatedLosses2022-04-012023-03-3111359519core:RetainedEarningsAccumulatedLosses2023-04-012024-03-31113595192023-03-3111359519core:PlantMachinery2024-03-3111359519core:FurnitureFittings2024-03-3111359519core:MotorVehicles2024-03-3111359519core:PlantMachinery2023-03-3111359519core:FurnitureFittings2023-03-3111359519core:MotorVehicles2023-03-3111359519core:CurrentFinancialInstrumentscore:WithinOneYear2024-03-3111359519core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3111359519core:Non-currentFinancialInstrumentscore:AfterOneYear2024-03-3111359519core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-3111359519core:CurrentFinancialInstruments2024-03-3111359519core:CurrentFinancialInstruments2023-03-3111359519core:Non-currentFinancialInstruments2024-03-3111359519core:Non-currentFinancialInstruments2023-03-3111359519core:ShareCapital2024-03-3111359519core:ShareCapital2023-03-3111359519core:RetainedEarningsAccumulatedLosses2024-03-3111359519core:RetainedEarningsAccumulatedLosses2023-03-3111359519core:ShareCapital2022-03-3111359519core:RetainedEarningsAccumulatedLosses2022-03-311135951912023-04-012024-03-311135951912022-04-012023-03-31113595192023-03-31113595192022-03-3111359519core:PlantMachinery2023-04-012024-03-3111359519core:FurnitureFittings2023-04-012024-03-3111359519core:MotorVehicles2023-04-012024-03-3111359519core:UKTax2023-04-012024-03-3111359519core:UKTax2022-04-012023-03-311135951922023-04-012024-03-311135951922022-04-012023-03-3111359519core:PlantMachinery2023-03-3111359519core:FurnitureFittings2023-03-3111359519core:MotorVehicles2023-03-3111359519core:WithinOneYear2024-03-3111359519core:WithinOneYear2023-03-3111359519core:BetweenTwoFiveYears2024-03-3111359519core:BetweenTwoFiveYears2023-03-3111359519core:MoreThanFiveYears2024-03-3111359519core:MoreThanFiveYears2023-03-3111359519bus:PrivateLimitedCompanyLtd2023-04-012024-03-3111359519bus:FRS1022023-04-012024-03-3111359519bus:Audited2023-04-012024-03-3111359519bus:FullAccounts2023-04-012024-03-31xbrli:purexbrli:sharesiso4217:GBP