Company registration number 03150440 (England and Wales)
J.L.C. GROUNDWORKS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
J.L.C. GROUNDWORKS LIMITED
COMPANY INFORMATION
Directors
Mr J L Cookson
Mrs S M Cookson
Mr P S Brown
Secretary
Mrs S M Cookson
Company number
03150440
Registered office
The Boat House
Blackpool Road
St Michaels
Preston
PR3 0NB
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
J.L.C. GROUNDWORKS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 22
J.L.C. GROUNDWORKS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -

The directors present the strategic report for the year ended 31 May 2024.

Review of the business

The directors are pleased to report the Company’s results despite a challenging year of trade. In the first half of the year, the company experienced a significant tightening in the regional residential development market, its dominant income stream.

 

The directors made the decision to not procure contracts at lower margins, given past experiences. Leveraging the company’s strong liquidity, they were able to be selective, ensuring the right contracts were taken on for a fair level of profitability. The company’s position also allowed it to retain its full workforce, despite the significant reduction in demand and effectively absorb this cost. The directors wanted to retain the knowledge, skill and talent which the company has used successfully to grow and to enhance its reputation over recent years.

 

Against this backdrop the financial results are considered a success with a profit still reported, despite operating profits falling to £127,737 (2023: £2,287,748) and turnover reducing to £7,283,550 (2023: £12,869,911).

 

Gross profitability fell significantly as the company retained its full workforce, so direct labour costs were comparable to the prior year and also incurred similar ongoing costs for its fixed asset base. The directors maintain tight control over overheads, with the discretionary additional costs seen in the prior year not repeated during the year to 31 May 2024.

 

The company held total cash reserves of £207,378 (2023: £3,247,498) at the balance sheet date. Whilst the company generated positive cash flows in the year, albeit reduced from prior years, significant levels of surplus cash were transferred to its parent company where liquid resources have been pooled to generate a greater rate of return.

 

Finally the company reported increased net assets at the balance sheet date of £6,019,975 (2023: £5,859,679), ensuring the it retains sufficient ability to fund its working capital.

 

Each of the above benchmarks are considered to be the most important financial KPIs and are monitored keenly by the directors on a monthly and often weekly basis.

 

J.L.C. GROUNDWORKS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Principal risks and uncertainties

The main risks to the company are increases in the costs of labour and materials. In particular, the latter has seen significant and more frequent increases in recent years than experienced across the longer term. This makes contract negotiation more important and something which the directors are keenly aware of. To mitigate this, the company looks to agree specific terms for each phase of a residential development.

 

The strong demand experienced in recent years within the new build housing sector has waned as the wider economic backdrop becomes uncertain with higher interest rates apparently here to stay. In anticipating this uncertainty, the directors have secured further contracts in the housing association sector and are exploring commercial works to further diversify the company’s operations and protect longer term prospects. The company is not dependent upon any single customer or development site, so the directors are content with its risk position when approving these financial statements. The company has demonstrated within these financial statements that it can choose the right work in tough environments and not compromise itself financially or from an ongoing skills perspective.

 

Turning to operations, the main challenge to the future of the business is the recruitment and retention of high-quality staff, to produce work of a standard that the directors expect and have helped built up the long term reputation of the company. As noted in prior years, the directors believe 'Off payroll' worker regulations should be applied consistently and fairly throughout the industry. The absence of this makes the recruitment of legitimate employed skilled workers tough.

 

The company is debt free and the directors believe they have minimal credit risk through receiving stage payments as it progresses through jobs with its longstanding and well established customer base. The directors’ strategy is to retain cash within the group so sufficient liquid resources are always available for investment.

 

Future developments

At the time of approving these financial statements, the directors are positive over the future. Work levels have picked up from the prior year and the new government has so far made positive remarks about the need for more residential development, together with how they will look to ease the barriers to achieve this. Whilst there will be no immediate boom, this can only assist the main sector in which the company operates. The directors believe the company is in a very strong place to weather any future storms and note the diversification of the company’s customer base referenced above.

 

Through the wider group, the company has access to significant levels of free cash so maintains sufficient liquidity to adapt to the future and to take advantage of any opportunities which may present over the upcoming year.

 

The directors continue to pursue a strategy of controlled expansion, mindful of existing labour capacity given the issues noted already in this report. The board will only seek to win profitable work it knows can be staffed and therefore maintain the high standards of work for which the company is known.

 

The directors would like to place on record their thanks to the company's loyal staff, for their efforts during the year under report.

On behalf of the board

Mr J L Cookson
Director
18 February 2025
J.L.C. GROUNDWORKS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 May 2024.

Principal activities

The principal activity of the company continued to be that of a specialist groundworks contractor.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J L Cookson
Mrs S M Cookson
Mr P S Brown
Auditor

Following the merger of MHA Moore & Smalley with MHA, the company's independent auditor has now become MHA. The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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
Mr J L Cookson
Director
18 February 2025
J.L.C. GROUNDWORKS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 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:

 

 

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.

J.L.C. GROUNDWORKS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J.L.C. GROUNDWORKS LIMITED
- 5 -
Opinion

We have audited the financial statements of J.L.C. Groundworks Limited (the 'company') for the year ended 31 May 2024 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the 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 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.

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.

J.L.C. GROUNDWORKS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J.L.C. GROUNDWORKS LIMITED (CONTINUED)
- 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:

 

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.

Matters on which we are required to report by exception

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:

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 responsibilities for the audit of the financial statements

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

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

 

J.L.C. GROUNDWORKS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF J.L.C. GROUNDWORKS LIMITED (CONTINUED)
- 7 -

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 is also greater regarding irregularities occurring due to fraud rather than errors, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

 

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.

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.

Joe Sullivan FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
18 February 2025
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
J.L.C. GROUNDWORKS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MAY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
7,283,551
12,869,911
Cost of sales
(6,774,691)
(9,933,977)
Gross profit
508,860
2,935,934
Administrative expenses
(499,548)
(758,347)
Other operating income
118,426
110,161
Operating profit
4
127,738
2,287,748
Interest receivable and similar income
7
177
7,231
Fair value gains and losses on investment properties
11
90,000
70,000
Profit before taxation
217,915
2,364,979
Tax on profit
8
(57,619)
(462,003)
Profit for the financial year
160,296
1,902,976
Retained earnings brought forward
5,859,579
5,556,603
Dividends
9
-
0
(1,600,000)
Retained earnings carried forward
6,019,875
5,859,579

The Statement of Income and Retained Earnings has been prepared on the basis that all operations are continuing operations.

J.L.C. GROUNDWORKS LIMITED
BALANCE SHEET
AS AT
31 MAY 2024
31 May 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
805,491
805,540
Investment property
11
2,525,001
2,435,001
3,330,492
3,240,541
Current assets
Stocks
12
1,267,605
1,261,054
Debtors
13
2,538,308
3,184,947
Cash at bank and in hand
207,378
3,247,498
4,013,291
7,693,499
Creditors: amounts falling due within one year
14
(929,178)
(4,703,521)
Net current assets
3,084,113
2,989,978
Total assets less current liabilities
6,414,605
6,230,519
Provisions for liabilities
Deferred tax liability
15
394,630
370,840
(394,630)
(370,840)
Net assets
6,019,975
5,859,679
Capital and reserves
Called up share capital
17
100
100
Profit and loss reserves
6,019,875
5,859,579
Total equity
6,019,975
5,859,679

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 18 February 2025 and are signed on its behalf by:
Mr J L Cookson
Director
Company registration number 03150440 (England and Wales)
J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 10 -
1
Accounting policies
Company information

J.L.C. Groundworks Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Boat House, Blackpool Road, St Michaels, Preston, PR3 0NB.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of J.L.C. Groundworks (Holdings) Limited. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

1.2
Going concern

The directors have every expectation that the company will continue in operational existence for the foreseeable future. trueRevenues fell during the year under report owing to the dampening of demand within the residential development sector, to which a significant number of the company’s current jobs pertain. Activity increased towards the end of the financial year under report and this has continued subsequent to the balance sheet date.

 

The company is not dependent on any single developer or individual site and carry out work in other areas, to naturally reduce the associated risk of a long term decline in the residential market.

 

The directors note that significant cash balances are available across the entity and its parent company, but have referred to prudent work in hand forecasts, which indicate sufficient funds are in place to meet all liabilities as they are projected to fall due for payment over the next twelve months, leading them to the conclusion that there are no material uncertainties over adopting the going concern basis at the time of signing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT.

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 11 -

Revenue from contracts for the provision of 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, subcontractor costs 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.

 

Income related to property rental and the hire of equipment is recognised in line with the period or rent/hire.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
2% per annum straight line
Plant and machinery
20% per annum reducing balance
Fixtures, fittings & equipment
30% per annum reducing balance
Motor vehicles
20% per annum reducing balance

The company has amended its rate of depreciating Plant & Machinery and Motor Vehicles asset categories during the current year, which is a change in accounting estimate. In prior years, depreciation was charged at 30% reducing balance and 25% reducing balance, respectively. The impact of this change in the current financial year is to reduce the depreciation charge by £67,426.

 

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
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure.

Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in profit or loss.

1.6
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Development land is initially stated at the cost of acquisition. Regular impairment reviews are carried out and a provision made for any irrecoverable amounts if necessary.

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 12 -

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

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

 

Where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

1.9
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.

1.10
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs 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

All of the company's financial assets are basic financial instruments.

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 13 -
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.

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 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

All of the company's financial liabilities are basic financial instruments.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
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.

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

1.13
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.

 

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.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

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.

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 15 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Recognition of contract revenue and profit

This is a natural area of estimation uncertainty given the industry in which the company operates. The narrative within notes 1.3 and 1.8 to the financial statements provides further information.

 

The company uses a suitably qualified Quantity Surveyor to assess the level of work done, associated revenue and thus profit recognition. These assessments are then reviewed by the company's finance team, providing an additional level of internal assurance that reduces the estimation uncertainty to an appropriate level.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Provision for irrecoverable trade debtors

At each balance sheet date, management undertake a review of the outstanding customer retention balances and estimate the balance that should either be impaired or provided against.

 

This calculation is based on the financial position of the customers, the historical speed of payment and any ongoing discussions.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Construction contracts
7,283,551
12,869,911
2024
2023
£
£
Other revenue
Interest income
177
7,231
J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 16 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
13,000
11,800
Depreciation of owned tangible fixed assets
153,387
209,021
Profit on disposal of tangible fixed assets
(7,425)
(36,340)
Operating lease charges
2,954
2,841
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Administrative
3
6
Management
10
10
Operations
33
35
Total
46
51

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,676,231
1,979,501
Social security costs
170,364
229,689
Pension costs
114,492
372,867
1,961,087
2,582,057
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
51,678
96,069
Company pension contributions to defined contribution schemes
40,597
273,254
92,275
369,323
J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 17 -
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
177
7,231
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
33,827
414,433
Adjustments in respect of prior periods
2
(39)
Total current tax
33,829
414,394
Deferred tax
Origination and reversal of timing differences
23,790
47,609
Total tax charge
57,619
462,003

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
217,915
2,364,979
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.00%)
54,479
472,996
Tax effect of expenses that are not deductible in determining taxable profit
2,250
(6,385)
Adjustments in respect of prior years
-
0
26
Effect of change in corporation tax rate
-
0
9,517
Depreciation on assets not qualifying for tax allowances
890
-
0
Super deduction
-
0
(14,151)
Taxation charge for the year
57,619
462,003

The headline rate of corporation tax increased to 25% from 1 April 2023.

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
9
Dividends
2024
2023
£
£
Final paid
-
0
1,600,000
10
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 June 2023
178,000
969,077
30,798
392,274
1,570,149
Additions
-
0
89,309
300
65,555
155,164
Disposals
-
0
-
0
-
0
(15,700)
(15,700)
At 31 May 2024
178,000
1,058,386
31,098
442,129
1,709,613
Depreciation and impairment
At 1 June 2023
49,763
378,856
25,676
310,314
764,609
Depreciation charged in the year
3,560
121,490
1,619
26,719
153,388
Eliminated in respect of disposals
-
0
-
0
-
0
(13,875)
(13,875)
At 31 May 2024
53,323
500,346
27,295
323,158
904,122
Carrying amount
At 31 May 2024
124,677
558,040
3,803
118,971
805,491
At 31 May 2023
128,237
590,221
5,122
81,960
805,540
11
Investment property
2024
£
Fair value
At 1 June 2023
2,435,001
Net gains or losses through fair value adjustments
90,000
At 31 May 2024
2,525,001

Investment property comprises various land banks and properties owned by the company. The fair value of the company's investment properties has been arrived at on the basis of a valuation carried out by Mr J L Cookson, director. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties/land banks.

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
12
Stocks
2024
2023
£
£
Raw materials and consumables
15,390
14,667
Development land and work in progress
1,252,215
1,246,387
1,267,605
1,261,054
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
484,054
645,394
Gross amounts owed by contract customers
1,233,513
1,654,759
Corporation tax recoverable
96,590
-
0
Amounts owed by group undertakings
207,916
-
0
Other debtors
174,034
403,744
Prepayments and accrued income
32,824
42,414
2,228,931
2,746,311
2024
2023
Amounts falling due after more than one year:
£
£
Gross amounts owed by contract customers
309,377
438,636
Total debtors
2,538,308
3,184,947
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
830,002
793,897
Amounts owed to group undertakings
-
0
3,430,105
Corporation tax
-
0
202,659
Other taxation and social security
53,294
55,374
Other creditors
3,996
4,094
Accruals and deferred income
41,886
217,392
929,178
4,703,521

 

J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
15
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
168,156
167,148
Retirement benefit obligations
(441)
(723)
Investment property
226,915
204,415
394,630
370,840
2024
Movements in the year:
£
Liability at 1 June 2023
370,840
Charge to profit or loss
23,790
Liability at 31 May 2024
394,630

The company has not finalised its capital expenditure programme for the next financial year and therefore an assessment as to the likely movement of timing differences cannot reasonably be made.

16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
114,492
372,867

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.

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
50
50
50
50
B Ordinary shares of £1 each
40
40
40
40
C Ordinary shares of £1 each
5
5
5
5
D Ordinary shares of £1 each
5
5
5
5
100
100
100
100
J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
17
Share capital
(Continued)
- 21 -

Each class of shares has equal voting rights and ranks pari passu in all respects except for that a dividend may be declared in respect of one class of shares and not the other.

18
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
2,692
1,624
Between two and five years
2,462
3,248
5,154
4,872
J.L.C. GROUNDWORKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
19
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
2024
2023
£
£
Other related parties
-
0
51,140

The company carried out work on an arms length basis during the year for an other related party. At the balance sheet date, the value of uninvoiced work amounted to £287,522 (2023: £248,685 ). No amounts in respect of invoiced sales were due from the related party at the current or prior balance sheet dates.

The company has taken advantage of the exemption permitted under FRS102, Section33 'Related Party Disclosures' paragraph 33.1A, from disclosing transactions with group companies, on the basis that it is a wholly owned subsidiary.

20
Ultimate controlling party

The immediate and ultimate parent company is JLC Groundworks (Holdings) Limited, a company registered in England and Wales.

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