The directors present their annual report and financial statements for the year ended 31 October 2024.
The Key Performance Indicators of the business are:
Financial
Safety Performance
Human Resources
Financial
The board recognises that 2024 was another productive year and subsequently satisfactory year for the business in terms of the financial performance. Our turnover increased by 40% to £9.3m as several substantial contracts were delayed the year before and pushed into this year. Our margin decreased slightly as we focussed on working with favourable clients within the utilities supply industry and construction of sub stations within land development. We continued to invest in our people and skills to meet the future requirements of the business.
We will continue to implement a strategy whereby the primary focus is securing contracts of value and scope which are commensurate to our resources, capabilities, and business model. The board are confident that this selective approach to pursuing and undertaking contracts across a balanced portfolio of clients will allow the business to release a satisfactory profit in the current year.
Health, Safety and the Environment.
The group recognises that it is the responsibility of the entire workforce to perform the company's health and safety policies, processes and comply with the management systems. The internal systems continue to be developed and digitalised year on year and implemented to the highest standards in providing a safe and secure place of work for our employees, clients, visitors, members of the public.
We continue to receive 3rd Party recognition from clients and governing UKAS approved accreditation bodies from LRQA who audit and evaluate our ISO Standard Accreditations of 9001:2015 + 14001:2015 and 45001:2018. We have just completed our certificate renewal in January 2025 and maintained Gold status with Achilles UVDB audit process. There were zero nonconformities raised with positive feedback on health & safety standards. We have full integration of all three standards into our management system PIMS and continuing the digitalisation of all operations functions both at site and office with the integration of Work Wallet, demonstrating our consistency in continuous improvement of technology and innovation, recognising standards in health, safety and environmental culture and function. Further evidence of the continued successes in this direction has been recognised again by ROSPA who have awarded PTC with a 7th consecutive gold medal award for our sustained level of safety excellence.
Our harmonised and fully integrated management system (PIMS) has continued to progress our digitalisation throughout the company. We have continued to use our high-quality software platforms (HandsHQ – Digital RAMS), (Work Wallet - Site/Project Management), (LUS - Legislation Registers and Management), (BrightHR - Digital HR Processes and Management). Work Wallet has been continually embedded into the daily operations to assist in managing documentation and data gathering for leading indicators. This has made efficiencies related to site processes by 90%. Our aim and core objective to mitigate all personal risks to stakeholders of the business, prevent injury, harm, or loss, continues, and is now in an even stronger position having implemented our digitalisation project. Furthermore, this supports our continuous improvement in company culture, focusing on leading Indicators in the absence of negative events; this is demonstrated with our continued excellent safety performance. Evidence of our successes and investment has achieved a positive safety performance, now nearing 8 years LTI free - Zero Environmental incidents for the same period. This indicates solid performance and further evidence the business continues to move and maintain the right course.
Our management procedures, systems, and processes demand that these are audited internally and externally to ensure compliance, effectiveness and fulfil our continuous improvement. We maintain our active membership to British Safety Council, Achilles UVDB, ROSPA, Safe Contractor, Safe PQQ, Constructionline, SIPP, Safe Contractor (PAS91) and Safe PQQ. We are also members of Mates in Mind, Sabre and have Croner to support our staff with Mental health and Wellbeing, providing our EAP (Employee Assistance Program). We maintain in house mental health first aiders, suicide first aiders and provide mental health awareness courses for all managers. CHS provide our Occupational Health support services ongoing with Fit for Work medicals for all plant operators and annual medical health assessments for all staff.
Human Resources
The skills, qualifications, experience, and competencies of our employees underpins the business; our investment in our people is unwavering as we implement annual training plans, matrixes and programme for the growth of our employees’ compliance, skills, competencies and professional development (CPD). Continuous health & safety training has been carried out through the year by externally approved training providers and behavioural safety programmes, carried out internally. Training hours for the year amounted to 700 hours. The business is an equal opportunities employer, and all applications are fully and fairly considered in accordance with the aptitudes and abilities of the applicant.
The industry continues to face some unique challenges on the employee front, with skill gaps and shortages of competent workers across almost every aspect of construction. We have developed our own strategy for a future workforce and fulfilling any future needs regarding employee resources; PTC maintains its apprentice program at CETC with 2 apprentices currently attending and more planned in the year ahead. As a Government Licenced Sponsor and Rated as A1 Employer; this has allowed us to look beyond the UK market for skilled workers, which has led to employment of a Site Manager, via the skilled worker visa -DCoS (UKVI) who has both Civils and Electrical HV backgrounds, qualifications and experience. This and future employment will support our growth and demand for substation production for data centres and DNO networks.
With regards to CETC and the investment made by PTC into this innovative and unique approach to an industry focussed apprenticeship programme for ground workers and civil engineers, we continue to recover that investment both financially, with heavily discounted training and apprenticeship fees, and in new staff resources as they successfully complete their apprenticeships and become qualified staff.
Risk
Liquidity
The liquidity of the business is satisfactory and is reporting a year end acid test ratio of 1.23. The business continues to be funded adequately thereby eliminating credit risk to the creditors and stakeholders of the business.
Bidding risk
The company bids selectively for contracts throughout the year. The tender documents are compiled in accordance with the internal management and process of the business in order to identify the pertinent risks associated with the tender. The final quantitative and qualitative documents are subject to a final review from senior management.
Credit risk
There is currently no exposure to bad debts or foreign exchange risk. The business undertakes due diligence on existing and prospective clients to ensure credit risk are minimal.
The Future Outlook
Contracts secured for 2025 with a reported turnover of £8.8m will generate around 72% of our budgeted turnover for the year. We have a continued focus on substation work with selected clients. These jobs are repeatable and are well suited to the skills of the current workforce. There are risks associated with concentration of work, but we have other steady clients to support this. Clearly there are still potential risks availability of labour and supplies but to date our sector has been relatively less affected than many. Price pressures will continue to be a major issue in 2025.
The board are committed to pursuing opportunities that complement the resources of the business, the criteria of safe project delivery, enhanced profitability, and cash generation. This strategic focus will ensure sustainability of the business and the successful delivery of our client's projects.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Fiander Tovell Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
P. T. Contractors Limited is a private company limited by shares, incorporated in England and Wales. The registered office is Unit 6 Imperial House, West Bay Road, Southampton, SO15 0RB.
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 £.
Revenue is recognised by reference to the level of work complete. The stage of completion is measured by the proportion of revenue invoiced for work performed to date compared to the estimated total sales. The amount of total profit expected is applied to the current stage of completion to identify the proportion of total turnover earned.
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.
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, 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.
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.
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.
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.
Recognition of revenue and profit is based on judgements made in respect of the ultimate profitability of a contract. Such judgements are arrived at through the use of estimates in relation to the costs and value of work performed to date and to be performed in bringing contracts to completion. These estimates are made by reference to recovery of pre-contract costs, surveys of progress against the construction programme, changes in work scope, the contractual terms under which the work is being performed, including the recoverability and any unratified income from variations and the likely outcome of discussions on claims, costs incurred and external certification of the work performed.
The company has appropriate control procedures to ensure that all estimates are determined on a consistent basis and subjected to the appropriate review and approval. The total value of accrued income recognised on contracts (including retentions) is £1,495,680 (2023 - £493,554). The total value of accrued costs on contracts is £1,552,999 (2023 - £864,906).
A significant portion of long-term contracts P. T. Contractors Limited have ongoing at year end involve two phases of work, being design work and building work. After this work is complete the remaining site work is taken on by another company, however the contracts in place for this work means that the design work they have completed and any subsequent issues and costs associated with rectifying this work is liable to P T Contractors to pay for.
As there is a contractual obligation for remedial works due to the past work completed by P T Contractors, a provision for these potential additional costs has been recognised in the financial statements.
The directors estimate that the value of the potential remedial works to be 2.5% of the revenue on each design and build contract. This is provided for 12 years, with the provision being released in equal instalments each year from the handover of the works to the client, to reflect the decrease in likelihood of remedial works being required as the contracted remediation period progresses.
The total value of provisions for design and build work recognised on ongoing contracts is £367,043 (2023 - 123,794)
The average monthly number of persons (including directors) employed by the company during the year was:
At 31 October 2024, retentions held by customers for contract work amounted to £312,382 (2023 - £164,022)
P. T. Contractors have an overdraft facility in place with Lloyds Bank. The overdraft facility is secured by a mortgage deed on the parent company's freehold investment property.
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
The company has taken advantage of the exemption available in Section 33.1A of FRS102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.