Company registration number 15398265 (England and Wales)
HOWARD GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
HOWARD GROUP LIMITED
COMPANY INFORMATION
Directors
C L Howard
(Appointed 9 January 2024)
D M H Howard
(Appointed 9 January 2024)
L R Yelland
(Appointed 9 January 2024)
Company number
15398265
Registered office
Boot Street
Great Bealings
Woodbridge
IP13 6PB
Auditor
Ensors Accountants LLP
Connexions
159 Princes Street
Ipswich
IP1 1QJ
HOWARD GROUP LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Company statement of cash flows
13
Notes to the financial statements
14 - 29
HOWARD GROUP LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the period ended 30 September 2024.
Principal activities
The principal activity of the company and group continued to be that of groundworks and construction.
Review of the business
It is the first year of trade under the new ownership structure for the group and its subsidiaries . The business was acquired through an MBO is disclosed on note 1.3 of these accounts. The smooth transition to the new owners meant that the business continues to show a good trajectory due to existing relationships gained over time. The group has continued to work as a subcontractor to major construction companies in Suffolk which has been the core business activity for the year just like in previous years.
The market was buoyant during 2024. The group has benefitted from a solid financial position, enabling competition for larger and lengthier contracts, closer to home, having travelled further afield in previous years.
Our client base remains solid and is currently expanding, as do the opportunities for work within our chosen area of operation.
Relations with our clients are strong and coupled with excellent negotiated payment terms and financial management, enable the company to plan sensible and risk reduced growth within the industry.
The group maintains and continues to enhance a reputation as one of the regions premier ground work and civil engineering contractors with our clients and local authority representatives, enabling the opportunity to compete for future projects.
Due to the company’s strong position, working capital is financed through retained earnings and credit and cash flow risks are managed through strict credit control procedures.
Being aware of credit limits with each of our clients, based on longstanding payment history, the risk of poor payment is minimised significantly.
Principal risks and uncertainties
The group naturally faces a number of commercial and business risks. The directors have established policies and procedures to manage and mitigate these risks. They are also closely involved in the day to day running of the business.
The group operates a system to close management control over contracts and maintains sound credit control to minimise the likelihood of contract losses, claims and bad debts as far as possible. The exposure of the company to liquidity and cash flow risk is considered by the directors to be low, with no reliance on external funding.
Key performance indicators
The directors manage individual contract performance on a regular basis against agreed costings. This process is aimed at maximizing profitability whilst remaining competitive. Overall, the company achieved a gross profit margin of 19% and the operating profit margin of 7.7% is a slight decrease from prior year due to ownership changes and the related additional costs incurred but this was in accordance with the directors' expectations.
C L Howard
Director
3 March 2025
HOWARD GROUP LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 2 -
The directors present their annual report and financial statements for the period ended 30 September 2024.
Results and dividends
The results for the period are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
C L Howard
(Appointed 9 January 2024)
D M H Howard
(Appointed 9 January 2024)
L R Yelland
(Appointed 9 January 2024)
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
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 auditor of the company 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 auditor of the company 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
C L Howard
Director
3 March 2025
HOWARD GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 3 -
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 group and company, and of the profit or loss of the group 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HOWARD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HOWARD GROUP LIMITED
- 4 -
Opinion
We have audited the financial statements of Howard Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 September 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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 group's and the parent company's affairs as at 30 September 2024 and of the group's profit for the period 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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial period 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.
HOWARD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HOWARD GROUP LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our audit was designed to include tests of detail together with an assessment of the control environment to enable us to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement due to fraud. This included work on areas where we consider there is a higher risk of fraud including transactions with related parties, revenue recognition and management override of systems and control.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company are complying with the legal and regulatory framework;
inquired of management, and those charged with governance, about their own identification and assessment of the risks and irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud;
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of potential bias, and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
HOWARD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HOWARD GROUP LIMITED
- 6 -
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.
Barry Gostling (Senior Statutory Auditor)
For and on behalf of Ensors Accountants LLP, Statutory Auditor
Chartered Accountants
Connexions
159 Princes Street
Ipswich
IP1 1QJ
18 March 2025
HOWARD GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 7 -
Period
ended
30 September
2024
Notes
£
Turnover
3
12,905,127
Cost of sales
(10,457,625)
Gross profit
2,447,502
Administrative expenses
(1,461,316)
Other operating income
5,311
Operating profit
4
991,497
Interest receivable and similar income
8
586
Interest payable and similar expenses
9
(155,604)
Profit before taxation
836,479
Tax on profit
10
(500,036)
Profit for the financial period
23
336,443
Profit for the financial period is all attributable to the owners of the parent company.
Total comprehensive income for the period is all attributable to the owners of the parent company.
HOWARD GROUP LIMITED
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 8 -
2024
Notes
£
£
Fixed assets
Goodwill
11
2,562,342
Tangible assets
12
1,516,422
4,078,764
Current assets
Stocks
15
795,445
Debtors
16
6,160,478
Cash at bank and in hand
1,254,085
8,210,008
Creditors: amounts falling due within one year
17
(6,443,385)
Net current assets
1,766,623
Total assets less current liabilities
5,845,387
Creditors: amounts falling due after more than one year
18
(5,243,249)
Provisions for liabilities
Deferred tax liability
20
265,595
(265,595)
Net assets
336,543
Capital and reserves
Called up share capital
22
100
Profit and loss reserves
23
336,443
Total equity
336,543
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
The financial statements were approved by the board of directors and authorised for issue on
3 March 2025
03 March 2025
and are signed on its behalf by:
C L Howard
Director
Company registration number 15398265 (England and Wales)
HOWARD GROUP LIMITED
COMPANY BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 9 -
2024
Notes
£
£
Fixed assets
Investments
13
11,884,455
Current assets
Debtors
16
100
Cash at bank and in hand
214,447
214,547
Creditors: amounts falling due within one year
17
(7,214,203)
Net current liabilities
(6,999,656)
Total assets less current liabilities
4,884,799
Creditors: amounts falling due after more than one year
18
(5,027,476)
Net liabilities
(142,677)
Capital and reserves
Called up share capital
22
100
Profit and loss reserves
23
(142,777)
Total equity
(142,677)
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £142,777.
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
3 March 2025
03 March 2025
and are signed on its behalf by:
C L Howard
Director
Company registration number 15398265 (England and Wales)
HOWARD GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 9 January 2024
-
-
-
Period ended 30 September 2024:
Profit and total comprehensive income
-
336,443
336,443
Issue of share capital
22
100
-
100
Balance at 30 September 2024
100
336,443
336,543
HOWARD GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 9 January 2024
-
-
-
Period ended 30 September 2024:
Profit and total comprehensive income
-
(142,777)
(142,777)
Issue of share capital
22
100
-
100
Balance at 30 September 2024
100
(142,777)
(142,677)
HOWARD GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 12 -
2024
Notes
£
£
Cash flows from operating activities
Cash generated from operations
26
2,912,289
Interest paid
(71,257)
Income taxes paid
(86,871)
Net cash inflow from operating activities
2,754,161
Investing activities
Purchase of business
(1,341,659)
Purchase of tangible fixed assets
(4,939)
Proceeds from disposal of tangible fixed assets
500
Interest received
586
Net cash used in investing activities
(1,345,512)
Financing activities
Proceeds from issue of shares
100
Payment of finance leases obligations
(154,664)
Net cash used in financing activities
(154,564)
Net increase in cash and cash equivalents
1,254,085
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
1,254,085
HOWARD GROUP LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 13 -
2024
Notes
£
£
Cash flows from operating activities
Cash generated from operations
27
12,148,722
Interest paid
(50,475)
Net cash inflow from operating activities
12,098,247
Investing activities
Purchase of subsidiaries
(11,884,455)
Interest received
555
Net cash used in investing activities
(11,883,900)
Financing activities
Proceeds from issue of shares
100
Net cash generated from financing activities
100
Net increase in cash and cash equivalents
214,447
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
214,447
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 14 -
1
Accounting policies
Company information
Howard Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Boot Street, Great Bealings, Woodbridge, Suffolk, IP13 6PB. The company registration number is 15398265.
The group consists of Howard Group Limited and all of its subsidiaries.
1.1
Reporting period
These financial statements are presented for the period between 09 January 2024 and 30 September 2024, a period of less than a year, due to the incorporation date of the company, and alignment with the statutory year ends of the other companies within the group. Trade commenced on 09 January 2024.
These are the first financial statements produced by the company.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.3
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.4
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Howard Group Limited together with all entities controlled by the parent company .
All financial statements are made up to 30 September 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
1.5
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.6
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 and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.7
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.8
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:
Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
Office equipment
15% reducing balance
Motor vehicles
15% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
1.9
Fixed asset investments
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 16 -
1.10
Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.11
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.12
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.
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 17 -
1.13
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
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
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.
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 group after deducting all of its liabilities.
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 18 -
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.
1.14
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.15
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.16
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.
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 19 -
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
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 balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Contract debtors
Included in trade debtors are contract debtors where a valuation is based on engineer's estimate of work done to date. All valuations are performed by qualified surveyors who are best placed in judging the level of completion for all individual contract works. Management also recognise accruals for all known costs incurred not billed at the date of the valuations.
3
Turnover and other revenue
2024
£
Turnover analysed by class of business
Groundworks and construction
12,905,127
2024
£
Other revenue
Interest income
586
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 20 -
4
Operating profit
2024
£
Operating profit for the period is stated after charging:
Depreciation of owned tangible fixed assets
116,462
Loss on disposal of tangible fixed assets
3,948
Amortisation of intangible assets
134,860
Operating lease charges
15,000
5
Auditor's remuneration
2024
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
8,510
Audit of the financial statements of the company's subsidiaries
15,900
24,410
For other services
Audit-related assurance services
9,563
Other taxation services
6,050
Bookkeeping and management accounts preparation
55,476
71,089
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the period was:
Group
Company
2024
2024
Number
Number
Direct
53
-
Administrative
25
-
Directors
3
3
Total
81
3
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
6
Employees
(Continued)
- 21 -
Their aggregate remuneration comprised:
Group
Company
2024
2024
£
£
Wages and salaries
1,875,765
Social security costs
260,512
-
Pension costs
59,805
2,196,082
7
Directors' remuneration
2024
£
Remuneration for qualifying services
111,037
Company pension contributions to defined contribution schemes
3,101
114,138
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3.
8
Interest receivable and similar income
2024
£
Interest income
Interest on bank deposits
586
2024
Investment income includes the following:
£
Interest on financial assets not measured at fair value through profit or loss
586
9
Interest payable and similar expenses
2024
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
141,034
Other finance costs:
Interest on finance leases and hire purchase contracts
14,570
Total finance costs
155,604
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 22 -
10
Taxation
2024
£
Current tax
UK corporation tax on profits for the current period
454,629
Tax relating to prior year adjustments recognised in profit or loss
(5,555)
Total current tax
449,074
Deferred tax
Origination and reversal of timing differences
45,134
Adjustment in respect of prior periods
5,828
Total deferred tax
50,962
Total tax charge
500,036
The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:
2024
£
Profit before taxation
836,479
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00%
209,120
Tax effect of expenses that are not deductible in determining taxable profit
16,149
Adjustments in respect of prior years
(5,555)
Group relief
(1,989)
Permanent capital allowances in excess of depreciation
469
Amortisation on assets not qualifying for tax allowances
276,013
Deferred tax adjustments in respect of prior years
5,829
Taxation charge
500,036
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 23 -
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 9 January 2024
Additions - business combinations
2,697,202
At 30 September 2024
2,697,202
Amortisation and impairment
At 9 January 2024
Amortisation charged for the period
134,860
At 30 September 2024
134,860
Carrying amount
At 30 September 2024
2,562,342
The company had no intangible fixed assets at 30 September 2024.
12
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 9 January 2024
Additions
95,045
95,045
Business combinations
1,435,635
32,768
45,226
28,658
1,542,287
Disposals
(5,657)
(5,657)
At 30 September 2024
1,525,023
32,768
45,226
28,658
1,631,675
Depreciation and impairment
At 9 January 2024
Depreciation charged in the period
108,454
2,510
3,303
2,195
116,462
Eliminated in respect of disposals
(1,209)
(1,209)
At 30 September 2024
107,245
2,510
3,303
2,195
115,253
Carrying amount
At 30 September 2024
1,417,778
30,258
41,923
26,463
1,516,422
The company had no tangible fixed assets at 30 September 2024.
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 24 -
13
Fixed asset investments
Group
Company
2024
2024
Notes
£
£
Investments in subsidiaries
14
11,884,455
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 9 January 2024
-
Additions
11,884,455
At 30 September 2024
11,884,455
Carrying amount
At 30 September 2024
11,884,455
14
Subsidiaries
Details of the company's subsidiaries at 30 September 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Howard Construction (Anglia) Limited
United Kingdom
Ordinary
100.00
Howard Plant Limited
United Kingdom
Ordinary
100.00
Howard Holdings (Anglia) Limited
United Kingdom
Ordinary
100.00
The registered office address for each of the subsidiaries is Third Floor Connexions Building, 159 Princes Street, Ipswich, IP1 1QJ.
15
Stocks
Group
Company
2024
2024
£
£
Raw materials and consumables
795,445
-
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 25 -
16
Debtors
Group
Company
2024
2024
Amounts falling due within one year:
£
£
Trade debtors
5,265,262
Other debtors
772,569
100
Prepayments and accrued income
122,647
6,160,478
100
17
Creditors: amounts falling due within one year
Group
Company
2024
2024
Notes
£
£
Obligations under finance leases
19
308,196
Trade creditors
3,405,612
Amounts owed to group undertakings
5,655,429
Corporation tax payable
310,307
Other taxation and social security
213,469
-
Other creditors
1,801,044
1,550,264
Accruals and deferred income
404,757
8,510
6,443,385
7,214,203
18
Creditors: amounts falling due after more than one year
Group
Company
2024
2024
Notes
£
£
Obligations under finance leases
19
215,773
Other creditors
5,027,476
5,027,476
5,243,249
5,027,476
19
Finance lease obligations
Group
Company
2024
2024
£
£
Future minimum lease payments due under finance leases:
Within one year
308,196
In two to five years
215,773
523,969
-
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
19
Finance lease obligations
(Continued)
- 26 -
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
2024
Group
£
Accelerated capital allowances
270,662
Tax losses
(5,067)
265,595
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the period:
£
£
Asset at 9 January 2024
-
-
Charge to profit or loss
265,595
-
Liability at 30 September 2024
265,595
-
The deferred tax liability set out above is expected to reverse within 36 months and relates to accelerated
capital allowances that are expected to mature within the same period.
21
Retirement benefit schemes
2024
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
59,805
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
22
Share capital
Group and company
2024
2024
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
100
100
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
22
Share capital
(Continued)
- 27 -
23
Reserves
Profit and loss reserves
The profit and loss reserves account represents cumulative profit and loss net of distributions to owners.
24
Acquisition of a business
On 11 April 2024 the group acquired 100 percent of the issued capital of Howard Holdings (Anglia) Limited.
Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
1,542,287
-
1,542,287
Inventories
581,803
-
581,803
Trade and other receivables
5,765,180
-
5,765,180
Cash and cash equivalents
3,812,796
-
3,812,796
Obligations under finance leases
(588,527)
-
(588,527)
Trade and other payables
(1,763,549)
-
(1,763,549)
Tax liabilities
(162,737)
-
(162,737)
Total identifiable net assets
9,187,253
-
9,187,253
Goodwill
2,423,624
Total consideration
11,610,877
The consideration was satisfied by:
£
Cash
5,154,455
Deferred consideration
6,456,422
11,610,877
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
12,905,126
Profit after tax
865,186
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 28 -
25
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2024
£
£
Within one year
13,540
-
Between two and five years
3,386
-
16,926
-
26
Cash generated from group operations
2024
£
Profit after taxation
336,443
Adjustments for:
Taxation charged
500,036
Finance costs
155,604
Investment income
(586)
Loss on disposal of tangible fixed assets
3,948
Amortisation and impairment of intangible assets
134,860
Depreciation and impairment of tangible fixed assets
116,462
Deferred consideration
(6,456,422)
Movements in working capital:
Increase in stocks
(213,642)
Increase in debtors
(395,298)
Increase in creditors
8,730,884
Cash generated from operations
2,912,289
HOWARD GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2024
- 29 -
27
Cash generated from operations - company
2024
£
Loss after taxation
(142,777)
Adjustments for:
Finance costs
134,822
Investment income
(555)
Movements in working capital:
Increase in debtors
(100)
Increase in creditors
12,157,332
Cash generated from operations
12,148,722
28
Analysis of changes in net funds - group
9 January 2024
Cash flows
New finance leases
30 September 2024
£
£
£
£
Cash at bank and in hand
-
1,254,085
-
1,254,085
Obligations under finance leases
-
(433,863)
(90,106)
(523,969)
-
820,222
(90,106)
730,116
29
Analysis of changes in net funds - company
9 January 2024
Cash flows
30 September 2024
£
£
£
Cash at bank and in hand
-
214,447
214,447
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