Company registration number 03157805 (England and Wales)
PENNY LANE BUILDERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
PENNY LANE BUILDERS LIMITED
COMPANY INFORMATION
Directors
G P McEvoy
J McEvoy
G O McEvoy
Company number
03157805
Registered office
Penny Lane House
Evans Road
Venture Point
Liverpool
L24 9PG
Auditor
Mitchell Charlesworth (Audit) Limited
Suites C, D, E & F
14th Floor, The Plaza
100 Old Hall Street
Liverpool
England
L3 9QJ
PENNY LANE BUILDERS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 26
PENNY LANE BUILDERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

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

Principal Activities

Penny Lane Builders Limited operates throughout the North West of England, constructing, repairing and improving homes for social housing clients. Principal activities encompass:

  1. Responsive repairs & maintenance

  2. Planned programmes

  3. Compliance programmes

  4. Refurbishments

  5. Decarbonisation programmes

  6. Design and build projects

 

Fair Review of the Business

                                    2024        2023

                                    £’000        £’000

Turnover                                    20,038        17,731

Profit/(Loss) for the financial year                        (1,513)        627

 

The company’s core business from its framework contracts with Plus Dane Housing, Onward Homes and Crosby Housing Association has performed both operationally and financially in line with the contracts and internal expectations. A number refurbishments for various clients were successfully executed and completed during the year including a car park regeneration project for a new client, Knowsley Metropolitan Borough Council, which accounted for £2.1m of the years turnover and performed in line with business expectations.         

Whilst the company’s core business has performed well, it has continued to face a number of challenges within the construction sector including inflationary pressures alongside skilled labour and building supply shortages which has negatively impacted the financial performance within the design and build business with all 3 major projects moving into construction phase during the year. The in year financial performance within the design and build business has also been negatively impacted by the requirement for a provision for onerous contracts to cover the excess of cost over income incurred post year-end to bring 2 of the major projects to completion and successful handover back to the respective clients, Torus62 and Plus Dane Housing.

Income from Other Fixed Asset Investments remained constant delivering another £0.2m for the company. This income is derived from the on-going JV partnerships in place with Avela Home Service LLP and Avela Developments LLP.

 

Performance

The company's key financial and other performance indicators for the Year Ending 30th March 2024 were as follows:

 

Financial KPIs

Unit

2024

2023

Turnover

£m

20.04

17.7

Gross Profit

£m

1.6

3.5

Gross Profit Margin

%

8.1

19.8

Operating Profit/(Loss)

£m

(1.7)

0.5

Operating Profit Margin

%

-

2.8

Income from other Investments

£m

0.2

0.2

Profit/(Loss) Before Tax

£m

(1.5)

0.6

Profit Before Tax

%

-

3.4

Net Assets

£m

0.7

2.0

 

PENNY LANE BUILDERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

Planned Strategy

The company’s strategy is to grow its core business by actively focusing on securing and delivering higher income volumes on home improvements through planned programmed works, home refurbishments, compliance programmes including gas and electrical works and general maintenance programmes for current and new social housing clients and has made the decision in conjunction with the Senior Management Team to de-risk the business by exiting from the long term design and build construction market in the short to medium term.

In support of the business strategy, the company has expanded its client portfolio by securing a key new framework contract with Cobalt Housing Association effective from August 2024 covering planned and maintenance works across the Clients social housing estate in the North West of England.

The company has the accreditations to perform Decarbonisation works and continues to develop its capabilities to support clients and the wider nation on the Net Carbon Zero agenda.

The company continues to review its operational model of a mixed delivery model with self-delivery through the Company’s internal work force and where appropriate outsourcing work packages to the company’s longstanding subcontractor network.

The company's ambition is to continue to expand and to meet this aim, it has strengthened the Senior Management Team and continues to work closely in partnership with all clients, subcontractors and suppliers.

Principal risks and uncertainties

The nature of the company’s activities in the current trading environment together with the uncertainties associated with labour resources and material availability and price fluctuations mean the business is exposed to a number of inherent risks. The directors have adopted a thorough risk management process which involves review of all the risks identified and a management of these risks. The solutions to these risks involve liaising with clients regarding inflationary price pressures, the recruitment of a number of apprentices, upskilling the current work force and rewarding and retaining talent. Externally these risks continue to be managed and mitigated by the continuation of close partnership working with all clients, suppliers and subcontractors to ensure that business ambitions are delivered.

Future Developments

The company plans to deliver an operating model that maximizes the core business under new and existing Client frameworks agreements and refurbishment contracts.

The governments targets for transitioning the UK to a low carbon economy present opportunities for the company to expand its portfolio of work by offering its decarbonisation capability across the North West of England.

A combination of the company's client mix, diverse construction portfolio, an expanding and enthusiastic dedicated workforce, along with the continual review of processes and cost control, lead the board to view that the company's future performance will be secure.

On behalf of the board

G P McEvoy
Director
28 March 2025
PENNY LANE BUILDERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

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

Principal activities

The principal activity of the Company continued to be that of general construction, including property repairs and improvements and decarbonisation.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £31,355. The directors do not recommend payment of a further dividend.

Directors

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

G P McEvoy
J McEvoy
G O McEvoy
Statement of directors' responsibilities

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.

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.

PENNY LANE BUILDERS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
On behalf of the board
G P McEvoy
Director
28 March 2025
PENNY LANE BUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PENNY LANE BUILDERS LIMITED
- 5 -
Opinion

We have audited the financial statements of Penny Lane Builders Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainties relating to going concern

We draw attention to note 1.2 headed going concern in the financial statements, which indicated that the company has made a significant loss for the year, impacting reserves.  As stated in note 1.2, these events or conditions, along with other matters as set forth in this note, indicate that the company has relied upon reserves, ongoing banking facilities and strategic operating changes in reaching their going concern conclusion.  Our opinion is not modified in respect of this matter.

 

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.  Our responsibilities and the responsibilities of the board with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

PENNY LANE BUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PENNY LANE BUILDERS LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

 

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 error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

PENNY LANE BUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PENNY LANE BUILDERS LIMITED (CONTINUED)
- 7 -

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:

 

(i) The presentation of the Profit and Loss Account, (ii) the accounting policy for revenue recognition (iii) amounts recoverable on WIP, (iv) understatement of creditors. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act.

 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

 

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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.

PENNY LANE BUILDERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PENNY LANE BUILDERS LIMITED (CONTINUED)
- 8 -

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Louise Casey
Senior Statutory Auditor
For and on behalf of Mitchell Charlesworth (Audit) Limited
28 March 2025
Accountants
Statutory Auditor
Suites C, D, E & F
14th Floor, The Plaza
100 Old Hall Street
Liverpool
England
L3 9QJ
PENNY LANE BUILDERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
as restated
Notes
£
£
Turnover
3
20,038,547
17,731,185
Cost of sales
(18,401,835)
(14,262,307)
Gross profit
1,636,712
3,468,878
Administrative expenses
(3,349,178)
(3,013,552)
Other operating income
-
0
9,600
Operating (loss)/profit
5
(1,712,466)
464,926
Interest receivable and similar income
8
200,660
163,683
Interest payable and similar expenses
9
(1,149)
(1,387)
(Loss)/profit before taxation
(1,512,955)
627,222
Tax on (loss)/profit
10
290,521
(140,293)
(Loss)/profit for the financial year
(1,222,434)
486,929

The profit and loss account has been prepared on the basis that all operations are continuing operations.

PENNY LANE BUILDERS LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 10 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
13
246,937
275,369
Investment property
14
850,000
850,000
1,096,937
1,125,369
Current assets
Stocks
15
671,480
-
Debtors
16
5,051,421
4,120,043
Cash at bank and in hand
34
81,578
5,722,935
4,201,621
Creditors: amounts falling due within one year
17
(4,732,481)
(3,201,461)
Net current assets
990,454
1,000,160
Total assets less current liabilities
2,087,391
2,125,529
Provisions for liabilities
Provisions
20
1,384,651
-
0
Deferred tax liability
21
-
0
169,000
(1,384,651)
(169,000)
Net assets
702,740
1,956,529
Capital and reserves
Called up share capital
23
1,000
1,000
Profit and loss reserves
701,740
1,955,529
Total equity
702,740
1,956,529

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 28 March 2025 and are signed on its behalf by:
G P McEvoy
Director
Company registration number 03157805 (England and Wales)
PENNY LANE BUILDERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 March 2023:
Balance at 1 April 2022
1,000
336,695
1,849,252
2,186,947
Effect of change in accounting policy
-
(336,695)
-
0
(336,695)
As restated
1,000
-
0
1,849,252
1,850,252
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
486,929
486,929
Dividends
11
-
-
(380,652)
(380,652)
Balance at 31 March 2023
1,000
-
0
1,955,529
1,956,529
Year ended 31 March 2024:
Loss and total comprehensive income
-
-
(1,222,434)
(1,222,434)
Dividends
11
-
-
(31,355)
(31,355)
Balance at 31 March 2024
1,000
-
0
701,740
702,740
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
1
Accounting policies
Company information

Penny Lane Builders Limited is a private company limited by shares incorporated in England and Wales. The registered office is Penny Lane House, Evans Road, Venture Point, Liverpool, L24 9PG.

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 the revaluation of freehold properties and to include investment properties and certain financial instruments 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 PLB Holdings Limited. These consolidated financial statements are available from its registered office, Penny Lane House, Evans Road, Venture Point, Speke, Liverpool, United Kingdom, L24 9PG.

1.2
Going concern

The Directors have considered the going concern position of the truecompany. The company’s planned strategy, as described in the Strategic Report, to focus on its core business, mitigate risk and the fact that the company has secured a significant contract with a new client have been considered as part of the going concern review of the company. As a result of this review, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable period of at least 12 months from approving the financial statements. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.

 

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for 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.

PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -

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 staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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.

1.5
Tangible fixed assets

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

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

Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
Motor vehicles
25% 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 credited or charged to profit or loss.

1.6
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. Changes in fair value are recognised in profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company 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.

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.

PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -

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.

1.8
Stocks and work in progress

Stock and work in progress is stated at the lower of cost and realisable value.

 

Stock and work in progress represents direct costs incurred on long term contracts not invoiced at the balance sheet date.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
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

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.

PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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 and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
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.

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.

 

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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.14
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.

1.15
Retirement benefits

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

PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
1.16
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 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.

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.

Key sources of estimation uncertainty
Recoverability of amounts due from customers

Amounts recoverable on contracts are reviewed for impairment each year, in arriving at the assessment management take into account likihood of recovery against contract terms.

 

Bad debts are recognised where there are indicators of non-recoverability, and appropriate action has been taken to recover the debt unsuccessfully. When assessing recoverability, the directors consider factors such as the ageing of the receivables, past experience of recoverability, and the credit profile of individual groups of customers.

Impairment of fixed assets and investments

Where an indication of impairment exists, the directors will carry out an impairment review to determine the recoverable amount, which is the higher of fair value less cost to sell and value in use. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of services
20,038,547
17,731,185
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Turnover and other revenue
(Continued)
- 18 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
20,038,547
17,731,185
2024
2023
£
£
Other revenue
Interest income
50
-
4
Exceptional item
2024
2023
£
£
Expenditure
Exceptional item - Cost of sales
1,384,651
-

The exceptional item charged to cost of sales is the the result of the inclusion of an onerous contract provision. This represents the costs involved in completing the identified contracts above what is likely to be recovered from the customer.

5
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,000
9,500
Depreciation of owned tangible fixed assets
50,505
55,754
Operating lease charges
496,800
494,634
6
Employees

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

2024
2023
Number
Number
108
132
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
6
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
3,710,473
4,077,200
Social security costs
370,757
325,877
Pension costs
188,121
106,414
4,269,351
4,509,491
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
240,724
251,748
Company pension contributions to defined contribution schemes
23,958
12,500
264,682
264,248

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
132,677
132,292
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
50
-
0
Income from fixed asset investments
Income from other fixed asset investments
200,610
163,683
Total income
200,660
163,683
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
9
Interest payable and similar expenses
2024
2023
£
£
Interest on finance leases and hire purchase contracts
1,149
1,387
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(121,521)
121,521
Deferred tax
Origination and reversal of timing differences
(169,000)
18,772
Total tax (credit)/charge
(290,521)
140,293

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
(Loss)/profit before taxation
(1,512,955)
627,222
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(378,239)
119,172
Tax effect of expenses that are not deductible in determining taxable profit
-
0
472
Tax effect of income not taxable in determining taxable profit
(14,586)
-
0
Permanent capital allowances in excess of depreciation
-
0
(3,629)
Other permanent differences
3,080
-
0
Under/(over) provided in prior years
-
0
(213)
Deferred tax adjustments in respect of prior years
-
0
24,491
Movement in deferred tax not recognised
60,849
-
0
Losses carried back
38,375
-
0
Taxation (credit)/charge for the year
(290,521)
140,293
11
Dividends
2024
2023
£
£
Final paid
31,355
380,652
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
12
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2023 and 31 March 2024
30,000
Amortisation and impairment
At 1 April 2023 and 31 March 2024
30,000
Carrying amount
At 31 March 2024
-
0
At 31 March 2023
-
0
13
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023
18,831
440,206
123,000
582,037
Additions
-
0
22,073
-
0
22,073
At 31 March 2024
18,831
462,279
123,000
604,110
Depreciation and impairment
At 1 April 2023
13,824
243,166
49,678
306,668
Depreciation charged in the year
751
31,423
18,331
50,505
At 31 March 2024
14,575
274,589
68,009
357,173
Carrying amount
At 31 March 2024
4,256
187,690
54,991
246,937
At 31 March 2023
5,007
197,040
73,322
275,369
14
Investment property
2024
£
Fair value
At 1 April 2023 and 31 March 2024
850,000
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
14
Investment property
(Continued)
- 22 -

The fair value of the investment property has been arrived at on the basis of a valuation carried out at in May 2018 by Keppie Massie Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

 

The directors' reviewed the valuation of the investment property based on the open market and deemed the value as at 31 March 2024 was the same as the date of the valuation in May 2018.

 

The property was initially measured at historic cost of £310,788.

15
Stocks
2024
2023
£
£
Raw materials and consumables
671,480
-

 

There have been no impairments of stock during the year.

16
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,689,611
3,290,022
Gross amounts owed by contract customers
1,824,080
718,588
Corporation tax recoverable
121,571
-
0
Other debtors
15,809
10,127
Prepayments and accrued income
400,350
101,306
5,051,421
4,120,043

During the year there was an impairment of gross amounts owed by contract customers of £550,500 (2023: £nil).

PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
17
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
408,426
-
0
Obligations under finance leases
19
-
0
26,000
Trade creditors
3,410,296
2,063,080
Corporation tax
-
0
121,521
Other taxation and social security
495,525
616,670
Other creditors
283,233
29,994
Accruals and deferred income
135,001
344,196
4,732,481
3,201,461

 

18
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
408,426
-
0
Payable within one year
408,426
-
0

The bank overdraft is secured by fixed charges over the leasehold property owned by the company.

 

19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
-
0
26,000

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases were fully repaid in the year.

20
Provisions for liabilities
2024
2023
£
£
Provision against onerous contracts
1,384,651
-
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Provisions for liabilities
(Continued)
- 24 -
Movements on provisions:
Provision against onerous contracts
£
Additional provisions in the year
1,384,651
21
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
-
69,000
Investment property
-
100,000
-
169,000
2024
Movements in the year:
£
Liability at 1 April 2023
169,000
Credit to profit or loss
(169,000)
Liability at 31 March 2024
-
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
188,121
106,414

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.

 

Contributions totalling £25,489 (2023: £24,470) were payable to the scheme at the end of the year and are included in creditors.

PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
23
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Share Capital of £1 each
1,000
1,000
1,000
1,000
24
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
150,639
150,639
Between two and five years
282,529
358,168
433,168
508,807
25
Related party transactions

Summary of transactions with parent:

During the year, management charges were paid to PLB Holdings Limited amounting to £10,000 (2023 £10,000).

 

Summary of transaction with all joint ventures:

During the year, the company made sales to Avela Home Service LLP amounting to £1,183,069 (2023 £1,055,647) and purchases of £176,484 (2023 £210,937). The balance due from Avela Home Service LLP at the year end was £125,695 (2023 £42,705).

 

During the year, the company made sales to Avela Developments LLP amounting to £53,321 (2023 £527,218). The balance outstanding at the year end was £nil (2023 £nil).

 

Summary of transactions with key management:

During the year, the company made purchases from Park Lea Developments Limited amounting to £nil (2023 £nil). The balance outstanding at the year end was £nil (2023 £nil).

 

26
Ultimate controlling party

The ultimate controlling party is PLB Holdings Limited, which is incorporated in England and Wales.

27
Prior period adjustment
Reconciliation of changes in equity
The prior period adjustments is in relation to the reclassification of work in porgress to amounts recoverable on long term contracts.  This prior period restatement does not give rise to any effect upon equity.
PENNY LANE BUILDERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
27
Prior period adjustment
(Continued)
- 26 -
Reconciliation of changes in profit for the previous financial period
2023
£
Total adjustments
-
Profit as previously reported
486,929
Profit as adjusted
486,929
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