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Registered number: 03075151
TOPCOAT CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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TOPCOAT CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
The Director presents his strategic report for the year ended 31st July 2024.
The principal activities of the Company in the year under review were Repairs & Maintenance, Void Refurbishment, Planned Works, Cyclical Repairs and Property Refurbishment.
Our long term strategy is to develop a customer driven service that establishes the Company as a ‘best in class’ in Community Regeneration, Maintenance, Refurbishment and Specialist Construction services in London and the Home Counties whilst achieving sustained profitable growth by consistently delivery against the needs of our customers, partners and shareholders.
Our ongoing investment in our people, processes, ICT, environmental initiatives and community engagement has further served to reinforce our position as a preferred service provider within our target markets supported by an approach that is both collaborative and consultative.
Arising from this customer-focused methodology has been another good year of trading for the Company. We have sustained profitable operations with contracts secured at levels of return commensurate with our trading targets.
Our Repairs & Maintenance, Planned and Cyclical Works divisions have continued to secure long-term contracts within the public sector, reflecting a continued strong reputation of those divisions in their respective markets.
The 2023/24 financial year continued to present the construction industry with a number of extraordinary challenges. The conflict in Ukraine continued to cause supply chain disruptions and high energy costs persisted. Notwithstanding the gradual reduction in inflation, the costs of materials, components and services remained high but tempered by reduced rates of price increase as inflation returned to more acceptable norms in Q3 and Q4.
Despite these challenges and disruptions, we are pleased to announce that our business has thrived and achieved an exceptional outcome for 2023/24.
Our collective goal for the coming years is to continue to maximise the opportunities for growth across our core business activities, notwithstanding the challenging conditions within our industry, to continue to deliver a positive outcome year on year.
We do however remain cautious and will continue to prioritise maintaining our historic levels of profitability and managing trading risks, a prudent approach that will ensure a balanced and sustainable business model that safeguards our financial stability and long-term success.
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TOPCOAT CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
A key influence in determining the continued success of the business is risk and the mitigation measures we put in place. The types of risk relevant to the Company activities and services, listed below, if left unchecked, have the potential to undermine our business objectives and financial performance.
∙Economic Risk
∙Compliance Risk
∙Security & Fraud Risk
∙Financial Risk
∙Reputation Risk
∙Operational Risk
∙Competiton Risk
Proactive risk identification and avoidance, seeking only to engage in contracts aligned with our core activities where the associated risks are known and can be minimised, together with planning for risks across all aspects of business activity, will mitigate their impact.
By maintaining an awareness and understanding of risk, we will protect our financial resilience, reputation, customer base and trust that we have achieved across the business and within the markets we serve.
FINANCIAL KEY PERFORMANCE INDICATORS
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The financial highlights for the Company are as follows:
Turnover: £ 11,355,055 (2022-23 - £14,780,588)
Gross Profit: £ 2,317,627 (2022-23 - £2,202,514)
Profit (before taxation) £ 941,069 (2022-23 - £741,266)
This report was approved by the board on 24 March 2025 and signed on its behalf.
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TOPCOAT CONSTRUCTION LIMITED
REGISTERED NUMBER: 03075151
BALANCE SHEET
AS AT 31 JULY 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 March 2025.
The notes on pages 5 to 13 form part of these financial statements.
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TOPCOAT CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
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Capital redemption reserve
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Dividends: Equity capital
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Contributions by and distributions to owners
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Dividends: Equity capital
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The notes on pages 5 to 13 form part of these financial statements.
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Topcoat Construction Limited ("the Company") is a private company limited by shares, incorporated in England and Wales. Its registered office is Unit A, Melville Court, Spilsby Road, Harold Hill, Romford, Essex, RM3 8SB and its registered number is 03075151.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. The disclosure requirements of Section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The following principal accounting policies have been applied:
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates and value added tax. The following criteria must also be met before revenue is recognised:
Construction contracts
Profit on construction contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is recognised relative to the stage of completion of the contract. Full provision is made for losses on all contracts in the year in which they are first foreseen.
In the course of providing construction services the company's customers will retain a retention amount. The retention amount will be recognised in the accounting period when the company considers it has fulfilled its obligations under the terms of each of its contracts.
All sales are normally made with credit terms. The element of financing is deemed immaterial and is disregarded in the measurement of revenue.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following annual bases:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Finance costs are charged to the Statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight-line basis over the lease term.
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Leased assets: the company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Statement of comprehensive income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Defined contribution pension plan
The company contributes to defined contribution plans for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.
Interest income is recognised in the Statement of comprehensive income using the effective interest method.
All borrowing costs are recognised in the Statement of comprehensive income in the year in which they are incurred.
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the Statement of comprehensive income at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the statement of comprehensive income in the same period as the related expenditure.
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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Judgements in applying accounting policies and key sources of estimation uncertainty
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a) Critical judgements in applying the company's accounting policies
No significant judgements have had to be made by management in preparing these financial statements.
b) Key accounting estimates and assumptions
The key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:
Amounts recoverable on long-term contracts
The figure included in amounts recoverable on long-term contracts at the year end is based on the estimated sales value of work completed since the previous invoice. Consideration of the post period recovery is made, as well as historical experience, in arriving at the year end estimate.
Bad debts
The Company make judgements around the recoverability of trade debtors. Consideration of the post period recovery is made, as well as historical experience, in arriving at the year end estimate.
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The average monthly number of employees, including directors, during the year was 11 (2023 - 11).
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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Fixtures, fittings & equipment
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Charge for the year on owned assets
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Charge for the year on financed assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts recoverable on long term contracts
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Net obligations under hire purchase contracts, as disclosed in Notes 8 and 9 to the accounts, are secured upon the assets to which they relate.
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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The Company operates a defined contribution pension scheme. The scheme is administered by an insurance company independent of the company's finances. The Company contributions are charged to the profit and loss account in the year in which they are made. The pension charge for the year was £64,653 (2023 - £92,186). There was £824 outstanding at the year end (2023 - £1,115).
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Commitments under operating leases
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At 31 July 2024 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The assets of the company are cross guaranteed against a loan taken out by TCL Group (London) Limited.
At the balance sheet date, the company owed £2,980 (2023 - debtor of £135,263) to its parent company. During the year, the company paid dividends of £370,000 (2023 - £450,000) to its parent company.
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TOPCOAT CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
The immediate parent is TCL Group (London) Limited, a company incorporated in the UK and registered in England and Wales. Copies of these financial statements can be obtained from the registered office Unit A Melville Court, Spilsby Road, Harold Hill, Romford, Essex, England, RM3 8SB.
The company considers S Purdy as the ultimate controlling party.
The auditor's report on the financial statements for the year ended 31 July 2024 was unqualified.
The audit report was signed on 25 March 2025 by Graham Wallace (senior statutory auditor) on behalf of Barnes Roffe LLP.
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