Registered number:
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
COMPANY INFORMATION
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RENAKER BUILD LIMITED
CONTENTS
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RENAKER BUILD LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
The director presents his Strategic Report for the year ended 31 October 2024.
Market review
In 2024, much like 2023, the construction sector has experienced a slow recovery mirroring to some extent the UK economy as a whole, where longer-term growth and stability remains a challenge. The election of a new Labour Government in July could bring about notable shifts in strategy for UK companies but it is well reported that significant financial restrictions exist which could at the very least slow and inhibit the pace of change. Many of the post-election announcements affecting the construction and property sectors have focused on the planning framework and new financing for investment and infrastructure. It will take time for these initiatives to translate into increased activity on site. So, while the appointment of a new political leadership should bring stability, there will inevitably be delays in delivery of these new objectives as ministers get to grips with the challenge ahead of them. The most impactful development for the UK economy in the 2nd half of 2024, was the start of what is expected to be a period of base rate interest cuts. More encouraging inflation, earnings and employment data enabled some fiscal flexibility for the Bank of England. Lower interest rates should boost consumer confidence levels, which will in turn spill over into the housing market. During the year we have experienced some easing of inflationary pressures in the economy as a whole, though many companies in the construction sector continued to feel the effects of economic turbulence from previous years. Inflation relating to project costs has been less of a factor during 2024 than the industry expected 12 months ago. Total construction costs for residential high-rise buildings remain at an all-time high when compared with pre-pandemic levels but have at least calmed, particularly in respect of materials and energy. The ongoing skills gap in the construction industry remains one of the sector’s most significant challenges. Brexit and the rising cost of employment, including further increases in the minimum wage and national insurance, has made it more and more difficult to recruit a skilled and able workforce. From a legislative perspective, new building safety gateway processes for high-risk residential buildings have introduced substantial new risks for developers and contractors. Since the introduction of the new Building Safety Regulator in October 2023 there have been very few Gateway Two assessments completed. Developers and contractors might share the commercial risk associated with the time taken for the Gateway Review, but the consequences of delay resulting from a failed assessment could be significant for all parts of the supply chain. The new regulations not only impact the design of high-rise residential properties but also necessitate new approaches to collaboration and engagement across the supply chain to ensure competence and quality. While the implementation of these measures has introduced periods of uncertainty and delays in some projects, we remain optimistic that these disruptions will be minimized moving forward, and the current challenges are temporary. Renaker specialises in delivering large residential towers and has taken a proactive approach in managing this risk by maintaining direct control over design solutions and the supply chain. The business is preparing to submit its first Gateway Two application on behalf of its client, the outcome of which will provide greater clarity on anticipated timeframes and requirements moving forward.
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RENAKER BUILD LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The business continues to operate successfully despite a number of macro UK and Global uncertainties. On a more localised level, the Manchester and Greater Manchester region, in which we operate, remains a standout performer, outpacing much of the UK.
Demand for high-quality homes in the city with excellent amenities, situated in well-managed neighbourhoods remains robust. The new government’s commitment to delivering 1.5 million new homes within this parliament term points to the wider challenge of meeting demand. This commitment presents an opportunity for the business to continue delivering large, transformative residential developments on brownfield sites, further contributing to the growth and development of the city region. We remain vigilant and mindful of the challenges that exist for a low growth economy such as that of the UK but we recognize that many external factors lie beyond our control. Persistent global conflicts, such as those in Ukraine and the Middle East create significant global instability with no clear resolution in sight. Despite these challenges, the Manchester City Region continues to thrive. The projects we are delivering play a vital role in enhancing Manchester’s appeal providing a solid foundation for optimism regarding the outlook for 2025 and beyond.
2024 has been a successful year of further growth for the business, where our large scale residential projects continue to progress at pace. Delivery for our development clients has been extremely consistent and the support from our sub-contractors, suppliers and professional teams helps us to deliver projects on time and within budget.
While Turnover growth is not a primary gauge of how the business is performing, during 2024 we achieved record revenue of £265m (2023: £229m). This growth is a result of the measured scaling up of the business over the last decade, and the scale and significance of the individual projects we are delivering for our clients. However, gross profit and net profit margins remain consistent due to the calming of cost of materials and energy being offset by increases to employment costs. To support the increased trading activity, we have made significant investments in plant and machinery to enhance our operational capacity and efficiency. New contracts which commenced during the year include Trinity D1 Island, Contour and F1 at New Jackson. The business successfully achieved completion and handover of Crown Street Primary School and Three60 in August 2024 – which amounted to 445 new homes, residential amenity with residents Gym and public realm. This followed the delivery of the adjacent projects, The Blade and a 389 space public multi-storey car park which was handed over in October 2023. The first of two co-living towers (Union) was also successfully handed over to the client in January 2024. This scheme delivered 380 apartments with 870 beds in the St Johns neighbourhood for our client Vita Property. The second phase of this scheme is due for handover in Q2 2025. Calendar year 2025 is expected to see a record number of projects reach build completion and handover. Across 5 projects we are targeting completion of 1,414 apartments, 576 student beds and 806 co-living units. Future developments contracted which stretch beyond the current year will see the delivery of a further 988 new homes. This significant pipeline of ongoing contracts is a direct result of the skill, commitment and attitude of our people. In the year our staff headcount grew to 387 from 365, including 7 new trainees and apprentices as we continue to invest in our operational capability. The Company remains in a financially strong position to successfully complete all existing projects and hand over projects to clients as forecast.
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RENAKER BUILD LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The Company has identified certain principal risks and uncertainties and has assessed how these risks could best be mitigated through a combination of internal controls and risk management strategies. These risks are reviewed and updated on a regular basis. Risk management remains inherent in all operations and is given prominent place through the comprehensive project review process in place.
Health, safety and security – failure to identify, mitigate and/or react effectively to a major health, safety or security incident The Company's activities are significant and complex which require the continuous monitoring and management of health, safety and environmental risks. Failure to manage these risks could result in serious harm to employees, subcontractors, the public or the environment and could expose the Company to significant potential liabilities and reputational damage. The Company is committed to ensuring a safe working environment. These risks are managed by the Company and its supply chain through the strong promotion of a health and safety culture; and well-defined health and safety policies and procedures. Market and political uncertainty - a reduction in demand and the ability of our clients to buy, develop, manage and sell assets at the appropriate time in the property cycle. The business holds a strong reputation in the market for the quality of product, reputation for delivery, and setting high standards in its operations. Further to this, our experience of previous economic downturns is there can often be a flight to quality, which we anticipate will drive demand towards the product we are developing on behalf of clients. Our clients have a clear and credible pipeline of developments that are well progressed in well located parts of Manchester, with strong place-making and amenity. People and skills - our inability to attract, retain, and develop the right people and skills required to deliver the business objectives. Employee retention remains high within the business and our ability to attract talent and develop our existing teams remains a core strength of the Company. We have experienced some challenges in availability of resource within the operational part of the business at management level, where market demand for quality people has remained high.
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RENAKER BUILD LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
Supply Chain – the ability to procure the necessary labour, materials and expertise to deliver our projects.
The business retains a reliable core of key suppliers, many of whom are North West, and UK based and have partnered with us for several years. The vast majority of our core suppliers and sub-contractors operate exclusively in the UK. There is some reliance on overseas supply chain for specific components of our build and design. Where possible we will mitigate overseas supply chain risk by sourcing from larger 'Tier 1' level suppliers with whom we have an existing relationship. We will also seek additional security within supply contracts where there are long-lead times or potential logistical challenges in ensuring goods and services arrive in the UK on programme. Liquidity Risk – the risk of the ability to service and repay existing facilities as they mature, together with being able to secure future financing as required. Liquidity risk remains nominal, there are no open facilities with only moderate levels of asset finance on selective major plant and equipment assets. The day to day liquidity position of the business is closely monitored through detailed cash forecasting, reviewed regularly and risk assessed. All spending commitments are regularly reviewed against these forecasts. Credit Risk – the ability to collect and recover all sums due under design & build contracts and effective management of working capital. The Company is exposed to the ordinary risk of its ability to recover revenue from customers as and when this falls due. This is monitored regularly but the risk is significantly reduced by virtue of the vast majority of revenue being derived from contracts with related party companies, where we have regular reviews and full visibility of the underlying risks. Of the trade debtors outstanding at year end amounting to £47.6m, (2023: £46.7m), 100% of outstanding billed amounts have subsequently been settled in full. We are therefore satisfied that risks are well managed in this area and there are no material risks to settlement of long-term contracts.
In the decisions taken during the year ended 31 October 2024, the Director of Renaker Build Limited believes they have acted in the way they consider, in good faith, and most likely to promote the success of the Company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172 (1)(a-f) of the Companies Act 2006).
This statement sets out how the director complies with the requirements of Section 172 of the Companies Act 2006. The Director is the custodian of the business, with a responsibility to create and sustain long-term value for our shareholders and stakeholders by directing its affairs and meeting their legitimate interests. The Board clearly understands the correlation between good corporate governance, healthy stakeholder relations, effective communication, and the alignment of corporate goals with stakeholders' expectations and aspirations. In fulfilling the Board's principal responsibility, business performance and strategy is reviewed on monthly basis, looking out across 5-year business planning horizons. Annual budgets are set for each project with clear plans for delivery of each. The Board fully understands that the impact of our operations is measured not just in the quality of the project delivered but in the longer-term impact on the environment, communities, and people.
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RENAKER BUILD LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The director firmly believes that for the business to be successful, the Company must operate in a forward- thinking manner, be responsive to change and to be able to act quickly. Throughout the business, we adopt a “can do” attitude with the aim of delivering sustainable new communities in an enthusiastic, professional, and efficient manner.
To improve long-term decision making, the Company has put in place a structured governance model, with scheduled meetings for operational, financial and strategic planning and risk management. Our governance model supports the Company in ensuring that decisions are considered, and in alignment with our strategic plans. Detailed budgets and reforecasts are prepared every month to enable the Company to track performance and take any necessary actions to deliver performance in line with, or close to, expectations.
This report was approved by the board and signed on its behalf.
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RENAKER BUILD LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
The director presents his report and the financial statements for the year ended 31 October 2024.
The profit for the year, after taxation, amounted to £4,739 thousand (2023 - £3,799 thousand).
The business recorded turnover in the year of £265m (2023: £229m). The increase in turnover has not generated a proportionate increase in net profit due to a reduction in year on year operating profit margin, partially due to the inflationary pressures referred to earlier. As at 31 October 2024, the Company had net assets of £37m (2023: £32m).
Turnover in the year largely relates to completion of Three60, Crown Street Primary School and T1 at Union Living, amongst the ongoing contract delivery at Bankside, House of Social, T2 at Union Living, Vista River Gardens and Port Street. The director did not recommend the payment of a dividend in the year (2023: £Nil).
The director who served during the year was:
The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the director is required to:
∙select suitable accounting policies for the Company's financial statements 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 financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The director is 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 to enable him to ensure that the financial statements comply with the Companies Act 2006. He is 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.
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RENAKER BUILD LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The business is operating under letters of intent for four new projects which are expected to commence construction after the year end.
The Company seeks to ensure that every employee, without exception, is treated equally and fairly and that all employees are aware of their responsibilities. The Company's policies and procedures fully support our disabled colleagues. The Company take active measures to do so via a robust reasonable adjustment policy and processes to ensure colleagues are fully supported.
There have been no significant events affecting the Company since the year end.
The well-being of the Company’s employees is safeguarded through strict adherence to health and safety standards. The Safety, Health and Welfare at Work Act 1989 imposes certain requirements on employers and the Company has taken the necessary action to ensure compliance with the Act, including the adoption of a Safety Statement.
Suppliers
Good working relationships with suppliers are essential in order for the Company to deliver schemes at the pace and quality our customers come to expect. The Company works closely and supports development with suppliers to ensure standards remain high and costs are controlled. Customers Delivering high quality schemes, with robust quality control procedures in place enhances the Company’s reputation and meets the expectations of our clients. The business has a dedicated team to engage and support our clients immediately prior to handover, and by way of follow-on customer care. The Management Team regularly review feedback data and consider ways in which these processes can be improved. Stakeholders and the wider community The director is mindful of the effect our operations have upon local communities and we aim to make a positive contribution to the communities within which we work. This includes minimising disruption; fostering local authority relationships, supporting the use of local labour, equipment, materials and supply chain partners; and engaging effectively with the local community with regard to our project aspirations and delivery.
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RENAKER BUILD LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The Company's greenhouse gas emissions and energy consumption for the year are:
In publishing this information, the Company has adhered to the Environmental Reporting Guidelines. The figures set out are in accordance with the GHG protocol including Streamlined Energy and Carbon Reporting Guidelines. The latest published UK Governments Conversion factors have been used for all calculations.
Scope 1 emissions are direct emissions produced by the combustion of fuels purchased by Renaker Build Limited.
Scope 2 emissions are indirect emissions generated by the electricity purchased by Renaker Build Limited.
Scope 3 emissions are indirect emissions produced by activity from Renaker Build Limited but owned and controlled by another emitter.
Electricity purchased in the year totalled 4,046,115 kWh (2023: 3,621,457 kWh).
In the period covered by this report, Renaker Build Limited has continued to effect environmental change through the evolution of our Environmental Management System (EMS). We are actively identifying environmental opportunities and minimising risk, positively contributing towards our energy efficiency.
A changeable picture of energy consumption owing to the progression of key projects means our greenhouse gas (GHG) emissions have actually reduced in the period in proportion to turnover, however this is not likely to be representative of the medium-term picture owing to an increase in our project activity. To ensure we continue to drive down our emissions, we are continuing to develop more efficient means of operating, as well as driving a continually improving quality culture to reduce mistakes, the rectification of which also has a GHG impact. More specifically, we continue to;
∙Champion environmental toolbox talks focusing on energy efficiency, covering our offices, cabins and construction sites
∙Carefully track the maintenance of our plant and equipment to ensure they are operating at optimum efficiency
∙Upskill and increase the number environmental champions within our workforce to drive positive behavioural change at a local level
∙Roll out a programme of environmental awareness across the business
∙Regularly review the suitability and effectiveness of our environmental plans to ensure they are delivering optimal results
∙Observe the environmental challenges and innovations developing within the construction industry to help us recognise where we can apply environmental value
∙Consider all opportunities for further environmental improvement across our business
We continue to review and develop our EMS and in combination with the above, seek to further improve our efficiency.
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RENAKER BUILD LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
The auditors, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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RENAKER BUILD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RENAKER BUILD LIMITED
We have audited the financial statements of Renaker Build Limited (the 'Company') for the year ended 31 October 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of 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).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the company's business model including effects arising from macro-economic uncertainties such as the risk of recession on customer demand, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period.
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RENAKER BUILD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RENAKER BUILD LIMITED (CONTINUED)
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director 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 Auditors' Report thereon. The director is 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.
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 Director's 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:
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RENAKER BUILD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RENAKER BUILD LIMITED (CONTINUED)
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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework FRS 102 and the Companies Act 2006;
∙We understood how the company is complying with those legal and regulatory frameworks by making enquiries of management and those charged with governance of the entity. We corroborated our enquiries through a review of correspondence received from regulatory bodies where relevant;
∙We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
°Evaluation of the processes and controls established to address the risks related to irregularities and fraud;
°Identifying and testing unusual journal entries;
°Challenging the assumptions and judgements made by management in its significant accounting estimates, being the accounting treatment of long term construction revenue contracts.
∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
∙The assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s knowledge of the industry in which the client operates and the understanding of, and practical experience through training and participation with audit engagements of a similar nature;
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RENAKER BUILD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RENAKER BUILD LIMITED (CONTINUED)
∙From the procedures performed we did not identify any matters relating to non-compliance with laws and regulation or matters in relation to fraud;
∙In assessing the potential risks of a material misstatement, we obtained an understanding of the company’s operations, including the nature of its revenue sources, expected financial disclosures and business risks that may result in risk of material misstatement. This included the company’s control environment including the adequacy of procedures for the recording and authorisation of transactions.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.
for and on behalf of
Landmark
St Peter's Square
1 Oxford Street
M1 4PB
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RENAKER BUILD LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
REGISTERED NUMBER: 06600257
BALANCE SHEET
AS AT 31 OCTOBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 35 form part of these financial statements.
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RENAKER BUILD LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
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RENAKER BUILD LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
Renaker Build Limited is a private company limited by shares and incorporated in England and Wales. Its registered head office and principal place of business is located at 1st Floor, NQ Building, 47 Bengal Street, Manchester, Lancashire, M5 6BB.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company's financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except when otherwise stated.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The director has undertaken a detailed review of business performance and forecast resources, in order to make an informed and prudent assessment of the Company’s ability to operate as a going concern for the foreseeable future, being a period of at least 12 months from the date of signing these financial statements.
The review performed takes into account known and quantifiable risks, with further sensitivity and risk modelling performed over cashflow forecasts which considered the recoverability of long-term contracts, gross and net operating margins and possible programme delays. Having considered these long-term forecasts for the business, the director considers that there will be sufficient resources to continue as a going concern for the foreseeable future, being a period of at least 12 months from the date of signing these financial statements. adjustment made for the provision of income either in advance or arrears for the relative state of completion of each contract undertaken by the Company at the Balance Sheet date. Turnover on long term construction projects is recognised in accordance with the stage of completion for each project which is measured on an input basis. Full provision is made for losses on all contracts in the period in which the loss is first foreseen. Where the outcome of a contract can't be estimated reliably, turnover is recognised only to the extent of costs incurred that it is probable will be recoverable. Costs are recognised in the period to which they relate.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
The margin applied to costs incurred is based upon management estimates of costs to complete contracts and any contract variations that may be agreed. These expected future costs will fluctuate as the project progresses and more information is available.
All turnover, in both the current and prior year, arose from construction projects within the United
Kingdom.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
There were no factors that may affect future tax charges.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
Plant and machinery with net book value of £1,639k (2023: £1,767k) are held under finance leases.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
Profit and loss account
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
The director has confirmed that as at 31 October 2024 there were purchase commitments of £123k (2023: £Nil) in relation to website development and motor vehicles.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £948k (2023: £666k) . Contributions totalling £191k (2023: £164k) were payable to the fund at the balance sheet date and are included in creditors.
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
The following transactions occurred during the year with companies under common control of Mr D Whitaker: Revenue
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RENAKER BUILD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
Expenses
Revenue relates to the provision of design and construction services to companies under common control of Mr D Whitaker.
Expenses relate to the provision of advice and construction services by companies under the common control of Mr D Whitaker.
The ultimate controlling party is Mr D Whitaker.
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