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Company Registration Number 03012678























Harron Homes Limited





FINANCIAL STATEMENTS





 31 DECEMBER 2024


























 
HARRON HOMES LIMITED
 

COMPANY INFORMATION


Directors
Mr P A Harrison 
Mr S T Harrison 




Company secretary
Mr P Hayes



Registered number
03012678



Registered office
Ground Floor
3 Colton Mill

Bullerthorpe Lane

Colton

Leeds

LS15 9JN




Independent auditor
Armstrong Watson Audit Limited
Chartered Accountants & Statutory Auditor

Third Floor

10 South Parade

Leeds

West Yorkshire

LS1 5QS




Bankers
Santander UK plc
58-60 Briggate

Leeds

LS1 6AS




Solicitors
Knights plc
Majestic

City Square

Leeds

LS1 2EF





 
HARRON HOMES LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 6
Independent Auditor's Report
 
7 - 10
Statement of Comprehensive Income
 
11
Statement of Financial Position
 
12
Statement of Changes in Equity
 
13
Notes to the Financial Statements
 
14 - 28


 
HARRON HOMES LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024

Introduction
 
The directors present their report and the financial statements for the year ended 31 December 2024.

Business review
 
Harron Homes Limited has had a satisfactory year of business operations during the year ended 31 December 2024. Turnover has decreased to £160,854,000 (2023: decreased to £162,853,000). Profit before tax has decreased to £7,524,000 (2023: decreased to £25,063,000). The decreases in both turnover and profit are due to the number of homes being sold decreasing, due to the continued slowdown in the UK housing market, cost price increases and higher sales incentive levels.
Customer demand remained flat throughout 2024, however, we have seen an improvement in sales rates since the start of 2025, and we are monitoring the progress of the sales market carefully.
During the year, Harron Homes successfully acquired several high-quality new sites within the Company’s areas of operations. These new sites ensure the continued future delivery of much-needed new homes to our customers.

Principal risks and uncertainties
 
The following are considered to be the principal risks and uncertainties affecting the Company: 
• Changes in the general economic climate, which could adversely impact the UK housing market;
• Shifts in customer demand, requiring new product development or changes to existing products and    scheme design criteria; 
• Sourcing sufficient new parcels of high quality land for future development; 
• Obtaining planning permission for new developments, in accordance with scheme appraisals and in a    timely manner; 
• Recruiting enough skilled, qualified and experienced people to support the Company's growth; 
• Maintaining and improving quality and customer service standards as the Company's number of active    developments increases; 
• Securing and maintaining committed borrowing facilities for the business on a long-term basis; and 
• Expanding the supply chain, whilst maintaining quality and controlling costs. 
The Board and management constantly monitor these risks and uncertainties and develop strategies to ensure that the business is able to respond swiftly and effectively to these and any other challenges as they arise.

Page 1

 
HARRON HOMES LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Financial key performance indicators
 
Turnover for the year ended 31 December 2024 was £160,854,000 (2023: £162,853,000). Gross profit was £19,855,000 (2023: £38,456,000). Profit before tax was £7,524,000 (2023: £25,063,000).
Financial risk management
The Company's activities expose it to a number of financial risks, including liquidity risk and market risk. 
Liquidity risk 
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Company uses a mixture of long-term and short-term debt finance, which are made available to the Company through its group banking facility (see note 2.3 to the Financial Statements). The Company has agreed set interest rates in place within its banking facilities, linked to bank base rate.
Market risk 
A downturn in the UK housing market could have various impacts on the business, including downward pressure on sales prices and volumes and consequently on profit margins.
Management constantly monitor economic indicators in the economy as a whole, as well as detailed, up to date information on the current sales performance of the business. A range of forecasts of various sensitivities are prepared to assess the impact of various economic scenarios on the business and to ensure that at all times it is able to withstand the effects of any downturn. Mitigating measures available include restricting investment in land, slowing down construction and reducing the overhead base.


This report was approved by the board and signed on its behalf.





................................................
Mr P A Harrison
Director

Date: 17 April 2025

Page 2

 
HARRON HOMES LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments 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 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.

Principal activity

The principal activity of the Company is house building. There have been no significant changes to the Company's principal activity in the year under review. The directors are not aware, at the date of this report, of any likely major changes in the Company's activities in the next year. 

Results and dividends

The profit for the year, after taxation, amounted to £5,584,000 (2023: £19,480,000).

Dividends of £4,259,000 have been paid in the year (2023: £7,689,000).

Directors

The directors who served during the year were:

Mr P A Harrison 
Mr S T Harrison 

Page 3

 
HARRON HOMES LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Environmental matters

The Company aims to prevent any possible adverse effects upon the environment and people arising from its activities. Strict guidelines on cleaning up any land contamination and remediation are followed and only licensed, approved, specialist waste disposal contractors are used. 

Future developments

The Directors intend to continue the ongoing operations of the current business model.

Going concern

The Company meet their day to day working capital requirements through a Group banking facility, which is next due to be reviewed on 28 March 2027. The directors have prepared forecasts up to the year ending 31 December 2026 which take into account reasonable possible changes in trading. 
A range of sensitivities and scenarios have been considered and modelled against the current banking facilities that are currently in place.
 
Current company trading forecasts and cashflow modelling indicated that for the period of more than 12 months from the date of signing of the accounts the directors are completely satisfied and confident that the business has adequate resources to continue to trade beyond this period and thus the business is able to continue to adopt the going concern basis in preparation of the director report and the financial statements.
The directors have also considered the potential effects of current market conditions, based upon the latest available information, and do not consider that it will have a significant impact on the Company's ability to operate as a going concern.

Page 4

 
HARRON HOMES LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Statement by the directors in performance of their statutory duties in accordance with section 172 of the Companies Act 2006

Under s172 of the Companies Act 2006 directors of UK companies have a duty to promote the success of their Company for the benefit of the members as a whole and, in doing so, have regard to: 
a. the likely consequences of any decision in the long term; 
b. the interests of the Company's employees;
c. the need to foster the Company's business relationships with suppliers, customers and others; 
d. the impact of the Company's operations on the community and the environment; 
e. the desirability of the Company maintaining a reputation for high standards of business conduct; and 
f.  the need to act fairly between members of the Company. 
The directors of Harron Homes Limited consider the following areas to be of key importance in its fulfilment of this duty: 
• carrying out detailed planning and forecasting to ensure the ongoing financial safety of the business; 
• seeking opportunities, by finding new locations to buy land and build new homes, to grow the business    for the benefit of current and future employees, customers and suppliers as well as the wider UK     economy; 
•  maintaining the highest standards of integrity and honesty in the Company's dealings with employees,   suppliers, the general public and local and national government; 
• prioritising the maintenance of the highest standards of health and safety and environmental protection    through investment in training, equipment, monitoring and external support; 
• working to constantly maintain and improve the quality of the homes that we build, and providing the best   possible aftersales support to our customers; and 
• listening to feedback from customers in order to identify scope for improvement and to drive to achieve    the highest possible reputation for the quality of our designs, standards of construction and customer    care. 
The results of the measures that we have taken in these areas can be seen in: our positive financial results, the increased strength of our Statement of Financial Position and land bank, our excellent health and safety and environmental records, and our improving quality ratings as measured by independent surveys. 

Employee involvement

The Company's policy is to keep employees informed on matters relevant to them as employees through regular meetings. All employees have access to some form of pension scheme. 

Disabled employees

The Company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the Company's policy, wherever practical, to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate. 

Qualifying third party indemnity provisions

During the financial year, a qualifying third party indemnity provision for the benefit of the directors was in force. 

Greenhouse gas emissions, energy consumption and energy efficiency action

The Company's greenhouse gas emissions and energy consumption for the year are disclosed within the consolidated accounts of Harron Group Limited.

Page 5

 
HARRON HOMES LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

The auditor, Armstrong Watson Audit Limitedwill be proposed for reappointment in accordance with section 487(2) of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
Mr P A Harrison
Director

Date: 17 April 2025

Page 6

 
HARRON HOMES LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES LIMITED
 

Opinion


We have audited the financial statements of Harron Homes Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 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.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


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 ReportOur 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.


Page 7

 
HARRON HOMES LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES LIMITED (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


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:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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.


Page 8

 
HARRON HOMES LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES LIMITED (CONTINUED)


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.


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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below:
 
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and knowledge of the Company to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the Company through discussions with the directors and other management and review of appropriate industry knowledge.  Key laws and regulations we identified during the audit were the UK Companies Act 2006, UK tax legislation, Health and Safety legislation and employment law;
we assessed the extent of compliance with the laws and regulations identified above by making enquiries of management; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:
 
performed analytical procedures as a risk assessment tool to identify any unusual or unexpected relationships;
tested journal entries recorded on the Company’s finance system to identify unusual transactions that may indicate override of controls;
reviewed key judgements and estimates for any evidence of management bias; and
reviewed the application of accounting policies with focus on those with heightened estimation uncertainty.
 
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
 
agreeing financial statement disclosures to underlying supporting documentation; and
enquiring of management to identify actual and potential litigation and claims.


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.


Page 9

 
HARRON HOMES LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES LIMITED (CONTINUED)



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 Auditor's Report.


Use of our 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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Steven Preston (Senior Statutory Auditor)
for and on behalf of
Armstrong Watson Audit Limited
Chartered Accountants & Statutory Auditor
Leeds

17 April 2025
Page 10

 
HARRON HOMES LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024

2024
2023
Note
£000
£000

  

Turnover
 4 
160,854
162,853

Cost of sales
  
(140,999)
(124,397)

Gross profit
  
19,855
38,456

Administrative expenses
  
(10,851)
(11,946)

Other operating income
 5 
149
-

Operating profit
 6 
9,153
26,510

Interest receivable and similar income
  
135
104

Interest payable and similar expenses
 10 
(1,764)
(1,551)

Profit before tax
  
7,524
25,063

Tax on profit
 11 
(1,940)
(5,583)

Profit for the financial year
  
5,584
19,480

There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2024 (2023: £NIL).

The notes on pages 14 to 28 form part of these financial statements.

Page 11

 
HARRON HOMES LIMITED
REGISTERED NUMBER: 03012678

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024

2024
2023
Note
£000
£000

Fixed assets
  

Intangible assets
 13 
67
102

Tangible assets
 14 
560
798

  
627
900

Current assets
  

Stocks
 15 
184,244
202,908

Debtors
 16 
3,141
3,970

Cash at bank and in hand
 17 
14,060
3,878

  
201,445
210,756

Creditors: amounts falling due within one year
 18 
(31,743)
(47,052)

Net current assets
  
 
 
169,702
 
 
163,704

Total assets less current liabilities
  
170,329
164,604

Creditors: amounts falling due after more than one year
 19 
(4,400)
-

  

Net assets
  
165,929
164,604


Capital and reserves
  

Called up share capital 
 21 
250
250

Profit and loss account
 22 
165,679
164,354

  
165,929
164,604


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
Mr P A Harrison
Director

Date: 17 April 2025

The notes on pages 14 to 28 form part of these financial statements.

Page 12

 
HARRON HOMES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024


Called up share capital
Profit and loss account
Total equity

£000
£000
£000


At 1 January 2023
250
152,563
152,813


Comprehensive income for the year

Profit for the year
-
19,480
19,480

Dividends: Equity capital
-
(7,689)
(7,689)



At 1 January 2024
250
164,354
164,604


Comprehensive income for the year

Profit for the year
-
5,584
5,584

Dividends: Equity capital
-
(4,259)
(4,259)


At 31 December 2024
250
165,679
165,929


The notes on pages 14 to 28 form part of these financial statements.

Page 13

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

1.


General information

Harron Homes Limited is a private company limited by shares, incorporated and registered in England and Wales. Its registered office is located at Ground Floor, 3 Colton Mill, Bullerthorpe Lane, Leeds, LS15 9JN. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 presentation and functional currency is British Pound Sterling (£).

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Harron Group Limited  as at 31 December 2024 and these financial statements may be obtained from Companies House.

 
2.3

Going concern

The Company meet their day to day working capital requirements through a Group banking facility, which is next due to be reviewed on 28 March 2027. The directors have prepared forecasts up to the year ending 31 December 2026 which take into account reasonable possible changes in trading. 
A range of sensitivities and scenarios have been considered and modelled against the current banking facilities that are currently in place.
 
Current company trading forecasts and cashflow modelling indicated that for the period of more than 12 months from the date of signing of the accounts the directors are completely satisfied and confident that the business has adequate resources to continue to trade beyond this period and thus the business is able to continue to adopt the going concern basis in preparation of the director report and the financial statements.
The directors have also considered the potential effects of current market conditions, based upon the latest available information, and do not consider that it will have a significant impact on the Company's ability to operate as a going concern.

Page 14

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

  
2.4

Revenue

Turnover comprises revenue recognised by the Company in respect of goods supplied during the year from house building activities, including customer extras, exclusive of Value Added Tax and after sale discounts. 
Turnover from house building activities is recognised upon legal completion of each sale. Turnover includes the gain or loss arising on the disposal of part-exchange properties, which is calculated as the difference between the cost of the part-exchange property and its net realisable value. Deposits received in advance from customers are deferred until legal completion of each sale. 

 
2.5

Finance leases and hire purchase

Assets obtained under hire purchase contract 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 Profit and Loss Account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss 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.

 
2.9

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan 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 profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 15

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.10

Current and deferred taxation

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 reporting 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 reporting 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 reporting date.

 
2.11

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 Amortisation is provided on the following bases:

Software
-
25%
per annum straight line

Page 16

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

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.

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:

Plant and machinery
-
25%
per annum straight line
Motor vehicles
-
25%
per annum reducing balance
Office equipment
-
25%
per annum straight line

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.

  
2.13

Stock

Stock includes work in progress and part-exchange properties held for sale. 
Work in progress balances represent costs incurred on specific developments, net of amounts transferred to cost of sales. 
Profit on legally completed sales is only recognised when the outcome of the whole development can be assessed with reasonable certainty. 

  
2.14

Part-exchange properties

Part-exchange properties are stated at the lower of cost and net realisable value. Net realisable value is based on estimated selling prices less all further costs to completion and all relevant marketing and selling costs. 

  
2.15

Shared equity debtors

Shared equity debtors consist of loans made to customers which are secured by second charges over the properties sold to them. The loans are recorded at fair value, being the amount receivable by the Company discounted to present day values. The difference between the nominal amount and the fair value is credited over the deferred term to the Profit and loss account, with the debtor increasing to its full expected cash settlement value on the anticipated receipt date. Credit risk is accounted for in determining fair values and appropriate discount factors are applied. 

 
2.16

Trade and other debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 17

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

Creditors

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.

 
2.19

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.20

Financial instruments

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.

Page 18

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)


2.20
Financial instruments (continued)

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.

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 payments 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.

 
2.21

Dividends

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 at an annual general meeting.

Page 19

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires the directors to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include the carrying value of work in progress and the valuation and recoverability of debts. 
The assessment of the carrying value of work in progress relies upon calculations of the cost of sales of each development which are based on detailed forecasts of expected remaining revenues and scheme costs. Such forecasts require judgements to be made, on a development by development basis, about the anticipated revenues on unreserved plots. These judgements are based upon sales experience to date combined with an assessment of market conditions as at the measurement date. Judgements are also required of remaining expenditure on each development. These are based upon an expert knowledge of the current state of completion of each development together with a detailed understanding of the specific outstanding costs to be expended. These judgements together may have a material impact on the carrying value of work in progress balances in the Statement of Financial Position and the amount charged to the Profit and Loss account as cost of sales in each accounting period. The carrying value of work in progress as at 31 December 2024 was £174,097,000 (2023: £190,237,000).


4.


Turnover

The whole of the turnover is attributable to the principal activity of the Company.

All turnover arose within the United Kingdom.


5.


Other operating income

2024
2023
£000
£000

Other operating income
149
-

149
-



6.


Operating profit

The operating profit is stated after charging:

2024
2023
£000
£000

Depreciation of tangible fixed assets
309
353

(Profit)/loss on sale of tangible fixed assets
5
(7)

Operating lease rentals - motor vehicles, plant and machinery
309
291

Operating lease rentals - land and buildings
401
442

Amortisation of intangible assets
44
42

Page 20

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

7.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor and its associates:


2024
2023
£000
£000

Fees payable to the Company's auditor and its associates for the audit of the Company's financial statements
36
35

Fees payable to the Company's auditor and its associates in respect of:

Taxation compliance services
7
6

Other services
8
7


8.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£000
£000

Wages and salaries
12,133
12,544

Social security costs
1,334
1,390

Cost of defined contribution scheme
395
432

13,862
14,366


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Construction
93
106



Sales and Marketing
49
52



Administration
95
100

237
258

Page 21

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

9.


Directors' remuneration

2024
2023
£000
£000



Directors' emoluments
112
125

112
125

The highest paid director received remuneration of £55,820 (2023: £62,700).
No directors (2023: none) were members of Group pension schemes, and no pension contributions were made in respect of the directors in either year.


10.


Interest payable and similar expense

2024
2023
£000
£000


Bank interest payable
1,764
1,551

1,764
1,551


11.


Taxation


2024
2023
£000
£000

Corporation tax


Current tax on profits for the year
1,767
5,790

Adjustments in respect of previous periods
204
(207)


1,971
5,583


Total current tax
1,971
5,583

Deferred tax


Origination and reversal of timing differences
(31)
-

Total deferred tax
(31)
-


Taxation on profit on ordinary activities
1,940
5,583
Page 22

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - lower than) the standard rate of corporation tax in the UK of 25.00% (2023 - 23.52%). The differences are explained below:

2024
2023
£000
£000


Profit on ordinary activities before tax
7,524
25,063


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25.00% (2023 - 23.52%)
1,881
5,895

Effects of:


Expenses not deductible for tax purposes
64
172

Capital allowances for year in excess of depreciation
-
(140)

Adjustments to tax charge in respect of prior periods
204
(207)

Additional deduction for land remediation expenditure
(176)
(176)

Movement in deferred tax not recognised
(33)
-

Additional RPDT at 4%
-
39

Total tax charge for the year
1,940
5,583


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


12.


Dividends

2024
2023
£000
£000


Dividend Issued
4,259
7,689

Page 23

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

13.


Intangible assets




Software

£000



Cost


At 1 January 2024
413


Additions
9



At 31 December 2024

422



Amortisation


At 1 January 2024
311


Charge for the year on owned assets
44



At 31 December 2024

355



Net book value



At 31 December 2024
67



At 31 December 2023
102



Page 24

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

14.


Tangible fixed assets





Plant and machinery
Motor vehicles
Office equipment
Total

£000
£000
£000
£000



Cost or valuation


At 1 January 2024
1,705
6
1,198
2,909


Additions
47
-
29
76


Disposals
(12)
-
-
(12)



At 31 December 2024

1,740
6
1,227
2,973



Depreciation


At 1 January 2024
1,255
2
854
2,111


Charge for the year on owned assets
184
-
125
309


Disposals
(7)
-
-
(7)



At 31 December 2024

1,432
2
979
2,413



Net book value



At 31 December 2024
308
4
248
560



At 31 December 2023
450
4
344
798


15.


Stocks

2024
2023
£000
£000

Work in progress
174,098
190,237

Part exchange properties
10,146
12,671

184,244
202,908


Page 25

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

16.


Debtors


2024
2023
£000
£000

Due after more than one year

Shared equity debtors
54
54

54
54

Due within one year

Trade debtors
200
214

Amounts owed by group undertakings
505
-

Other debtors
794
2,263

Prepayments and accrued income
477
643

Tax recoverable
1,047
763

Deferred taxation
64
33

3,141
3,970



17.


Cash and cash equivalents

2024
2023
£000
£000

Cash at bank and in hand
14,060
3,878

14,060
3,878



18.


Creditors: Amounts falling due within one year

2024
2023
£000
£000

Bank facility drawdown
-
11,500

Trade creditors
23,217
26,532

Amounts owed to group undertakings
-
239

Other taxation and social security
702
655

Other creditors
471
495

Accruals and deferred income
7,353
7,631

31,743
47,052


Obligations under finance lease and hire purchase contracts are secured on the assets to which they relate.

Page 26

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

19.


Creditors: Amounts falling due after more than one year

2024
2023
£000
£000

Trade creditors
4,400
-


Obligations under finance lease and hire purchase contracts are secured on the assets to which they relate.


20.


Deferred taxation




2024
2023


£000

£000






At beginning of year
33
33


Utilised in year
31
-



At end of year
64
33

The deferred tax asset is made up as follows:

2024
2023
£000
£000


Depreciation in excess of capital allowances
30
9

Other short term timing differences
34
24

64
33


21.


Share capital

2024
2023
£000
£000
Allotted, called up and fully paid



250,000 (2023 - 250,000) Ordinary shares of £1.00 each
250
250

There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.



22.


Reserves

Profit and loss account

This reserves includes all current and prior period retained profits and losses.

Page 27

 
HARRON HOMES LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

23.


Pension commitments

The Company operates a defined contributions retirement benefit schemes for all qualifying employees. The assets of the scheme are held separately from those of the Company. The Company's only obligations with respect to the schemes is to contribute specified percentages of payroll costs to the schemes to fund the benefits.
The total cost charged to income of £395,000 (2023: £452,000) represents contributions payable to the schemes at rates specified in the rules of the plans. As at 31 December 2024, contributions of £62,000 (2023: £65,000) due in respect of the current reporting period had not been paid over to  the schemes.


24.


Commitments under operating leases

At 31 December 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£000
£000


Not later than 1 year
593
615

Later than 1 year and not later than 5 years
492
790

1,085
1,405


25.


Related party transactions

The company has taken advantage of the exemptions allowed under FRS102 not to disclose transactions with other group companies and key management personnel remuneration.


26.


Controlling party

The ultimate parent company is Harron Group Limited, a company registered in England and Wales. Harron Group Limited is the parent company of the largest and smallest group in which the Company is consolidated. The accounts of Harron Group Limited are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

The directors of the Company, Mr P A Harrison and Mr S T Harrison, control the Company as a result of controlling, directly or indirectly, 100% of the issued share capital of the company.

Page 28