Company registration number 04557318 (England and Wales)
MORCOM CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
MORCOM CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Independent auditor's report
3 - 5
Statement of income and retained earnings
6
Balance sheet
7
Statement of cash flows
8
Notes to the financial statements
9 - 17
MORCOM CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
Mr R J Morcom
Mrs R M Morcom
Company number
04557318
Registered office
9 Tregarne Terrace
St Austell
Cornwall
PL25 4DD
Auditors
Phillips Frith LLP
9 Tregarne Terrace
St Austell
Cornwall
PL25 4DD
MORCOM CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present the strategic report for the year ended 31 December 2024.
Review of the business
For the trading company, 2024 ended up being on Par with other years. Again, the turnover has been maintained as planned, thank fully we achieved a good 2nd, 3rd, and 4th quarter that was exceptional to enable us to claw back a poor 1st quarter due to the weather as stated previously. We have had several tender enquiries in the second half of 2024, however very few have yet to be decided by the client. Those that have commenced have been awarded to our competition; My conclusion is that other contractors have been struggling to find work and have reduced their margins or rates in align with the small number of contracts available. From my discussions with the potential clients, it has become apparent that we need to be more competitive.
Looking ahead to 2025 Morcom Construction Limited has several contracts completing in the 2nd quarter, mainly the previously long-term contracts. We have and are continuing to price all enquiries, we have reduced are margins to reflect the current market which appears at present to be depressed. In my opinion we are in or about to enter a recession, all our suppliers are saying they have never been so quiet and that generally turnover is under the norm.
Principal risks and uncertainties
All of the tenders that we have returned are taking longer than normal to be decided, again I assume this is due to the lack of confidence in the market and the uncertainty of the impact that the war with Russia, Trump effect or Labour’s decision to increase minimum wages and National Insurance will affect the economy.
Expenditure again will be kept to a minimum this year due to the current climate. We have a good stock of plant to enable us to cover what plant is required for various contracts and I have no intentions of renewing any plant.
Employment appears to be stable at present, we have been successful in finding new apprentices which equates to approximately 5% of our current work force. We intend in adding the same number of apprentices yearly which will only but strengthen the future of the company.
Material prices are continuing to increase along with employment costs, these increases are going to have to be absorbed due to the current market conditions. As said, we have had to reduce our margins, with the above in mind I anticipate a lower profit margin that what we have ever experienced. Our investments return made in previous years will prove to be helpful to allow the company to remain strong in these uncertain times.
Mr R J Morcom
Director
28 April 2025
MORCOM CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company in the year under review continued to be that of building contractors.
Results and dividends
The results for the year are set out on page 6.
Ordinary dividends were paid amounting to £355,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr R J Morcom
Mrs R M Morcom
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr R J Morcom
Director
28 April 2025
MORCOM CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MORCOM CONSTRUCTION LIMITED
- 3 -
Opinion
We have audited the financial statements of Morcom Construction Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial 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.
MORCOM CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MORCOM CONSTRUCTION LIMITED
- 4 -
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, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Overall, we consider that the company's financial statements have a low susceptibility of material misstatement as a result of fraud.
In terms of income, contracts are agreed with the customer and payments are made based on the stage of completion. By nature of the trade, contracts and payments are of significant value and therefore misappropriation would be inherently difficult. Payments to dummy suppliers or employees could occur but entity controls limit the opportunity for this.
There is the potential that stock could be stolen from sites, but there is CCTV in most cases and stock levels are not significant.
There is minimal cash handling by nature of the type of transactions and therefore any fraud from misappropriation of cash would be trivial.
The main laws and regulations of significance to the company are health and safety regulations, employment law, tax and accounting law.
Our audit work in response to the risks identified included but was not limited to:
- Enquiry of management and those charged with governance around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing legal fee invoices for any evidence of non-compliance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Testing income and expenditure and agreeing to supporting documentation. Ensuring the company’s systems are adequate in this regard.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
MORCOM CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MORCOM CONSTRUCTION LIMITED
- 5 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Amy Sole FCA (Senior Statutory Auditor)
For and on behalf of Phillips Frith LLP
29 April 2025
Chartered Accountants
Statutory Auditor
9 Tregarne Terrace
St Austell
Cornwall
PL25 4DD
MORCOM CONSTRUCTION LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 6 -
2024
2023
Notes
£
£
Turnover
3
11,680,685
10,740,418
Cost of sales
(9,592,724)
(8,396,788)
Gross profit
2,087,961
2,343,630
Administrative expenses
(1,145,264)
(1,637,611)
Other operating income
2,771
1,898
Operating profit
4
945,468
707,917
Interest payable and similar expenses
8
(26,082)
(37,028)
Profit before taxation
919,386
670,889
Tax on profit
10
(158,382)
(36,069)
Profit for the financial year
761,004
634,820
Retained earnings brought forward
2,237,492
3,217,672
Dividends
9
(355,000)
(1,615,000)
Retained earnings carried forward
2,643,496
2,237,492
MORCOM CONSTRUCTION LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 7 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
720,027
1,032,424
Current assets
Stocks
12
58,263
62,696
Debtors
14
2,404,254
2,103,554
Cash at bank and in hand
588,845
184,263
3,051,362
2,350,513
Creditors: amounts falling due within one year
16
(916,685)
(625,235)
Net current assets
2,134,677
1,725,278
Total assets less current liabilities
2,854,704
2,757,702
Creditors: amounts falling due after more than one year
13
(54,265)
(286,052)
Provisions for liabilities
(155,943)
(233,158)
Net assets
2,644,496
2,238,492
Capital and reserves
Called up share capital
18
500
500
Capital redemption reserve
500
500
Profit and loss reserves
2,643,496
2,237,492
Total equity
2,644,496
2,238,492
The financial statements were approved by the board of directors and authorised for issue on 28 April 2025 and are signed on its behalf by:
Mr R J Morcom
Director
Company Registration No. 04557318
MORCOM CONSTRUCTION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 8 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
835,662
1,606,605
Interest paid
(26,082)
(37,028)
Income taxes paid
-
(158,782)
Net cash inflow from operating activities
809,580
1,410,795
Investing activities
Purchase of tangible fixed assets
(115,446)
(898,630)
Proceeds on disposal of tangible fixed assets
306,992
578,983
Receipts arising from loans made
59,781
Net cash generated from/(used in) investing activities
191,546
(259,866)
Financing activities
Payment of finance leases obligations
(241,544)
242,716
Dividends paid
(355,000)
(1,615,000)
Net cash used in financing activities
(596,544)
(1,372,284)
Net increase/(decrease) in cash and cash equivalents
404,582
(221,355)
Cash and cash equivalents at beginning of year
184,263
405,618
Cash and cash equivalents at end of year
588,845
184,263
MORCOM CONSTRUCTION LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
1
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
2
Accounting policies
Company information
Morcom Construction Limited is a private company limited by shares incorporated in England and Wales. The registered office is 9 Tregarne Terrace, St Austell, Cornwall, PL25 4DD. The principal place of business is Perrose, Lantyan, Milltown, Lostwithiel, Cornwall, PL22 0JJ.
2.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
2.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
2.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for building services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from contracts for the provision of building services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
2.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2
Accounting policies
(Continued)
- 10 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold buildings
2% per annum on the straight line method
Plant and machinery
15% per annum on the reducing balance method
Computer equipment
33.3% per annum on the straight line method
Motor vehicles
25% per annum on the reducing balance method
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
2.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
2.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell after making due allowance for obsolete and slow moving stock.
2.7
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include deposits held at call with banks.
2.8
Debtors and creditors receivable/payable within one year
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.
2.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
2
Accounting policies
(Continued)
- 11 -
2.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2.11
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
3
Turnover
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Construction
11,680,685
10,740,418
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
5,250
5,000
Depreciation of owned tangible fixed assets
20,058
47,078
Depreciation of tangible fixed assets held under finance leases
98,035
126,606
Loss on disposal of tangible fixed assets
2,758
52,191
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
78
78
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
5
Employees
(Continued)
- 12 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,042,748
3,001,347
Social security costs
319,628
316,715
Pension costs
81,617
80,954
3,443,993
3,399,016
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
18,200
18,200
7
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
5,250
5,000
8
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
26,082
37,011
Other interest
17
26,082
37,028
9
Dividends
2024
2023
£
£
Interim paid
355,000
1,615,000
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
235,596
11,713
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
10
Taxation
2024
2023
£
£
(Continued)
- 13 -
Deferred tax
Origination and reversal of timing differences
(77,214)
24,356
Total tax charge
158,382
36,069
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
919,386
670,889
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
229,847
157,797
Tax effect of expenses that are not deductible in determining taxable profit
700
Tax effect of income not taxable in determining taxable profit
12,264
Permanent capital allowances in excess of depreciation
5,049
(158,348)
Deferred tax
(77,214)
24,356
Taxation charge for the year
158,382
36,069
11
Tangible fixed assets
Freehold buildings
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2024
87,500
1,189,736
1,000
16,000
1,294,236
Additions
105,312
1,384
8,750
115,446
Disposals
(377,070)
(1,000)
(16,000)
(394,070)
At 31 December 2024
87,500
917,978
1,384
8,750
1,015,612
Depreciation and impairment
At 1 January 2024
17,500
239,982
330
4,000
261,812
Depreciation charged in the year
1,750
113,698
457
2,188
118,093
Eliminated in respect of disposals
(79,990)
(330)
(4,000)
(84,320)
At 31 December 2024
19,250
273,690
457
2,188
295,585
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
11
Tangible fixed assets
Freehold buildings
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
£
(Continued)
- 14 -
Carrying amount
At 31 December 2024
68,250
644,288
927
6,562
720,027
At 31 December 2023
70,000
949,754
670
12,000
1,032,424
Tangible fixed assets includes assets held under finance leases or hire purchase contracts, as follows:
2024
2023
£
£
Plant and machinery
555,530
717,434
12
Stocks
2024
2023
£
£
Materials
25,000
25,000
Work in progress
33,263
37,696
58,263
62,696
13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
15
54,265
286,052
Hire purchase agreements are secured against the assets to which they relate. The outstanding amount at 31 December 2024 was £286,052 (2023: £527,596). See note 11.
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,806,524
1,514,578
Gross amounts owed by contract customers
578,318
512,176
Other debtors
912
48,964
Prepayments and accrued income
18,500
27,836
2,404,254
2,103,554
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 15 -
15
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
231,787
241,544
In two to five years
54,265
286,052
286,052
527,596
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
15
231,787
241,544
Trade creditors
383,268
379,423
Amounts owed to group undertakings
(188)
(62,291)
Corporation tax
118,847
(116,749)
Other taxation and social security
93,223
99,953
Other creditors
1,921
952
Accruals and deferred income
87,827
82,403
916,685
625,235
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
155,943
233,158
2024
Movements in the year:
£
Liability at 1 January 2024
233,158
Credit to profit or loss
(77,215)
Liability at 31 December 2024
155,943
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 16 -
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
500
500
500
500
The company has one class of ordinary shares which carry equal rights in voting and payment of dividends.
19
Financial commitments, guarantees and contingent liabilities
The company has given a guarantee to Lloyds Blank plc in respect of the borrowing of R & R Morcom Holdings Limited. This guarantee includes both fixed and floating charges over all of the property owned by the company.
20
Operating lease commitments
[Further information as appropriate]
As lessor - operating leases
The operating leases represent leases [of XXX] to third parties. The leases are negotiated over terms of [XX-YY] years and rentals are fixed for [XX-YY] years. All leases include a provision for five-yearly upward rent reviews according to prevailing market conditions. There are no options in place for either party to extend the lease terms.
[Further information as appropriate]
21
Related party transactions
The company was a wholly owned subsidiary of R & R Morcom Holdings Limited and has taken advantage of the exemption under FRS102 Section 33, not to disclose group transactions.
22
Ultimate controlling party
The parent company of Morcom Construction Limited is R & R Morcom Holdings Limited and its registered office is 9 Tregarne Terrace, St Austell, Cornwall, PL25 4DD.
23
Directors' transactions
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening
balance
Amounts
advanced
Amounts
repaid
Closing
balance
£
£
£
£
Directors loan
-
(189)
820
(1,839)
(1,208)
(189)
820
(1,839)
(1,208)
The above loan is non interest bearing and repayable on demand.
MORCOM CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
24
Analysis of changes in net funds/(debt)
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
184,263
404,582
588,845
Lease liabilities
(527,596)
241,544
(286,052)
(343,333)
646,126
302,793
25
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
761,004
634,820
Adjustments for:
Taxation charged
158,382
36,069
Finance costs
26,082
37,028
Loss on disposal of tangible fixed assets
2,758
52,191
Depreciation and impairment of tangible fixed assets
118,093
173,684
Movements in working capital:
Decrease/(increase) in stocks
4,432
(37,696)
(Increase)/decrease in debtors
(300,700)
1,027,383
Increase/(decrease) in creditors
65,611
(316,874)
Cash generated from operations
835,662
1,606,605
26
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
81,617
80,954
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
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