The directors present the strategic report for the year ended 31 December 2024.
Structure Tone Ltd is a wholly owned subsidiary of the Structure Tone International Group which in turn is a member of STO Building Group, one of the largest contractors in North America with interests across the globe. The parent group continued to grow in 2024 reporting Revenue of $12.0bn and Net Income of $165m.
ST International Group (London, Dublin and Holland) commenced its mission critical expansion into Europe under the tutelage of the Dublin office and closed the year with £444m in Revenue and a PBT of £8.5m.
Structure Tone UK Directors are pleased to report Revenue of £175m, PBT of £1.66m and a secure backlog of £187m.
2024 will be forever remembered as a pivotal year for the London fit out market with the disruption of the ISG Group going into administration, alongside a notable and expected surge in activity within the sector, evident from the last quarter of the year.
The impact of a main contractor suddenly leaving the market brings with it a myriad of both risk and opportunities. Project disruptions, supply chain ripple effect, labour market dynamics, market confidence and economic impact all pose significant risks which need to be carefully navigated. On the plus side, competitors are presented with great opportunity with halted projects needing to find a new home alongside a readily available pool of experienced talent in the market.
Following the announcement in September, Matt Blowers joined Structure Tone as joint MD and the recruitment of former ISG executives and teams commenced. By the end of the year the business had onboarded several high profile projects left in the wake of ISG and effectively doubled its headcount to onboard and retain the teams who had been actively working on those projects.
Structure Tone’s corporate strength, agility and experience in the market, allowed our enabling teams to work tirelessly to ensure a smooth transition for both clients and supply chain. Our ability to provide bond cover to our clients alongside our stringent policy of paying subcontractors on time has provided tangible stability in the marketplace.
In our 2024 strategic report we anticipated a rebound in growth towards the end of the year. This analysis of the market has borne true and the London fit-out sector has indeed shown signs of a significant rebound. Recent data indicates that leasing activity has picked up since the low point in early 2024 with an average of around 4.3m sqft leased over the last three quarters.
The uptick in leasing activity suggest a growing demand for office refurbishments and new fit-outs with premium properties in central locations continuing to command high rents and a “flight to quality” trend.
Business’s continue to prioritise well connected, prestigious locations where prime rents have had significant growth reflecting strong demand for these areas.
Energy efficient business’s with strong sustainability credentials are being driven by regulatory and corporate responsibility commitments.
The need to attract and retain top talent in the city is driving a surge in high end fit outs for business in the financial and legal sectors.
Our financial plan for 2025 is looking at revenue of circa £400m. Our strategic focus will be on structured delivery and quality, whilst embracing advanced technologies and sustainable practices that will fundamentally reshape the sector.
We are committed to continual investment in the development of our environmental impact team putting sustainability as front and centre of everything we do alongside health and safety.
Geopolitical risks will continue to dominate the economic landscape in 2025.
Global trade disruptions, political instability and changes in Government policies create uncertainty amongst investors and uncertainty in the cost and accessibility to raw materials.
At a more local level, volatility within the supply chain remains a major concern.
Increases in cost of living and rises in employer taxes alongside the demise of a Tier 1 contractor in the London market in 2024 all have a significant impact.
We have stringent policies in place to monitor and mitigate our risks around
Unacceptable risks in contracts and the management of any accepted risk
The company’s clients and sub-contractors are reviewed for financial security to minimize credit and project risks. Throughout the duration of a project these factors are continually reviewed.
Provision of information to Trade Credit Insurers on which our subcontractors depend.
Significant contracts spanning long timelines are being tendered with additional clauses to mitigate the high risks associated with volatile costs.
Constant review of the economic outlook for the London market and the impact of the Global economy.
Financial Key Performance Indicators
| 2024 | 2023 |
Gross Revenue | £175m | £134m |
Gross Profit % | 5.33% | 5.54% |
Estimated future value of contracts awarded | £187.4m | £92m |
Estimated future value of contracts secured by not awarded | £257.3m | £7.8m |
Accident Frequency Rate (AFR) | XX | 0.3 |
Financial risk management objectives and policies
The company’s operations are all conducted in the UK and there is minimal foreign exchange risk. Surplus funds are invested in short term deposits to ensure certainty of cash flows. The company has no long-term external borrowing and has the support of its ultimate parent company to ensure sufficient funds are available for ongoing operations. The company manages its financial risk through the implementation of strict project management processes. The activities are primarily construction management where cash flow and credit risk are minimized through the selection of known sub-contractors and the valuation processes. The company is exposed to price competition within the sector but manages price risk through the Bidding Process and the establishment of minimum acceptable profit margins for new business. The company does not undertake projects with currency risk.
The Board of Directors in the performance of their duties must act in accordance with the requirements of the Companies Act 2006 S172 as follows:
The STO Group Mission statement is the embodiment of S172.
MISSION STATEMENT
“We solve our clients’ challenges and service our chosen markets by:
Fostering long-term relationships with our clients, employees, and partners
Creating a culture of collaboration, integrity, and transparency
Providing innovative construction solutions
Delivering project excellence and workplace safety
Executing sustainable organisational growth and financial strength
In pursuance of its Mission Statement the STO group provides a comprehensive body of directives, supports and tools which each business unit utilises in the pursuance of its own strategic vision and that of the parent. The key components of this framework are effectively the core constituents of S172.
Decision Making
StructureTone Limited actively engages with its stakeholders, including employees, client and consultant teams, suppliers, the local community and supporting organisations. The company ensures that stakeholder feedback is logged and systematically integrated into its decision-making processes from tender to project completion.
Regular consultations and feedback sessions are embedded in business and project processes to understand the needs and concerns of each stakeholder group. This approach enables the company to make informed decisions that balance the interests of all parties involved.
Our decisions are driven by a commitment to do what’s right, prioritising sustainability and social impact, rather than solely focusing on financial return.
Our People and their development
With our team doubling in size, we developed a set of values that redefine who we are going forward and govern the way we work ensuring we continue to deliver amazing spaces.
Go Get it, Always Adapt , Own it, Work Together, Do what’s right
Our people are supported to develop the necessary skills to align with our values, to go above and beyond in their day-to-day work and the opportunity to become experts in field, building a rewarding and meaningful career at ST UK in the process.
We supplement our comprehensive in-house professional development programs – STOBG University – with an employee tuition assistance program, as well as certificate and degree programs offered at accredited institutions. Each employee is encouraged to participate in these programs, which is an integral part of our annual performance and career development review.
STO Building Group University core pillars include:
Rotational Project Engineer Program/Management Training (RPE).
STO Building Group’s RPE Program provides entry-level college graduates with backgrounds in architecture, civil engineering, construction management, and interior design exposure to a well-rounded professional experience in construction management. RPE employees are rotated (9 to 12 months) through each of STO Building Group’s four major disciplines: Field Operations, Estimating, Purchasing and Engineering. They are guided through the program by a mentor, as well as receiving training. RPE graduates become superintendents, estimators, or engineers, with the benefit of comprehensive experience in each of the key construction disciplines.
Development Programs
Leadership Fundamentals Certificate (LFC)
STO Building Group’s four-year program enables selected employees pursuing management positions to enhance their skills in leadership, client relationships, communications, and ethics. The coursework also includes presentation and communications training and time, conflict, and stress management.
Management Development Certificate (MDC)
To develop our future leaders, selected managers will complete a comprehensive four-year program that improves their abilities in managing teams, leadership strategy, supervision techniques, hiring, coaching and employee performance management. We partner with various 3rd parties to include courses on project management, financial principles, negotiation and conflict resolution, and advanced presentation techniques. In addition, as a part of our commitment to sustainable building, our managers participate in the latest sustainability and renewable energy courses available.
STO Building Group Training Courses
In-house trainers and industry experts instruct our employees in fundamental and more advanced skills to increase their effectiveness, including goal setting and time management as well as the company’s proprietary software and technology.
STO Building Group’s Emerging Leaders
To enable the company’s next generation of ‘Emerging Leaders’ to see deeper into the culture of the organization, develop their leadership skills, and empower them to initiate change within the company and the wider industry, the company engages a group of high potential employees representing every facet of STO Building Group.
Professional Development Seminars
We host seminars for mid-level professionals and line supervisors to improve their technical and managerial skills and to prepare them for a future in senior management. Seminars include topics on construction management skills, safety certification and estimating.
Executive Development Programs
Through regular management consultant led sessions, 360-degree multi-rater feedback and team-building exercises, Structure Tone executives’ leadership and inter-personal skills are developed.
Tuition Reimbursement
In addition to our in-house programs, we provide financial assistance to employees furthering their education, especially for courses in construction management, or in courses that could enhance their skills in their current or future positions.
Our Customers, Suppliers and Subcontractors
We form partnerships with our Suppliers and Subcontractors to realize our client vision and opportunities for innovation.
We understand that the strong relationships we have with our suppliers form an integral part of the success of our projects. We have established many long-term associations, allowing our subcontractors to develop alongside us, achieving joint objectives and ensuring continuity of work and improvement of service.
Our existing and new supply chain members naturally become an integral part of our delivery, health and safety, financial and sustainability initiatives and it is essential that we encourage their capability and development.
This is achieved through training initiatives, regular discussion at site and director level and ensuring feedback is given and received from each project.
We work with our key suppliers to raise awareness of Health and Safety, wellbeing and sustainability issues. Encouraging onsite workshops and skills sessions, practical training and the appointment of apprentices with our sub-contractors to ensure future skilled operatives in the industry to mirror our recruitment initiatives.
Supplier Diversity remains a top priority as we seek to boost the local economy, we will support our supply chain to first understand and then diversify their supply chain.
We have a moral duty to our clients and a duty of care under the CDM regulations to ensure that our new and existing sub-contractors can competently deliver the service we require. To ensure competence we have a qualification procedure to identify health and safety competence, financial security, design, ability to deliver and employment practices.
We have a policy for the development of the supply chain and workload risk monitors which ensure that we are not over-committing to any individual contractors, especially on high risk works such as mechanical, electrical, partitions and steelwork. The aim of the supply chain management scheme is to improve industry standards on all our projects. Evidence of this is captured on end of project score sheets which measure against recognized and industry KPI’s.
By working closely with the industry, we want to continuously challenge conventional methods and explore innovative delivery approaches that reduce environmental impact. We acknowledge that the key to achieving a sustainable built environment is embedded in collaboration with our clients, consultants and supply chain.
Social Impact and Sustainability
In line with the UK’s transformative shift towards sustainable construction, Structure Tone London placed environmental sustainability, social impact, and integration at the heart of our operations in 2024:
Sustainability Leadership: We significantly expanded our environmental impact team, embedding low-carbon, circular economy, and sustainable material choices into every stage of our projects.
Social Value & Community Impact: We grew our Social Impact team and strengthened our social value commitments, ensuring that projects generate measurable benefits for local communities. This included supporting apprenticeships, increasing SME and social enterprise engagement, and fostering employment pathways for underrepresented groups.
Integration & Collaboration: We deepened our integration efforts across our supply chain, ensuring subcontractors align with our sustainability and social value ambitions. Additionally, we advanced collaboration with our sister company in Dublin and parent company in the US, enabling knowledge-sharing and best practice alignment.
25k raised for communities and charities.
400+ Volunteer hours from staff.
Band of Builders Charity Partner 2023/24/25.
Big Brew Events - 300 operatives attended.
Making an Impact in 2025
As members of the communities we help shape, we recognise our responsibility to create lasting, positive change. The built environment has a profound impact on people’s lives, and we are committed to designing and delivering spaces that not only serve their purpose but also create meaningful opportunities for those who need them most.
We are dedicated to expanding our social impact programmes, ensuring they meet and exceed the needs of the communities we work in. Through every project, we will set clear KPIs, with a particular focus on supporting individuals experiencing homelessness into work and creating opportunities for those historically underrepresented in our industry. Our long-term strategy prioritises building lasting partnerships and deepening our understanding of socio-economic challenges across Tower Hamlets, Camden, Islington, the City of London, and Westminster.
We will focus on:
Empowering local economies through responsible procurement
Creating jobs and opportunities that uplift everyone
Championing community-led innovation for lasting change
Combating social isolation with meaningful engagement
Crafting an inclusive culture where we all thrive
All underpinned by the Social Value Act (2012) and RIBA Plan of Work because real impact starts with real commitment.
To measure and enhance our impact, we will use The Impact Evaluation Standard, aligned with the UK government’s Social Value Model and PPN06/20. Insights gathered from our work will drive continuous improvement, ensuring we maximise our contribution to social value.
Our 2025 Social Responsibility Report will capture the many ways we are working to do what’s right, foster inclusion, and create meaningful change.
As our organisation evolves, so will our approach; adopting new practices, scaling our resources, and adapting to the evolving needs of society. We will always strive to do better, and we hope this report reflects our ongoing commitment to making a real difference.
Sustainability
At StructureTone London, sustainability is at our core and woven into our identity, influencing every decision and shaping how we approach both business operations and project delivery. Aspiring to be the leader in sustainability within the construction industry, we are actively challenging and rethinking our conventional delivery methods.
By partnering and collaborating closely with our clients, consultants, and supply chain, we are focused on setting new benchmarks for sustainable and responsible building practices. Through these strategic collaborations, we aim to share knowledge and drive change.
As we look ahead to 2025, we are proud to continue our journey on our carbon reduction roadmap and Science Based Targets initiative (SBTi) targets. However, in 2025, our sustainability strategy will be strengthened by the integration of responsible practices that consider a holistic, lifecycle-focused approach to delivery.
We recognise our impact and are fully accountable for our operations, knowing that what we build today must not only address the immediate impact but also play a crucial role in shaping a better future for the natural and built environment.
Our approach to sustainability is built upon the following key themes:
Environmental Management: Structure Tone is committed to for filling our environmental obligations through efficient management of our environmental performance and to take all reasonable measures to conduct our operations in a safe and responsible matter that controls and minimises negative impacts to the environment.
Scope 1, 2, and 3 Emissions Reduction: With a clear roadmap to become carbon neutral, we will focus on a year-by-year reduction in our direct emissions (Scope 1), indirect emissions from energy consumption (Scope 2), and emissions throughout our supply chain (Scope 3). These efforts are aligned with global standards and third party validated to ensure transparency and accountability.
Circularity, Futureproofing, and Unlocking Economic Value: We are committed to advancing the circular economy by prioritising the reuse of materials and focusing on futureproofing our buildings to meet the needs of tomorrow. This includes delivering spaces that are adaptable, resource-efficient, and capable of creating long-term economic value through their entire lifecycle.
Responsible Procurement: Our sustainability strategy extends beyond our operations to our supply chain. We will continue to work with suppliers who share our commitment to ethical and sustainable sourcing, ensuring that the products, materials, and services we use are aligned with our environmental and social responsibility goals.
Enhancing Local Ecological Value: We will prioritise enhancing the ecological value of the areas in which we operate. From air quality to biodiversity, our projects will be designed to create a positive impact.
Embracing Innovation through Technology: We recognise the transformative shift in technology and how it is reshaping the way the world operates. We are committed to embracing this change and using technology ethically and responsibly to enhance sustainability. By integrating technological innovations, we not only improve efficiency but also ensure that sustainability remains at the forefront of the industry’s future.
Through these approaches, Structure Tone London is committed to leading the way in sustainable construction, delivering value to our clients, the environment, and future generations. Our dedication to sustainability will continue to guide our decisions, ensuring that we remain a responsible, innovative, and trusted partner in the construction industry.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 18.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
In accordance with the Companies (Directors' Report) and Limited Liability Partnerships (Amendment) (EU Exit) Regulations 2019, the following report outlines Structure Tone Limited's energy consumption, greenhouse gas emissions, and related performance indicators for the financial year ended 31 December 2024.
The figures were calculated using UK government conversion factors, expressed as tonnes of carbon dioxide equivalent.
|
|
|
Scope 1 and 2 Disclosures
| 31 December 2024 | 31 December 2023 |
Energy (kwh) |
|
|
Electricity | 112,522 | 154,601 |
Emissions (tC02e) | 23,298 | 32,014 |
Intensity (tC02e/£’000 revenue) |
|
|
Revenue (£’000) | 174,991 | 133,950 |
TC02e per £’000 revenue | 0.13 | 0.24 |
Intensity |
|
|
Employees | 133 | 98 |
TC02e per employee | 175.17 | 326.67 |
Methodology
The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, GHG Protocol Scope 2 Guidance: An amendment to the GHG Protocol Corporate Standard, Technical Guidance for Calculating Scope 3 Emissions (version 1.0)
Renewable Energy Consumption:
0% of renewable energy was consumed during the reporting year in either business unit. Structure Tone intend to be 100% renewable by December 2025.
Offsetting:
Structure Tone at present to not offset any GHG emissions arising from our operations. If and when we do choose to invest in carbon credits, we will do so with high-integrity, evidence-backed carbon sequestration and removal programmes with long-lived storage. The evaluation of these programmes will be based primarily on authenticity and verifiability, but also durability, permanence, absence of double-counting, and prevention of leakage.
Our preference will be to supports permanent removal because of their capacity to provide a lasting solution for carbon removal, thus aiding in mitigating the impacts of climate change.
Future Goals and Initiatives:
Structure Tone Ltd have partnered with a carbon accounting platform to the improve accuracy of carbon emissions recorded, inclusive of scope 3 emissions, and we are working to publish a carbon reduction plan leading to a date in which the company will achieve net zero emissions.
Structure Tone Ltd will focus heavily on reducing our greenhouse gas emissions, exploring opportunities to source renewable energy and reduce overall energy consumption.
Sustainability Integration:
In addition to financial performance, Structure Tone Ltd remains committed to sustainability. Our efforts in reducing energy consumption and greenhouse gas emissions are integral to our long-term strategy, aligning with environmental and social responsibility.
We appreciate your attention to this integrated report, demonstrating our commitment to financial transparency and sustainability practices.
We have audited the financial statements of StructureTone Limited (the 'company') for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for 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
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude 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 auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
StructureTone Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sixth Floor, 80 Cannon Street, London, EC4N 6HL.
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 £000.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of StructureTone International Limited. These consolidated financial statements may be obtained from Companies House.
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.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimation and assumption that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are:
The estimation techniques used for revenue and profit recognition in respect of long-term contracts require forecasts to be made of the outcome of the contracts which require assessments and judgements to be made on the recovery of pre-contract costs, changes in the scope of work, contract programmes, maintenance and defects liabilities and changes in costs.
The recoverability of trade and other debtors is regularly reviewed in the light of available economic information specific to each receivable and provision are recognised for balance is considered to be irrecoverable.
Provisions against projects are liabilities of uncertain timing or amount and therefore in making a reliable estimate of the amount and timing of liabilities judgement is applied and re-evaluated at each reporting date. At the date of signing these accounts, there was a key audit judgement and estimate made in respect of certain contract provisions.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).
The actual credit 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:
The company has tax losses available for offset against the future profits. The unrecognised deferred tax assets is approximately £1,671k (2023: 5,314k). This has not been recognised due to uncertainty over when it might be realised.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
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.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company has taken advantage of the exemption in Financial Reporting Standard 102 Section 33.1A from the requirement to disclose transactions with group companies on the grounds that all entities which were party to such transactions are wholly owned members of the group.