Company registration number 03653041 (England and Wales)
S & R CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
S & R CONSTRUCTION LIMITED
COMPANY INFORMATION
Director
Mr S Sankey
Company number
03653041
Registered office
The Premier Industrial Estate The Leys
Brockmoor
Brierley Hill
West Midlands
DY5 3UP
Auditor
BK Plus Audit Limited
Azzurri House
Walsall Road
Aldridge
Walsall
WS9 0RB
S & R CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
S & R CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 1 -

The director presents the strategic report for the year ended 31 October 2024.

Review of the business

S & R Construction is a family-owned utility services provider based in the West Midlands, specialising in the design, procurement, installation, testing and commissioning of sustainable gas, water, and electricity solutions. Serving both the private and public sectors, we deliver high quality operations with a strong commitment to safety, quality and the environment, backed by industry accreditations including ISO9001, ISO14001, ISO45001, GIRS, NERS, WIRS, CHAS, and Gas Safe.

 

Our expertise spans new utility installations, utility replacements, reinstatement, and meter services, with capabilities in comprehensive utility infrastructure, including pipework, multi-utility installations, and cabling for complex site requirements. We also operate in groundworks, traffic management and electric vehicle installations. Guided by our health and safety policies and supported by a dedicated and passionate team, we aim to foster long-term strategic growth through quality-driven client satisfaction strategies and our passion for excellence in the services we provide.

 

Company growth and key performance indicators

 

S & R Construction Ltd has consolidated its recent growth and operational expansion in recent years, resulting in revenue growth of 1% to £45,852,578 from that achieved in the previous financial year.

 

The resilience of our business model was demonstrated through the delivery of strong profit margins:-

 

Gross profit margin:- £11.26M -24.56% (2023: £8.196M - 18.1%)

Pre tax profit:- £4.104M - 8.95% (2023: £2.467M - 5.45%)

 

Key factors driving these increase include securing major new contracts, expanding our divisional capabilities and diversifying our portfolio of services. Each strategic development has strengthened our position within the associated industries, setting a foundation for sustained long-term continued growth and success.

 

Principle risks and uncertainty

 

Uncertainty in the UK Construction market coupled with escalating material costs present challenges to our business in the short term.

 

However our scalable business model gives us the ability to react to market forces to mitigate any impact on trading and protect our assets.

 

We continue to monitor pricing fluctuation appropriately to give us price certainty when tendering for large projects.

S & R CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 2 -
Key drivers of growth

 

Severn Trent Water Contract

 

The Severn Trent Water contract has been a pivotal addition in 2023, providing a reliable revenue stream through a high value, long-term agreement with a major utility provider.

 

This contract leverages our core expertise and reputation in utility services & also enhances our portfolio, positioning us as a preferred partner for future contracts with large utility companies.

 

Consistent delivery and maintaining high standards for this contract may lead to contract extensions, additional contracts, and potential new business from other utility companies.

 

Highways Contract

 

In 2023 the addition of a new highways contract has allowed us to penetrate a previously underrepresented sector in our portfolio. This contract aligns well with our capabilities in infrastructure and complements our existing utility services and groundworks services.

 

This venture into highway services has significantly contributed to our turnover in recent years by expanding our client base and service offerings. It also diversifies our revenue sources, reducing reliance on a single sector and providing additional stability to our strategic business model.

 

Successful execution of this contract will open doors to further opportunities in the public and private sectors for road and infrastructure projects. Additionally, our performance will be instrumental in building our reputation for handling diverse, large-scale infrastructure projects and delivering our first class service on time, every time.

 

Groundworks Division

 

The establishment of the Groundworks Division in recent years marks a strategic move to bring in-house capabilities to our construction and infrastructure projects, reducing dependency on external subcontractors and increasing our operational efficiency.

 

This division has already contributed significantly to revenue growth, providing cost savings and greater control over project timelines and quality. By owning the groundwork phase, we improve the profitability of each project and enhance our ability to deliver on complex, multi-phase projects.

 

Our groundworks division has now matured with a healthy sales order book and we anticipate securing additional stand-alone groundworks projects and establishing a competitive edge in our bids for complex infrastructure projects. This division also offers scalability potential as we aim to further streamline operations.

 

Increased Recognition in Multi-Utility Services

 

Our team has received multiple awards for excellence in multi-utility services, establishing us as a leader in the field and enhancing our reputation within the industry.

 

These awards not only validate our team’s capabilities but also attract new business opportunities. Industry recognition provides greater trust and credibility, giving us a competitive edge in bids for large, high-value contracts. This recognition has translated into direct financial gains through new contract awards, contributing to the consolidation of our turnover.

 

Awards and recognition create momentum, enhancing our marketability to potential clients and partners. We anticipate this reputation will facilitate future bids and enable us to expand our multi-utility services footprint.

 

S & R CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 3 -
Conclusion and strategic outlook

In summary, the company has consolidated its growth plans this year due to strategic contract wins, expansion into complementary service areas, and increased industry recognition. This growth has not only amplified our revenue but also diversified our service offerings and fortified our industry position as a first tier contractor.

 

Looking forward, we plan to build on these achievements by:

 

1. Leveraging our expanded capabilities to pursue additional contracts across water, highways, groundworks, traffic management and multi utility services.

2. Continuing to invest in operational efficiencies within the Groundworks Division.

3. Pursuing targeted growth opportunities in multi-utility services, particularly those that align with our core competencies.

 

This strategic approach will enable sustained growth and further solidify our role as a leader in infrastructure, utility, and multi-utility service delivery.

 

 

 

On behalf of the board

Mr S Sankey
Director
23 May 2025
S & R CONSTRUCTION LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 4 -

The director presents his annual report and financial statements for the year ended 31 October 2024.

Principal activities

The principal activity of the company continued to be that of construction specialists.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £104,000. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr S Sankey
Mr C Sankey
(Resigned 15 July 2024)
Financial instruments

The company is exposed to credit risk primarily through trade receivables. Credit risk arises where a customer or counterparty fails to meet its contractual obligations, resulting in a financial loss to the company.

 

The director actively monitors the credit quality of customers and set credit limits based on internal assessments and external credit ratings where available. Trade receivables are subject to regular review, and a provision is made for expected credit losses where necessary, in line with the company’s accounting policies.

 

The company maintains a diversified customer base, which helps mitigate concentration risk.

 

The directors consider the company’s exposure to credit risk to be moderate, and no significant concentrations of credit risk existed at the balance sheet date.

 

Research and development

The company continues to invest in research and development activities to maintain its competitive advantage and respond to evolving customer needs.

Future developments

Details of the future developments can be found in the "Conclusion and strategic outlook" section of the Strategic Report on page 3 of this annual report.

Auditor

BK Plus Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of director's responsibilities

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the director must not approve the financial statements unless he is 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.

S & R CONSTRUCTION LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 5 -

In preparing these financial statements, the director is required to:

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr S Sankey
Director
23 May 2025
S & R CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF S & R CONSTRUCTION LIMITED
- 6 -
Opinion

We have audited the financial statements of S & R Construction Limited (the 'company') for the year ended 31 October 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, 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:

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 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

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

 

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

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 director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

S & R CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF S & R CONSTRUCTION LIMITED (CONTINUED)
- 7 -
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 director's report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

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.

 

From the preliminary stages of the audit, we ensure our understanding of the entity is up to date. This includes, but is not limited to, current knowledge of their activities, the business and control environments, and their compliance with the applicable legal and regulatory frameworks. This information supports our risk identification and the subsequent design of audit procedures to mitigate those risks; ensuring that the audit evidence obtained is sufficient and appropriate to support our opinion.

 

In response to the risks identified, specific to this entity, we designed procedures which included, but were not limited to:

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.

S & R CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF S & R CONSTRUCTION LIMITED (CONTINUED)
- 8 -

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 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.

Keval Dattani ACA (Senior Statutory Auditor)
For and on behalf of BK Plus Audit Limited, Statutory Auditor
Chartered Certified
Azzurri House
Walsall Road
Aldridge
Walsall
WS9 0RB
23 May 2025
S & R CONSTRUCTION LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
45,852,578
45,287,622
Cost of sales
(34,592,212)
(37,090,792)
Gross profit
11,260,366
8,196,830
Distribution costs
(1,761,434)
(1,958,816)
Administrative expenses
(5,087,948)
(3,596,522)
Operating profit
5
4,410,984
2,641,492
Interest receivable and similar income
7
861
-
0
Interest payable and similar expenses
8
(306,902)
(173,677)
Profit before taxation
4,104,943
2,467,815
Tax on profit
9
481,307
(660,437)
Profit for the financial year
4,586,250
1,807,378

The profit and loss account has been prepared on the basis that all operations are continuing operations.

S & R CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2024
- 10 -
2024
2023
£
£
Profit for the year
4,586,250
1,807,378
Other comprehensive income
-
-
Total comprehensive income for the year
4,586,250
1,807,378
S & R CONSTRUCTION LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2024
31 October 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
9,970,344
5,896,720
Current assets
Stocks
12
2,503,637
3,089,153
Debtors
13
4,821,290
1,886,975
Cash at bank and in hand
4,968,168
4,915,066
12,293,095
9,891,194
Creditors: amounts falling due within one year
14
(10,476,075)
(9,050,316)
Net current assets
1,817,020
840,878
Total assets less current liabilities
11,787,364
6,737,598
Creditors: amounts falling due after more than one year
15
(3,151,523)
(2,063,384)
Provisions for liabilities
Deferred tax liability
17
159,608
680,231
(159,608)
(680,231)
Net assets
8,476,233
3,993,983
Capital and reserves
Called up share capital
19
200
200
Profit and loss reserves
8,476,033
3,993,783
Total equity
8,476,233
3,993,983

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 23 May 2025 and are signed on its behalf by:
Mr S  Sankey
Director
Company registration number 03653041 (England and Wales)
S & R CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 November 2022
200
2,721,405
2,721,605
Year ended 31 October 2023:
Profit and total comprehensive income
-
1,807,378
1,807,378
Dividends
10
-
(535,000)
(535,000)
Balance at 31 October 2023
200
3,993,783
3,993,983
Year ended 31 October 2024:
Profit and total comprehensive income
-
4,586,250
4,586,250
Dividends
10
-
(104,000)
(104,000)
Balance at 31 October 2024
200
8,476,033
8,476,233
S & R CONSTRUCTION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
4,271,676
7,662,497
Interest paid
(306,902)
(173,677)
Income taxes paid
(174,053)
(62,322)
Net cash inflow from operating activities
3,790,721
7,426,498
Investing activities
Purchase of tangible fixed assets
(5,450,572)
(5,087,791)
Proceeds from disposal of tangible fixed assets
44,792
108,333
Repayment of loans
(40,178)
431,522
Interest received
861
-
0
Net cash used in investing activities
(5,445,097)
(4,547,936)
Financing activities
Movement in finance lease liabilities
1,811,478
1,313,936
Dividends paid
(104,000)
(535,000)
Net cash generated from financing activities
1,707,478
778,936
Net increase in cash and cash equivalents
53,102
3,657,498
Cash and cash equivalents at beginning of year
4,915,066
1,257,568
Cash and cash equivalents at end of year
4,968,168
4,915,066
S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 14 -
1
Accounting policies
Company information

S & R Construction Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Premier Industrial Estate The Leys, Brockmoor, Brierley Hill, West Midlands, DY5 3UP.

1.1
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.

1.2
Going concern

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

 

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional 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.

1.4
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.

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 15 -

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 land and buildings
2% straight line
Plant and equipment
20% straight line
Fixtures and fittings
20% straight line
Computers
33.33% straight line
Motor vehicles
20% straight line

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.

1.5
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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 16 -
1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

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.

Classification of financial liabilities

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.

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 17 -
Basic financial 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.

Other financial liabilities

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

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.

1.10
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.

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 18 -
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.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases
As lessee

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.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14

Accrued and deferred income

 

In recognising accrued income in the financial statements, management estimate work completed but not billed to the client. In recognising deferred income in the financial statements management estimate work billed to the client but not completed. These estimates are based on project contracts, project knowledge and professional judgement.

 

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 19 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is 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.

Key sources of estimation uncertainty

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.

Useful economic life of tangible assets

Management estimate the useful economic life of non-current assets based on the period over which the asset is expected to be used and provide for depreciation accordingly. Where an indication of impairment is identified the estimation of recoverable value requires estimation.

Contingent liabilities

The potential financial effect of the legal dispute is uncertain, and management has estimated the range of possible outcomes based on current information and legal advice. The key assumption involves the probability of an adverse outcome and the estimated amount of any settlement.

Bad debt provision

The provision for doubtful debts is based on historical loss experience adjusted for current and forward-looking information. The most significant estimation uncertainty relates to assumptions around future economic conditions, customer-specific factors, and changes in the credit risk profile.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
45,852,578
45,287,622
2024
2023
£
£
Other revenue
Interest income
861
-

There is one class of turnover which is that of construction services.

 

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 20 -
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Directors
2
2
Management and administration
11
10
Production
48
38
Total
61
50

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
2,598,647
1,859,898
Social security costs
274,657
196,673
Pension costs
45,288
35,037
2,918,592
2,091,608
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
23,500
25,000
Depreciation of owned tangible fixed assets
679,881
712,909
Depreciation of tangible fixed assets held under finance leases
647,975
326,587
Loss/(profit) on disposal of tangible fixed assets
4,300
(18,750)
Operating lease charges
94,993
60,000
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
26,489
27,462
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
861
-
0
S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 21 -
8
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
306,513
171,005
Other interest
389
2,672
306,902
173,677
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
485,395
657,060
Adjustments in respect of prior periods
(446,079)
(195,723)
Total current tax
39,316
461,337
Deferred tax
Origination and reversal of timing differences
(520,623)
199,100
Total tax (credit)/charge
(481,307)
660,437

The actual (credit)/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
4,104,943
2,467,815
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
1,026,236
616,954
Tax effect of expenses that are not deductible in determining taxable profit
385,068
205,074
Adjustments in respect of prior years
(446,079)
-
0
Depreciation on assets not qualifying for tax allowances
(161,994)
-
0
Under/(over) provided in prior years
-
0
(195,723)
Deferred tax movement
(520,623)
199,099
Capital allowances
(3,887)
(92,539)
Changes in tax rate
-
0
(72,428)
Effect of research and development deduction
(760,028)
-
0
Taxation (credit)/charge for the year
(481,307)
660,437
S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 22 -
10
Dividends
2024
2023
£
£
Interim paid
104,000
535,000
11
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 November 2023
2,843,116
4,115,343
73,710
54,463
1,586,365
8,672,997
Additions
2,014,983
1,873,711
3,800
3,742
1,554,336
5,450,572
Disposals
-
0
(86,000)
-
0
-
0
-
0
(86,000)
At 31 October 2024
4,858,099
5,903,054
77,510
58,205
3,140,701
14,037,569
Depreciation and impairment
At 1 November 2023
18,614
2,020,034
55,648
24,897
657,084
2,776,277
Depreciation charged in the year
71,504
740,969
7,576
16,510
491,297
1,327,856
Eliminated in respect of disposals
-
0
(36,908)
-
0
-
0
-
0
(36,908)
At 31 October 2024
90,118
2,724,095
63,224
41,407
1,148,381
4,067,225
Carrying amount
At 31 October 2024
4,767,981
3,178,959
14,286
16,798
1,992,320
9,970,344
At 31 October 2023
2,824,502
2,095,309
18,062
29,566
929,281
5,896,720

Tangible fixed assets includes assets held under finance leases or hire purchase contracts, as follows:

2024
2023
£
£
Plant and equipment
2,985,102
1,806,339
Motor vehicles
1,629,380
636,449
4,614,482
2,442,788
S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 23 -
12
Stocks
2024
2023
£
£
Work in progress
2,475,243
3,017,061
Finished goods and goods for resale
28,394
72,092
2,503,637
3,089,153
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,032,907
908,695
Corporation tax recoverable
477,414
195,723
Related party balances
-
0
85,000
Other debtors
738,554
588,162
Prepayments and accrued income
147,415
109,395
2,396,290
1,886,975
2024
2023
Amounts falling due after more than one year:
£
£
Related party balances
2,425,000
-
0
Total debtors
4,821,290
1,886,975
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
16
1,555,744
832,405
Trade creditors
6,173,916
6,348,552
Corporation tax
802,274
655,320
Other taxation and social security
77,846
192,713
Other creditors
15,374
24,423
Accruals and deferred income
1,850,921
996,903
10,476,075
9,050,316
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
16
3,151,523
2,063,384
S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
15
Creditors: amounts falling due after more than one year
(Continued)
- 24 -

The finance leases are secured over the assets.

16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
1,555,744
832,404
In two to five years
3,151,523
2,063,385
4,707,267
2,895,789

Finance lease payments represent rentals payable by the company for certain items of plant and machinery, some of which include purchase options at the end of the lease period. The finance leases taken out range between 3 and 5 years with interest charged linked to the movement in Bank of England base rate.

17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
159,608
680,231
2024
Movements in the year:
£
Liability at 1 November 2023
680,231
Credit to profit or loss
(520,623)
Liability at 31 October 2024
159,608

The deferred tax liability set out above is expected to reverse over a period of time and relates to accelerated capital allowances that are expected to mature within the same period.

18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
45,288
35,037

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.

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 25 -
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
200
200
200
200
20
Operating lease commitments
As lessee

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:

2024
2023
£
£
Within 1 year
271,872
249,633
Years 2-5
514,547
698,318
786,419
947,951
21
Analysis of changes in net funds
1 November 2023
Cash flows
31 October 2024
£
£
£
Cash at bank and in hand
4,915,066
53,102
4,968,168
Lease liabilities
(2,895,789)
(1,811,478)
(4,707,267)
2,019,277
(1,758,376)
260,901
S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 26 -
22
Cash generated from operations
2024
2023
£
£
Profit after taxation
4,586,250
1,807,378
Adjustments for:
Taxation (credited)/charged
(481,307)
660,437
Finance costs
306,902
173,677
Investment income
(861)
-
0
Loss/(gain) on disposal of tangible fixed assets
4,300
(18,750)
Depreciation and impairment of tangible fixed assets
1,327,856
1,039,496
Movements in working capital:
Decrease in stocks
585,516
1,067,663
(Increase)/decrease in debtors
(2,612,446)
332,513
Increase in creditors
555,466
2,600,083
Cash generated from operations
4,271,676
7,662,497
23
Contingent liabilities

Contingent liabilities totalling £732k are present at the reporting date, as estimated by management in relation to future claims against the company. These claims are being contested by the Company therefore the timing of the settlement is unsure and final settlement amounts are estimated at this stage.

24
Related party transactions
Balances with related parties
Amounts owed by
Amounts owed to
related parties
related parties
2024
2023
2024
2023
£
£
£
£
Wychbury Developments Ltd
2,425,000
85,000
-
0
-
0
Other information

The balance outstanding is in relation to a interest free loan to a company that the Director has a controlling interest in.

S & R CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 27 -
25
Directors' transactions

The Directors' loan outstanding at the reporting date has been repaid within 9 months of the year end.

Description
% Rate
Opening balance
Amounts advanced
Interest charged
Closing balance
£
£
£
£
Directors loan
2.25
11,321
39,318
861
51,500
11,321
39,318
861
51,500
26
Ultimate controlling party

The ultimate controlling party is the Director and sole shareholder Steven Sankey.

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