Introduction
The directors present the strategic report for the year ended 30 September 2024.
The M R Stephenson Limited group comprised: M R Stephenson Limited, Stephenson Construction (Southern) Limited, Stephenson Construction (North) Limited, Stephenson Limited, SSC Construction Services Limited and Boston Road Development Limited as the main trading companies within the group. The group also includes dormant companies: Stephenson (Shell & Core) Limited, Stephenson Shell & Core (Scotland) Limited, Stephenson Development (Southern) Holdings Limited, Stephenson Development (Stockton) Limited and Stephenson Development (Ifold) Limited.
M R Stephenson Limited is the ultimate parent of the M R Stephenson Limited group. The principal activity of the Company is that of a holding company of the M R Stephenson Limited group.
The main trading companies provide construction services which build reinforced concrete structures operating through the turnover companies, Stephenson Construction (Southern) Limited and Stephenson Construction (North) Limited with costs being recharged from the cost companies Stephenson Limited and SSC Construction Services Limited. Boston Road Development Limited has a different principal activity with this company operating as a property development company.
The M R Stephenson Group works selectively in all markets throughout the UK in the construction of reinforced concrete structures and developments incorporating the latest technologies and products available for both on and offsite techniques.
M R Stephenson Group has seen good levels of growth in the year ending September 2024. It has a significant number of secured orders for the next year and a strong pipeline. M R Stephenson Group has continued to invest heavily in training and asset purchasing to ensure our methods of construction are provided consistently and we safely execute quality builds across the country.
Turnover has increased to £115.5m (2023: £69.7m). Over the past year not only have we secured work with a broader client base, the average size of secured contracts has been larger and therefore higher in value. This is attributed to our continued success in providing new and existing clients throughout the UK a safe delivery along with cost and programme certainty for their projects. Our key workforce are highly experienced both on and off site, and the support network of office staff with new streamlined procedures and work processes enable them to assist the site teams thereby allowing the business the flexibility to embrace and adapt to larger turnover demands.
Operating profit has increased to £9.3m (2023: £2.2m), gross margins increased from 12.1% to 15.1% driven by further efficiencies in our operations, increased buying power on materials and continued investment in our own plant and equipment. Administrative expenses increased from £6.2m to £8.2m to support the growth of the business. The much improved profit before taxation of £9.3m (2023: £2.1m) reflects the impact of the measures stated above.
The Group balance sheet shows a strong net asset position of £27m (2023: 20.4m). The increase in the net assets was driven largely by an increase in cash which is as a direct result of the strong performance in 2024 as explained above. The cash balance was £21.9m (2023: £14m).
Our retained profit and cash balance will assist us in future investment into our staff and assets to continue our growth independently without the requirements of large bank loans.
M R Stephenson continues to strengthen its position as a leading RC frame subcontractor, delivering high-quality construction solutions while prioritizing sustainability, efficiency, and innovation. Over the past financial year, the company has expanded operations, improved productivity, and integrated new technologies to enhance project delivery.
Key highlights from the year include:
Strengthened relationships with key contractors and developers.
Increased adoption of Modern Methods of Construction (MMC) to improve efficiency and reduce waste.
Investment in low-carbon materials to align with industry sustainability targets.
Enhanced digital transformation initiatives, reducing paper use and improving operational efficiencies.
UK Energy Use and Associated Emissions
M R Stephenson is committed to reducing its environmental impact and reports energy consumption and emissions in line with SECR requirements.
This report represents the greenhouse gas ("GHG") emissions quantified by M R Stephenson for the financial year ending 2024. The report has been prepared under the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, which require us to disclose our UK energy use and associated GHG emissions. Specifically, we report UK energy usage and emissions derived from purchased electricity, gas, and transport.
Emissions Breakdown
Scope 1: Direct emissions from fuel combustion, including diesel, HVO, company vehicles, and gas usage.
Scope 2: Indirect emissions from purchased electricity, including the new Scotland office opened in 2024.
Scope 3: Indirect emissions from materials, business travel, supply chain activities, and waste disposal.
All figures are calculated using the latest UK Government GHG Conversion Factors.
Methodology
The report has been prepared in reference to the GHG Protocol Corporate Standard, using an ‘operational control’ approach to define the GHG emissions boundary. This approach captures emissions associated with the operation of all buildings and, to the extent required under the reporting scope, business travel.
Emissions Calculation:
Scope 1 emissions were calculated using the SECR.uk Energy Unit Conversion Calculator, based on actual onsite diesel usage of 346,651.91 litres.
Scope 2 emissions were calculated from actual electricity consumption (kWh) using the latest UK Government conversion factors published on 30 October 2024. Greenhouse gas reporting: conversion factors 2024 - GOV.UK There are no material omissions from the mandatory reporting scope.
Scope 3 emissions were calculated using the Supply Chain Sustainability School methodology, allowing for more detailed value chain emissions assessment.
Restatement of FY23 Figures: To enhance accuracy and comparability, the calculation methodology was updated from FY23 to FY24.
As part of this improvement, FY23 figures for Scope 1 and Scope 2 have been restated using the updated methodology and the latest government conversion factors.
Scope of SECR Reporting
M R Stephenson’s SECR reporting covers the following areas:
Scope 1: Direct emissions from owned or controlled sources, including fuel combustion in company vehicles, machinery, and heating.
Scope 2: Indirect emissions from purchased electricity used across operations, including offices and site facilities.
Scope 3: Indirect emissions arising from business travel, purchased goods and services, supply chain activities, and waste disposal.
Energy Consumption: Total UK energy use, including fuel combustion and electricity purchases.
Energy Efficiency and Carbon Reduction Initiatives
M R Stephenson has implemented a range of measures to enhance energy efficiency and reduce emissions:
Fleet Electrification: 80% of company cars are now electric or hybrid.
Low-Carbon Construction: Increased use of low-carbon concrete (GGBS, PFA) to reduce embodied carbon.
Renewable Energy Adoption: Transition to 100% renewable energy tariffs for office and site electricity.
HVO Fuel Integration: Expansion of Hydrotreated Vegetable Oil (HVO) usage on-site to replace diesel.
Waste Reduction: Digital transformation initiatives to minimise paper and resource usage.
Commentary on Energy Use Increase in FY24
Energy consumption and emissions have increased significantly in FY24 due to:
Operational Expansion: The opening of new facilities, including the Scotland office, has contributed to higher electricity and fuel usage.
Project Scale and Intensity: Increased construction activity and large-scale projects have led to higher materiaI consumption and transport emissions.
Fleet Modernisation: A transition phase towards electrification and HVO use has caused a temporary overlap with traditional fuel sources.
Principal risks and uncertainties
Financial risk management
The group does not operate any overdraft with the banks, however, does has a pooling arrangement across the group. The group always operates on a cash positive position. Assets purchased through hire purchase are detailed in note 20. Trade debtors and creditors arise directly from the Company’s operating activities.
Liquidity risk
The directors review the liquidity position on a regular basis and are confident that the business has sufficient cash resources to meet its trading needs. The Company's exposure is minimised by financial management on its major contracts by negotiating appropriate payment terms with respective customers and suppliers. The Company's objective is to ensure an overall positive or neutral cash flow on all projects.
Price risk
The company is subject to commodity price and other cost inflationary risks, however, manages this risk by entering into wherever possible fixed pricing agreements with its supply chain and subcontractors.
Credit risk
Fixed payment terms for construction contracts provide for regular monthly payments against the full contract value. The creditworthiness of new customers is assessed by the Company prior to entering into a contract. The Company actively manages the collection of payments to ensure that they are received promptly and in accordance with the agreed terms, thereby ensuring the Company’s exposure to bad debts in minimised.
The Directors believe that they have effectively implemented their duties under section 172 of the Companies Act 2006. The company has considered the long-term strategy of the business in the Strategic Report and consider that this strategy will continue to deliver long term success of the business and it’s stakeholders.
The company is committed to maintaining an excellent reputation and strives to achieve high standards. They are highly selective about which suppliers are used to deliver best value while maintaining an awareness of the environmental impact of the work that they do and strive to reduce their carbon footprint.
The Directors recognise the importance of the wider stakeholders in delivering their strategy and achieving sustainability within the business. The main stakeholders in the company are considered to be the employees, sub-contractors, suppliers and customers.
In ensuring that all our stakeholders are considered as part of every decision process, we believe we act fairly between all members of the company.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 September 2024.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Ordinary dividends were paid amounting to £150,000. The directors do not recommend payment of a further dividend.
The group maintains insurance policies on behalf of all the directors against liability arising from negligence, breach of duty and breach of trust in relation to the group.
The group has further strengthened and maintained its strong relationship with key clients and supply chain partners in the industry and has secured a very healthy forward workload for the years ahead that has secured a path of future investment and sustainable growth.
The principal risks and uncertainties continue, as is the case with many other businesses within the UK, to revolve around the economic cycles within the UK economy. With that comes opportunities, so with the group's low and flexible overhead structure, strong balance sheet, and with well-established connections in the industry it is very well placed for the future.
The auditor, Moore Kingston Smith LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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.
We have audited the financial statements of M R Stephenson Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group 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).
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 group's and parent 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 group's or the parent 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 group or the parent 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.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
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 noncompliance 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 members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.
There was no other comprehensive income for 2024 (2023: NIL).
As permitted by s408 Companies Act 2006, the company has not presented its own statement of comprehensive income and related notes. The company’s profit for the year was £1,440,744 (2023 - £291,634).
M R Stephenson Limited (“the Company”) is a limited company domiciled and incorporated in England and Wales. The registered office is Provender Mill, Mill Bay Lane, Horsham, West Sussex, RH12 1SS. The principal activity of the company is that of a holding company and the provision of management services, with overall management of companies within the group along with control of company assets and investments.
The principal activities of the group are that of the construction of Reinforced Concrete Substructures and Superstructures along with Enabling Works, Piling, Precast Elements and Property Development throughout the UK.
The Group consists of M R Stephenson Limited and all of its subsidiaries.
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, modified to include the revaluation of investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
As permitted by s408 Companies Act 2006, the company has not presented its own statement of comprehensive income and related notes. The company’s profit for the year was £1,440,744 (2023 - £291,634).
While the group has net current assets at 30 September 2024 of £18,984,560 and net assets of £26,992,992, the company has net current liabilities of £5,812,421, and net assets of £2,792,711. The company balance sheet includes amounts due to fellow group undertakings of £33,380,672 and amounts due from fellow group undertakings of £1,278,942. Under consolidation, amounts due to and from fellow group undertakings are eliminated (see Notes 16 and 17).
The group has continued to strengthen its position with secure contracts and development opportunities which will provide a path of sustainable growth for all areas of operation. The group has maintained its strong relationships with key clients and supply chain partners in the industry and they believe it is well placed to continue to secure new contracts from both regular and new client base. Consequently, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Notwithstanding the position shown by the company Balance Sheet, the directors are confident that the group and, therefore, the company is a going concern and that it remains appropriate for the accounts of the company and the group to be prepared on the going concern basis. At the time of approving the financial statements, the directors are confident that the company and the group has adequate resources to successfully continue to operate for at least the next 12 months from the date of approval of the financial statements and for the foreseeable future beyond.
Turnover is generated from construction services provided, sales of development properties and rental income. Turnover from construction services and related contracts is addressed in note 1.11.
Turnover from sales of development properties and rental income is recognised at the fair value of the consideration received or receivable for the services provided.
Revenue from hire of plant and machinery is recognised at the fair value of the consideration received or receivable for the services provided.
Management fee income is recognised when at the fair value of the consideration received or receivable for the services provided.
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 recognised in the profit and loss account.
Although the long leasehold policy is in accordance with FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102"), it is a departure from the general requirements of the Companies Act 2006 for all tangible fixed assets to be depreciated. In the opinion of the directors compliance with the standard is necessary for the financial statements to give a true and fair view. Depreciation or amortisation is only one of the many factors reflected in the annual valuation and the amount of this which might otherwise have been charged cannot be separately identified or quantified.
In the parent company financial statements investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Other investments and the classic car collection are measured at fair value through profit or loss on an open market basis.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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 group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
In the application of the group’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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Recognition of turnover and profit on construction contracts requires management judgment regarding the anticipated final outcome of individual contracts and of the proportion of works completed at the balance sheet date. Each live contract is regularly reviewed by the directors as part of the contract valuation process. The directors review the costs and revenues to date, the estimated stage of completion and estimated costs and revenues to completion, which enables the directors to assess the most likely profit outcome and valuation of works carried out at a point in time. The closer to completion a contract is, the more certain the outcome will be and the directors will always take a prudent view of contracts which cannot be estimated with certainty.
The estimation of final contract value includes assessments of the recovery of the variations which have yet to be agreed with customer and if relevant any compensation events and claims that are probable to be agreed.
The age, nature and recoverability of all debtors and amounts recoverable on construction contracts are reviewed regularly by management and provisions made as appropriate.
An analysis of the group's turnover is as follows:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% (rather than remaining at 19%, as previously enacted). There has been no change to corporation tax rates for the financial year ended 30 September 2024. For the financial year ended 30 September 2024 the weighted average tax rate was 25% (30 September 2023 weighted average tax rate was 22.01%).
A revaluation of the properties to fair market value took place on July 2020, following an assessment made by independent professional valuers for the company's bankers. The directors do not believe the value at 30 September 2024 was materially different.
The historic cost of the leasehold properties at the balance sheet date is £1,122,878 (2023: £1,122,878).
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. The depreciation charge in respect of such assets amounted to £373,372 (2023: £417,693) for the year.
During the year ended 30 September 2015, the management and upkeep of the formwork plant, previously valued on an open market basis, became the sole responsibility of M R Stephenson Limited. The deemed value of the assets at the date of transition has been used as the cost for depreciation purposes.
The historic cost of these assets is £3,695,512 (2023: £3,695,512).
The historic cost of the classic car collection in Group and Company is £604,000 (2023: £604,000). They were valued on an open market basis on 26 July 2021 by DB Motor Brokers and revalued by the directors at 30 September 2024 on an open market basis.
As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments, denoted by 'n/a' above.
Trade debtors are stated after provisions for impairment on retentions of £1,168,574 (2023: £741,033).
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Included within group and company creditors is a bank loan of £198,000 (2023: £215,600) secured by fixed and floating charges over the company's leasehold properties and other property, assets and rights. The loan has interest of 1.95% above the Bank of England base rate charged on it. Interest charged on the loan in the year was £14,867 (2023: £13,110).
Finance lease payments represent rentals payable by the company or group for certain motor vehicles. 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 2 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions totalling £8,861 (2023: £8,711) were payable to the fund at the balance sheet date and are included included in creditors.
Deferred tax assets and liabilities are offset where the group or 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:
The deferred tax liability set out above relates to accelerated capital allowances that are expected to mature within 10 years.
There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.
The remuneration of the group's key management personnel is as follows.
Group
The group has taken advantage of the exemption in The Financial Reporting Standard applicable in the UK and Republic of Ireland ("FRS 102") from the requirement to disclose transactions with wholly owned group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.
During the year the group incurred construction costs and administration fees of £13,185,013 (2023: £8,400,089) from S C Contractors Limited, a company in which M R Stephenson has a material interest. Included in creditors at 30 September 2024 was an amount due to S C Contractors Limited of £3,795,077 (2023: £4,993,375).
The group also incurred construction costs and administration fees of £32,783,931 (2023: £20,993,826) from SSC Contractors Limited, a company in which M R Stephenson has a material interest. Included in creditors at 30 September 2024 was an amount due to SSC Contractors Limited of £14,900,657 (2023: £10,528,387).
The group generated plant hire revenue and incurred plant hire costs of £4,764,481 (2023: £1,404,640) from RJS Support Services Limited, a company in which M R Stephenson has a material interest. At the year end £nil (2023: £1,685,571) was outstanding and is included within creditors.
During the year the group incurred management charges of £2,033,961 (2023: £2,021,508) from M R Stephenson Group Limited, a company in which M R Stephenson has a material interest. Management charges of £2,033,961 (2023: £2,424,741) are included within accruals and deferred income at the year end.
Included within creditors at the year end is £1,879,987 (2023: £1,879,987) due to Ty Glyn Student Limited, a company in which a director has a material interest, from Boston Road Development Limited.
Included within creditors at the year end is £492 (2023: £nil) due to Provender Mews Management Company Limited, a company controlled by the director, from Boston Road Development Limited.
Included within debtors at the year end is £290,024 (2023: £290,024) due from a director and shareholder in the company. A guarantee has been provided for this balance by M R Stephenson Group Limited for a period until the balance is settled.
The group incurred salary cost, including pension costs, of £280,386 (2023: £211,565) with employees who are close family members of key management personnel.
The group incurred maintenance costs of £1,618 (2023: £2,884) with a close family member of key management personnel.
Company
Included in debtors at 30 September 2024 was an amount due from Webbliworld Limited, a company in which M R Stephenson has a material interest, of £866,305 (2023: £866,305). This balance has been guaranteed by M R Stephenson Group Limited.
Included in debtors at 30 September 2024 was an amount due from Sparkzmedia Limited, a company in which M R Stephenson has a material interest, of £18,237 (2023: £18,237).
Included in debtors at 30 September 2024 was an amount due to The Stephenson Pension Trust, of which M R Stephenson is sole trustee, of £9,441 (2023: £549 - debtor). During the year the company was charged rent of £63,000 (2023: £63,000) from The Stephenson Pension Trust.
Included in debtors at 30 September 2024 is a balance due from Stephenson Development (Southern) Holdings Limited of £895,401 (2023: £635,741) net of provisions of £3,385,102.
Included in debtors at 30 September 2024 is a balance due from Ty Glyn Student (One) Limited, a company in which M R Stephenson has a material interest, of £24,903 (2023: £24,890).
Included in debtors at 30 September 2024 was an amount due from Ty Glyn Student Limited, a company in which M R Stephenson has a material interest, of £32,225 (2023: £32,199).
Included in debtors at 30 September 2024 was an amount due from Verteka Holdings Limited, a company in which M R Stephenson has a material interest, of £117,204 (2023: £104,791).
Included in debtors at 30 September 2024 was an amount due from VTK Structures Limited, a company in which M R Stephenson has a material interest, of £253,737 (2023: £253,737).
Included in debtors at 30 September 2024 was an amount due from S C Contractors Limited, a company in which M R Stephenson has a material interest, of £1,632,107 (2023: £2,059,267). During the year management fees of £nil (2023: £150,000 charged by) were charged to S C Contractors Limited.
Included in debtors at 30 September 2024 was an amount due from SSC Contractors Limited, a company in which M R Stephenson has a material interest, of £4,544,416 (2023: £3,860,472). During the year management fees of £1,000,000 (2023: £700,000) were charged to SSC Contractors Limited.
Included in debtors was an amount due from M R Stephenson Group Limited, a company in which M R Stephenson has a material interest, of £7,405,230 (2023: £4,066,955). At the Balance Sheet date there was a short term loan of £nil (2023: £2,828,000) due to M R Stephenson Group Limited.
Included in debtors at 30 September 2024 was an amount due from RJS Support Services Limited, a company in which M R Stephenson has a material interest, of £1,292 (2023: £171,542).
Included within debtors at the year end is £10,184 (2023: £3,331,957) due from Boston Road Development Limited, a company related by virtue of its shareholding.
Company
The company has provided security under a multilateral cross guarantee for a bank pooling facility covering a number of companies under the control of M R Stephenson. The facility allows there to be overdrawn bank accounts across the companies involved up to a total of £20,000,000, providing there are also positive bank balances across the companies that match or exceed the overdrawn accounts. There was no overdraft facility during the year.
Operating lease payments represent rentals payable by the company for certain properties . The total expense recognised through profit and loss for the year ended 30 September 2024 was £176,872 (2023: £132,048).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Details of the company's subsidiaries at 30 September 2024 are as follows:
The subsidiary companies are all registered in England and Wales and have the same registered office address as M R Stephenson Limited.
Although Boston Road Development Limited is owned 30.6% by M R Stephenson Limited, the directors believe M R Stephenson Limited controls the company.
By virtue of S479a of Companies Act 2006, the following subsidiaries were exempt from audit due to the statutory guarantee provided by M R Stephenson Limited:
Stephenson (Shell & Core) Limited
Stephenson Development (Ifold) Limited
Stephenson Development (Southern) Holdings Limited
Stephenson Development (Stockton) Limited
Stephenson Shell & Core (Scotland) Limited
Stephenson Civils Limited
The group sold one of the remaining plots of the development in Boston Road Development Limited for £792,500 with the sale being agreed on 20 January 2025.
The Group has acquired tangible assets under finance leases. £51,001 has been capitalised as the cost of the asset, being the present value of the minimum lease payments.