Stephenson Construction (Southern) Limited
Annual Report and Financial Statements
For the year ended 30 September 2024
Company Registration No. 07255065 (England and Wales)
Stephenson Construction (Southern) Limited
Company Information
Directors
M R Stephenson
E Sheil
T Hemsley
M Hacker
E Vere
C O'Sullivan
C Mitchell
I Pitea-Crisan
J Griffiths
Company number
07255065
Registered office
Provender Mill
Mill Bay Lane
Horsham
West Sussex
RH12 1SS
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Stephenson Construction (Southern) Limited
Strategic Report
For the year ended 30 September 2024
Page 1

The directors present the strategic report for the year ended 30 September 2024.

Fair review of the business

Stephenson Construction (Southern) Limited works selectively in markets throughout the South of the UK in the construction of reinforced concrete structures and developments incorporating the latest technologies and products available for both on and offsite techniques.

Stephenson Construction (Southern) Limited 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. Stephenson Construction (Southern) Limited is a subsidiary of M R Stephenson Limited which has continued to investment 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 £92.9m (2023: £51.8m). Over the past year not only have we secured work with a broader client base, but the average size of secured contracts has also 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 within the M R Stephenson Limited group is 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 £5.3m (2023: £3.4m), gross margins increased from 13.7% to 17.9% driven by further efficiencies in our operations, increased buying power on materials and continued investment in our own plant and equipment across the M R Stephenson Limited group. Administrative expenses increased from £3.7m to £11.3m to support the growth of the business and reflect the management support provided by M R Stephenson Limited. The much improved profit before taxation of £5.3m (2023: £3.4m) reflects the improved year on year operating profit explained above.

The balance sheet shows a strong net asset position of £9.4m (2023: £5.4m). The increase in the net assets was driven largely by an increase in trade debtors and cash which is as a direct result of the strong performance in 2023 as explained above. The trade debtor balance was £13.6m (2023: £5.6m) and cash balance was £3.5m (2023: £1.3m).

Our retained profit and cash balance will assist us in future investment into our staff and assets, throughout the M R Stephenson Limited group, to continue our growth independently without the requirements of large bank loans.

 

Stephenson Construction (Southern) Limited
Strategic Report (Continued)
For the year ended 30 September 2024
Page 2
Key performance indicators

Health and safety

Our primary focus is on the health and safety and well-being of our workforce within the group, along with the impact that our operations can have beyond the boundary of the projects where we operate. We are proud of the whole team and the initiatives we have implemented which has strengthened our commitment to achieve zero incidents on site.

 

Quality and environmental

Our Quality Management System is central to our processes and operations and is under constant review - ‘Do it right first time’ - This along with working to industry accreditation / certification such as Achilles, Cares, FSC, FIRAS, Considerate Contractors means we are able to meet that of our own and client expectations.

 

Our Environmental Management System is there to not only manage but mitigate the impact of all aspects of our operations, sustainability, waste, emissions, energy consumption, procurement etc on the environment as a whole throughout the group.

 

The key aspects of the sustainable growth are as follows:

2024
2023
2022
2021
£'m
£'m
£'m
£'m
Turnover
92.88
51.84
43.91
29.47
Gross margin
17.88%
13.67%
10.92%
23.72%
Net assets
9.44
5.39
5.34
9.95

Principal risks and uncertainties

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 company balance sheet, and with well-established connections in the industry it is very well placed for the future individually and as a fully owned subsidiary of M R Stephenson Limited.

 

Financial risk management

The company does not operate any overdraft with the banks, however, does have a pooling arrangement across the group. The group always operates on a cash positive position. Trade debtors and creditors arise directly from the Company’s and consolidated groups 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 risk is management by financial management on its major contracts within the group 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 within the group.

 

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.

 

Cashflow risk

Fixed payment terms for both debtors and creditors allow the effective management of a positive cashflow.

Stephenson Construction (Southern) Limited
Strategic Report (Continued)
For the year ended 30 September 2024
Page 3

Credit risk

Fixed payment terms for construction contracts within the group provide for regular monthly payments against the full contract value. The creditworthiness of new customers is assessed by the relevant group company prior to entering into a contract. The group actively manages the collection of payments to ensure that they are received promptly and in accordance with the agreed terms, thereby ensuring the group’s exposure to bad debts in minimised.

Other performance indicators

Future prospects

After 62 years of trading, 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.

 

Promoting the success of the company and group

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 within M R Stephenson Limited, 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 group 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

M R Stephenson
Director
20 May 2025
Stephenson Construction (Southern) Limited
Directors' Report
For the year ended 30 September 2024
Page 4

The directors present their annual report and financial statements for the year ended 30 September 2024.

Principal activities

The principal activity of the company is the building of reinforced concrete structures.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

M R Stephenson
E Sheil
T Hemsley
M Hacker
E Vere
C O'Sullivan
C Mitchell
I Pitea-Crisan
J Griffiths
Directors' insurance

The company 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 company.

Future developments

The company 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.

Auditor

The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

Detailed reporting of greenhouse gas emissions, energy consumption and energy efficiency action is provided in the financial statements of the ultimate parent company, M R Stephenson Limited.

Stephenson Construction (Southern) Limited
Directors' Report (Continued)
For the year ended 30 September 2024
Page 5
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
M R Stephenson
Director
20 May 2025
Stephenson Construction (Southern) Limited
Directors' Responsibilities Statement
For the year ended 30 September 2024
Page 6

The directors are responsible for preparing the Strategic report, Directors' report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

Stephenson Construction (Southern) Limited
Independent Auditor's Report
To the Members of Stephenson Construction (Southern) Limited
Page 7
Opinion

We have audited the financial statements of Stephenson Construction (Southern) Limited (the 'company') for the year ended 30 September 2024 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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

 

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

 

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

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual 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.

Stephenson Construction (Southern) Limited
Independent Auditor's Report (Continued)
To the Members of Stephenson Construction (Southern) Limited
Page 8

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

 

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

 

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Stephenson Construction (Southern) Limited
Independent Auditor's Report (Continued)
To the Members of Stephenson Construction (Southern) Limited
Page 9
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.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

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.

 

 

Stephenson Construction (Southern) Limited
Independent Auditor's Report (Continued)
To the Members of Stephenson Construction (Southern) Limited
Page 10

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:

 

 

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 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.

Colin Turnbull
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
21 May 2025
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Stephenson Construction (Southern) Limited
Statement of Comprehensive Income
For the year ended 30 September 2024
Page 11
2024
2023
Notes
£
£
Turnover
3
92,877,300
51,837,304
Cost of sales
(76,266,362)
(44,749,022)
Gross profit
16,610,938
7,088,282
Administrative expenses
(11,265,841)
(3,693,437)
Operating profit
4
5,345,097
3,394,845
Interest receivable and similar income
-
13
Interest payable and similar expenses
-
(3,013)
Profit before taxation
5,345,097
3,391,845
Tax on profit
7
(1,294,017)
(38,974)
Profit for the financial year
4,051,080
3,352,871

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

Stephenson Construction (Southern) Limited
Balance Sheet
As at 30 September 2024
Page 12
2024
2023
Notes
£
£
£
£
Current assets
Debtors
9
26,970,427
20,755,757
Cash at bank and in hand
3,537,261
1,317,272
30,507,688
22,073,029
Creditors: amounts falling due within one year
10
(21,067,684)
(16,684,105)
Net current assets
9,440,004
5,388,924
Capital and reserves
Called up share capital
11
1
1
Profit and loss reserves
9,440,003
5,388,923
Total equity
9,440,004
5,388,924
The financial statements were approved by the board of directors and authorised for issue on 20 May 2025 and are signed on its behalf by:
M R Stephenson
Director
Company Registration No. 07255065
Stephenson Construction (Southern) Limited
Statement of Changes in Equity
For the year ended 30 September 2024
Page 13
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2022
1
5,336,052
5,336,053
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
3,352,871
3,352,871
Dividends
8
-
(3,300,000)
(3,300,000)
Balance at 30 September 2023
1
5,388,923
5,388,924
Year ended 30 September 2024:
Profit and total comprehensive income for the year
-
4,051,080
4,051,080
Balance at 30 September 2024
1
9,440,003
9,440,004
Stephenson Construction (Southern) Limited
Notes to the Financial Statements
For the year ended 30 September 2024
Page 14
1
General information

Stephenson Construction (Southern) Limited is a private company limited by shares 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 the building of reinforced concrete structures.

1.1
Accounting Policies
Basis of Preparation

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
Financial Report Standard 102 - reduced disclosure exemption

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of M R Stephenson Limited. These consolidated financial statements are available from its registered office, Provender Mill, Mill Bay Lane, Horsham, West Sussex, RH12 1SS.

1.3
Going concern

At the time of approving the financial statements, the directors are very confident that the company 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. The company 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 company has maintained its strong relationships with key clients and supply chain partners in the industry and they believe the company 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.true

1.4
Turnover

Turnover represents net invoiced amounts from construction projects, by reference to the value of work carried out in the year excluding any VAT.

Stephenson Construction (Southern) Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2024
1
General information
(Continued)
Page 15
1.5
Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period and is based on the assessed value of work completed to-date (an output measure).

1.6
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.

1.7
Financial instruments

The company only has financial instruments classified as basic and measured at amortised cost. The company has no financial instruments that are classified as 'other' or financial instruments measured at fair value.

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.

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.

Stephenson Construction (Southern) Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2024
1
General information
(Continued)
Page 16
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.

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.

1.8
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.

1.9
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Stephenson Construction (Southern) Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2024
1
General information
(Continued)
Page 17
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.

 

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.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Construction contracts

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.

Stephenson Construction (Southern) Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2024
Page 18
3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Construction services
92,877,300
51,837,304
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
92,877,300
51,837,304
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Impairment of contract retentions
366,685
221
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
25,500
8,250
For other services
All other non-audit services
1,500
-
0
6
Employees

The average monthly number of persons employed by the company during the year was: nil (2023: nil).

7
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,250,041
169,870
Adjustments in respect of prior periods
43,976
(130,896)
Total current tax
1,294,017
38,974
Stephenson Construction (Southern) Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2024
7
Taxation
(Continued)
Page 19

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
5,345,097
3,391,845
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.01%)
1,336,274
746,485
Tax effect of expenses that are not deductible in determining taxable profit
-
0
428
Change in unrecognised deferred tax assets
91,671
-
0
Adjustments in respect of prior years
43,976
-
0
Group relief
(177,904)
(577,043)
Research and development tax credit
-
0
(130,896)
Taxation charge for the year
1,294,017
38,974

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%).

8
Dividends
2024
2023
£
£
Interim paid
-
0
3,300,000
9
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
13,612,248
5,603,831
Gross amounts owed by contract customers
7,187,453
7,407,900
Amounts owed by group undertakings
5,843,459
7,043,488
Other debtors
327,267
487,450
Prepayments and accrued income
-
0
213,088
26,970,427
20,755,757

Trade debtors are stated after provision against contract retentions of £958,716 (2023: £592,031).

Stephenson Construction (Southern) Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2024
9
Debtors
(Continued)
Page 20

Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

10
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
30,757
68,672
Corporation tax
1,466,900
172,882
Other creditors
16,542,651
14,080,963
Accruals and deferred income
3,027,376
2,361,588
21,067,684
16,684,105
11
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share of £1 each
1
1
1
1
12
Financial commitments, guarantees and contingent liabilities

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.

Stephenson Construction (Southern) Limited
Notes to the Financial Statements (Continued)
For the year ended 30 September 2024
Page 21
13
Related party transactions

The company has taken the exemption, in accordance with FRS 102 - Section 33 "Related Party Disclosures", from disclosing related party transactions entered into between members of a group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.

During the year the company made purchases of £9,568,873 (2023: £6,252,349) from S C Contractors Limited, a company in which M R Stephenson has a material interest. At the year end £2,723,105 (2023: £3,622,855) was outstanding and is included within trade creditors.

 

During the year the company made purchases of £29,306,949 (2023: £15,900,349) from SSC Contractors Limited, a company in which M R Stephenson has a material interest. At the year end £13,819,545 (2023: £8,967,234) was outstanding and is included within trade creditors.

 

During the year the company made purchases of £4,375,570 (2023: £1,242,392) from RJS Support Services Limited, a company in which M R Stephenson has a material interest. At the year end £nil (2023: £1,490,873) was outstanding and is included within related party creditors.

 

During the year the company incurred management charges of £1,802,272 (2023: £1,428,228) from M R Stephenson Group Limited, a company in which M R Stephenson has a material interest. Management charges of £1,802,272 (2023: £1,831,461) are included within accruals and deferred income at year end.

 

During the year the company recognised construction income of £9,500 (2023: £90,127) from Boston Road Development Limited, a fellow subsidiary undertaking. Included within amounts recoverable on contracts at the year end is £1,039,500 (2023: £1,039,500) owing to construction services provided.

14
Ultimate controlling party

The immediate and ultimate parent undertaking is M R Stephenson Limited, a company incorporated in England and Wales.

 

No one person controlled the company throughout the year.

 

 

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