The directors present the strategic report for the period ended 30 September 2024.
Until 30 September 2024 Gallagher Aggregates Limited was ultimately controlled by Mr. P Gallagher, who owned 100% of the issued share capital. On the same date, P Gallagher Limited acquired the shares in Gallagher Aggregates Limited.
The group acquired the entire share capital of Gallagher Aggregates Limited on 30th September 2024 and therefore there is no profit and loss for the period.
Gallagher Aggregates supply up to 2 million tonnes of aggregates product per year and are the only remaining company actively quarrying Kentish ragstone.
Future Prospects
The market is likely to remain challenging while interest rates remain high, impacting the residential new-build housing market. Inflation rates have fallen since the peak of 2022, however are still ahead of the Bank of England’s targets. As such, interest rates have been reduced, however at a slower rate than previously expected and with a cautious outlook for future rate reductions. The government has proposed a new Planning and Infrastructure Bill, which it hopes will boost housebuilding, once approved by Parliament. Our investment in Blaise was completed in 2023, the new fixed barrel and binder has enabled us to increase output and extend the range of products.
There are a number of potential risks and uncertainties which could impact the Group’s performance, and these are considered by the Board on a regular basis. The Board of Directors and the relevant management teams consider the risks of all significant business decisions and changes in the external environment and in the Group’s operations. The key risks affecting the business are as follows:
Operating Risk – the Group’s reputation and continued success depends on its ability to provide goods and services which are valued by its customers. The Group regularly reviews the quality of its goods and services both internally and externally through client feedback and evaluation to ensure the reputation of the Group is maintained at a high level with all stakeholders.
Market Risk – the Group operates in a specialised market and seeks to maintain a competitive advantage by offering appropriate and relevant products and services at a competitive price. The housing market currently represents much of our sales. We actively nurture alternative markets and keep abreast of developments in the market through regular dialogue with customers, and monitoring competitors and the wider economic environment.
Personnel Risk – the Group is a privately owned business and places great emphasis on recruiting, training, rewarding and retaining high-quality people. The Directors consider staff resourcing and succession planning regularly. We promote from within wherever we can to maintain the Group culture. We also embrace new people from elsewhere as they bring fresh ideas and the benefit of their experience.
Financial Risk – the Group is principally funded from retained profits supported by prudent levels of finance on machinery. Financial monitoring, forecasting and planning are ever-present processes with care taken to achieve a reasonable profit margin and investment in resources whilst maintaining delivery of high-quality goods and service levels to customers.
Taxation Risk – the Group is exposed to financial risks from increases in tax rates and the basis of taxation including corporation tax and VAT. Principal controls include regular monitoring of legislative proposals, the engagement of experienced executives and the use of experienced sector-specific professional advisers to mitigate the impact of any changes and ensure compliance.
Information Technology – the Group relies heavily on systems to operate its business, ordering goods, paying suppliers, ensuring health and safety records are accurate, accounting and payroll. The risk of cyber-attacks is ever-present and an increasing risk to every business. Ensuring we have robust and up-to-date cyber security measures and vigilant users is critical to the successful running of these systems, as well as employing appropriately skilled and experienced staff and external specialist support as required.
Health and Safety and environmental management
The Group considers health and safety and environmental management to be a top priority in the business. We approach the subjects in a reasonable, practical and pragmatic manner, concentrating on the things that make a difference.
To achieve high standards, we make sure we have the correct, competent, trained people and modern well-maintained plant and equipment. Our management systems and policies provide clear guidance and monitoring/reporting of performance and incidents. Our internal resources are audited and supported by external industry experts, with “prevention”, “learning from experience” and “continuous improvement” being the underlying themes. We continue to focus on the Health and Safety requirements of the business and we believe we have put in place processes and procedures that ensure a high level of safety for our staff, customers and suppliers.
The balance sheet on page 11 of the financial statements shows that the group's financial position at the year end is stong, in both net assets and liquidity terms.
Sufficient retained earnings are kept in the subsidiaries to maintain and grow the business and any surplus is distributed as dividend to the holding company.
We measure and analyse a number of non-financial criteria in order to monitor our performance and to help identify trends, good or bad, including;
Health & Safety – RIDDOR accidents and minor accidents
Staff turnover – staff who leave and the reasons thereto.
Payments to suppliers
We respect the role that suppliers play in the success of the business and as such we aim to pay suppliers to the agreed terms. Our policy is to pay suppliers 45 days from the end of the month of delivery. Other terms can be agreed.
P Gallagher II Limited is the parent pf Gallagher Aggregates Limited. The same family of shareholders ultimately control P Gallagher Limited, a separate legal group of companies which comprises Gallagher Group Holdings Limited, Gallagher Group Limited, Gallagher Limited and Gallagher Plant Limited.
The principal activity of Gallagher Aggregates Limited is that of supplying quarry stone, re-cycled aggregates, masonry products (Kentish Ragstone) and ready mixed concrete together with infill and land restoration. The management define the success of the business as long-term value creation for all parts of the Gallagher Group and associated companies. Working together to provide efficient solutions that can use all elements of the group of companies’ resources, contracting, aggregates, concrete, masonry, recycling, property investment and property development.
The Board is committed to and actively encourages effective relationships and communications with all the Group’s stakeholders to obtain a greater understanding of each other’s needs and objectives. This way we can optimise the long-term value creation and success of the Group. The Group has identified the following key stakeholders and explains how the Board considers their interests.
Shareholders: The Group is ultimately controlled by a family of shareholders, who also take an active role in managing the business along with the Executives. The Board has a very close dialogue with the shareholders through regular discussions, Board meetings and routine financial and operational reporting. These processes ensure that the long-term strategy of the business is aligned with their expectations. Annual detailed Budgets and 3-year Business plans are prepared, presented, discussed, and approved by the Board that are aligned to the shareholders' goals. Decisions are made at regular Board and Management meetings. Governance is established using an Authority Schedule and the inclusion of 2 experienced non-executive Directors who liaise closely with the shareholders, Executive team and family members through the family council forum.
Colleagues: The Group is a family business and recognises the hugely important role that staff have in making the business successful. It prides itself on having the best people to create strong teams and who all essentially care for the business. We aim to be the employer of choice offering both formal and informal training for all. Gallagher’s culture is to instill pride in our work and ensure quality workmanship prevails throughout the workplace. We want everyone to feel part of the family by making people feel valued, engaged and safe.
Customers and Suppliers: The Group wants to be first choice for value-minded clients, our values state that we are customer-focused, we listen and are eager to learn, we are passionate and confident, we are solution-driven, we are a business of character and we work as a team. This will ensure that our customers’ needs are met. Delivering high-quality solutions will lead to repeat business. We equally recognise that along with our staff we rely heavily on like-minded suppliers of materials and services. We aim to treat our suppliers with respect and will work with them to ensure their needs are met. Suppliers delivering high levels of service and quality are met with loyalty from the Group.
Environment: The Group is aware of the increasing need to protect the environment and has recently completed its fifth Streamlined Energy and Carbon report. As a result of which it aims to be carbon neutral within the next couple of years. Electrification of both of the quarries is now complete, using 100% renewable sources, and the use of alternative fuels are projects which will reduce our carbon footprint. Our Social Value report has also just been updated and shows that the Group continues to add significant economic and social value to the area in which it operates, South East England. The Group is a large employer of local people and a large user of local suppliers and services. We also make material donations to local and national charities and encourage staff to complete charitable work across the community.
On behalf of the board
The directors present their annual report and financial statements for the period ended 30 September 2024.
The results for the period are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
The group's principal financial instruments comprise bank balances, trade creditors, trade debtors, and loans to the group. The main purpose of these instruments is to raise funds for the group's operations and to finance the group's operations.
Due to the nature of the financial instruments used by the group, there is no exposure to price risk.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
The group is subject to the risk of interest rate fluctuations, with it affecting its interest earning operations. In respect of loan from group undertakings and companies under common control, these are interest free.
Financial instruments which potentially subject the group to concentrations of credit risk consist only of cash and trade debtors.
Trade debtors are monitored on an on going basis and provision is made for doubtful debts where necessary.
Goldblatts were appointed as auditor to the group 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.
As the group has consumed more than 40,000 kWh of energy in this reporting period, it is required to prepare an SECR report on its emissions, energy consumption and energy efficiency activities.
Gallagher Aggregates Ltd has appointed Carbon Footprint Ltd, a leading carbon and energy management company, to independently assess its Greenhouse Gas (GHG) emissions in accordance with the UK Government’s ‘Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance’.
The GHG emissions have been assessed following the Greenhouse Gas Protocol Corporate Standard and has used the 2024 emission conversion factors published by Department for Environment, Food and Rural Affairs (Defra) and the Department for Business, Energy & Industrial Strategy (BEIS). The assessment follows the dual reporting (market and location-based) approach for assessing Scope 2 emissions from electricity usage. The financial control approach has been used.
In an effort to improve our business’s energy efficiency and to reduce associated emissions, we switched our Blaise farm quarry’s diesel-powered fixed plants to 100% renewable (REGO certified) electricity during the year ended 30 September 2023. Also in that year the group implemented a new energy management system conforming to ISO 50001 in 2023 and successfully completed it’s external certification by NQA. During 2024, the group maximized its use of fixed plants, powered by mains electricity supplied by 100% renewable electricity, in order to minimize the use of mobile plants powered by diesel. The monitoring process of fuel efficiencies in both plant and vehicle fleet was also enhanced to reduce idling and improve work efficiencies.
We have audited the financial statements of P Gallagher II Limited (the 'parent company') and its subsidiaries (the 'group') for the period 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, the company 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 period 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows;
the engagement partner ensured the engagement team had the appropriate competence, capabilities and skills to identify or recognise possible non-compliance with applicable laws and regulations.
we identify significant laws and regulations applicable to the group through discussions with directors, along with our commercial knowledge and experience of the Aggregate industry in which our client supplies quarry stone, re-cycled aggregates, ready mix concrete and waste disposal to its customers.
we focused on specific laws and regulations which we consider may have a material effect on the financial statements or operations of the group, including Environmental and Planning regulations, Health & Safety including explosive regulations, Companies Act 2006, taxation legislation, data protection and employment law.
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considered the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
have performed analytical procedures to identify any unusual variances
reviewed and tested journal entries and other adjustments to identify any unusual transactions
assessed judgements and assumptions used in determining the accounting estimates which could indicate any potential bias investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
reviewing disclosures in the financial statements and testing to supporting documentation.
reviewing meeting minutes where available
discussions with management regarding actual or potential litigations and / or claims.
reviewing correspondence with HMRC and other relevant regulators
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from the financial transactions, the less likely it is that we would become aware or any possible non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of directors and other management and the inspection of regulatory and legal correspondence, if any.
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.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0.
P Gallagher II Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .
The group consists of P Gallagher II Limited and all of its subsidiaries.
The companies year end was shortened to 30th September 2024 to align with other group entities. The Group was formed when the company acquired the shares in Gallagher Aggregates Limited on the 30th September 2024 and therefore is no trading profit and loss for the period.
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.
The consolidated group financial statements consist of the financial statements of the parent company P Gallagher II Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 September 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from 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.
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
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.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
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 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.
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.
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.
Management regularly review the depreciation rates given to each class of fixed asset to ensure they are carrying the asset at the appropriate value. Where necessary the impairment of assets is also considered where the net book value seems unrealisable.
Management consider the costs incurred in producing the stock to ensure the costs are correctly stated when calculating the lower of cost or net realisable value.
The average monthly number of persons (including directors) employed by the group and company during the period was:
The Group has no direct employees, all labour was supplied by Gallagher Resources Limited, including those paid under contract of service agreements.
The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 30 September 2024 are as follows:
The registered office of the subsidiaries above is Leitrim House, Little Preston, Aylesford, Kent ME20 7NS.
On 30th September 2024 the company issued 26,300,000 redeemable preference shares. The holders of these shares are entitled to a fixed annual dividend of 0.05%
The preference shares are redeemable upon the receipt of notice from the holders.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
£678,691 of the the deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
£800 of the ordinary share capital is unpaid.
At the year end the group had commitments to pay royalties amounting to £500,000 per annum over the next 3 years.
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date: