The directors present the strategic report for the period ended 30 September 2024.
Until 30 September 2024 Gallagher Group Holdings 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 Group Holdings Limited.
The group acquired the entire share capital of Gallagher Group Holdings Limited on 30th September 2024 and therefore there is no profit and loss for the period.
Future Prospects
The Group has entered the new financial year with a strong order book and a good level of tenders. General inflation levels have reduced, which should provide some confidence to the market, however are still above the target levels. Interest rates remain high, however have started to fall, albeit at a slower rate than previously expected. Our focus on delivering high-quality projects to a loyal customer base ensures a positive outlook.
Planning permission for commercial development has been granted on a plot of Land owned by the company in Paddock Wood, now known as The Hop Exchange, all options for its future development or sale are being considered.
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 services which are valued by its customers. The group regularly reviews the quality of its 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 – the Group operates in a specialised market and seeks to maintain a competitive advantage by offering an appropriate and relevant service range and providing a high level of customer service from professional and dedicated staff. The group keeps abreast of developments in the market through maintaining regular dialogue with its clients 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 on a regular basis. We promote from within whenever we can to maintain the group culture. We also embrace new people from elsewhere as they bring fresh ideas and the benefits of their experience.
Financial Risk – the Group is principally funded from retained profits. Financial monitoring, forecasting, and planning are ever present processes with the care taken to achieve a reasonable profit margin and investment in resources whilst maintaining delivery of a high-quality service 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 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, safety, and environmental management to be a top priority within the business. We approach the subject in a responsible, practical and pragmatic manner, concentrating on the things that make a difference. Gallagher Limited is ISO45001 accredited, has reformed its QA system through Flowforma, has started using Chime time and attendance which has provided a live training matrix for our projects in addition to using Skillco to assist management of our training needs. We have a positive and professional attitude to these subjects led by the Directors and senior managers who are required to set a good example.
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 and analysis 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. During 2023, the HSQE management systems have been reassessed and externally certified as compliant by Achilles Building Confidence, ISO 9001 and ISO 14001 and Construction line Level 3 Gold. In 2021 we also gained accreditation to ISO 45001. We continue to focus on the Health and Safety requirements of the business, and 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 12 of the financial statements shows that the group's financial position at the year end is strong in both net assets and liquidity terms.
Cash Measure - the net cash balance (Cash and cash equivalents less borrowings) is a measure of the strength of the balance sheet and to confirm that the group has the funds necessary to continue to grow organically.
Net cash balance is £57.8m.
We measure and analyse several non-financial criteria in order to identify our performance and to help spot trends, including:
Health and Safety – RIDDOR accidents, minor accidents, Toolbox talks, near misses, Service Strikes and rolling Accident Frequency rate.
Staff turnover – staff who leave and the reasons thereto.
Enquiry success rate for tenders and price estimates.
The number of vacant days amongst the investment property units.
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. Generally speaking, our policy is to pay suppliers 45 days from the end of the month of delivery. Other terms can be agreed in exceptional circumstances.
P Gallagher Limited is the parent of Gallagher Group Holdings Limited, within this Group are Gallagher Group Limited, Gallagher Limited and Gallagher Plant Limited. The same family of shareholders ultimately control a separate legal Group P Gallagher II Limited the parent of Gallagher Aggregates Limited.
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 and 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 company.
Environment: The group is aware of the increasing need to protect the environment and has recently completed its fifth Streamlined Energy and Carbon report. The results of the report are summarised in the Directors Report, which shows an increase in energy consumption in 2024 versus 2023. The increase was driven by the nature of the groundworks and civil engineering projects undertaken by Gallagher Limited, which involved the use of more heavy plant during 2024 compared to 2023. The Group aims to be carbon neutral and is reviewing its use of fuels as well as other carbon reduction related projects. 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. It also makes material donations to local and national charities and encourages employees 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 11.
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 work in progress. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company 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.
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.
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.
The Group 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 GHG 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 approach for assessing Scope 2 emissions from electricity usage. The financial control approach has been used.
Currently, 100% of our electricity is backed by renewable sources. Additionally, this year HVO was used at one of larger projects and 121.6tCO2e was avoided as a result. The CO2 impact is deemed out of scope as per DEFRA guidelines.
We have audited the financial statements of P Gallagher 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 company through discussions with directors, along with our commercial knowledge and experience of the construction industry, plant hire industry, management services and commercial landlord sector in which our client operates.
we focused on specific laws and regulations which we consider may have a material effect on the financial statements or operations of the company, including Health & Safety regulations, Emission regulations, Landlord and Tennant Act, Planning law, 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 group’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 £3,500,000.
P Gallagher Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 4th Floor, 4 Tabernacle Street, London EC2A 4LU.
The group consists of P Gallagher 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 Group Holdings Limited on the 30th September 2024 and therefore there is no 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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
In calculating the goodwill figure, the cost of the investment in Gallagher Group Limited was arrived at based on a valuation carried out by KPMG
The fair value of net assets has been calculated using the open market value at the date of acquisition where this is appropriate.
The amounts due from contract customers requires the company to make a judgement in relation to the stage of completion of the contracts ongoing at the year end. Management are provided with internal valuations by experienced personnel based on the costs incurred to date and the terms and conditions of the contract.
Management regularly review the current market value, rental market and rental yields of the Investment property.
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 regularly review the intercompany balances for recoverability.
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 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.
Investment property amounts to £6,159,200. The fair value of the investment property has been arrived at on the basis of a valuation carried out by BNP Paribas on 30 August 2024. BNP Paribas are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. The directors considered the value on 30 September 2024 and are of the opinion that there has been no significant change in value since 30 August 2024.
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.
The amounts owed by group companies, companies under common control and related parties (included within other debtors falling due within one year) are interest free, with no security and no fixed repayment terms.
The amounts owed to companies under common control and other related parties (included in other creditors) are interest free, with no security and no fixed repayment terms.
On 30 September 2024 the company issued 143,971,029 redeemable preference shares. The holder 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 of the preference shares.
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:
We are expecting a net decrease of the deferred tax liability amounting to £937,436 in the next 12 months due to the written down allowances being in excess of the depreciation rate used.
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:
Amounts contracted for but not provided in the financial statements:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date: