The director presents the strategic report for the year ended 31 December 2024.
Introduction
Despite the continued unsettled economic and political environment 2024 has been another successful year for the Sale Group, and we look towards 2025 with great optimism.
Sale Group is now one of the largest family-owned Mechanical and Building Services companies in the UK. The ambition remains to deliver a best-in-class service to all our customers. We do this by practising our motto, “Big enough to support, Small enough to care” throughout all our business interactions. The result is a happy and loyal client, employee and supply chain base which is so important in an ever more unsettled world. We pride ourselves on developing strong collaborative relationships and as such a significant element of our work comes through existing clients and recommendation.
The principal activity of the business is Mechanical fit-out and maintenance services.
Sale Group operates in the following sectors:
Commercial office fit-out
Super prime residential fit-out
Historic buildings
Healthcare & life sciences
Retail
Leisure facilities
Education
Financial services
Restaurants
Financial highlights
This year we have seen continued success as measured by the key performance indicators, some of which are shown below. The detailed results for the business are set out in in the financial statements but include the following key figures:
Sale Group implement a range of control measures to minimise risk and exposure for the business. We maintain close links with our supply chain partners and monitor all relevant market data which relates to our sector.
We employ highly competent professionals in all areas of our business. Each project has a designated team of project managers, quantity surveyors and designers who work closely with our clients and supply chain to ensure there is quality communication throughout each project and its life cycles.
Sale Group's clients are leading names in the industry such as Collins, Unispace, University Of Portsmouth, Morgan Lovell, Structuretone, 8Build, Knight Harward, Mace, Parkeray, Overbury and All England Tennis Club, to manage operational risk and their expectations, Sale Group businesses are highly accredited and certified with trade bodies.
These include Gold membership of Constructionline, Facilitiesline , REFCOM Elite, (Fortus) and Achilles, which helps us to manage our supply chain risk. We are also a member of the Supply Chain Sustainability school which covers all aspects of the built environment with a focus on sustainability.
Sale Group are ISO 45001 certified for Occupational Health and Safety. We also have CHAS Elite status, Alcumus Safe contractor and Acclaim accreditation, which prove that our business meets excellent standards in Health and Safety. We have a dedicated manager in house to ensure that we maintain safe environments for all our supply chain.
We have a highly competent in-house preconstruction and CAD/Design department who attempt to derisk our projects at the design stage.
Sale Group are also ISO9001 accredited for quality management systems which enables us to meet all our stakeholders statutory and regulatory requirements relating to products and services.
Sale Group businesses are Daikin Premium partners and a Mitsubishi Diamond Quality Partner which recognises our standards for excellence in design, training and installation workmanship.
Sale Group continues to be a completely debt free business. The principal has always been to grow the business organically by reinvesting profits. This has built up cash reserves to assist the business to weather potential setbacks such as Covid 19, Cyber threats and supply chain failures. This approach ensures a stable long-term platform and means we can make less pressurised commercial decisions.
As a business we have a strong reputation in our market for the quality of our work and much of our work is negotiated with repeat clients. Sale Group has a diversified client base, and we do not put all our eggs in any one basket. This ensures protection against client-side failures. The true importance of this approach to risk management was evident this year with the demise of ISG. Whilst the failure of ISG was unfortunate, it had minimal impact upon our results. This resilience is built into our business model.
We have commercial reviews and financial checks in place for all our projects on a continuous basis. These include checks for quality, health and safety, timeliness and profitability. We insure against all our clients and review the levels of cover necessary on an ongoing basis.
We have invested heavily in our IT Infrastructure both hardware and software to enable us to work remotely if necessary.
The long-term growth of the business depends on the Company’s ability to attract and retain high quality people. We manage this risk using personal development plans for all our employees. These plans are backed by specific policies and procedures in areas of training, management development, performance management and continuing professional development.
We are mindful of the huge role that our staff play in our business. Their dedication and skill sets are what set us apart. As a family business, Sale Group has always carefully selected the right person for the role and aim to nurture each one to fulfil their own unique potential. We endeavour to maintain a culture of caring for our staff and a friendly working environment based on respect for all.
We are a registered Mindful Employer, supporting a positive approach to mental health at work.
We operate a highly successful apprenticeship program throughout the business, offering a chance for ambitious people to qualify in building services engineering, quantity surveying, estimating , design and administrative roles.
Sale Group is committed to the welfare of the greater community and each year we carefully select organisations and charities where we feel we can make a difference.
2024 saw us participate in the Mental Health World Cup which aims to promote mental health awareness in the construction industry as well as providing a chance for people to meet up in a fun environment and make connections.
Each year Sale Group run what many consider the best Golf Day in the industry. We bring our entire supply chain together to raise vital money for local charity The Children’s Trust, who assist children with brain injuries. This year we raised over £35,000 on the day, something we are very proud of.
Each year we also contribute to Great Ormond Street so that children in hospital over Christmas can have as much joy as possible.
In broader terms we are an environmentally conscious organisation. A structured management plan is in place to guide us to becoming a Net Zero organisation. We are PAS 2060 and Achilles certified and aim to be carbon neutral. In 2024 we supported a community-based project in Bolivia to offset our carbon usage.
Current market conditions
As mentioned earlier, Sale Group have secured £60m turnover for 2025 with a diverse range of clients and we have many more exciting projects in the pipeline. The key focus for 2025 will be to continue to grow our market leading, quality service to our clients. We will continue to deepen our regional offering in the Southern Home Counties and the eastern regions.
This report has been prepared in compliance with Section 172 of the Companies Act 2006 to promote the success of the Company.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £1,130,000. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Saffery LLP have expressed their willingness to continue in office as auditors of the group.
We have audited the financial statements of Sale Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 director with respect to going concern are described in the relevant sections of this report.
Other information
The director is responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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.
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 parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent 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 £1,130,000 (2023 - £2,036,362 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Sale Group Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is Sale House, 25 Upper Mulgrave Road, Cheam, Sutton, SM2 7AY.
The group consists of Sale Group Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Sale Group Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 December 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.
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 director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover represents amounts receivable for services net of VAT and trade discounts.
Revenue from contracts for the provision of construction services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably.
The 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 income statement.
In the parent company financial statements, investments in subsidiaries 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.
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 statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors, 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
In preparing the financial statements, it is necessary to estimate the stage of completion, expected profit achievable and recoverability on ongoing construction contracts. This judgement significantly effects revenue, cost of sales, work in progress and accruals.
It is the opinion of the directors that the figures shown in the financial statements give a true and fair view of the stage of completion of contracts completed in the period or ongoing at the balance sheet date.
Grants received in the current and prior year relate to the apprenticeship incentive scheme. No conditions or contingencies are attached to the government grant and amounts do not require to be repaid.
All turnover is derived from sales within the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
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:
Details of the company's subsidiaries at 31 December 2024 are as follows:
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Fixed asset timing differences are expected to reverse in line with each corresponding fixed asset class and the classes depreciation rates, as noted in the accounting policies.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Each share is entitled to one vote in any circumstance and has equal dividend rights.
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:
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
Dividends totalling £1,130,000 (2023 - £200,000) were paid in the year in respect of shares held by the Group's director.