The directors present the strategic report for the period ended 31 December 2024.
The group’s results for the 18 month period comprised turnover of £105.8m (2023 - £76.5m), a gross profit of £11.0m (2023 - £5.5m), operating loss of £0.8m (2023 – profit of £1.3m) and loss on ordinary activities before taxation of £0.8m (2023 - profit of £0.2m).
The group’s performance for the period under review is based on 18 months trading compared to the prior financial period which covered 12 months.
The past 18 months has been a period of significant transition for the Highwood Group. At the beginning of the period, the business underwent a change in leadership following a period marked by strategic decisions that, in hindsight, did not align with the long-term needs of the business. While these choices presented operational and financial challenges, the company responded with focus and determination. Through disciplined execution, stronger forecasting practices, and a realignment of strategic priorities, we have not only stabilised performance but also laid the foundation for sustainable growth.
As a result, the Board approved an extension of the financial period end to December 2024. This allowed the group time to embed structural and cultural changes, aimed at improving long-term resilience and performance. The new leadership team has focused on stabilising operations, addressing legacy issues, and laying the groundwork to restore stability across the group. During the period, group profitability was adversely impacted by ongoing legacy projects, which are scheduled for completion in Q1 2025. Their completion will mark a natural point of transition, enabling the business to enter a new phase of strategic delivery in the next financial period.
Performance in the period continued to be challenged by inflationary pressures and subcontractor insolvencies. Many project prices were fixed prior to the outbreak of conflict in Ukraine, leaving the business exposed to significant increases in energy, material, and labour costs. The market remained turbulent throughout the period, with procurement often occurring at higher costs than originally tendered.
The planning environment has remained challenging, with negative rhetoric and policy signals from the Government earlier in the period, contributing to delays in converting our pipeline into deliverable sites. However, there has been a noticeable shift in tone and direction following the incoming government in September 2024. This has been further supported by recent changes to the National Planning Policy Framework (NPPF), prompting local authorities to reassess their positions. Encouragingly, we are already seeing the benefits of this change, most notably in the recent consent granted for the Rowlands Castle Road site in the last quarter.
Despite the unique challenges faced, the Group remained committed to investing in our people and ongoing development. As a result, we successfully secured 4 land transactions with trusted clients for delivery in 2025. During the 18-month period, the group completed or was in the contractual process for a total of 445 beds across a variety of sites, and commenced construction of 4 care and 1 retirement sites with a healthy flow of land deals progressing through planning for 2025.
The key risks and uncertainties expected to impact the group in the future include:
Housing incentives and supply chain implications
Government-led housing incentives, whether in the form of subsidies, planning reforms, or new-build targets have the potential to increase demand sharply. While this presents growth opportunities, it also places strain on a supply chain already under pressure. Increased demand for materials and labour could inflate costs and elongate delivery timelines, challenging our ability to meet client expectations efficiently. Strategic partnerships and long-term supplier agreements are increasingly essential.
Demographic challenges in the construction workforce
The construction sector continues to face a critical shortage of new talent entering the workforce, compounded by an aging demographic among skilled tradespeople. This talent gap threatens future capacity and raises concerns about knowledge transfer, continuity, and project resilience. The group is prioritising engagement with apprenticeships, training initiatives, and strategic recruitment to address this systemic issue and secure a sustainable talent pipeline.
Geopolitical risk
Ongoing global instability heightens uncertainty in supply chains, financing, and investor confidence. These factors can also affect energy prices and material availability. The group is incorporating scenario-based forecasting to prepare for potential disruptions and maintain business continuity under a variety of global risk conditions.
Building safety act
The UK Government’s evolving stance on building safety, particularly post-Grenfell reforms, continues to reshape compliance expectations across the industry. The implementation of the Building Safety Act introduces stricter requirements on accountability, documentation, and oversight, especially for high-risk buildings. The group supports these reforms and is investing in internal systems and training to ensure full compliance and to contribute meaningfully to safer, more transparent construction practices.
Natural England mandates
The growing imposition of moratoriums in place in certain regions for water neutrality and nutrient neutralities is affecting the viability and approval process for new developments. These directives often necessitate additional mitigation strategies and infrastructure investment, adding complexity, delay and cost to projects. We are working closely with planning authorities, engineers, and environmental consultants to overcome neutrality from the earliest design stages and minimise downstream risks.
Performance bond availability
The tightening of availability and terms for performance bonds poses a significant constraint on our ability to bid for and deliver larger projects. As insurers adopt more cautious risk appetites, it becomes more difficult for SMEs to secure bond cover without offering onerous terms. We are engaging with clients and insurers to explore alternatives to support our continued growth without undue exposure.
Our strategy and core strengths remain aligned with our long-established approach: delivering successful partnership-led developments by securing land, expertly managing the planning process, and building out in close collaboration with housing associations, local authorities, and private sector partners. This end-to-end capability has continued to underpin our reputation for reliability, agility, and value creation.
In this period and looking ahead, we have made a strategic pivot to prioritise operational efficiency over headline turnover. This deliberate shift enables us to strengthen margins, reduce exposure to market volatility, and invest in the long-term value of our relationships. Our focus has been on forming deeper, more purposeful partnerships in the care, retirement living, and general housing sectors. By maintaining a diverse delivery pipeline across these subsectors, we not only mitigate risk but also position ourselves to selectively capitalise on the most promising opportunities.
With the new Labour government in place, alongside recent amendments to the National Planning Policy Framework (NPPF) and an uplift in national housing targets, the group is well positioned to capitalise on its strategic land portfolio. These changes are expected to support a strong and sustainable pipeline of activity in the years ahead, reinforcing our long-term growth prospects.
While our contracting business encountered notable challenges during the period, resulting in a negative profit position, it nonetheless achieved meaningful delivery milestones, contributing £90.9m in revenue and securing £29.5m in forward work for the next financial year. The contracting arm remains a vital component of our integrated model, particularly where it supports the group’s land-led developments for key clients. We have taken swift action to strengthen governance and cost control in this area, and we remain confident in its future contribution to group performance.
The business has made adequate provisions for a small number of legacy sites, which have now been completed, reflecting our commitment to acting responsibly and maintaining high standards of corporate governance. As directors, we are taking a prudent and proactive approach to managing historical liabilities, ensuring the business remains on a stable and sustainable footing for the future.
The diversity within our business model has been a source of resilience and differentiation. Our ability to operate across the value chain, from land acquisition to delivery, gives us both flexibility and control in a market where certainty is at a premium. This adaptability will be crucial as we continue to navigate a changing economic and regulatory landscape.
Looking forward, we are optimistic about the opportunities ahead. Our land pipeline is strong, our client partnerships are deepening, and we have a team that is both experienced and energised. With a sharpened focus, a balanced portfolio, and a clear commitment to quality and trust, the group is well positioned to thrive in the next phase of its journey.
Management consider key performance indicators to include: turnover, gross profit, profit on ordinary activities before taxation, number of land transactions, number of beds completed or in contractual process and number of commenced constructions contracts. The values of these key performance indicators can be found in the 'Review of the business' section.
The group operates as a consolidated entity, bringing together both contracting and development activities under the unified oversight of the Board. This central Board provides strategic leadership and governance, overseeing and evaluating major decisions made by the subsidiary company boards. This structure ensures that all key decisions are thoroughly reviewed and consistently aligned with the group’s high standards, long-term strategy, and core values.
The Directors of Highwood Group Holdings Limited acknowledge their duty under Section 172 of the Companies Act 2006 to act in a way that promotes the success of the group for the benefit of its members as a whole. In doing so, the Board considers a wide range of stakeholders and balances long-term sustainability with short-term objectives. Our strategic decisions take into account the impact on employees, suppliers, clients, the environment, and the communities in which we operate.
Long-term decision making
Our business model is built around long-term value creation, both commercially and socially. We continue to focus on land-led development in partnership with housing associations, care providers, and private sector clients, ensuring each project is viable, sustainable, and aligned with our stakeholders’ expectations. Recent strategic decisions, such as shifting focus toward efficiency and margin rather than turnover, were made to strengthen the group’s foundations for future resilience.
Employees
Our people are at the core of everything we do. The Directors are committed to creating a safe, inclusive, and empowering workplace that fosters loyalty and professional growth. Regular communication, clear career pathways, and ongoing training initiatives ensure that staff remain engaged and equipped to meet evolving industry standards. During the period we provided 284 apprenticeship weeks. We also place strong emphasis on employee wellbeing, recognising that a healthy and motivated workforce is essential to delivering high-quality outcomes for our clients and partners. We continue to investing in the wellbeing of our people by providing digital health service with cash plan including tailored wellbeing and mental health support as part of our benefits offering.
Suppliers and subcontractors
Our supply chain relationships are vital to the quality, reliability, and integrity of our delivery. We work closely with a trusted network of subcontractors, consultants, and material suppliers, and we view them as valued partners. In an increasingly constrained market, we prioritise fairness, prompt payment practices, and collaboration, which strengthens our ability to secure reliable delivery and long-term commitment. The Board regularly reviews procurement strategies to ensure they reflect ethical practices, commercial fairness, and environmental standards.
Clients and partners
The group is built on deep-rooted partnerships with registered providers, local authorities, care providers, and private clients. We take pride in maintaining open, transparent communication, and tailoring our services to meet their long-term needs. By fostering mutual trust and alignment of values, we are able to create sustainable developments that serve the public good while supporting our commercial objectives.
Environment and sustainability
As a responsible developer, the group is committed to minimising our environmental impact and supporting the transition to a low-carbon, climate-resilient economy. We incorporate sustainability principles across all project phases, from land acquisition and planning to construction and aftercare. Our approach includes prioritising biodiversity, meeting or exceeding energy efficiency targets, and responding proactively to emerging policy frameworks such as water neutrality. The Board considers environmental performance a key pillar of risk management and long-term success.
Community and social value
The developments we deliver directly impact local communities, and we take that responsibility seriously. For each new project undertaken, the group commits a financial contribution to support community-led initiatives in the local area, ranging from outdoor classrooms for schools to charitable funds and social infrastructure. We engage early and meaningfully with residents, local authorities, and other stakeholders to understand local needs and aspirations. Wherever possible, we aim to generate wider social value through placemaking, employment opportunities, and community investment.
Governance and stakeholder engagement
The Board maintains strong governance practices and ensures that stakeholder perspectives inform key decisions. Structured engagement with clients, staff, supply chain partners, and professional advisors ensures that diverse viewpoints are considered. This inclusive approach allows us to anticipate challenges early, adapt confidently, and remain accountable to those we serve.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 December 2024.
The results for the period are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a 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 operates a centralised treasury function which is responsible for managing the liquidity and interest risks associated with the group's activities.
The group's principal financial instruments include bank balances, trade debtors and trade creditors arising directly from its operations.
The group manages its cash and borrowing requirements centrally 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.
Investments of cash surpluses and borrowings are made through financial institutions which must fulfil credit rating criteria approved by the board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The directors consider that the group faces the usual pricing risk of any other company operating in a competitive, commercial environment.
The S172(1) statement in the strategic report provides details of how the directors have had regard to the need to foster business relationships with suppliers, customers and other stakeholders during the period.
The auditor, Fiander Tovell Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
UK energy use and associated greenhouse gas emissions
Current UK based annual energy usage and associated annual greenhouse gas (“GHG”) emissions are reported pursuant to the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (“the 2018 Regulations”) that came into force 1 April 2019.
Organisational boundary
In accordance with the 2018 Regulations, the energy use and associated GHG emissions are for those assets owned or controlled within the UK only as defined by the operational control boundary, with the mandatory inclusion of scope 3 business travel in employee-owned vehicles (grey fleet). Emissions associated with rented equipment used in onsite operations is reported but considered voluntary according to the 2018 Regulations, as it is not considered transport or gas.
Reporting period
The reporting period is 1 July 2023 to 31 December 2024 and 1 July 2022 to 30 June 2023 for the comparative period. The energy and carbon emissions are aligned to the periods stated above.
The 2019 UK Government Environmental Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) were followed. The 2024 UK Government GHG Conversion Factors for Company Reporting were used in emission calculations as these relate to the majority of the reporting period. The report has been reviewed independently by Zenergi Limited (trading as Briar Consulting Engineers Limited).
Electricity and gas consumption were based on meter reads and invoice records. Where usage did not cover the whole reporting period, consumption was apportioned using the pro-rata estimation technique. Invoice records were used to calculate diesel consumption for onsite equipment. Mileage was used to calculate energy and emissions from fleet vehicles and grey fleet. Gross calorific values were used except for mileage energy calculations as per Government GHG Conversion Factors.
The emissions are divided into mandatory and voluntary emissions according to the 2018 Regulations, then further divided into the direct combustion of fuels and the operation of facilities (scope 1), indirect emissions from purchased electricity (scope 2) and further indirect emissions that occur as a consequence of company activities but occur from sources not owned or controlled by the organisation (scope 3).
Three intensity ratios are recorded internally showing emissions (tCO2e) per total million-pound (£m) turnover, per total million-pound (£m) cost of sales and per employee. The ratio activity data relates to UK operations only to align with the energy and emission reporting boundary. The turnover financial metric is considered the most relevant to the group’s energy consuming activities and provides a good comparison of performance over time and across different organisations and sectors, this has been disclosed in the table above. Emissions per million-pound cost of sales and per employee provide other relevant comparable and performance metrics for the business.
Within the period, the group has begun steps in developing a net zero strategy, with emission saving opportunities being reviewed across the owned buildings and development sites. As a result of this, plans are now in place for all new development sites to feature a more energy efficient portacabin(s) for use as site offices. These consist of PIR and LED lighting, insulated walls, programmable wall heaters and door closers to improve electrical and heating efficiency.
At the head office, most of the light fittings have now been converted to LED lighting and work is beginning to investigate the feasibility of roof top solar panels. The use of electric vehicles is also encouraged via an electric vehicle salary sacrifice scheme (available to all employees) along with the installation of 2 electric vehicle charging points at head office. The EV charge points are used daily by both employees and customers.
Nature based carbon capture solutions also form part of the group's decarbonisation strategy on development sites through the protection of as many trees as possible and the additional planting of new trees.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of strategies and future outlook.
We have audited the financial statements of Highwood Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial 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 that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience.
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation.
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.
considering 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:
performed analytical procedures to identify any unusual or unexpected relationships.
tested journal entries to identify unusual transactions.
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 were indicative of 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:
agreeing financial statement disclosures to underlying supporting documentation.
reading the minutes of meetings of those charged with governance.
enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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 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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
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 period was £nil (2023 - £2,000,000).
Highwood Group Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is The Hay Barn, Upper Ashfield Farm, Hoe Lane, Romsey, Hampshire, SO51 9NJ.
The group consists of Highwood 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 £'000.
The financial statements have been prepared on 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the group are consolidated in the financial statements of Highwood Holdings Limited. These consolidated financial statements are available from its registered office,The Hay Barn, Upper Ashfield Farm, Romsey, Hampshire, SO51 9NJ.
The consolidated group financial statements consist of the financial statements of the parent company Highwood Group 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 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. 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.
The financial statements cover the 18 month period ended 31 December 2024, the prior period covers the year ending 30 June 2023. The group has decided to change it's reporting period to better reflect it's business cycle. As a result, the comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.
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. The group recognises turnover on an accruals basis, where the amount of turnover can be reliably measured and it is probable that the future economic benefits will flow to the group.
Revenue from construction contracts is recognised by reference to the value of certified work at the year end.
Land sales are recognised upon exchange of ownership, when the rewards and responsibilities are transferred
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 instruments are measured at fair value through profit or loss except for those equity investments that are not publicly traded 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 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.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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 derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Recognition of revenue and profit is based on judgements made in respect of the ultimate profitability of a contract. Such judgements are arrived at through the use of estimation in relation to costs and value of work performed to date and to be performed in bringing contracts to completion. These estimates are made by reference to recovery of pre-contract costs, variations in work scopes, claim recoveries and expected contract costs to complete. The group has appropriate control procedures to ensure all estimates are determined on a consistent basis and subject to review and authorisation. The amount included in cost accruals which has been estimated based on the expected profit margin is £14,270,372 (2023: £13,543,231).
The total turnover of the group for the period has been derived from its principal activities wholly undertaken in the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 7 (2023: 9).
The amounts included for employee and directors' remuneration cover the 18 months period ending 31 December 2024.
With effect from the 1 April 2023, UK Corporation tax rates changed in line with the enacted tax rate from 19% to 25%.
The actual charge for the period 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:
During the period ended 31 December 2024, the group acquired the 100% shareholdings in Highwood Ventures 1 Limited.
This is to recognise the transfer of Highwood Ventures 1 Limited from being direct a subsidiary of the ultimate parent holding company, Highwood Group Holdings Limited, to being a subsidiary of Highwood Homes Limited (and so within this group and this consolidation).
This transfer is a group reconstruction and as such is accounted for under merger accounting. This requires the transfer to be treated as if it was always in place. Therefore the transactions relating to the subsidiary have been brought into the comparative and opening positions.
The registered offices for all of the above entities are the same as for Highwood Group Limited.
The revenue disclosed for both the current and comparative periods, relates to construction contracts. All trade debtors, work in progress and trade creditors at the period end are related to these ongoing contracts.
The balance sheet also includes accrued income of £5,735,569 (2023 - £5,228,649) and accrued costs of £14,270,372 (2023 - £13,543,231) in respect of these contracts.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
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.
There were outstanding contributions at the period end of £53,024 (2023: £39,260).
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.
The group has taken advantage of the exemptions contained within section 33.1A of FRS102 to not disclose transactions with other group entities that are 100% owned members of the group.
During the period the group made sales of £760,000 (2023: £nil) to Littlemeads Investments Limited, a company that shares key management personnel. There was no balance outstanding at the period end in relation to this transaction.
During the period the group also operated loan accounts with other entities under the control of the directors. These loan accounts were interest free and repayable on demand.
At the balance sheet date, the following amounts were owed to the group by:
CKS Investment Properties Limited - £nil (2023: £687,000).
Highwood Care Group Limited - £nil (2023: £10,880).
Highwood Strategic Land Limited - £518,987 (2023: £527,000).
Highwood Land 2 LLP - £nil (2023: £7,400).
Upper Ashfield Management Company Limited - £1,025 (2023: £9,000).
Hoe Lane Investments Limited - £252,339 (2023: £252,000).
At the balance sheet date, the following amounts were owed by the group to:
Ashfield Property Developments (Fordingbridge) Limited - £nil (2023: £3,717)
CKS Investment Properties Limited - £500,000 (2023: £nil).
The group also had transactions with Granthorne Holdings Limited which included purchases of £40,000 during the period. There was no amount outstanding as at the period end relating to these transactions.
The group was charged interest on the loan from CKS Investment Properties Limited during the period totalling £54,795 (2023 - £nil).