Company registration number 05080117 (England and Wales)
HIGHWOOD CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2024
HIGHWOOD CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
S Matthews
P Prosser
M Hawthorne
S Beech
N Brown
Company number
05080117
Registered office
The Hay Barn
Upper Ashfield Farm
Hoe Lane
Romsey
Hampshire
SO51 9NJ
Auditor
Fiander Tovell Limited
Stag Gates House
63/64 The Avenue
Southampton
Hampshire
SO17 1XS
HIGHWOOD CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Statement of income and retained earnings
10
Balance sheet
11
Notes to the financial statements
12 - 23
HIGHWOOD CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 1 -

The directors present the strategic report for the period ended 31 December 2024.

Review of the business

The company’s results for the 18 month period comprised turnover of £90.9m (2023 - £58.1m), a gross loss of £1.5m (2023 - £1.2m gross profit), operating loss of £4.3m (2023 – £3.0m operating profit) and loss on ordinary activities before taxation of £3.7m (2023 - £2.4).

 

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.

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

Despite these challenges, the group achieved significant milestones by successfully securing and initiating four new contracts with a combined value of £36 million Throughout the period, the group completed, or was in the contractual process for a total of 6 care home and housing schemes delivering 259 beds and 63 housing units and completed on a further 223 mix of care units and apartments, which completed after the period end. Additionally, the group finalized two land deals, incorporating two associated contracted construction projects with trusted clients at Storrington for a 60-bedroom care home as well as land at Rowlands Castle which will deliver a mix of 100 housing units, with a combined value of £30m, all expected to complete in financial year 2026. A new contract for £10m at Waterlooville was also concluded after the period end, this is scheduled to deliver a 64 bed care home within the financial year 2026.

Principal risks and uncertainties

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. Highwood 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. Highwood 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. Highwood 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.

HIGHWOOD CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 2 -

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.

Strategies and future outlook

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.

While our contracting business encountered notable challenges during the period resulting in a negative profit position, it nonetheless achieved meaningful delivery milestones, contributing £86.5m in revenue with £29.5m of secured 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 will make appropriate provisions for a small number of legacy sites, 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 compliant footing.

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, Highwood Group is well positioned to thrive in the next phase of its journey.

Key performance indicators

Management consider key performance indicators to include: turnover, gross profit, profit on ordinary activities before taxation, number of housing units completed and number of beds completed or in contractual process. The values of these key performance indicators can be found in the 'Review of the business' section.

Group section 172 statement

The Highwood 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 acknowledge their duty under Section 172 of the Companies Act 2006 to act in a way that promotes the success of the company 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.

HIGHWOOD CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 3 -

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, Highwood 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, Highwood 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.

HIGHWOOD CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 4 -

On behalf of the board

N Brown
Director
16 July 2025
HIGHWOOD CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 5 -

The directors present their annual report and financial statements for the period ended 31 December 2024.

Principal activities

The principal activity of the company continued to be that of property development, building and construction services.

Results and dividends

The results for the period are set out on page 10.

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

Directors

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

S Matthews
M Baskerville
(Resigned 19 February 2024)
E Lord
(Resigned 28 March 2025)
P Prosser
M Hawthorne
S Beech
A Stevenson
(Resigned 31 October 2023)
N Brown
Financial instruments
Treasury operations and financial instruments

The company operates a treasury function which is responsible for managing the liquidity and interest risks associated with the company's activities.

 

The company's principal financial instruments include bank balances, trade debtors and trade creditors arising directly from its operations.

Liquidity risk

The company 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.

Credit risk

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.

Pricing risk

The directors consider that the company faces the usual pricing risk of any other company operating in a competitive, commercial environment.

Changes in presentation of the financial statements

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company'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.

HIGHWOOD CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 6 -
Auditor

The auditor, Fiander Tovell Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

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

 

 

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

Statement of disclosure to auditor

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

On behalf of the board
N Brown
Director
16 July 2025
HIGHWOOD CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGHWOOD CONSTRUCTION LIMITED
- 7 -
Opinion

We have audited the financial statements of Highwood Construction Limited (the 'company') for the period ended 31 December 2024 which comprise the statement of income and retained earnings, the balance sheet 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).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

HIGHWOOD CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHWOOD CONSTRUCTION LIMITED
- 8 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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:

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

 

 

 

HIGHWOOD CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHWOOD CONSTRUCTION LIMITED
- 9 -
Audit response to risk identified

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

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.

Mark Gregory ACA
Senior Statutory Auditor
For and on behalf of Fiander Tovell Limited
16 July 2025
Chartered Accountants
Statutory Auditor
Stag Gates House
63/64 The Avenue
Southampton
Hampshire
SO17 1XS
HIGHWOOD CONSTRUCTION LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 10 -
Period
Year
ended
ended
31 December
30 June
2024
2023
Notes
£'000
£'000
Turnover
3
90,941
58,136
Cost of sales
(92,406)
(59,340)
Gross loss
(1,465)
(1,204)
Administrative expenses
(3,477)
(1,892)
Other operating income
639
71
Operating loss
4
(4,303)
(3,025)
Interest receivable and similar income
8
557
590
Interest payable and similar expenses
9
-
0
(1)
Loss before taxation
(3,746)
(2,436)
Tax on loss
10
178
(4)
Loss for the financial period
(3,568)
(2,440)
Retained earnings brought forward
4,259
6,699
Retained earnings carried forward
691
4,259

The profit and loss account has been prepared on the basis that all operations are continuing operations.

HIGHWOOD CONSTRUCTION LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 11 -
31 December 2024
30 June 2023
Notes
£'000
£'000
£'000
£'000
Fixed assets
Intangible assets
11
29
59
Tangible assets
12
69
119
98
178
Current assets
Stocks
14
65
138
Debtors
15
15,133
15,114
Cash at bank and in hand
1,011
8,377
16,209
23,629
Creditors: amounts falling due within one year
16
(13,698)
(18,058)
Net current assets
2,511
5,571
Total assets less current liabilities
2,609
5,749
Creditors: amounts falling due after more than one year
17
(1,708)
(1,280)
Net assets
901
4,469
Capital and reserves
Called up share capital
20
30
30
Share premium account
180
180
Profit and loss reserves
691
4,259
Total equity
901
4,469
The financial statements were approved by the board of directors and authorised for issue on 16 July 2025 and are signed on its behalf by:
N Brown
Director
Company registration number 05080117 (England and Wales)
HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 12 -
1
Accounting policies
Company information

Highwood Construction Limited is a private company limited by shares, incorporated in England and Wales. The registered office is The Hay Barn, Upper Ashfield Farm, Hoe Lane, Romsey, Hampshire, SO51 9NJ.

1.1
Accounting convention

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 £1,000.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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

 

 

The financial statements of the company are consolidated into the financial statements of Highwood Group Limited which are consolidated into the financial statements of Highwood Holdings Limited and then consolidated into the ultimate parent Highwood Group Holdings Limited. All sets of consolidated financial statements are available from Companies House.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Highwood Construction Limited is a wholly owned subsidiary of Highwood Group Limited and the results of Highwood Construction Limited are included in the consolidated financial statements of Highwood Group Limited which are available from Companies House.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

1.3
Reporting period

The financial statements cover the 18 month period ended 31 December 2024, the prior period covers the year ending 30 June 2023. The company 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.

HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.4
Turnover

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 company 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 company.

 

Revenue from construction contracts is recognised by reference to the value of certified work at the period end.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
20% straight line
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
10% straight line
Plant and equipment
20% - 25% straight line
Motor vehicles
25% straight line

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 credited or charged to profit or loss.

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the company 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.

HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.9
Stocks

Stock and work in progress are valued at the lower of cost or net realisable value.

 

Long term contracts are stated at cost less foreseeable losses and payments on account.

1.10
Construction contracts

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

 

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

1.11
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less.

1.12
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.14
Taxation

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

Current tax

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

HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.15
Employee benefits

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.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.17
Leases

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 leases asset are consumed.

1.18
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

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

 

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

HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty

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.

Accounting for construction contracts

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-contracts costs, variations in work scopes, claim recoveries and expected contract costs to complete. The company 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 for the contract is £8,938,860 (2023: £10,535,000).

3
Turnover and other revenue

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

2024
2023
£'000
£'000
Turnover analysed by class of business
Revenue from construction contracts
90,942
58,136
2024
2023
£'000
£'000
Other significant revenue
Dividends received
557
590
4
Operating loss
2024
2023
Operating loss for the period is stated after charging:
£'000
£'000
Depreciation of owned tangible fixed assets
47
33
Loss on disposal of tangible fixed assets
2
-
Amortisation of intangible assets
30
20
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
9
8
For other services
All other non-audit services
5
5
HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 18 -
6
Employees

The average monthly number of persons (including directors) employed by the company during the period was:

2024
2023
Number
Number
Directors
7
8

All employees and directors are employed and remunerated through other group companies. Costs are recharged from these companies to the group company which utilises the employees services. During the year £7,142,288 (2023: £5,134,000) of costs were recharged to Highwood Construction, representing the value of services provided to this company.

7
Directors' remuneration
2024
2023
£'000
£'000
Remuneration for qualifying services
634
421
Company pension contributions to defined contribution schemes
27
21
661
442

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2023 - 6).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£'000
£'000
Remuneration for qualifying services
192
192
Company pension contributions to defined contribution schemes
10
8
8
Interest receivable and similar income
2024
2023
£'000
£'000
Other income from investments
Dividends received
-
0
590
Income from fixed asset investments
Income from shares in group undertakings
557
-
0
Total income
557
590
HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 19 -
9
Interest payable and similar expenses
2024
2023
£'000
£'000
Other interest
-
0
1
10
Taxation
2024
2023
£'000
£'000
Current tax
Adjustments in respect of prior periods
4
4
Deferred tax
Origination and reversal of timing differences
(182)
-
0
Total tax (credit)/charge
(178)
4

The actual (credit)/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:

2024
2023
£'000
£'000
Loss before taxation
(3,746)
(2,436)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
(937)
(499)
Tax effect of expenses that are not deductible in determining taxable profit
8
50
Tax effect of income not taxable in determining taxable profit
(139)
(112)
Change in unrecognised deferred tax assets
4
-
0
Adjustments in respect of prior years
4
-
0
Group relief
882
565
Taxation (credit)/charge for the period
(178)
4
HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 20 -
11
Intangible fixed assets
Software
£'000
Cost
At 1 July 2023 and 31 December 2024
99
Amortisation and impairment
At 1 July 2023
40
Amortisation charged for the period
30
At 31 December 2024
70
Carrying amount
At 31 December 2024
29
At 30 June 2023
59
12
Tangible fixed assets
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£'000
£'000
£'000
£'000
Cost
At 1 July 2023
263
255
17
535
Disposals
-
0
(197)
-
0
(197)
At 31 December 2024
263
58
17
338
Depreciation and impairment
At 1 July 2023
186
219
11
416
Depreciation charged in the period
29
13
5
47
Eliminated in respect of disposals
-
0
(194)
-
0
(194)
At 31 December 2024
215
38
16
269
Carrying amount
At 31 December 2024
48
20
1
69
At 30 June 2023
77
36
6
119
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Highwood Ventures 2 Limited
England and Wales
Ordinary A Shares
100.00

During the year ended 30 June 2023, the company acquired a 100% shareholding in Highwood Ventures 2 Limited. The results for the period for this subsidiary has been consolidated into the financial statements of the parent company, Highwood Group Limited.

HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 21 -
14
Stocks
2024
2023
£'000
£'000
Work in progress
65
138
15
Debtors
2024
2023
Amounts falling due within one year:
£'000
£'000
Trade debtors
2,909
3,021
Amounts owed by group undertakings
9,383
7,480
Accrued income
1,045
3,377
Prepayments
20
-
0
13,357
13,878
Deferred tax asset (note 18)
182
-
0
13,539
13,878
2024
2023
Amounts falling due after more than one year:
£'000
£'000
Trade debtors
1,594
1,236
Total debtors
15,133
15,114
16
Creditors: amounts falling due within one year
2024
2023
£'000
£'000
Trade creditors
2,559
6,476
Amounts owed to group undertakings
2,115
973
Taxation and social security
26
-
0
Other creditors
-
0
15
Accruals and deferred income
8,998
10,594
13,698
18,058
17
Creditors: amounts falling due after more than one year
2024
2023
£'000
£'000
Trade creditors
1,708
1,280
HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 22 -
18
Deferred taxation

Deferred tax assets and liabilities are offset where the 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:

Assets
Assets
2024
2023
Balances:
£'000
£'000
Tax losses
182
-
2024
Movements in the period:
£'000
Liability at 1 July 2023
-
Credit to profit or loss
(182)
Asset at 31 December 2024
(182)

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
3
159

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The amount payable at the period end amounted to £Nil (2023: £Nil).

20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary A shares of £1 each
30,000
30,000
30
30

Ordinary A shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.

21
Related party transactions
Other information

The company has taken advantage of the provision of FRS102 section 33 to not disclose transactions with other wholly owned members of the group.

HIGHWOOD CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 23 -
22
Ultimate controlling party

The immediate parent company is Highwood Group Limited, a company incorporated in England and Wales. Its registered office is The Hay Barn Upper Ashfield Farm, Hoe Lane, Romsey, Hampshire SO51 9NJ and copies of the consolidated financial statements can be obtained from Companies House.

 

The ultimate parent is Highwood Group Holdings Limited consolidated accounts can be obtained from Companies House. Its registered office is The Hay Barn Upper Ashfield Farm, Hoe Lane, Romsey, Hampshire SO51 9NJ.

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