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Registration number: 2757691

Chestnut Homes Limited

Annual Report and Financial Statements

for the Year Ended 31 October 2024

 

Chestnut Homes Limited

Contents

Strategic Report

1 to 3

Directors' Report

4 to 6

Statement of Directors' Responsibilities

7

Independent Auditor's Report

8 to 11

Profit and Loss Account

12

Balance Sheet

13

Statement of Changes in Equity

14

Statement of Cash Flows

15

Notes to the Financial Statements

16 to 28

 

Chestnut Homes Limited

Strategic Report for the Year Ended 31 October 2024

The directors present their strategic report for the year ended 31 October 2024.

Principal activity

The principal activity of the company is that of house builders.

Fair review of the business

The company reported turnover of £29.2 million in 2024, a significant decrease from £39.4 million in 2023. This remains in line with general market expectations due to a tougher trading period in the 2024 financial year.

The housing market demand has suffered as a result of the increased interest rates, withdrawal of mortgage products and a reduction in consumer confidence. In addition to this, the First Homes Scheme was withdrawn which had previously buoyed the new home market.

Due to the fall in demand for private housing, the company increased the focus on social housing sales where demand remained higher. The margins in this sector are generally thinner and this has had an impact on the gross profit margin falling from 19% to 17%.

The company remains in a strong position with a good variety of ongoing sites in good geographic locations. Whilst the market activity remains slightly depressed, consumer appetite remains robust. This is expected to produce greater sales in the future, as mortgage availability increases and consumer confidence returns.

At the end of the reporting period, construction activity levels had reduced slightly to reflect the reduction in market activity. Stock and work in progress levels remained high at £30.2m (2023 - £29.3m). Careful management of cashflow means that net debt levels have remained consistent at £5.4m.

The company's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2024

2023

Turnover

£000

29,233

39,361

Gross profit

£000

5,000

7,385

Gross profit margin

%

17

19

Operating profit

£000

1,748

4,024

Operating profit margin

%

6

10

 

Chestnut Homes Limited

Strategic Report for the Year Ended 31 October 2024

Principal risks and uncertainties

As with any business, Chestnut Homes Limited faces risks and uncertainties in the course of its day to day operations. The successful management of risk is essential to enable the company to deliver its strategic objectives.

Noted below is a summary of the company’s principal risks and uncertainties. Control of each of these is critical to the ongoing success of the business. As such, their management is primarily the responsibility of the board of directors, supported by the management throughout the company.

Government policy and planning regulations:

Obtaining timely planning permissions and achieving other regulatory requirements and permits is key to starting on site as soon as possible and the delivery of completed homes efficiently. Our management team have technical and planning expertise, focussed on complying with regulations and achieving implementable planning consents which meet local regulations, but are also desirable homes for our customers.

Mortgage availability and demand:

We build homes which are sold to individual purchasers who take on mortgages to finance their purchases. Whilst there is still a shortfall in new homes being built in the UK, the market has experienced a reduction in demand for new purchases, as people lost confidence in the economy due to the elevated levels of inflation. Interest rates have dropped in the period which should help stimulate demand for, and availability of, new mortgages.

Our team selects the locations and home designs that best meet the needs of the local community and customer demand in the present and future. We evaluate new outlet openings on the basis of local market conditions and regularly review the pricing and incentives that we offer. We continue to promote the Government backed schemes and our customers demonstrate continued interest.

Material costs and availability of subcontractors:

We aim to commence work on new sites as soon as planning consents allow, to accelerate build progress and optimise return on capital employed. If the availability of subcontractors or materials is insufficient to meet demand, this could lead to longer build times and increased costs, thereby reducing profitability and return on capital employed. We maintain regular contact with suppliers, negotiating contract volumes, pricing and duration. We provide high level and site-specific programme information to the subcontractor base to aid with demand planning. When selecting our subcontractors, we consider competencies particularly in relation to health and safety, quality, previous performance and financial stability.

Land purchasing:

Purchasing poor quality or mispriced land, or incorrectly timing land purchases would have a detrimental impact on our profitability and return on capital employed. Acquiring insufficient land would reduce our ability to actively manage our land portfolio and generate profits. Our land team prepares, develops and follows an acquisition strategy to guide their land searches to match the needs of the company. They select and appraise each site, with the appraisal process ensuring that each project is financially viable, consistent with our strategy and appropriately authorised.

 

Chestnut Homes Limited

Strategic Report for the Year Ended 31 October 2024



Health and safety:

The company has detailed procedures and policies in place to minimise health and safety risks which are inherent due to the nature of the business. The directors takes this responsibility seriously and in order to manage this risk, procedures and policies are constantly being reviewed and extensive training is provided.

Section 172(1) statement

The board understands that its decisions can have an impact on the long term success of the business. At board level the stakeholders of the company have been identified, the key stakeholders for the business are the company employees, suppliers and the communities the company serves. These stakeholders are then considered in all business operations.

Our employees are fundamental to our business. We aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and wellbeing of our employees is one of our primary considerations in the way we do business.

Chestnut Homes has built up a reputation over 30 years for building quality homes for the residents of Lincolnshire. Close relationships are developed with suppliers and stringent review processes are in place to ensure the finished home is of the highest quality to meet the expectations of our customers.

Chestnut Homes is a local company serving the local communities, so engagement with these stakeholders is important for both the benefit of the local area and the success of the business.

Understanding the local communities’ views and desires is imperative when considering new sites, and it can be seen that the company will react to local views, as plans are submitted and amended. The directors are active at liaising with interested parties in matters of planning.

Approved by the Board on 25 July 2025 and signed on its behalf by:

Mr D S Newton
Director

   
     
 

Chestnut Homes Limited

Directors' Report for the Year Ended 31 October 2024

The directors present their report and the financial statements for the year ended 31 October 2024.

Directors of the company

The directors who held office during the year were as follows:

Mr R D Newton

Mr N R Kempster

Mr D S Newton

Financial instruments

Objectives and policies

The directors take the management of risk very seriously and as such have policies and procedures in place which have been authorised by the Board. Managing risk is seen as a key attribute of the company and strict health and safety policies are in place as well as detailed working procedures to minimise the risks out on site. At Board level regular meetings are held where current management accounts and long term forecasts are available to highlight any financial risks to be dealt with.

Price risk, credit risk, liquidity risk and cash flow risk

The business' principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest. All of the business' cash balances are held in such a way that achieves a competitive rate of interest.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Corporate governance

The company does not apply a formal corporate governance code. The need to apply a particular formal code was reviewed and concluded that due to the small number of members of the company board it would not be cost effective. The close direct involvement of the board alleviates a large amount of the extra work to adopt The Wates Corporate Governance Principles.

The board is made up of three directors who are involved in all areas of the daily business activities and therefore have a good understanding and close involvement in each area. The board also represent the shareholders of the company. The expectations of the board are clearly conveyed and all members work to the highest standards.

The board fosters a close relationship with the stakeholders of the business as identified and encourages open dialogue with those parties. Through the close relationships it will ensure the future success of the company.

Engagement with employees

Employees are of strategic importance for the business. The Section 172(1) statement within the Strategic Report gives further detail.

 

Chestnut Homes Limited

Directors' Report for the Year Ended 31 October 2024

Engagement with suppliers, customers and other relationships

The board of directors have identified the importance of building relationships with the suppliers and customers of the business. The Section 172(1) statement within the Strategic Report gives further detail.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Non-financial and sustainability information

Energy and carbon report

We have considered the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) when preparing this report. These recommendations encourage businesses to increase disclosure of climate-related information, with an emphasis on financial disclosure. Chestnut Homes Limited supports these recommendations and are committed to disclosing the relevant information which can be found below.

Governance

At Chestnut Homes, we believe that each of our employees, suppliers, contractors and stakeholders has a crucial role in the sustainable development of our new homes.

We are committed to manage our environmental impacts and reduce carbon emissions.

Emissions and energy consumption

Energy and carbon reporting follows a financial control approach, consolidating emissions from multiple sources, reporting significant energy consumption and carbon emissions from activities and operations that Chestnut Homes have financial control over.

This includes energy consumption and carbon emissions from our offices (including sales offices and head office), construction sites, plots, show homes and transport under our control.

Gas and electricity totals have been taken from service supplier bills for each office / site with a per kWh average taken over each quarter.

Transport fuel totals for those with company vehicles were taken from the company fuel card invoices in litres and converted accordingly.

 

Chestnut Homes Limited

Directors' Report for the Year Ended 31 October 2024

Energy and carbon data summary for the year ended 31 October 2024:

Name and
description

Unit of
measurement

2024

2023

Annual quantity of emissions resulting from activities for which the company is responsible for the purposes of transport

tCO2e

75.00

80.00

Annual quantity of emissions resulting from the purchase of electricity by the company for its own use

tCO2e

294.00

343.00

Aggregate of the annual quantity of energy consumed from activities for which the company is responsible for the purposes of transport and by the company for its own use

kWh

477,151.00

522,159.00

   

Intensity ratio

CO2 emissions have been reviewed in respect of properties sold with 3,336kWh (2023 - 2,664kWh) emitted per property sold.

Approved by the Board on 25 July 2025 and signed on its behalf by:


Mr D S Newton
Director

 

Chestnut Homes Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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.

 

Chestnut Homes Limited

Independent Auditor's Report to the Members of Chestnut Homes Limited

Opinion

We have audited the financial statements of Chestnut Homes Limited (the 'company') for the year ended 31 October 2024, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of 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:

give a true and fair view of the state of the company's affairs as at 31 October 2024 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

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 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Chestnut Homes Limited

Independent Auditor's Report to the Members of Chestnut Homes Limited

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 7, 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.

Auditors' 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

the nature of the industry and sector, control environment and business performance;

 

Chestnut Homes Limited

Independent Auditor's Report to the Members of Chestnut Homes Limited

the company’s own assessment of the risks that irregularities may occur either as a result of fraud or error;

results of our enquiries of management about their own identification and assessment of the risks of irregularities;

the key laws and regulations under which the business operates and whether management were aware of any instances of non-compliance;

whether the management have knowledge of any actual, suspected or alleged fraud;

the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and

the matters discussed among the audit engagement team, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: work in progress costing and margin recognition and purchase/working capital transactions. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the health and safety regulations, UK Companies Act, Tax legislation, and Regulations established by regulators in the key markets in which the company operates.

 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These included the operating and environmental regulations relevant to the company.

 

In addition to the above, our procedures to respond to risks identified included the following:

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having a direct effect on the financial statements;

enquiring of management, concerning any actual and potential litigation and claims;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

in addressing the risk of fraud in revenue recognition, we have vouched sales to completion statements or third party valuations to assess accuracy and completeness of revenue recognised;

in addressing the risk of fraud in the use of purchase ledger/working capital transactions, we have reviewed the accounting treatments adopted by management against the specific contractual terms and arrangements associated with each individual transaction and reviewed the related disclosures in the financial statements;

in addressing the risk of fraud through the work in progress costing and margin recognition, we have tested the calculation of site appraisals, tested WIP additions to the supporting invoices to ensure they are correctly recognised, performed retrospective review of appraisals on both closed and active developments to ensure appraisals are up to date, accurate and appropriate, inquired with management regarding any unusual trends; and

 

Chestnut Homes Limited

Independent Auditor's Report to the Members of Chestnut Homes Limited

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

 

Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: 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.




John Heeney BA FCA (Senior Statutory Auditor)
For and on behalf of RNS Chartered Accountants, Statutory Auditor

50-54 Oswald Road
Scunthorpe
North Lincolnshire
DN15 7PQ

25 July 2025

 

Chestnut Homes Limited

Profit and Loss Account for the Year Ended 31 October 2024

Note

2024
£

2023
£

Turnover

3

29,233,433

39,360,886

Cost of sales

 

(24,233,011)

(31,975,923)

Gross profit

 

5,000,422

7,384,963

Administrative expenses

 

(3,297,206)

(3,405,375)

Other operating income

4

44,429

43,944

Operating profit

5

1,747,645

4,023,532

Interest payable and similar expenses

7

(525,781)

(409,496)

Profit before tax

 

1,221,864

3,614,036

Taxation

11

(310,920)

(818,646)

Profit for the financial year

 

910,944

2,795,390

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

Chestnut Homes Limited

Registration number: 2757691

Balance Sheet as at 31 October 2024

Note

2024
£

2023
£

           

Fixed assets

   

 

Tangible assets

12

 

416,663

 

365,885

Other financial assets

13

 

25,000

 

25,000

   

441,663

 

390,885

Current assets

   

 

Stocks

14

30,219,114

 

29,287,591

 

Debtors

15

3,399,395

 

3,107,545

 

Cash at bank and in hand

16

61,093

 

7,013

 

 

33,679,602

 

32,402,149

 

Creditors: Amounts falling due within one year

17

(10,203,348)

 

(9,675,243)

 

Net current assets

   

23,476,254

 

22,726,906

Total assets less current liabilities

   

23,917,917

 

23,117,791

Provisions for liabilities

19

 

(80,653)

 

(91,471)

Net assets

   

23,837,264

 

23,026,320

Capital and reserves

   

 

Called up share capital

21

100

 

100

 

Profit and loss account

23,837,164

 

23,026,220

 

Total equity

   

23,837,264

 

23,026,320

Approved and authorised by the Board on 25 July 2025 and signed on its behalf by:
 


Mr D S Newton
Director

   
 

Chestnut Homes Limited

Statement of Changes in Equity for the Year Ended 31 October 2024

Share capital
£

Retained earnings
£

Total
£

At 1 November 2023

100

23,026,220

23,026,320

Profit for the year

-

910,944

910,944

Dividends

-

(100,000)

(100,000)

At 31 October 2024

100

23,837,164

23,837,264

Share capital
£

Retained earnings
£

Total
£

At 1 November 2022

100

20,530,830

20,530,930

Profit for the year

-

2,795,390

2,795,390

Dividends

-

(300,000)

(300,000)

At 31 October 2023

100

23,026,220

23,026,320

 

Chestnut Homes Limited

Statement of Cash Flows for the Year Ended 31 October 2024

Note

2024
£

2023
£

Cash flows from operating activities

Profit for the year

 

910,944

2,795,390

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

124,348

138,304

Loss/(profit) on disposal of tangible assets

5

653

(7,893)

Finance costs

7

525,781

409,496

Corporation tax expense

11

310,920

818,646

 

1,872,646

4,153,943

Working capital adjustments

 

Increase in stocks

 

(931,523)

(3,852,379)

(Increase)/decrease in debtors

 

(291,850)

549,561

Increase/(decrease) in creditors

 

779,099

(1,370,321)

Cash generated from operations

 

1,428,372

(519,196)

Corporation taxes paid

 

(670,351)

(869,789)

Net cash flow from operating activities

 

758,021

(1,388,985)

Cash flows from investing activities

 

Acquisitions of tangible assets

12

(175,779)

(61,906)

Proceeds from sale of tangible assets

 

-

13,771

Net cash flows from investing activities

 

(175,779)

(48,135)

Cash flows from financing activities

 

Interest paid

7

(525,781)

(409,496)

Repayment of other borrowing

 

(3,780)

85,851

Dividends paid

23

(100,000)

(300,000)

Net cash flows from financing activities

 

(629,561)

(623,645)

Net decrease in cash and cash equivalents

 

(47,319)

(2,060,765)

Cash and cash equivalents at 1 November

 

(5,391,588)

(3,330,823)

Cash and cash equivalents at 31 October

16

(5,438,907)

(5,391,588)

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

1

General information

The company is a private company limited by share capital, incorporated in England.

The address of its registered office is:
The Old School
Wragby Road
Langworth
Lincoln
LN3 5BJ

Registration number: 2757691.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The accounts are presented in Sterling, which is the functional currency of the company. The accounts have been rounded to the nearest pound.

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 reviewed where the revision affects only that period, or in the period of revision and future periods where the revision affects both current and future periods.

Revenue recognition

Turnover is recognised at the legal completion in respect of the total proceeds of building and development. Turnover is measured at the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

Contract revenue recognition

Turnover is only recognised on a construction contract where the outcome can be estimated reliably. Turnover and costs are recognised by reference to the stage of completion of contract activity at the year end date. This is normally measured by surveys of the work performed to date. Contracts are only treated as construction contracts when they have been specifically negotiated for the construction of a development of property.

Government grants

Government grants are recognised in the profit and loss account so that the income is matched with the costs to which they relate.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Furniture, fittings and equipment

15% on written down value or 20%, 33% or 50% on cost

Motor vehicles

25% on written down value

Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured less a provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks and work in progress, excluding long-term contract work in progress, are valued at the lower of cost and estimated selling price less costs to complete and sell which is equivalent to the net realisable value.

The cost of finished goods and work in progress comprises direct materials, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised at the transaction price.

Borrowings

Interest-bearing borrowings are recorded at fair value, net of transaction costs.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

3

Turnover

The analysis of the company's turnover for the year from continuing operations is as follows:

2024
£

2023
£

Sale of goods

19,681,809

32,204,617

Construction contracts

9,551,624

7,156,269

29,233,433

39,360,886

The amount of contract revenue recognised in the year was £9,551,624 (2023 - £7,156,269).

Contract revenue is determined based on the stage of completion of the project.

A third party assesses the valuation of the works completed to date.

The gross amount due from customers for contract work was £1,458,951 (2023 - £1,150,658).

The gross amount due to customers for contract work as a liability is £172,264 (2023 - £252,038).

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2024
£

2023
£

Rent receivable

10,100

10,300

Other income

34,329

33,644

44,429

43,944

5

Operating profit

Arrived at after charging/(crediting)

2024
£

2023
£

Depreciation expense

124,348

138,304

Operating lease expense - property

67,205

67,211

Loss/(profit) on disposal of property, plant and equipment

653

(7,893)

6

Government grants

Included within turnover is £nil (2023 - £4,608,953) in relation to grants received from the Government under the First Homes Scheme. The grants are recognised on the legal completion of the property.

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

7

Interest payable and similar expenses

2024
£

2023
£

Interest on bank overdrafts and borrowings

519,281

403,127

Interest expense on other finance liabilities

6,500

6,369

525,781

409,496

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2024
£

2023
£

Wages and salaries

2,148,072

2,186,584

Social security costs

322,163

345,509

Pension costs, defined contribution scheme

93,094

272,082

2,563,329

2,804,175

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2024
No.

2023
No.

Production

28

30

Administration and support

32

34

Sales

9

9

69

73

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2024
£

2023
£

Remuneration

429,776

467,542

Contributions paid to money purchase schemes

15,898

194,717

445,674

662,259

During the year the number of directors who were receiving benefits and share incentives was as follows:

2024
No.

2023
No.

Accruing benefits under money purchase pension scheme

2

3

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

In respect of the highest paid director:

2024
£

2023
£

Remuneration

225,200

219,008

Company contributions to money purchase pension schemes

-

180,000

10

Auditors' remuneration

2024
£

2023
£

Audit of the financial statements

18,435

13,960

Other fees to auditors

Taxation compliance services

750

575

All other assurance services

7,729

3,090

8,479

3,665


 

11

Taxation

Tax charged in the profit and loss account

2024
£

2023
£

Current taxation

UK corporation tax

321,738

837,350

Deferred taxation

Arising from origination and reversal of timing differences

(10,818)

(18,704)

Tax expense in the profit and loss account

310,920

818,646

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of 25% (2023 - 25%).

The differences are reconciled below:

2024
£

2023
£

Profit before tax

1,221,864

3,614,036

Corporation tax at standard rate

305,466

903,509

Decrease from effect of different tax rates

-

(92,304)

Effect of expense not deductible in determining taxable profit

5,453

7,506

Deferred tax credit from unrecognised temporary difference from a prior period

(10,818)

(18,704)

Tax increase from effect of capital allowances and depreciation

10,819

18,639

Total tax charge

310,920

818,646

Deferred tax

Deferred tax assets and liabilities

2024

Liability
£

Differences between accumulated depreciation and capital allowances

80,653

80,653

2023

Liability
£

Differences between accumulated depreciation and capital allowances

91,471

91,471

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

12

Tangible assets

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost or valuation

At 1 November 2023

1,063,683

209,828

1,273,511

Additions

61,082

114,697

175,779

Disposals

(1,936)

-

(1,936)

At 31 October 2024

1,122,829

324,525

1,447,354

Depreciation

At 1 November 2023

802,850

104,776

907,626

Charge for the year

71,825

52,523

124,348

Eliminated on disposal

(1,283)

-

(1,283)

At 31 October 2024

873,392

157,299

1,030,691

Carrying amount

At 31 October 2024

249,437

167,226

416,663

At 31 October 2023

260,833

105,052

365,885

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

2024
£

2023
£

Equipment

-

8,908

   
 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

13

Other financial assets (current and non-current)

Financial assets at cost less impairment
£

Total
£

Non-current financial assets

Cost or valuation

At 1 November 2023

25,000

25,000

At 31 October 2024

25,000

25,000

Carrying amount

At 31 October 2024

25,000

25,000

14

Stocks

2024
£

2023
£

Work in progress

30,219,114

29,287,591

15

Debtors

2024
£

2023
£

Trade debtors

1,293,276

914,931

Other debtors

507,959

690,901

Prepayments

1,259,674

1,114,856

Social security and other taxes

338,486

386,857

Total current trade and other debtors

3,399,395

3,107,545

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

16

Cash and cash equivalents

2024
£

2023
£

Cash on hand

9,059

7,013

Cash at bank

52,034

-

61,093

7,013

Bank overdrafts

(5,500,000)

(5,398,601)

Cash and cash equivalents in statement of cash flows

(5,438,907)

(5,391,588)

17

Creditors

Note

2024
£

2023
£

Due within one year

 

Loans and borrowings

18

5,500,000

5,407,950

Trade creditors

 

2,582,319

3,131,525

Amounts due to related parties

25

18,108

12,539

Social security and other taxes

 

93,615

122,636

Accrued expenses

 

1,873,569

516,243

Corporation tax liability

 

135,737

484,350

 

10,203,348

9,675,243

18

Loans and borrowings

Current loans and borrowings

2024
£

2023
£

Bank overdrafts

5,500,000

5,398,601

Hire purchase contracts

-

9,349

5,500,000

5,407,950



The bank loans and overdrafts are secured on various assets included in the land bank.

Hire purchase contracts are secured against the assets to which they relate.

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

19

Provisions for liabilities

Deferred tax
£

Total
£

At 1 November 2023

91,471

91,471

Decrease in existing provisions

(10,818)

(10,818)

At 31 October 2024

80,653

80,653

20

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £93,094 (2023 - £272,082).

21

Share capital

Allotted, called up and fully paid shares

2024

2023

No.

£

No.

£

Ordinary shares of £1 each

100

100

100

100

       

Rights, preferences and restrictions

Ordinary shares have full rights in the company regarding voting, dividends and capital distribution.

22

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2024
£

2023
£

Later than one year and not later than five years

65,000

65,000

65,000

65,000

The amount of non-cancellable operating lease payments recognised as an expense during the year was £65,000 (2023 - £65,000).

 

Chestnut Homes Limited

Notes to the Financial Statements for the Year Ended 31 October 2024

23

Dividends

Interim dividends paid

 

2024
£

2023
£

Interim dividend of £1,000 (2023 - £3,000) per each ordinary share

100,000

300,000

     

24

Commitments

The total amount of financial commitments not included in the balance sheet due within one year is £115,635 (2023 - £63,416). The total amount of financial commitments not included in the balance sheet due later than one year and not later than five years is £121,033 (2023 - £86,846). This is in respect of lease hire vehicles.

25

Related party transactions

Transactions with directors

2024

At 1 November 2023
£

Advances to director
£

Repayments by director
£

At 31 October 2024
£

Mr D S Newton

Director's loan account

(12,539)

94,431

(100,000)

(18,108)

2023

At 1 November 2022
£

Advances to director
£

Repayments by director
£

At 31 October 2023
£

Mr D S Newton

Director's loan account

88,590

198,871

(300,000)

(12,539)

No interest is charged in respect of this balance, which is repayable on demand.

Summary of transactions with all entities with joint control or significant interest

Companies controlled by one of the directors
 During the year the company made sales of goods and services to companies under common control of £175,899 (2023 - £170,433) and purchases of goods and services of £447,212 (2023 - £87,770).

At the balance sheet date the amount due from companies under common control was £649,527 (2023 - £649,479).