Company Registration No. 05999928 (England and Wales)
FAIRCLOTH CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
FAIRCLOTH CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
David Stuart Faircloth
Darren Stephen Faircloth
Stephen Dann Webber
Georgina Ann Faircloth
Benjamin Thomas Whitewood
Dale Duane Nelhams
Sonia Lopes
Garry Francis McGovern
(Appointed 16 June 2025)
Company number
05999928
Registered office
The Old Library
Dudley Road
Tunbridge Wells
Kent
United Kingdom
TN1 1LE
Auditor
HW Fisher Audit
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
FAIRCLOTH CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 26
FAIRCLOTH CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 1 -

The directors present the strategic report for the year ended 30 November 2024.

 

Principal activity

The principal activity of the company continued to be that of the construction of commercial buildings and related works.

Fair review of the business

The Company again achieved a strong increase in turnover, driven by the continued retention of valued clients, along with successful negotiations and tender wins. Despite facing intense competition in the UK marketplace, rising costs, and wider economic uncertainty, the Company maintained strong trading levels and has already secured new tenders for the next trading period.

During the year, a gross profit margin of 10.99% was achieved. While slightly lower than the previous year, this reflects the Company’s commitment to competitive pricing and effective cost control. The directors and management team remain focused on regularly reviewing pricing, costing, and project performance. These efforts help strengthen costing models and ensure that a healthy gross profit is maintained while controlling expenses effectively.

Overhead costs were reduced by £857k, with administrative expenses falling from £4.1 million in 2023 to £3.3 milion in 2024. This substantial reduction reflects the Company’s disciplined approach to cost management. Despite this improvement, the Directors continue to invest in people, operational procedures, and information technology to support the successful delivery of profitable contracts in the future.

The Company’s overall financial health continued to improve, supported by stronger working capital. Net current assets increased from £18.2 million to £22.7 million, reflecting improvements in liquidity and operating efficiency. In particular, the cash balance rose by £1.96 million, from £5.35 million in 2023 to £7.31 million in 2024. This increase was largely the result of better cash management and stronger collections from debtors.

The UK construction industry continued to feel the impact of global inflation. Although inflation in the UK has started to ease, cost pressures remain, leading to delays in some projects and lower investment activity. On a more positive note, weaker global demand has helped stabilise the prices of materials like steel and cement. However, challenges persist in the form of disrupted supply chains and a tight labour market, with the ongoing conflict in Ukraine continuing to have knock-on effects.

The Company remains fully committed to the health and safety of all employees. A dedicated Health and Safety Manager continues to oversee workplace well-being. The Company is proud to hold ISO 45001, ISO 14001, and ISO 9001 accreditations, demonstrating a commitment to safety, environmental responsibility, and quality management.

For a detailed financial review of the business, please refer to the Company’s Statement of Comprehensive Income and Balance Sheet on pages 10 and 11, respectively.

FAIRCLOTH CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 2 -
Principal risks and uncertainties

The company has identified continued cost pressures, the Ukraine war, rising energy costs and labour shortages as the primary drivers of increased expenses, posing a significant risk to operations. A strategic approach was adopted, involving careful negotiations with clients to recuperate higher costs. The Company aims to safeguard its financial stability by proactively addressing these challenges.

 

Financial risk

The directors have recognised that the Company faces financial risks of rising construction costs and lower profit margins within the industry. The Company continues to minimise these challenges through effectively negotiating cost increases for individual contracts.

Reputational risk

Customer claims continue to pose a reputational risk. The Company responds to these claims promptly and settles them when necessary. The Company diligently records all claims, carries out reviews to identify lessons learned and implement procedures aimed at prevention.

Economic risk

The Directors acknowledge the importance of maintaining strong relationships with customers to identify potential financial difficulties early. Contracts are carefully reviewed throughout their duration and close relationships are maintained with key customers. The Company diligently works to mitigate supply chain risks by screening suppliers carefully and diversifying its supplier base.

Development and performance

Safety

Safety is a priority for the Directors and all company employees due to the inherent hazards associated with the Company’s activities. The Company rigorously monitors its health, safety and environmental practices through regular meetings of key management. Compliance is regularly reviewed by third parties. The Company takes pride in its strong safety record and continues to foster a safety-first culture.

People

The Company relies on a skilled and motivated executive team and workforce and places great importance on providing excellent training and development opportunities to maintain high standards.

Key performance indicators

The Company's key financial performance indicators during the year were as follows:

 

Unit

2024

2023

Turnover

£

84,487,376

55,078,068

Gross profit

%

10.99

14.97

Administrative expenses

£

3,275,832

4,133,323

Profit before taxation

£

6,254,433

4,116,858

Net current assets

£

22,657,155

18,218,344

The directors believe there are no non-financial KPIs that are of strategic importance to the Company.

FAIRCLOTH CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 3 -
Other information and explanations

Future developments

The Company's success has been driven by its ability to innovate, adopt new technologies, and embrace novel approaches to enhance workforce safety, maintain operational continuity, and deliver completed projects to customers. The Company remains dedicated to researching and developing innovative construction methods and techniques, with a focus on safety enhancement, efficient project delivery, utilisation of new materials and working methods, energy efficiency, and information modelling.

Sustainability: The Company is firmly committed to enhancing environmental sustainability, reducing its carbon footprint, and incorporating green building practices into its work.

 

Health and Safety: The Company successfully obtained ISO45001 certification, underscoring its strong focus on maintaining a safe and healthy work environment for all employees.

 

Supply Chain Optimisation: The Company continuously works on mitigating supply chain risks by diversifying its supplier base, ensuring a more robust and reliable procurement process.

FAIRCLOTH CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 4 -
Promoting the success of the company

In line with Companies (Miscellaneous Reporting) Regulations 2018, the Directors of the Company are required to give an annual statement on how they have discharged their duty under section 172 of the Companies Act 2006 to promote the success of the Company for the benefit of its members as a whole and with regard to broader stakeholder interests. This section of the Strategic Report states how the Directors have had regard to the matters set out in section 172 1) (a) to (f) during the year as required by section 414CZA, of the Companies Act 2006.

 

The Company is a direct, wholly owned subsidiary of Faircloth Holdings Limited as explained in note 20 Ultimate Controlling Party. Individual subsidiary companies are used for the operation of the business. Notwithstanding this, the Board of the Company undertakes engagement activities with the employees and external stakeholders.

 

The Company has identified their stakeholders as being their customers, employees, suppliers, subcontractors, surveyors, and the communities in which they operate.

 

The Directors acknowledge that effective and meaningful engagement with stakeholders and employees is key to promoting the success of the Company. Details of the action taken to support these objectives are set out as follows:

 

On behalf of the board

Darren Stephen Faircloth
Director
8 August 2025
FAIRCLOTH CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 5 -

The directors present their annual report and financial statements for the year ended 30 November 2024.

Principal activities

The principal activity of the company continued to be that of construction of commercial buildings and related works.

Results and dividends

The results for the year after taxation are shown on the Statement of Comprehensive Income of the financial statements. Further commentary is given in the Strategic Report.

Ordinary dividends were paid amounting to £1,372,000. The directors do not recommend payment of a final dividend.

Directors

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

David Stuart Faircloth
Darren Stephen Faircloth
Stephen Dann Webber
Georgina Ann Faircloth
Benjamin Thomas Whitewood
Dale Duane Nelhams
Sonia Lopes
Garry Francis McGovern
(Appointed 16 June 2025)
Financial instruments
Objectives and Policies

The Company's principal financial instruments comprise debtors, creditors and bank balances. The primary purpose of these financial instruments is to finance the Company's operations.

 

The financial risk management objectives & policies and information on exposure to various risks are described in detail in Principal risks and uncertainties section in the Strategic Report.

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

The most significant risk identified by the company is an increase in costs as a result of inflation, the Ukrainian war, and rising energy costs. To reduce risk, a deliberate and controlled negotiation with Clients was carried out to recover increased costs in the short and long term.

 

In respect of bank balances, the liquidity risk is managed by managing working capital between payment to suppliers and receipts from debtors. Funds are maintained to maximise cash whilst not impacting on the immediate financial needs of the company.

 

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

 

Liquidity risk in respect of creditors is managed by ensuring sufficient funds are available to meet amounts due.

Statement of engagement with suppliers, customers, and others in a business relationship with the Company

The company's strengths, credit, and relationships with suppliers and subcontractors are all growing. In negotiating ongoing and future contracts, the Directors continue to prioritise customer relationships. The Directors' primary responsibilities include the interests of all employees, their health and safety, workplace safety, and well-being.

 

This is described in detail in Section 172 statement section in the Strategic Report.

FAIRCLOTH CONSTRUCTION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 6 -
Post reporting date events

There are no post-reporting date events that occurred.

Future developments

Future developments are described in detail in Future developments section in the Strategic Report.

Streamlined Energy and Carbon Reporting

The company has taken the exemption not to report on their greenhouse gas emissions, on the basis they are a subsidiary undertaking, and their results are incorporated within the group accounts of Faircloth Holdings Limited.

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
Darren Stephen Faircloth
Director
8 August 2025
FAIRCLOTH CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF FAIRCLOTH CONSTRUCTION LIMITED
- 7 -
Opinion

We have audited the financial statements of Faircloth Construction Limited (the 'company') for the year ended 30 November 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 FRS 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:

FAIRCLOTH CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF FAIRCLOTH 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 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:

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.

Detection of irregularities, including fraud

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.

As part of our planning process:

FAIRCLOTH CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF FAIRCLOTH CONSTRUCTION LIMITED
- 9 -

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Rebecca Donnelly (Senior Statutory Auditor)
For and on behalf of HW Fisher Audit
8 August 2025
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
FAIRCLOTH CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
84,487,376
55,078,068
Cost of sales
(75,200,066)
(46,834,073)
Gross profit
9,287,310
8,243,995
Administrative expenses
(3,275,832)
(4,133,323)
Other operating income
19,723
16,395
Operating profit
4
6,031,201
4,127,067
Interest receivable and similar income
7
260,224
26,526
Interest payable and similar expenses
8
(36,992)
(36,735)
Profit before taxation
6,254,433
4,116,858
Tax on profit
10
(1,368,453)
(1,047,412)
Profit for the financial year
4,885,980
3,069,446

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

FAIRCLOTH CONSTRUCTION LIMITED
BALANCE SHEET
AS AT
30 NOVEMBER 2024
30 November 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
117,357
59,431
Current assets
Debtors
13
33,099,470
27,204,926
Cash at bank and in hand
7,311,278
5,349,694
40,410,748
32,554,620
Creditors: amounts falling due within one year
14
(17,753,593)
(14,336,276)
Net current assets
22,657,155
18,218,344
Total assets less current liabilities
22,774,512
18,277,775
Provisions for liabilities
Provisions
15
1,254,559
272,431
Deferred tax liability
12,971
12,342
(1,267,530)
(284,773)
Net assets
21,506,982
17,993,002
Capital and reserves
Called up share capital
17
10,000
10,000
Profit and loss reserves
21,496,982
17,983,002
Total equity
21,506,982
17,993,002
The financial statements were approved by the board of directors and authorised for issue on 8 August 2025 and are signed on its behalf by:
Darren Stephen Faircloth
Director
Company registration number 05999928 (England and Wales)
FAIRCLOTH CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 December 2022
10,000
16,108,194
16,118,194
Year ended 30 November 2023:
Profit and total comprehensive income
-
3,069,446
3,069,446
Dividends
11
-
(1,194,638)
(1,194,638)
Balance at 30 November 2023
10,000
17,983,002
17,993,002
Year ended 30 November 2024:
Profit and total comprehensive income
-
4,885,980
4,885,980
Dividends
11
-
(1,372,000)
(1,372,000)
Balance at 30 November 2024
10,000
21,496,982
21,506,982
FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 13 -
1
Accounting policies
Company information

Faircloth Construction Limited is a private company limited by shares incorporated in England and Wales.

 

The registered office is:

 

The Old Library

Dudley Road

Tunbridge Wells

Kent

TN1 1LE

 

The nature of the Company's operations and its principal activities are set out in the Strategic Report.

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.

1.2
Basis of preparation

These financial statements have been prepared using the historical cost convention. 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.

 

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2.

 

In these financial statements, the Company has applied the exemptions available under FRS102 in respect of the following disclosures:

 

  1. A cash flow statement and related notes (Section 7) – The Company has taken advantage of the exemption from preparing a cash flow statements, on the basis that it is a qualifying entity and it’s ultimate parent Company, Faircloth Holdings Limited, includes the Company’s cash flows in its consolidated financial statements.

     

  2. Related party transaction notes (Section 33) – The Company only discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with its parent or with members of the same group that are wholly owned.

     

  3. Disclosures in respect of the compensation of key management personnel (Section 33) – The Company has taken the advantage of the exemption from the requirements to disclose key management personnel when the key management personnel and directors are the same.

 

The financial statements of the company are consolidated in the financial statements of Faircloth Holdings Limited. These consolidated financial statements are available from its registered office: The Old Library, Dudley Road, Tunbridge Wells, Kent, United Kingdom, TN1 1LE.

 

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

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.3
Going concern

The financial statements truehave been prepared on a going concern basis. When making their assessment, the directors considered the current economic conditions, which included supply chain constraints, price inflation, an increase in the cost of living and wider uncertainties resulting from the effects of European hostilities. The directors will continue to monitor all of these issues and, where possible, take action to mitigate their effects. The Directors have a reasonable expectation that the Company will have adequate resources to continue for the foreseeable future at the time of approving the financial statements for the following reasons:

  1. a.    The Company has a strong and growing order book which will provide a pipeline of secured work over the going concern assessment period.

  2. b.    There continues to be strong underlying demand in commercial constructions in the UK.

  3. c.    The Company has sufficient internally generated cash resources to meet its liabilities as they fall due for the next 12 months from the date of approval of these financial statements.

Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover represents the value of work done during the year net of value added tax. The value of work done is calculated as the certified work, plus the amount anticipated to be certified, adjusted for over and under measure. As described in more detail in the construction contract note 1.7, revenue and costs are recognised by reference to the stage of completion of construction contracts where it can be reliably measured.

1.5
Tangible fixed assets

Tangible assets are stated in the statement of financial position 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 is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
20% reducing balance method
Computers
20% reducing balance method
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.
1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.7
Construction contracts

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date (“percentage-of-completion method”). When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

The stage of completion is measured by completed Quantity Surveyors reports of work done.

Contract revenue comprises of the initial amount of revenue agreed in the contract and variations in the contract work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it is probable that the customer will approve the variation or negotiations have reached an advanced stage such that it is probable that the customer will accept the claim.

Contract cost is measured by reference to the ratio of contract work certified during the year to the amount of revenue agreed in the contract over the total estimated cost for the contract. When it is not probable that contract costs are recoverable from the customers, in which case, such costs are recognised as an expense immediately.

At the balance sheet date, the amount recoverable on contracts within ‘Debtors’ are the accumulative recoverable costs incurred to date less recoverable costs charged to the profit and loss account. Where the recoverable costs charged to the profit and loss account exceeds the accumulative recoverable cost incurred to date, the balance is presented as amount payable on contracts within ‘Creditors’.

Progress billings not yet paid by customers and retentions by customers are included within 'Debtors'. Advances received are included within trade creditors.

The accrued income is estimated by the Project Managers by reference to the work programme or instructions from the the customers.

1.8
Financial instruments

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

All financial assets and liabilities are initially measured at transaction price.

Non-current debt instruments, which meet the conditions set out in paragraph 11.9 of FRS 102, are subsequently measured at amortised cost using the effective interest method.

Debt instruments that have no stated interest rate and are classified as payable or receivable within one year and which meet the above conditions are initially measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

 

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets

Financial assets

Financial assets are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the profit and loss account. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying value does not exceed what the carrying value would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.

 

Financial liabilities

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

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.

1.9
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.

1.10
Taxation

The tax expense for the period comprises current tax 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.

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.

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
1
Accounting policies
(Continued)
- 17 -
1.11
Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

Provisions include the cost of anticipated remedial & warranty work based on the status of the site at year end and other claims against the company. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

 

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

1.12
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.

1.13

Retention

Retention income is recognised once there is sufficient certainty over the probability it will be received and the amount to be received can be measured reliably.

 

Retention expense is recognised when it is paid.

1.14

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 18 -
2
Judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

 

The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the income and expenses and the carrying amounts of assets and liabilities within the next financial year are addressed below.

Accounting for contract and margin recognition

The Company’s accounting for contract and margin recognition policies, which are set out in note 1, are central to how the Company values the work it has carried out in each financial year. Contract accounting requires estimates to be made and in many cases these contractual obligations span more than one financial period.

These policies require forecast to be made of the outcome of the construction obligations which require both estimates and judgements to be made of both cost and income recognition on each contract. No margin is recognised until the outcome of the contract can be estimated with reasonable certainty. On the cost side, estimates of budgeted and irrecoverable costs are made on each contract in addition to potential costs to be incurred for any maintenance and defects liabilities. On the income side, estimates and judgements are made on variations to consideration which typically include variations due to changes in scope of work, recoveries of claim income from customers, and potential liquidated damages that may be levied by the customers.

These income and costs may be affected by a number of uncertainties that depend on the outcome of future events and may need to be revised as events unfold and uncertainties are resolved.

Recoverable value of recognised debtors

The recoverability of debtors especially trade debtors, accrued income, retentions and gross amount due from customers for contract work, are regularly reviewed in the light of the available economic information specific to each receivable and specific provisions are recognised for balances considered to be irrecoverable.

Provisions

Provisions are liabilities of uncertain timing or amount; therefore in making a reliable estimate of the quantum and timing of liabilities, judgement is applied and re-revalued at each reporting date. The range of potential outcomes as the result of uncertain future events could result in a materially positive or negative impact on profit or loss and cash flow.

More specifically provisions for onerous contract are made for all known or expected losses on individual contracts once such losses are foreseen.

The Company also sets aside provisions for remedial and warranty work for any liabilities arising due to defects over the latent defect period stated in the contract. The provision for remedial work reflects the present obligation to rectify the work defects on completed contracts in order to recover retentions withheld by customers. In the year ended 30 November 2024, the provision for remedial works has been estimated to be 10% of total retentions outstanding (2023: 10%). The provision for warranty work reflects the present obligation to rectify the work defects on completed contracts within the warranty period, which can be up to 12 years after completion. A provision for warranty work is only recognised when a reliable estimate can be made.

 

The Company has recognised provisions of £1,254,559 (2023: £272,431). Please refer to note 15.

Going concern

The Company also considers Going Concern as a significant area of judgement and has included specific disclosure in relation to this within note 1.3.

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 19 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Construction
84,487,376
55,078,068
2024
2023
£
£
Other revenue
Interest income
260,224
26,526

All turnover arose from trading activities within the United Kingdom.

4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
77,523
61,250
Depreciation of owned tangible fixed assets
21,922
9,499
Operating lease charges
48,031
32,000
5
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
590,191
477,626
Company pension contributions to defined contribution schemes
81,853
207,723
672,044
685,349

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
153,773
153,370
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
77,523
61,250
FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 20 -
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
260,224
26,526
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
36,992
36,735
9
Employees

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

2024
2023
Number
Number
Production
30
26
Administation and support
21
18
51
44

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
3,258,806
3,082,750
Social security costs
378,201
337,895
Pension costs
197,763
281,766
3,834,770
3,702,411
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,367,824
1,025,372
Adjustments in respect of prior periods
-
0
9,698
Total current tax
1,367,824
1,035,070
Deferred tax
Origination and reversal of timing differences
629
12,342
Total tax charge
1,368,453
1,047,412
FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
10
Taxation
(Continued)
- 21 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
6,254,433
4,116,858
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.34%)
1,563,608
960,932
Tax effect of expenses that are not deductible in determining taxable profit
11,176
221,392
Tax effect of income not taxable in determining taxable profit
-
0
(6,979)
Adjustments in respect of prior years
-
0
9,698
Group relief
(208,847)
(143,733)
Permanent capital allowances in excess of depreciation
1,887
(8,044)
Depreciation on assets not qualifying for tax allowances
-
0
1,804
Deferred tax
629
12,342
Taxation charge for the year
1,368,453
1,047,412

The rate of tax increased from 19% to 25% on 1 April 2023.

11
Dividends
2024
2023
£
£
Interim paid
1,372,000
1,194,638
FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 22 -
12
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 December 2023
16,349
53,542
69,891
Additions
41,178
38,670
79,848
At 30 November 2024
57,527
92,212
149,739
Depreciation and impairment
At 1 December 2023
1,935
8,525
10,460
Depreciation charged in the year
9,381
12,541
21,922
At 30 November 2024
11,316
21,066
32,382
Carrying amount
At 30 November 2024
46,211
71,146
117,357
At 30 November 2023
14,414
45,017
59,431
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
8,315,812
3,459,880
Amounts owed by group undertakings
9,690,309
12,871,504
Other debtors
4,559,949
2,289,587
Prepayments and accrued income
4,464,296
6,204,603
27,030,366
24,825,574
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
6,069,104
2,379,352
Total debtors
33,099,470
27,204,926

Included in other debtors is amount owed from customers for contract work of £2,103,989 (2023 £871,803).

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 23 -
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
5,878,375
6,816,281
Amounts owed to group undertakings
-
0
1,532,347
Corporation tax
866,532
658,197
Other taxation and social security
2,621,321
1,298,724
Other creditors
4,603,753
2,368,243
Accruals and deferred income
3,783,612
1,662,484
17,753,593
14,336,276

Included in other creditors is amount due to customers for contract work of £3,346,966 (2023 £1,637,023).

 

 

15
Provisions for liabilities
2024
2023
£
£
Provision for litigation
-
5,750
Provision for onerous contract
917,752
-
Provision for remedial work
336,807
209,141
Provision for warranty work
-
57,540
1,254,559
272,431
Movements on provisions:
Provision for litigation
Provision for onerous contract
Provision for remedial work
Provision for warranty work
Total
£
£
£
£
£
At 1 December 2023
5,750
-
209,141
57,540
272,431
Additional provisions in the year
-
917,752
273,037
-
1,190,789
Utilisation of provision
(5,750)
-
(145,371)
(57,540)
(208,661)
At 30 November 2024
-
917,752
336,807
-
1,254,559

Provision for litigation

 

The existing litigation provision was utilised during the year to cover the related costs. No additional provision was raised during the period.

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
15
Provisions for liabilities
(Continued)
- 24 -

Provision for onerous contract

 

When it is probable that the total contract costs will exceed the total contract revenue on construction contracts, the Company recognises the expected losses as an expense immediately with a corresponding provision for losses. These provisions are expected to be utilised within one year after the balance sheet date. The provision for onerous contracts was £917,752 (2023 £Nil) as at the balance sheet date.

Provision for remedial work

 

The Company has a present obligation to rectify the work defects on completed contracts in order to recover retentions withheld by customers. These provisions are expected to be utilised within two years after the balance sheet date.

Provision for warranty

 

The warranty provision brought forward was utilised during the year to meet warranty obligations. No further provision was required.

The above provisions are made when a reliable estimate can be made based on the management's best estimate of known loss making contracts, remedial work, defects and warranties on contracts and legal actions.

16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
197,763
281,766

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. At the year end £66,558 (2023 £21,826) was payable to the scheme and is included in creditors.

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
- 25 -
18
Financial commitments, guarantees and contingent liabilities

Financial commitments and guarantees

 

Performance guarantees were provided by the bank to customers covered by indemnities given to the bank. The amount of the financial guarantee contract is £3,475,932 (2023 £3,237,950).

 

Contingent liabilities

 

Provisions have been made for the Directors’ best estimate of known legal claims, remedial work and warranty work for any defects work and contract losses. No provision is made where the Directors consider, based on legal advice and past practice that the claims or action are unlikely to succeed or that the Company can not make a sufficiently reliable estimate of the potential obligations.

The Company in the normal course of business has given guarantees in respect of bonds relating to the Company’s own contracts. Guarantees are treated as contingent liabilities until such time as it becomes probable payment will be required under the terms of the guarantee.

Charges

 

The company's bankers hold a fixed and floating charge over the undertaking and all property and assets present and future, including goodwill, uncalled capital, buildings, fixtures, fixed plant and machinery.

19
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
32,000
32,000
20
Ultimate controlling party

The Company’s parent company is Faircloth Holdings Limited, which is registered in England and Wales, with its registered office at The Old Library, Dudley Road, Tunbridge Wells, Kent, TN1 1LE.

The ultimate parent company and controlling party is Faircloth Holdings Limited, which is 100% owned by the director, Darren Stephen Faircloth.

The group consolidated financial statements of Faircloth Holdings Limited, are available upon request from The Old Library, Dudley Road, Tunbridge Wells, Kent, United Kingdom, TN1 1LE.

21
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

FAIRCLOTH CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2024
21
Related party transactions
(Continued)
- 26 -

a) During the year the Company invoiced construction work of £Nil (2023 £69,750) and received services amounting to £135,463 (2023 £119,348) to and from a company owned by a family member of the Directors. At the year-end, the outstanding amount owed by the Company was £17,633 (2023 £11,524).

b) At the end of the year an outstanding amount due to the Company of £449,753 (2023 £437,201) was from a company of which a Director is also a director and the ultimate controlling party of that company. There was an increase in the amount due to new advances in the year. The loan is interest free and repayable on demand.

c) During the year the Company invoiced construction work of £7,673 (2023 £4,546) and paid rent of £11,031 (2023 £nil) to a company of which some of the Directors and their family are also the directors and the ultimate controlling party of that company. At the end of the year the outstanding amount due to the Company was £4,683,504 (2023 £1,183,504). The loan is interest free and repayable on demand.

Pension Scheme

 

The Directors who are members of the Faircloth family are the Trustees and the Members of an independently administered Pension Scheme. During the year the Company invoiced interest on a loan of £2,533(2023 £2,427) to the Pension Scheme. The Pension Scheme charged office rent of £38,000 (2023 £32,000) to the Company. At the end of the year the amount due to the Company was £23,745 (2023 £57,575). The loan is repayable on demand.

22
Directors' transactions

The key management personnel are the also the directors of the Company. Please see note 5 Directors' Remuneration.

 

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