The directors present their strategic report for the year ended 31 March 2025.
This time last year we referred to various factors that were affecting the market and creating further uncertainty and confusion within the industry. There are of course still matters of concern to our industry and many remain beyond our control. The market continues to be uncertain, property values are fluctuating, business are still failing, and the political and economic outlook remains confusing and uncertain.
It is a harsh reality of this environment that we have lost both members of our supply chain and sterling competitors during the last twelve months. These incidences have been too frequent and of great detriment to the industry as a whole. Many of these businesses were well managed and professional but the vagaries of the market and, no doubt, the length of some long-term fixed price contracts proved too great for them to continue.
Despite these challenges, the Board are happy to report that 8build are making an operating profit during the year to 31 March 2025 and feel that there is continued optimism within the market and for the trading year ahead.
The calendar year 2025 sees 8build enter its 20th year of operation which is an enviable milestone for many. Our first client still remains a valued customer to this day showing repeat business as a cornerstone of our success. Forging new relationships and with the continued support of our long-standing clients, 8build are embarking upon a year where we look forward to our greatest ever revenue. This comes with its challenges but 8build are perfectly placed to help clients achieve their desires in a proactive and collaborative manner.
The current financial year of 2025/26 has improved again on last year with significant projects secured at reasonable margins, and many for repeat clients. This position is most welcome after several difficult years for all companies in our industry and we anticipate this improvement continuing throughout the coming year.
8build continues to be represented across all sectors in the construction award circuit. We were shortlisted this year in no less than 8 award categories across 8 award events. We are delighted to have been voted winners of National Site Award from Considerate Constructors Scheme as well as a much-coveted Pineapple Award which recognises projects that make a positive social, environmental and economic impact.
We consistently report that we have strong cash reserves which have increased substantially since the year end and a record forward order book of £165m. We currently sit in a very strong position for the year ahead, confident of our highest turnover to date for 25/26 and anticipate a most profitable year. We are confident of strong results, including consistent repeat business, a growing orderbook and employee count and a solid pipeline of opportunities across most sectors.
The detailed results and the financial position of the company are shown in the financial statements.
The turnover for the year exceeded that reported last year at £157m (2024: £117m) which is a 34% increase on the year exceeding the budget. The markets, in our experience, have moved away from the PCSA contracts and moved to more Fixed Price Lump sum and Fixed Price Design and Build contracts. This has reduced the time period from enquiry to construction in comparison to the elongated PCSA periods. This has helped bolster our revenue for the period. As previously stated, we are confident of a record turnover for 2025/26.
As noted above, our operating profit was £1.61m (2024: £0.433m) and following the inclusion of investment income the Profit before Tax for the year is £2.1m.
The company continues its excellent working capital management with no bad debts, no borrowings of any kind and a year-end cash position of £17.1m (2024: £12.6). The current balance is in excess of £19.6m after our first six months trading in 2025/26, indicative of the currently strong year.
There has also been a significant increase in our aviation offering. We have worked in partnership with London City Airport for many years and during the past year we have also won projects at Heathrow and, most recently, at Gatwick. We are extremely excited by this development and hope to enhance this offering in the current year with many designated experienced airport teams within our portfolio.
Notable project successes during the year include the following, many of which are still ongoing:
6 More London £45m
Burlington Gardens £21m
Brick Street £9.2m
Sloane Avenue £6.6m
ICL Michael Uren £4.3m
RSA – Horsham £3.4m
Davies Street £3.2m
London City Airport £3.0m
22 Bishopsgate £2.3m
Bedford Square £2.2m
Record revenue of £157m is already secured for 2025/26 and with a total forward order book of £165m, this year and the coming one look to bring increased security and a more balanced outlook with better margins than in the past. We still choose to engage on projects of mixed length and value to employ strategically the various skillsets within our business.
The value of our Head Office which 8build own fully at Leman Street has decreased in value in line with the property market which we have prudently allowed for entirely within the accounts.
Our tendering procedures have been made even more robust ensuring that we now only tender for projects of low or manageable risk profiles and without overtly onerous conditions.
The directors continue to manage projects very closely, using their varied skills to good effect and ensuring the good health of the company. The culture of the business is as important as financial security, and we aim for continuous improvement in all things to prepare the business and its staff for the challenges and changes ahead. The introduction of oversight committees on key areas within the business has become fruitful by providing information in a more focused and informative manner to the operating teams which has helped improve our governance.
The management of the business and the execution of its strategy are subject to a number of risks. The key risks and uncertainties affecting the company remain much the same as last year and are considered to relate to:
The turbulent economic and political climate around the world and at home and how that affects client appetite for investment.
The economic outlook in the marketplace and the strength of the market against the backdrop of failing competition.
The effect of these changes upon our clients and supply chain and how they add to their overall fragility.
Recruitment and retention of high-quality staff.
The effect on labour and material supplies with overseas conflicts.
The health and safety of staff and suppliers as detailed below in the health and safety section of this report.
The threat of fraud and social engineering as evidenced by increased incidence in the world around us and any financial loss which may result.
The directors consider health and safety to be a key priority taking all reasonable measures to conduct business in a way that ensures the health, safety and welfare of all employees and other individuals who are affected by the company’s activities. They seek continuous improvement in all areas of health and safety, including training, reporting, and data collection in a systemised drive to reduce accidents and incidents of all kinds, focusing heavily on prevention. 8build have employed the most H&S safety staff we have ever had showing our commitment to improving the health and safety not only of our workforce but that of our subcontractors and clients and the industry as a whole.
Fortunately, we have experienced a decrease in our Accident Frequency Rate (AFR) this year. We have had four reportable incidents and with an increased man hours of 1.423-million-man hours (FY24 1.359-million-man hours), this results in an AFR of 0.28 which, although good in the industry, is higher than we would wish.
The year has seen significant improvement in early engagement with H&S processes with the introduction of a RAG scoring system at tender stage with the divisions as part of the whole tender review process. This identifies H&S risks and concerns ahead of reaching site to provide proactive rather than reactive solutions.
The directors are happy to report that all divisions across the business engage fully with the new H&S App. This provides real time data to enable an instant view on H&S incidents and statistics. It allows early intervention to quickly identify and correct any unhelpful trends, before they become matters of concern or worse, accidents, that cause harm to our employees or members of the public. This information is reviewed weekly by our Head of Health & Safety and H&S Director. Building on the success of our internally developed apps we have further enhanced the Health and Safety function and insight to improve our KPIs.
Work continues in establishing our H&S Strapline built around our five key headings of People, Workplace, Behaviours, Standards and Leading to Win. This work will provide a clear uniform message and keep our people safe and enhance our company reputation on H&S matters. We hope that all these initiatives will result in marked improvement in our statistics over the coming year.
During the past twelve months, 8build has partnered with a consultancy in regard to its data capture and reporting of carbon emissions. We have spent a great deal of time collaborating with ESGPro, encompassing not just Carbon reporting but CSR and Governance also, and we are currently awaiting our first report and our initial GRI score. It has been an eye-opening experience in which we realise what a great deal we have to learn. Despite having issued our initial Carbon Reduction Plan in 2021, we restarted our Carbon journey with ESGPro and issued a new baseline report for 2024. Our latest report for the year to 31 March 2025 has just been issued. There are extracts from this in the Energy and Carbon Section of the Directors Report later, but the full report can be located on our website.
Social Commitment
8build continues to engage widely with the communities in which we work, maintaining the excellent relationships we have held for many years. During the trading year we have given 1240 hours or work experience and engaged with three separate schools providing support and advice including financial support for STEM initiatives to 54 students.
Our charitable work now extends beyond mere donations to active involvement in projects and our staff work tirelessly to raise their own funds for many worthy causes. They have taken part in Marathons, Dragonboat Racing, Sailing Regattas, Tough Mudder’s etc. to name but few and have between them raised an additional £21k towards our chosen charities which is an 8build record. The introduction of our NextGen scheme has materially enhanced this offering as they are committed and enthusiastic group who continuously strive to make a positive impact in the world around them.
8build’s own donations are as follows:
31 March 2025 31 March 2024
Donations to medical charities £4,542 £1,234
Donations to youth charities £3,650 £800
Donations to helping the homeless £13,135 £12,323
8build remains a major supporter of the charity CRASH and further reinforced our relationship by running a Golf Day in partnership with them to raise further donations on games such as Nearest the Pin. The event was an astounding success with support from our key supply chain members who contributed a further £22k for the charity and we all eagerly anticipate next year’s invitational.
Employee wellbeing and development is vitally important at 8build, and we are committed to fostering a safe, healthy and inclusive working environment for everyone. We have touched on H & S already in this report and are rightly proud of our well-being strategy. We have enhanced this offering during the year in regard to mental health by engaging with our supply chain on this also and providing help and support where appropriate to members of the wider 8build community. We have also linked with James Place, who are a charity offering free lifesaving treatment to men in suicidal crisis. They have provided talks on sites about the services they offer to promote dialogue and support.
The company continues to support equal opportunities in employment and opposes all forms of unlawful or unfair discrimination on any grounds. The directors’ policy is to treat all employees, job applicants, clients and suppliers equally and as they would wish to be treated.
We are delighted to report a most successful first year with our NextGen cohort who have embraced the concept and risen to the challenge across the board. We now have tiers of training and education to suit all levels and disciplines and are constantly adding to the training suite where possible. This year we have reengaged with presentation training and, for the first time, are using it for targeted brand awareness. We are also delighted to report the inclusion of coaching into our offering and are confident that we will see great benefit from this initiative in years to come.
Overcoming the continuous ongoing challenges would not be possible without the commitment, enthusiasm and loyalty of all staff; and the directors give heartfelt thanks to all the company’s employees for supporting us continuously and giving of their best to colleagues, clients and all stakeholders alike
Governance, Duties and Stakeholder Engagement.
Section 172 of the Companies Act 2006 requires directors to act in a way that they consider most likely to promote the success of the business. In doing so, directors must take into consideration the interests of various stakeholders including employees, clients, suppliers, shareholders and the wider public. They must also consider the impact of operations on the community and the environment as well as the long-term consequences of the decisions they make.
The directors believe that in this report they have already evidenced many examples of their decisions and the reasons for them. Their overall goal is for continuous improvement for the benefit of the majority. However, details and specifics are further detailed below.
The company is owned by individuals who are employed within 8build. The Boards of 8build Limited and 8build Group Limited are all shareholders within the business so have a vested interest in tirelessly promoting the success of the company and the group. They are constantly seeking ways to improve stakeholder engagement. During the ongoing challenges, communication, strong decision making, and leadership has been as important as ever.
Employees
Our staff remain our primary focus. It is no mean feat to achieve a 20-year milestone with some of our staff having been with us for that entire time. Over 22% of our existing staff have been with the company for over 10 years and over 52% for 5 years. We continue to celebrate long service, and it is a matter of some pride that we retain so many loyal colleagues in such volatile and competitive market conditions. We aim to provide support to and tolerance of everyone, no matter their role or background. We believe that there is strength in celebrating our differences and learning from each other. May that continue for the next 20 years.
Clients
We are working harder than ever to build on our long-term relationships with our clients and partners. During the financial year we have delivered many projects with repeat clients. Some have been with the business 20 years. Last year we employed a business development director to help us manage and enhance these relationships which has helped bear fruit by bringing in some new clients to enjoy our value-added service.
Supply chain
Our sub-contractors and suppliers are critical to our operations at every level. We agree fair payment terms with all our suppliers, and it is our policy to pay within these terms. As well as supporting the Governments Prompt Payment Code we have supported some of our sub-contractors who have suffered as a result of the demise of our competitors. The Supply Chain department continues going from strength to strength as evidenced by the support and personal relationships flourishing within our supply chain. We always aim for long term collaborative relationships.
To improve our supply chain due diligence and control we implemented an improved supply chain management system which allows a more collaborative approach to tendering and liaison with our supply chain to bring improved value to both parties.
8build are proud to have been participants a tree planting program with a key supply chain member. Thanks to our combined efforts there are now 722 more trees in the world helping towards providing a sustainable future.
Communities
We engage with all our communities at site level; each site having a dedicated Community Liaison Officer. All sites have newsletters and public noticeboards, and we encourage engagement with local community groups where appropriate. We have worked very hard to maintain engagement with local communities. We are members of a variety of industry groups, and we hope to improve the image of the construction industry in the eyes of the general public by improving community engagement and providing a service to local people within those communities.
A number of the site teams help with initiatives in their local areas and raise money for local causes. We have seen and felt the benefits first-hand of what such engagement can deliver both personally and professionally.
Principal decisions
Principal decisions are those that are material to the company, and of benefit to the categories of stakeholders mentioned above. It is vital to the board that we act fairly in all our decision making and maintain a reputation for high standards of business conduct. The directors reviewed and approved the annual strategic plan and financial budget for the year whilst considering the company’s appetite for risk. We have had a complete overhaul of our meeting priorities, responsibilities and lines of communication within the business, and we feel better placed to deal with the challenges ahead.
The directors are also acutely aware of the increased incidence of fraud and social engineering around the world. To this end, we are delighted to report that we have successfully attained accreditation with BSI ISO 27001:2022 Information Security Management. This required considerable input from our IT and Compliance departments, but it is a vital step forward in combating information security issues in the years ahead.
On behalf of the board
The directors present their report with the financial statements of the company for the year ended 31 March 2025.
The results for the year are set out on page 13.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
8build Group are only too aware of the construction industry’s responsibility and its current contribution to high levels of CO2. Fo this reason, 8build has partnered with ESGPro, an award winning ESG consultancy. With their guidance, we have begun a new and improved cycle of SECR reporting. This underpins 8build’s commitment to openness in environmental performance. The framework provides a clear mechanism for monitoring progress and goes beyond regulatory compliance to demonstrate 8build’s accountability to all stakeholders.
Our full annual carbon report, of which this represents just a brief extract, can be found on our website, 8build.com. It has been prepared in alignment with the SECR framework established by the UK Government under the Companies (Director Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. Our disclosure covers Scope 1, Scope 2, and relevant Scope 3 categories.
The reporting boundary is the financial year 2024/2025 and covers the operations of the group within the UK. During the year we have enhanced our data capture and scope, tracking flights records, hotel stays and expense claims amassing more accurate data, and have therefore revisited the 23/24 figures for comparable statistics.
The year-on-year comparison reveals a profound change in 8build’s emissions profile. In 2023-24, Scope 3 Waste accounted for most reported emissions, totalling 1,629.98 tonnes of carbon dioxide equivalent. By 24-25, this figure had dropped to just 4.20 tonnes. This sharp reduction is the result of two key factors; a recycling rate exceeding 98 per cent across waste streams and an improved application of the DEFRA methodology, which assigns only minimal transport related emissions to recycled materials. This coupled with the purchase of 100% of renewable energy, resulted in a remarkable shift in reported emissions.
8build remains committed to reduction of CO2 emissions but recognises the huge challenge facing the industry moving forward. Business aspirations are to grow and with growth comes increased volume and greater challenges. With each year, data capture and reporting is also enhanced which, in turn, can lead to an increase is the data numbers. Against this is our continued desire to see those numbers reduce to reach our 2040 target
For the coming year, 8build is committed to stronger primary data capture and enhanced project level metering where possible. The next phase will encompass standardizing activity data across offices, sites and suppliers. This alone will be a mammoth task as so many moving parts are involved. We need to maintain both market based and location-based reporting for electricity and apply DEFRA 2024 factors with independent checks to ensure accuracy and completeness. Business travel is now a leading category, so a travel hierarchy will be introduced and embedded within policy and practice moving forward.
The directors have chosen, in accordance with the Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and risk management.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
For construction companies, there are judgements in assessing the contract revenues, stage of completion, final expected margins and assessment of loss making contracts. In addition, assessments must be made regarding the recovery of retentions and other contractual amounts. We therefore consider this to be a high risk area for fraud, due to the potential for management bias.
To respond to the above potential risk of fraud, our audit procedures included:
Assessing the relevant controls over the revenue invoicing and work in progress calculations for contract customers.
Reviewing a sample of the client’s on-going contracts to ensure the stage of completion method methodology had been correctly applied.
Reviewing a sample of customer contracts, assessing the costs to date and stage of completion per the valuation reports, variations within contract revenue and contract costs, and the completeness of loss provisions arising from customer disputes and contract overruns.
Re-performing the key calculations behind the profit margins or loss provisions applied.
Assessing and challenging the most significant contract positions and the judgements adopted by management to recognise revenue, costs and the profits or losses.
Evaluating the financial performance of contracts against previous estimates and historical trends.
Where appropriate, reviewing correspondence with insurance providers and legal advisors.
In addition to the above, our procedures to respond to the further risks identified included the following:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework (FRS 102, the Companies Act 2006), the relevant direct and indirect tax compliance regulation in the United Kingdom, health and safety regulations, as well as employment laws.
We understood how the company is complying with those frameworks by making enquiries of management and seeking representations from those charged with governance. We corroborated our understanding by reviewing supporting documentation, as well as reviewing certifications the company has and their health and safety policies.
We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur by considering the risk of management override of internal control and by designating management override as a fraud risk. We performed journal entry testing by specific risk criteria, with a focus on journals indicating large or unusual transactions based on our understanding of the business. We tested specific transactions reconciling to source documentation or independent confirmation, ensuring appropriate authorisation of the transactions.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquiries of management and those charged with governance, including a review of legal and professional expenses.
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
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.
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.
8build Limited undertakes property fit out, new build and refurbishment.
The company is a private company limited by shares and is incorporated and domiciled in England. The address of the registered office is 64 Leman Street, London, E1 8EU.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of 8build Group Limited. These consolidated financial statements are available from its registered office, 64 Leman Street, London, E1 8EU.
The directors have chosen not to depreciate the freehold land and buildings held by the company and these are instead held at market value, as stated above. This is in contravention of the Companies Act 2006 which requires depreciation to be charged. The directors are of the opinion that the residual value of the property at the end of its useful life is expected to be in excess of the carrying value. As a result any depreciation to be provided is not material over the life of the asset and therefore has not been accounted for.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in the profit and loss account in the year of disposal.
Basic financial assets, including trade and other debtors and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Insurance claims are recognised when the economic benefit arising from the claims is virtually certain.
Such assets are subsequently carried at amortised cost using the effective interest method.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised when:
the contractual rights to the cash flows from the asset expire or are settled, or
substantially all the risks and rewards of the ownership of the asset are transferred to another party, or
control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Basic financial liabilities, including trade and other payables and bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the liability is extinguished; that is when the contractual obligation is discharged, cancelled or has expired.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Termination benefits
Termination benefits are recognised when the company has demonstrated a commitment to either terminate the employment of an employee or group of employees before the normal retirement date, or to provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.
Exceptional items
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Exceptional items are reported separately in order to calculate adjusted results, as the company believes these adjusted measures provide additional useful information on continuing performance and trends. Judgement is required in determining whether an item should be classified as an exceptional item or included within adjusted results.
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next financial year are addressed below.
Recognition of revenue and profit is based on judgments made in respect of the ultimate profitability of a contract. Such judgements are arrived at through the use of estimates in relation to costs and value of work performed to date and to be performed in bringing contracts to completion, including rectification of snagging issues. These estimates are made by reference to recovery of pre-contract costs, surveys of progress against the construction programme, changes in work scope, the contractual terms under which the work is being performed, including the recoverability of any unagreed income from variations and the likely outcome of discussions on claims, costs incurred and external certification of the work performed. The company has appropriate control procedures to ensure all estimates are determined on a consistent basis and subject to appropriate review and authorisation.
The valuation of the freehold property is on the basis of a valuation carried out by an independent surveyor. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. Notwithstanding the turbulence in the property market, the directors consider the valuation to be materially accurate.
An analysis of the company's revenue is as follows:
The exceptional costs recognised during the prior year related to a complex legacy project whereby there were various insurance claims that were under recovered or subject to a provision and the associated legal costs. These costs have all been treated as exceptional as they relate to an unusual circumstance that is unlikely to reoccur.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The actual credit for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
In addition to the amount credited to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:
The freehold land and buildings were valued on 25 April 2025 on an open market basis by Frost Meadowcroft Surveyors LLP, an independent firm of property consultants and Chartered Surveyors.
If revalued assets were stated on an historical basis rather than a fair value basis, the total amounts included would have been as follows:
Freehold land and buildings with a carrying amount of £2,500,000 (2024: £3,500,000) have been pledged to secure banking facilities for the company. This charge was created on 8 July 2020. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity without a signed written consent.
Contract assets primarily relate to the company's right to consideration for construction work completed but not invoiced at the balance sheet date.
Where progress billings exceed costs incurred plus recognised profits less recognised losses, the balance is shown as contract liabilities.
At 31 March 2025, retentions held by customers for contract work amounted to £7,039,678 (2024: £5,208,300) and are included within contract assets.
At 31 March 2025, amounts of £4,438,305 (2024: £1,252,747) included in trade and other receivables and arising from contracts are due for settlement after more than 12 months.
At 31 March 2025, amounts of £4,047,159 (2024: £1,533,269) included in trade and other payables and arising from contracts are due for payment after more than 12 months.
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
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.
Operating lease payments represent rentals payable by the company for certain of its assets. Leases are negotiated for an average term of 5 years and rentals are fixed for that period.
At the year end the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows: