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

Principal activities

PCE Limited is one of the UK’s market leaders in DfMA (Design for Manufacture and Assembly) and hybrid solutions for structures and facades in both the Public and Private sectors with our approach being to reduce uncertainty and to be in control from concept to completion using innovative construction methods alongside our advanced digital techniques with pre-determined kits-of-parts, our clients optimum value, efficiency, predictability and speed.

Fair review of the business

The directors are satisfied with the strong business performance in 2024 and are optimistic for the future.

The profit before tax for the year ended 31 December 2024 was £6,076,524 (2023: £3,669,292). After taxation profit was £4,553,997 (2023: £2,889,629).

During the year, the Company declared and paid dividends amounting to £1,000,000.

Revenue during the year increased from £61,136,095 (2023) to £77,661,393 which was in line with our forecasts.

Overall shareholders’ funds increased by £3,553,997.

Some of the Companies hybrid design construction solutions require research into different methods of construction, techniques and /or Innovation and where appropriate the Company claims R&D corporation tax relief.

The Company’s Key Financial Performance Indicators during the year were as follows:

2024 2023

Turnover                     £77.66m    £61.14m

Profit before taxation                  £6.08m      £3.67m

Shareholders’ Funds                 £12.55m      £9.00m

Current work in hand             £123.25m    £81.38m

Current work in hand is at £123.25M with confirmed orders of £80.78M for 2026.

Operational review

Construction continued at the Fulton & Fifth Development of 876 residential units in Wembley London comprising of five high-rise towers using PCE’s hyTower® system with three of the five blocks completed in 2024 with overall completion being in 2025 and at the redevelopment of 247 Tottenham Court Road in London using the PCE HybriDfMA Frame System construction works completed during the year.

Construction commenced at the new Brent Cross Town Development in London for both Plot 14 – comprising of 286 residential units using PCE’s hyTower® system and Plot 1 - a new fourteen storey commercial block using the PCE HybriDfMA Frame System with completion on both projects being in 2025. Other significant projects commencing construction during 2024 where Plot 6 of the residential Silvertown Quays Development in London along with HMP Elmley, HMP Bullingdon and HMP Fosseway with all four projects substantially completed at the year end.

Design works commenced on the Ministry of Justice Small Secure Houseblocks Programme for HMP Lancaster and HMP Northumberland and the Accelerated Houseblock Development Programme for HMP Channings Wood with all three projects being in construction during 2025.

Notable new projects commencing in 2025 are the new HMP Gartree prison next to the existing site in Leicestershire providing 1,700 category B prison places and the new HMP Glasgow prison with a capacity of 1,344 providing a much-needed replacement for the 143-year-old HMP Barlinnie. Design works to both commencing early in 2025 with construction due to commence by the end of 2025.

We expect turnover in 2025 to be around £70M with an acceptable level of profitability for the year. Preconstruction, design and manufacturing have commenced on future projects although site commencement dates, which are outside the Company’s control, have moved back, which has subsequently pushed work forward into 2026 and beyond.

The Company’s focus remains in securing a good quality order intake with chosen customers / partners and, along with recognising the importance of our supply chain, we understand our goals can only be achieved with our operational teams working in close collaboration with both customer and supply chain partner.

The Company is continuing with its long-term plan of delivering offsite innovative hybrid construction solutions and the directors believe that the quality of people employed with their positive culture and creative thinking, along with operational efficiencies gives the Company a competitive edge. The directors see employee engagement as an important priority and understand that to meet the Company’s 2030 goals and beyond the Company needs to develop, retain, and invest in its people as well as attracting new people to be able to successfully deliver its plans.

The newly formed directors’ operational team along with the senior leadership team continues to work with the board directors managing the day-to-day operational function of the business and supporting in the development of the next generation leaders.

The Company has continued in further investing in people resource, people development through individual development plans and internal training along with further investment into health & safety, plant, and continuous improvement in all areas of the business. One area the company continues to heavily invest in, is the digitalisation of its processes with the “input data once” approach and acquiring innovative technologies to fully digitalise our project delivery which will enable us to control the current turnover levels and meet the 2030 Company plan and beyond.

The Company with support from the Ministry of Justice and Serco launched Workshop 5, a rehabilitation initiative at HMP Fosse Way designed to equip prisoners with the skills, mindset, and confidence to build a future beyond prison. Workshop 5 mirrors an offsite manufacturing environment, giving participants hands-on experience with modern construction techniques. This is more than just technical skills the programme instils teamwork, communication, and a strong work ethic giving transferable skills that can open doors across industries.

The Company continued in its accreditation to ISO: 9001:2015 in recognition of its Quality Management System during the year and places a high emphasis on delivering projects to the required quality with its supply chain partners. The Company also continued in its accreditation of both ISO 14001 (Environmental Management System) and ISO 45001 (Occupational Health & Safety incl. SSIP).

With over 50 years in business the Company has seen a major transformation; evolving from a construction only business to a comprehensive design and build organisation, developing its digital and strategic capabilities, and becoming a member of a 100% employee-owned Group. Whilst driven by a philosophy of continuous improvement, PCE Limited has progressed to becoming a leading DfMA (Design for Manufacture and Assembly) business, delivering some of the most impactful, award-winning structures across the UK.

What has been constant throughout the years of change is two things; the culture and ethic of the people behind the business, and their collective will to win. These characteristics, backed by the positive changes made by the business over the years, has allowed PCE Limited to adapt and excel. We have grown significantly in size and stature, whilst remaining true to the ethos and family culture instilled in the business by its late Founder, Vince Wetton.

We are truly grateful to each and every person, client, supplier, and partner who has helped the Company on its journey. To those who are still here, those who have gone in different directions, and to those who sadly are no longer with us the Company thanks them all. With a bright future of innovation, talent, progression, and sustainability, we are genuinely excited about where we are heading with our 2030 plan.

The Company won the Best use of Concrete Technology at the Offsite Awards for HMP Millsike prison project in East Yorkshire using the PCE Secure Living System. The Company was highly recommended in the categories for Best use of Hybrid Technology for 247 Tottenham Court Road in London using the PCE HybriDfMA Frame System and Residential Project of the Year for Fulton & Fifth Development in Wembley London using PCE’s hyTower® system.

Our staff and project teams have also received multiple awards from our customers for their work and efforts particularly in safety and engagement during the year.

Section172(1) Statement

Section 172(1) of the Companies Act 2006 requires a director of a company to act in the way they consider, in good faith, would most likely promote the success of the company for the benefit of its members as a whole and in doing so had regard amongst other matters the:

1. likely consequences of any decisions in the long term

2. interests of the Company’s employees

3. need to foster the Company’s business relationships with suppliers, customers and others

4. impact of the Company’s operations on the community and environment

5. desirability of the Company maintaining a reputation for high standards of business conduct

6. need to act fairly between members of the Company

The board both individually and collectively, have had regard to the matters set out in sections 172(1) when discharging their section 172 duties and take into account the impact of decisions on all our stakeholders and continue to ensure that the health, safety and wellbeing of our people partners and other stakeholders remains central to everything we do.

Regular board meetings are held where the directors review the Company’s activities and make any required decisions. The Directors will receive information in a range of different formats to ensure they consider section 172 matters when decision making.

The Company is Employee Owned with the PCE Employee Ownership Trust being the controlling party and majority shareholder of P.C.E. Group Holdings Limited, the Parent Company.

Being employee owned our people are our partners and we believe in the power of the employee voice and have a philosophy of engagement, involvement and participation meaning our people help to make decisions that define the Company’s identity, drive the business, and shape the future of the Company by using the PCE core behaviours - Humble, Honest, Hungry and Smart. As a people focused company a happy and engaged workforce is key for the success and longevity of the Company and as such the Company takes pride in having a long serving workforce.

The board directors continue to stage regular business updates and the use of several other communication channels like the internal communication hub to update staff on both performance and progress along with social media, e-mail and instant messaging channels.

We are committed to invest in our employees in health and safety, skills and leadership training, providing apprenticeships, and promoting employee ownership.

Regular one to ones along with performance and development reviews are held between managers and employees throughout the year and a six monthly confidential eNPS (employer net promotor score) is used to measure employee loyalty and engagement.

The employee run steering group continues influencing the current activities of the business along with the future vision helping to make PCE a place in which people are proud to work.

Along with customers and supply chain partners our other major stakeholders include insurers, bankers, auditors and advisors. The Company recognises the importance of having our stakeholders’ views and actively engages with them so the Company can proactively consider their interests in the decisions it makes.

Engagement with our various stakeholders is encouraged and is done through regular, open and collaborative dialogue where we ensure all parties are kept informed and listened to by way of regular Company updates, site visits, workshops and social media. The directors believe that this dialogue is important to promote a long-term working relationship with our stakeholders and to aid continuous improvement and communication.

The directors recognise that the Company must act responsibly towards sustainability and the environment and is committed in protecting the environment and aware that climate change is a huge challenge in both business and society and continues to implement policies and procedures to minimise the damage caused to the environment and promote energy efficiency.

The company encourages diversity and inclusion of employee partners of all backgrounds.

Principal risks and uncertainties

The principal risks which management face are of a financial and legislative nature and are regularly reviewed by the directors.

Health, Safety and Wellbeing

The Company is involved in activities that have the potential to result in injury or loss of life to employees and third parties. These risks are managed through a strong health, safety and wellbeing culture driven by the Company’s health and safety committee, controlled processes and procedures, investment into new equipment & systems and training with emphasis on working at height, lifting management and temporary works along with the control of the significant hazards, noise, dust and HAVS. The company invests in an EAP Employee Assistance Programme for its employee partners, which provides counselling and professional support for both personal and work-related problems.

Performance Risk

The Company’s Preconstruction, Design, Manufacture and Construction (DMC) coordination approach is enabling the Company to control risks on contracts to a much larger extent, as the scope of work is better defined at an early stage and price/programme/contracts agreed before commencing work. The Company rigorously evaluates the cost of projects at tender stage, along with the control, recording and monitoring of these costs during construction and the Company’s ability to recover these costs under the agreed payment terms of our contracts reduces the financial risk impact to its performance. The management of these risks is an integral part of the Company’s control processes and procedures, including a detailed monthly review of the status and profitability of current projects by the directors. The Company also provides a comprehensive construction service with a fully trained multi skilled workforce and maintains strong relationships at all levels of management with their customers.

Quality

The Company’s reputation is built around delivering a first-class standard of work on its projects and the quality of our work can directly impact relationships with our key client partners. These risks are manged through a “right first time” approach which is driven by the Board and Senior Leadership Team through a non-conformance and senior manager observation process as well as our project teams maintaining a close relationship with our Client Partners to resolve any issues at the earliest opportunity.

Price Risk

The Company’s revenues are derived from the construction market. These markets are subject to variations in patterns of demand and are largely influenced by economic growth, government spending and consumer confidence. In response to this risk, the directors keep up to date with local and wider economic conditions and can adapt the pricing strategy and the cost base of the Company accordingly. The Company provides resilience to market fluctuations by having a blend of client types along with multiple systems that cover multiple sectors along with having a broad supply chain and adopting a hybrid approach.

Credit risk

The Company’s policy is to trade only with recognised, creditworthy third parties. It is the policy of the Company that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, amounts received from trade debtors are monitored against contractual agreements, with the objective of minimising the Company exposure to bad debts. Other risk relates to the financial standing of our supply chain in terms of their ability to carry out their contracted obligations to us.

Cashflow risk

The Company monitors cash flow as part of its day-to-day control procedures. The Board considers cash flow projections monthly and ensures that appropriate facilities are available to be drawn down upon, as necessary.

Foreign exchange risk

The operations of the Company are mainly in the United Kingdom and as such its exposure to foreign exchange risk is minimal.

Legislative and regulation risk

These relate to current legislation and regulations and any changes to them including health, safety, and environmental issues. Significant focus is given at all levels from Board down within the organisation and mandatory policies and procedures have been implemented and regularly reviewed along with relevant training to control compliance and mitigate risk. No significant uncovered risks were identified up to the date of these financial statements being issued.

Key performance indicators

The key performance indicators, other than financial, used by the Company are – Health & Safety – Quality - People – Certainty in delivery from Design, Manufacture, to onsite Assembly.

Going Concern

The industry is still currently exposed to a number of economic and political uncertainties including the UK coming to terms with the change in government, the continued energy price crisis along with the current issues in the rest of the world which has had an impact with significant increases in both labour and materials costs. The Company looks to ensure that it collaborates closely with both client and supply chain partners to secure and place orders as soon as possible to ensure production slots and material prices are secured at the earliest opportunity to give greater certainty for the Company and its partners.

The Company has carried out a review of its financial forecasts, which are underpinned by Government projects taking place in 2025 and 2026, and the Directors believe that the Company has adequate financial resources even in the event of a severe downturn in activity to enable it to continue in operation for the foreseeable future. Hence, they consider that the going concern basis of accounting continues to be appropriate.

On behalf of the board

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

PCE Limited is one of the UK’s market leaders in DfMA (Design for Manufacture and Assembly) and hybrid solutions for structures and facades in both the Public and Private sectors, with an innovative approach to construction methods with the emphasis on safety, quality, speed and value.

The results for the year are set out on page 14.

Ordinary dividends were paid amounting to £1,000,000. 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, Burgis & Bullock, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The Company is responsible for disclosing information under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. These disclosures have been presented in the consolidated financial statements of PCE Group Holdings Limited.

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:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

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

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

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

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

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.

We have audited the financial statements of P C E Limited (the 'company') for the year ended 31 December 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor'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:

• 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.

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

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

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

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

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

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

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.

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

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

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Based on our understanding of the company and industry we identified that the principal risk of non-compliance with laws and regulations related to breaches of Health & Safety Law, Environmental and Quality regulations and Building Safety Act 2022 in relation to the company’s activities as well as Companies Act 2006, UK Tax Legislation, UK Employment Law. We also evaluated management incentive and opportunities for fraudulent manipulations of the financial statements.

Audit procedures performed included:

• Reviewing returns made to Companies House and HMRC;

• Discussions with management, including consideration of known or suspected incidences of non-compliance  with laws and regulation and fraud;

• Identifying and assessing the design effectiveness of controls in management have in place to prevent and detect fraud;

• Reviewing minutes of meetings of those charged with governance;

• Challenging assumptions and judgments made by management in their significant accounting estimates and assessing if these indicate evidence of management bias;

• Reviewing the accounting records for large and unusual journal entries and testing any identified and in particular the rationale for any transactions outside the company’s normal course of business;

• Reviewing the accounting records for large and unusual bank payments and testing any identified and in particular the rationale for any transactions outside the company’s normal course of business;

• Reviewing the accounting records for large and unusual transactions and testing any identified and in particular the rationale for any transactions outside the company’s normal course of business;

• Testing a sample of debit entries in the profit and loss account to check they are bona-fide costs of the business; and

• Testing a sample of bank payments to source documentation.

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

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

P C E Limited is a private company limited by shares incorporated in England and Wales. The registered office is 5-6 Mariner, Lichfield Road Industrial Estate, Tamworth, Staffordshire, B79 7UL.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

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

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

- 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of P.C.E. Group Holdings Limited. These consolidated financial statements are available from its registered office, 5-6 Mariner, Lichfield Road Industrial Estate, Tamworth, Staffordshire, B79 7UL.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

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

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

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.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. No impairment losses have been recognised in these financial statements.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work are included to the extent that the amount can be measured reliably and its receipt is considered probable.

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

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as amounts recoverable on contracts provided it is probable they will be recovered.

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

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost. Financial assets classified as receivable within one year are not amortised.

Financial assets classified as due in more than one year are amortised to the extent that there is a material impact on the financial statements.

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, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date. No Impairment losses have been recognised in these financial statements.

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

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

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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.

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

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

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.

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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 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.

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.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of contract costs.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

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

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

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

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

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

The main areas where judgement is required is the carrying value of contracts and possible bad debts.

Construction contracts

Recognition of turnover and profit on contracts requires the directors to make judgements, estimates and assumptions on the current progress and anticipated final outcome of individual contracts. Directors carry out detailed monthly reviews with management on each individual contract to exercise judgment on the current progress, the costs to complete, risks and opportunities, achieving the planned programme and recovery of claims and variations.

Recoverability of contract debtors

The directors make an assessment on the recovery of all debtors and amounts recoverable on contracts which are reviewed on a regular basis with management and provisions made where appropriate. When making assessment the directors consider the age and nature of the debt, recent correspondence along with recent trading and historical collection experience.

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

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

Their aggregate remuneration comprised:

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

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:

Tangible fixed assets includes assets held under finance leases or hire purchase contracts, as follows:

Other debtors includes VAT recoverable of £1,572,526 (2023 - £1,402,361). A VAT debtor has arisen due to the domestic reverse charge (DRC) scheme which commenced 1 March 2021.

Finance lease payments represent amounts payable by the company for certain items of machinery and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is predominantly 3 years and significant items are 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Obligations under finance leases are secured on the relevant assets.

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 deferred tax liability set out above is expected to reverse in line with the depreciation policies as it relates to accelerated capital allowances.

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 there were outstanding contributions of £71,528 (2023 - £51,193).

Construction Contracts

Due to the nature of the company’s activities it could be exposed to potential future claims in respect of work performed to date. The Directors consider that any such claims would normally be covered by insurance and/or counter-claims against third parties and, consequently they do not anticipate that any material liabilities are likely to arise which would impact the company’s ability to continue to trade. There are no such claims ongoing at the balance sheet date.

Employee Ownership Trust

During the year to 31 December 2020 the PCE Employee Ownership Trust was established which purchased the majority of the shares of P.C.E. Group Holdings Limited from the previous shareholders. The purchase was funded by the making of dividends from this company to P.C.E. Group Holdings Limited which then made equivalent gifts to the Employee Ownership Trust. All amounts were settled by the year end.

Operating lease payments represent rentals payable by the company for its property, office equipment and motor vehicles. The property lease has a minimum fixed term of 5 years. The office equipment and motor vehicle leases are fixed between 3 and 5 years.

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:

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

The following amounts were outstanding at the reporting end date, £1,710 (2023 - £nil).

The company has taken advantage of the exemption available in FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.

The parent company is PCE Group Holdings Ltd, a company incorporated in England.

The ultimate controlling party is the PCE Employee Ownership Trust.