REGISTERED NUMBER: 12939220 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 December 2024

for

Embrace Steel Group Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

C M Bartholomew

D Curnock

J T Sapak

R A Whiting

REGISTERED OFFICE:

Cawley House

149-155 Canal Street

Nottingham

Nottinghamshire

NG1 7HR

REGISTERED NUMBER:

12939220 (England and Wales)

AUDITORS:

Clayton & Brewill

Statutory Auditors and

Chartered Accountants

Cawley House

149-155 Canal Street

Nottingham

Nottinghamshire

NG1 7HR

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS

Turnover for the group in the year totalled £41,430,060 in with a gross profit of £10,593,459. The group received other income of £186,124, administrative expenses and overheads totalled £7,505,959 with finance costs of £1,090,753 and asset depreciation charged totalled £683,038.

The group made a pre-tax profit for the year of £2,298,001 in 2024 (2023 - £1,013,017).

The net assets of the group on 31 December 2024 were £4,055,109(2023 - £2,112,159), with net current assets of £2,158,894 (2023 - Net current assets £718,182).

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider that the principal risk to the operations of the group to be exposures arising from working on substantial contracts and the fluctuations in the timing of cash flows relating to these contracts. Care is taken during the negotiation of contract payment terms to alleviate working capital pressures as much as possible and minimises the use of the available financing facilities.

A further risk is the exposure to fluctuations in steel prices, particularly given many of the contracts are on a fixed price basis. Where possible pre-agreed prices and terms are negotiated with the main steel suppliers for contracted work.

There is a credit risk arising from exposure to customers defaulting on trade debts. The risk is minimised through tight credit control procedures, only dealing with reputable clients and in the use of Credit Insurance facilities.

These risks have been continued through 4 due to the impact of the continuing Ukraine conflict on the UK and world economies and additional pressures of similar nature.

The group's forecasts and projections, taking account of reasonable potential changes in trading performance, show that the group should be able to operate within its current facilities for the foreseeable future. The directors are not aware of any reason why the working capital position would change in the coming 12 months.

BUSINESS ACQUISITION

The directors are delighted to announce the acquisition of WAA (Holdings) Limited and its subsidiaries, Shufflebottom Limited and Celtic Cladding Services Limited. A move that signifies a strategic expansion of our capabilities and offerings within the structural steel fabrication industry. This acquisition represents a pivotal step forward in our growth strategy and reinforces our commitment to delivering unparalleled value to our clients and stakeholders.

Both Shufflebottom Ltd and Celtic Cladding Services Limited bring a wealth of expertise, specialized technologies, and a proven track record in structural steel fabrication that perfectly complements our existing group operations. By integrating their strengths with ours, we are poised to enhance our service offerings, broaden our market presence, and solidify our position in the industry.

This strategic alignment not only expands our portfolio but also enhances our ability to deliver comprehensive solutions to our clients. The synergies created through this acquisition will enable us to offer a more diverse range of products and services, catering to the evolving needs of our customers while maintaining the highest standards of quality and reliability.

Furthermore, the acquisition of Shufflebottom Ltd strengthens our production capabilities, enabling us to undertake larger and more complex projects with increased efficiency and precision. This enhanced capacity not only positions us for sustainable growth but also reinforces our reputation as a trusted partner for clients seeking innovative and reliable structural steel solutions.

As we move forward, we are committed to a seamless integration process that prioritizes collaboration, transparency, and shared success. By leveraging the collective expertise and resources of group entities, we are confident in our ability to maximize the benefits of this acquisition and drive long-term value for our stakeholders.

ON BEHALF OF THE BOARD:

C M Bartholomew - Director

23 September 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024.

FUTURE DEVELOPMENTS

The group continues to work on improving profitability and efficiency within the company and the group.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

C M Bartholomew

D Curnock

J T Sapak

Other changes in directors holding office are as follows:

R A Whiting - appointed 1 November 2024

FINANCIAL INSTRUMENT RISK

The details of the financial instrument risks are provided in the Strategic Report.

POLITICAL DONATIONS AND EXPENDITURE

During the year the group made charitable donations of £5,562 to a number of local and national organisations for general purposes.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group 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;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Clayton & Brewill, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C M Bartholomew - Director

23 September 2025

Opinion

We have audited the financial statements of Embrace Steel Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2024 and of the group's 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the parent 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 directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:

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

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

- Enquiry of management and those charged with governance around actual and potential litigation and claims;

- Reviewing financial statement disclosures and testing to supporting documentation to assess

compliance with applicable laws and regulations;

- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Mr Douglas Perry FCA (Senior Statutory Auditor)

for and on behalf of Clayton & Brewill

Statutory Auditors and

Chartered Accountants

Cawley House

149-155 Canal Street

Nottingham

Nottinghamshire

NG1 7HR

23 September 2025

TURNOVER

4

41,430,060

26,238,894

Cost of sales

30,836,601

20,824,248

GROSS PROFIT

10,593,459

5,414,646

Distribution costs

128,475

-

Administrative expenses

7,377,484

4,289,300

7,505,959

4,289,300

3,087,500

1,125,346

Other operating income

186,124

158,363

OPERATING PROFIT

6

3,273,624

1,283,709

Interest receivable and similar income

115,130

28,745

3,388,754

1,312,454

Interest payable and similar expenses

7

1,090,753

299,437

PROFIT BEFORE TAXATION

2,298,001

1,013,017

Tax on profit

8

355,051

268,082

PROFIT FOR THE FINANCIAL YEAR

1,942,950

744,935

Profit attributable to:

Owners of the parent

1,539,869

581,729

Non-controlling interests

403,081

163,206

1,942,950

744,935

PROFIT FOR THE YEAR

1,942,950

744,935

OTHER COMPREHENSIVE INCOME

Property revaluation

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,942,950

744,935

Total comprehensive income attributable to:

Owners of the parent

1,942,950

744,935

FIXED ASSETS

Intangible assets

11

9,803,349

1,662,322

Tangible assets

12

4,771,204

2,188,855

Investments

13

-

-

Investment property

14

2,120,000

2,120,000

16,694,553

5,971,177

CURRENT ASSETS

Stocks

15

829,865

139,464

Debtors

16

9,189,486

6,430,387

Cash at bank

4,207,051

3,725,219

14,226,402

10,295,070

CREDITORS

Amounts falling due within one year

17

12,067,508

9,576,888

NET CURRENT ASSETS

2,158,894

718,182

TOTAL ASSETS LESS CURRENT LIABILITIES

18,853,447

6,689,359

CREDITORS

Amounts falling due after more than one year

18

(13,701,060

)

(4,134,283

)

PROVISIONS FOR LIABILITIES

21

(1,097,278

)

(442,917

)

NET ASSETS

4,055,109

2,112,159

CAPITAL AND RESERVES

Called up share capital

22

8

8

Share premium

23

319,991

319,991

Revaluation reserve

23

433,383

433,383

Fair value reserve

23

178,423

178,423

Retained earnings

23

2,557,017

1,017,148

SHAREHOLDERS' FUNDS

3,488,822

1,948,953

NON-CONTROLLING INTERESTS

566,287

163,206

TOTAL EQUITY

4,055,109

2,112,159

The financial statements were approved by the Board of Directors and authorised for issue on 23 September 2025 and were signed on its behalf by:

C M Bartholomew - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

101

1

Investment property

14

-

-

101

1

CURRENT ASSETS

Debtors

16

11,656,766

1,687,237

Cash at bank

162,743

-

11,819,509

1,687,237

CREDITORS

Amounts falling due within one year

17

2,189,274

346,744

NET CURRENT ASSETS

9,630,235

1,340,493

TOTAL ASSETS LESS CURRENT LIABILITIES

9,630,336

1,340,494

CREDITORS

Amounts falling due after more than one year

18

9,719,479

1,020,495

NET (LIABILITIES)/ASSETS

(89,143

)

319,999

CAPITAL AND RESERVES

Called up share capital

22

8

8

Share premium

319,991

319,991

Retained earnings

(409,142

)

-

SHAREHOLDERS' FUNDS

(89,143

)

319,999

Company's loss for the financial year

(409,142

)

-

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 23 September 2025 and were signed on its behalf by:

C M Bartholomew - Director

Called up

share

Retained

Share

Revaluation

capital

earnings

premium

reserve

£

£

£

£

Balance at 1 January 2023

8

514,469

319,991

424,833

Changes in equity

Dividends

-

(70,500

)

-

-

Total comprehensive income

-

573,179

-

8,550

8

1,017,148

319,991

433,383

Non-controlling interest arising on business combination

-

-

-

-

Balance at 31 December 2023

8

1,017,148

319,991

433,383

Changes in equity

Total comprehensive income

-

1,539,869

-

-

8

2,557,017

319,991

433,383

Non-controlling interest arising on business combination

-

-

-

-

Balance at 31 December 2024

8

2,557,017

319,991

433,383

Fair

value

Non-controlling

Total

reserve

Total

interests

equity

£

£

£

£

Balance at 1 January 2023

178,423

1,437,724

-

1,437,724

Changes in equity

Dividends

-

(70,500

)

-

(70,500

)

Total comprehensive income

-

581,729

-

581,729

178,423

1,948,953

-

1,948,953

Non-controlling interest arising on business combination

-

-

163,206

163,206

Balance at 31 December 2023

178,423

1,948,953

163,206

2,112,159

Changes in equity

Total comprehensive income

-

1,539,869

-

1,539,869

178,423

3,488,822

163,206

3,652,028

Non-controlling interest arising on business combination

-

-

403,081

403,081

Balance at 31 December 2024

178,423

3,488,822

566,287

4,055,109

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

8

-

319,991

319,999

Changes in equity

Balance at 31 December 2023

8

-

319,991

319,999

Changes in equity

Total comprehensive income

-

(409,142

)

-

(409,142

)

Balance at 31 December 2024

8

(409,142

)

319,991

(89,143

)

Cash flows from operating activities

Cash generated from operations

1

8,836,446

(154,510

)

Interest paid

(1,082,103

)

(292,454

)

Interest element of hire purchase payments paid

(8,650

)

(6,983

)

Tax paid

(517,698

)

(98,380

)

Net cash from operating activities

7,227,995

(552,327

)

Cash flows from investing activities

Purchase of intangible fixed assets

(11,630,672

)

-

Purchase of tangible fixed assets

(1,548,018

)

(104,456

)

Sale of tangible fixed assets

70,973

-

Interest received

115,130

28,745

Net cash from investing activities

(12,992,587

)

(75,711

)

Cash flows from financing activities

New loans in year

9,924,505

3,741,860

Loan repayments in year

(3,627,575

)

(143,573

)

Capital repayments in year

(50,506

)

(47,292

)

Equity dividends paid

-

(70,500

)

Net cash from financing activities

6,246,424

3,480,495

Increase in cash and cash equivalents

481,832

2,852,457

Cash and cash equivalents at beginning of year

2

3,725,219

872,762

Cash and cash equivalents at end of year

2

4,207,051

3,725,219

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

Profit before taxation

2,298,001

1,013,017

Depreciation charges

683,038

452,655

(Profit)/loss on disposal of fixed assets

(3,979

)

43,647

Finance costs

1,090,753

299,437

Finance income

(115,130

)

(28,745

)

3,952,683

1,780,011

(Increase)/decrease in stocks

(904,132

)

40,949

Decrease/(increase) in trade and other debtors

5,637,829

(3,808,459

)

Increase in trade and other creditors

150,066

1,832,989

Cash generated from operations

8,836,446

(154,510

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

4,207,051

3,725,219

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

3,725,219

872,762

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

3,725,219

481,832

4,207,051

3,725,219

481,832

4,207,051

Debt

Finance leases

(53,277

)

(31,453

)

(84,730

)

Debts falling due within 1 year

(2,199,281

)

2,199,281

-

Debts falling due after 1 year

(2,826,375

)

(9,541,236

)

(12,367,611

)

(5,078,933

)

(7,373,408

)

(12,452,341

)

Total

(1,353,714

)

(6,891,576

)

(8,245,290

)