FOR THE YEAR ENDED 31 DECEMBER 2024
SOLUM SW HOLDINGS LIMITED
COMPANY INFORMATION
SOLUM SW HOLDINGS LIMITED
CONTENTS
SOLUM SW HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their Strategic Report for the year ending 31 December 2024.
Trading
The group operates in the groundworks, enabling works and civil engineering industries.
Turnover in the year was £13.07m, which, although lower than FY2023 and FY 2024, (two consecutive financial years of exceptionally high turnover and profit margin, resulting from the post-pandemic boom) was broadly in line with our forecasts and long-term growth strategy, and was as anticipated, given the sector slowdown following the surge in activity after Covid.
The trading business performed well in the year, although we were impacted by the collapse of the ISG Group - a large client - in the third quarter, costing around £400k, as well as lost opportunity for profit on the remainder of the unfinished contract. The impact of this is reflected in our annual profits for the year. Had this failure not been experienced, the trading company’s annual net profit would have been circa £600k – ahead of forecast. We achieved a gross margin of 16%, in line with expectations.
The delta between the trading company’s profit and the holding company's position is attributable to the amortisation of goodwill in the investment, which is being written down over a ten-year period.
Cashflow
We continue to enjoy excellent client relationships, which allow us to secure timely settlement of accounts, payment of retentions, and closely manage work-in-progress. As a result, we continue to maintain effective control of our cashflow.
The final deferred consideration payment to the founding directors was made in February 2024, using cash reserves retained from the group’s strong financial performance in 2023.
The cash position was impacted by the previously mentioned collapse of a significant client mid-contract; we were robust enough to endure this without any impact on our suppliers. We are proud that we remain a champion in the industry; one of our key priorities is our relationship with our supply chain, and we placed great focus during the year on paying our suppliers to term.
We did experience some key clients deferring their payments at the end of the year, but we continued to pay suppliers on time as we maintained our commitment to always keep to terms. Credit agency reports show that we significantly beat the industry average in terms of payment days.
People
We continue to place great value on the people in our business and have invested in training and qualifications at all levels throughout the year.
Twelve of our employees completed NVQ qualifications in the year, one apprenticeship was completed, and we welcomed four new apprentices into the business across different disciplines.
We worked hard to forge collaborative relationships with local colleges, universities and prisons to raise awareness of opportunities within the construction sector and specifically the groundworks industry. We have been pleased to recruit into the business because of these relationships.
Our headcount has increased by 13% on the prior year, and staff retention remains high, reflecting our commitment to our team.
The group operates in the groundworks, enabling works and civil engineering industries.
Turnover in the year was £13.07m, which, although lower than FY2023 and FY 2024, (two consecutive financial years of exceptionally high turnover and profit margin, resulting from the post-pandemic boom) was broadly in line with our forecasts and long-term growth strategy, and was as anticipated, given the sector slowdown following the surge in activity after Covid.
The trading business performed well in the year, although we were impacted by the collapse of the ISG Group - a large client - in the third quarter, costing around £400k, as well as lost opportunity for profit on the remainder of the unfinished contract. The impact of this is reflected in our annual profits for the year. Had this failure not been experienced, the trading company’s annual net profit would have been circa £600k – ahead of forecast. We achieved a gross margin of 16%, in line with expectations.
The delta between the trading company’s profit and the holding company's position is attributable to the amortisation of goodwill in the investment, which is being written down over a ten-year period.
Cashflow
We continue to enjoy excellent client relationships, which allow us to secure timely settlement of accounts, payment of retentions, and closely manage work-in-progress. As a result, we continue to maintain effective control of our cashflow.
The final deferred consideration payment to the founding directors was made in February 2024, using cash reserves retained from the group’s strong financial performance in 2023.
The cash position was impacted by the previously mentioned collapse of a significant client mid-contract; we were robust enough to endure this without any impact on our suppliers. We are proud that we remain a champion in the industry; one of our key priorities is our relationship with our supply chain, and we placed great focus during the year on paying our suppliers to term.
We did experience some key clients deferring their payments at the end of the year, but we continued to pay suppliers on time as we maintained our commitment to always keep to terms. Credit agency reports show that we significantly beat the industry average in terms of payment days.
People
We continue to place great value on the people in our business and have invested in training and qualifications at all levels throughout the year.
Twelve of our employees completed NVQ qualifications in the year, one apprenticeship was completed, and we welcomed four new apprentices into the business across different disciplines.
We worked hard to forge collaborative relationships with local colleges, universities and prisons to raise awareness of opportunities within the construction sector and specifically the groundworks industry. We have been pleased to recruit into the business because of these relationships.
Our headcount has increased by 13% on the prior year, and staff retention remains high, reflecting our commitment to our team.
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SOLUM SW HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Corporate Social Responsibility
We place strong emphasis on CSR, and this plays a key role in our overall business strategy. Our vision is to be a business that ‘builds for good’, and we’re committed to this through our core value of responsibility. We were delighted to win regional Social Value awards from two of our key clients in the year for our contributions to this area.
We are taking steps to become a ‘greener’ and more sustainable construction business. In 2024 we started to use industry-specific tools and software to report quarterly on our carbon emissions, which will enable us to establish our baseline CO2 creation, and allow us to take steps to reduce this moving forward. We have also increased the proportion of electric/hybrid vehicles in our fleet, and started to introduce a paperless accounting system, which is being fully implemented in 2025.
We have been privileged to provide support to local community projects in the year, including completing the groundworks at the Forget-Me-Not Remembrance Garden at Gloucestershire Royal Hospital, and installation of playground equipment at Eastcombe Recreation Ground. We were also proud to support numerous local charities and sports teams through donations, sponsorship and fundraising events. Examples include provision of kits for local junior rugby and football teams, a team of employees participating in the Bristol Half Marathon (raising sponsorship of over £3,000) and ongoing support to local cancer research efforts.
We place strong emphasis on CSR, and this plays a key role in our overall business strategy. Our vision is to be a business that ‘builds for good’, and we’re committed to this through our core value of responsibility. We were delighted to win regional Social Value awards from two of our key clients in the year for our contributions to this area.
We are taking steps to become a ‘greener’ and more sustainable construction business. In 2024 we started to use industry-specific tools and software to report quarterly on our carbon emissions, which will enable us to establish our baseline CO2 creation, and allow us to take steps to reduce this moving forward. We have also increased the proportion of electric/hybrid vehicles in our fleet, and started to introduce a paperless accounting system, which is being fully implemented in 2025.
We have been privileged to provide support to local community projects in the year, including completing the groundworks at the Forget-Me-Not Remembrance Garden at Gloucestershire Royal Hospital, and installation of playground equipment at Eastcombe Recreation Ground. We were also proud to support numerous local charities and sports teams through donations, sponsorship and fundraising events. Examples include provision of kits for local junior rugby and football teams, a team of employees participating in the Bristol Half Marathon (raising sponsorship of over £3,000) and ongoing support to local cancer research efforts.
Our biggest risk remains the potential loss of income from the failure of a main contractor, as we experienced in 2024. Protection against client failures is a challenge, with restricted options for cover in the sector being offered by insurers. As such, our strategy to mitigate this risk is to spread our business amongst a selection of clients, working mainly with ‘top-tier’ contractors. Continuous due diligence and market tracking provides further confidence and management of the exposure.
Our key performance indicators are turnover, gross profit margin, cash and net assets, which are detailed in the financial statements.
We proactively managed our turnover throughout the year (by the strategic application for and acceptance of new projects) to fit our profile in terms of capacity and resources, to ensure that these KPIs reflect our financial objectives.
We proactively managed our turnover throughout the year (by the strategic application for and acceptance of new projects) to fit our profile in terms of capacity and resources, to ensure that these KPIs reflect our financial objectives.
The cash position has recovered well since the bad debt in Q3 2024. Our 2025 mid-year Management Information shows turnover and gross profit for the year-to-date running slightly ahead of plan, and current forecasts indicate that year-end performance will be in line with expectations.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
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SOLUM SW HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The MD is supported by a Senior Management Team who have been in place through this period of transition and have developed into their leadership roles to provide strategic direction across all aspects of the business.
Following the final payment of deferred consideration in early 2024, the three founding directors officially resigned from their executive positions at the end of Q1 2025, in line with their planned exit strategies. As minority shareholders they remain invested in the success of the business, and continue to contribute their experience and insight in advisory and supporting roles.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
We continue to extend caution towards adverse contract conditions and payment terms, and we carefully consider these factors, as well as the duration of fixed contracts, when tendering for, or accepting, new projects.
We consider the funds available in retained profit and working capital to be sufficient to counter the potential risks and based on this information we believe the group can meet all its financial obligations as they fall due for the foreseeable future. We therefore continue to adopt the going concern basis in presenting the accounts for 2024.
Following the final payment of deferred consideration in early 2024, the three founding directors officially resigned from their executive positions at the end of Q1 2025, in line with their planned exit strategies. As minority shareholders they remain invested in the success of the business, and continue to contribute their experience and insight in advisory and supporting roles.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
We continue to extend caution towards adverse contract conditions and payment terms, and we carefully consider these factors, as well as the duration of fixed contracts, when tendering for, or accepting, new projects.
We consider the funds available in retained profit and working capital to be sufficient to counter the potential risks and based on this information we believe the group can meet all its financial obligations as they fall due for the foreseeable future. We therefore continue to adopt the going concern basis in presenting the accounts for 2024.
This report was approved by the board on 29 September 2025 and signed on its behalf.
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SOLUM SW HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to 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.
The loss for the year, after taxation, amounted to £150,086 (2023: profit £1,297,905).
Preference share dividends paid during the year amounted to £20,000 (2023: £20,000).
Ordinary share dividends paid during the year amounted to £200,000 (2023: £Nil).
Ordinary share dividends paid during the year amounted to £200,000 (2023: £Nil).
The directors who served during the year were:
Whist margins will always be tight within the construction industry, a solid financial and operating base is in place for the future management of the group and investment has been made in back office systems, health, safety and welfare. This will help drive performance, efficiencies, communication and growth potential.
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SOLUM SW HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
There have been no significant events affecting the Group since the year end.
The auditors, Bishop Fleming Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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SOLUM SW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED
We have audited the financial statements of Solum SW Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
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 or 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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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SOLUM SW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 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 Directors' report.
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SOLUM SW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED (CONTINUED)
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 Auditors' 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 Group 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:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
• the nature of the industry and sector, control environment and business performance;
• the results of our enquiries of management and the directors about their own identification and assessment of the risk of irregularities;
• any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to:
• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
• detecting and responding to the risk of fraud and whether they have knowledge of actual, suspected, or alleged fraud; and
• the internal controls established to mitigate the risks of fraud or non-compliance with laws and regulations.
• the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud, and incorrect recognition of revenue was identified as the greatest potential area for fraud.
In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures within the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Financial Reporting Standard 102 and UK tax legislation.
• the nature of the industry and sector, control environment and business performance;
• the results of our enquiries of management and the directors about their own identification and assessment of the risk of irregularities;
• any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to:
• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
• detecting and responding to the risk of fraud and whether they have knowledge of actual, suspected, or alleged fraud; and
• the internal controls established to mitigate the risks of fraud or non-compliance with laws and regulations.
• the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud, and incorrect recognition of revenue was identified as the greatest potential area for fraud.
In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures within the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Financial Reporting Standard 102 and UK tax legislation.
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 Auditors' report.
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SOLUM SW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED (CONTINUED)
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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
10 Temple Back
BS1 6FL
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SOLUM SW HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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SOLUM SW HOLDINGS LIMITED
REGISTERED NUMBER:13989294
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 31 form part of these financial statements.
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SOLUM SW HOLDINGS LIMITED
REGISTERED NUMBER:13989294
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 31 form part of these financial statements.
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SOLUM SW HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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SOLUM SW HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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SOLUM SW HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Solum SW Holdings Limited is a private company, limited by shares, incorporated in England and Wales. The registered office is Upper Buckover Farm, Wotton-Under-Edge, South Gloucestershire, GL12 8DZ and the registered number is 13989294.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The company was incorporated on 19 March 2022.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 19 March 2022.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 19 March 2022.
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The cash position has recovered well since the bad debt in Q3 2024. Our 2025 mid-year Management Information shows turnover and gross profit for the year-to-date running slightly ahead of plan, and current forecasts indicate that year-end performance will be in line with expectations.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
The MD is supported by a Senior Management Team who have been in place through this period of transition and have developed into their leadership roles to provide strategic direction across all aspects of the business.
Following the final payment of deferred consideration in early 2024, the three founding directors officially resigned from their executive positions at the end of Q1 2025, in line with their planned exit strategies. As minority shareholders they remain invested in the success of the business, and continue to contribute their experience and insight in advisory and supporting roles.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
We continue to extend caution towards adverse contract conditions and payment terms, and we carefully consider these factors, as well as the duration of fixed contracts, when tendering for, or accepting, new projects.
We consider the funds available in retained profit and working capital to be sufficient to counter the potential risks and based on this information we believe the group can meet all its financial obligations as they fall due for the foreseeable future. We therefore continue to adopt the going concern basis in presenting the accounts for 2024.
A continual review of cash flow and profit and loss account forecasts is undertaken, with a strategic focus on short-term cashflow forecasting based on the current performance of all live contracts. Opportunities to further sharpen this focus are being actively pursued, with new technologies and Artificial Intelligence being introduced as part of our strategy to bring a broader range of planning tools and opportunities for real-time analysis of KPIs.
A long-planned management buy-out process commenced in 2022, to allow the exit from the business of the three founding directors and formally complete the gradual handover to the next generation of leadership. The Managing Director, who has over 25 years of industry experience, has been a director of the business since 2015 and formally served as MD since 2023. He is now using his extensive experience to continue to lead the business into its next phase.
The MD is supported by a Senior Management Team who have been in place through this period of transition and have developed into their leadership roles to provide strategic direction across all aspects of the business.
Following the final payment of deferred consideration in early 2024, the three founding directors officially resigned from their executive positions at the end of Q1 2025, in line with their planned exit strategies. As minority shareholders they remain invested in the success of the business, and continue to contribute their experience and insight in advisory and supporting roles.
The business plans to buy back the minority shareholdings from the founding directors and following the recovery from 2024’s bad debt, this process is expected to commence in Q3 2025. Notwithstanding this process, a proportion of available cash will be retained by the business to ensure the continued growth of cash reserves and facilitate a planned increase in turnover as part of our 5-year strategy, and to equip the group in managing the risk of future client failures.
We continue to extend caution towards adverse contract conditions and payment terms, and we carefully consider these factors, as well as the duration of fixed contracts, when tendering for, or accepting, new projects.
We consider the funds available in retained profit and working capital to be sufficient to counter the potential risks and based on this information we believe the group can meet all its financial obligations as they fall due for the foreseeable future. We therefore continue to adopt the going concern basis in presenting the accounts for 2024.
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
GOODWILL
OTHER INTANGIBLE ASSETS
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's Statement of financial position when the Group 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
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
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 Group after the deduction of all its liabilities.
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
The preference shares are classified as debt. The preference share dividends are recorded within interest payable and similar charges.
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The estimates and underlying assumptions are reviewed on an ongoing basis. Any revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period. If the revision affects both current and future periods, then it is recognised in both the current and future period.
The key estimates in the accounts relate to the company’s revenue recognition and long-term service contracts policies are set out in note 2.4. These policies are central to the way in which the company values the work it has carried out at each reporting date and the estimation of the percentage completion of the contract. These policies require forecasts to be made of the outcome of long-term service contracts and require assessments and judgements to be made on the recovery of precontract costs, variations in work scopes, claim recoveries, expected contract costs to complete and the progress on contract programmes. The company has appropriate control procedures in place to ensure estimates are calculated on a consistent basis.
Analysis of turnover by country of destination:
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 24
SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
There were no factors that may affect future tax charges.
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 28
SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
16.Deferred taxation (continued)
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Profit and loss account
Page 30
SOLUM SW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. At the year end, £15,014 remained payable to the fund.
The ultimate controlling party is Thomas Frederick Reeves.
Page 31