REGISTERED NUMBER: 04182351 (England and Wales)

DMJ DRAINAGE LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

15

DIRECTORS:

Mr D M J Howell

Mrs C A Howell

Mr B J Culley

Mrs C A Brennan

Miss P Howell

SECRETARY:

Mrs C A Brennan

REGISTERED OFFICE:

The Woodlands

Mablethorpe Road

Theddlethorpe

Lincolnshire

LN12 1NQ

REGISTERED NUMBER:

04182351 (England and Wales)

INDEPENDENT AUDITORS:

Nicholsons Audit

Newland House

The Point

Weaver Road

Lincoln

Lincolnshire

LN6 3QN

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

REVIEW OF BUSINESS

The results for the year and financial position of the company are shown in the annexed financial statements.

2024

2023

£

£

Turnover

15,834,268

18,579,990

Cost of sales

10,213,305

9,731,000

Gross profit

5,620,963

8,848,990

Gross profit margin %

35.50

47.63

Profit / (loss) on ordinary activities before taxation

(771,674

)

4,588,343

% of profit / (loss) on ordinary activities before taxation

(4.87

)

24.70

This year was a pivotal year for the company with contract coming to an end and the commencement of new work being delayed resulting in a fall in turnover of £2.66 million. The Directors were reassured by the work gained for 2025 and 2026 which will see activity for the company return to 2023 levels.

The change in trading activity is reflected on the balance sheet with the reduction in net current assets of £3.25 million. The company has used funds to invest in fixed assets which show an increase of £2.35 million.

PRINCIPAL RISKS AND UNCERTAINTIES

The company operates in a competitive market place of few customers and significant financial contracts. As such it is dependant upon the company to manage costs, quality of service and effective delivery of projects in order to maintain competitive. The company is therefore subject to a number of risks -

- Fuel and power costs

- Competitive pricing within the market

- Geographical location of work sites

These risks are being addressed by -

- The size and growth of the company making it able to purchase products at competitive prices

- The range of equipment and expertise of the team create a good reputation by providing a good service

- The flexibility of the company to move team members and plant around the country is attractive to Nationwide customers and can be assessed as an asset.

The UK economy is still recovering from the pandemic with uncertainty regarding inflation, interest rates and government policy changes.The company finance its operation through equipment finance, overdraft and loans. As with all financial instruments there are risks in respect of interest rates. In comparison to the size of the operation the interest rate risk is considered small and manageable by the company.

Due to the nature and size of contract there is an inherent risk in respect of debts due from customers. The company try to maintain a diversified portfolio of projects to minimise this exposure. The management team monitor economic conditions and their client base closely to allow them to quickly adapt to any adverse changes.

FUTURE DEVELOPMENTS

The company continues to maintain its organic growth model for the drainage and civil work whilst exploring new service openings.

Contracts have been obtained to maintain the level of activity into 2025 and into 2026. The company has secured projects of circa £25,000,000. Agricultural drainage works has remained positive with the higher rain fall securing a healthy order book through to Autumn 2025.

Investment in modern plant and machinery has continued beyond the year end to facilitate the nature of the contracts obtained. The company continues to innovate and explore new opportunities within its sector working in close partnership with suppliers to ensure efficiency into the company's future contracts.

ON BEHALF OF THE BOARD:

Mr D M J Howell - Director

30 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of land drainage and civil works.

DIVIDENDS

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

FUTURE DEVELOPMENTS

The future developments report has been included in the strategic report in accordance with S414C CA 2006.

DIRECTORS

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

The beneficial interests of the directors holding office at 31 December 2024 in the shares of the company, according to the register of directors' interests, were as follows:

31.12.24

1.1.24

Ordinary A shares of £1 each

Mr D M J Howell

-

-

Mrs C A Howell

-

-

Mr B J Culley

1

1

Mrs C A Brennan

-

-

Miss P Howell

-

-

These directors did not hold any beneficial interests in the Ordinary shares of £1 each.

These directors did not hold any non-beneficial interests in any of the shares of the company.

EVENTS SINCE THE YEAR END

Investment into new plant, machinery and drainage equipment has continued post year end to facilitate the future contracts won by the company.

Many of the new large scale contracts have started in the next financial year and the Directors remain confident that profitability on the works being completed will be maintained from previous levels set.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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 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;

-	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.

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 company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr D M J Howell - Director

30 September 2025

Opinion

We have audited the financial statements of DMJ Drainage Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 31 December 2024 and of its loss 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 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 directors are responsible for the other information. The other information comprises the information in the 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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, 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.

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 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.

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:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the organisation and determined that the most significant are those that relate to the reporting framework (FRS102), the Companies Act 2006 and the relevant tax compliance.

We understood how the organisation is complying with those frameworks by making enquiries of management and those charged with governance, and we corroborated our enquiries by reviewing board minutes and reviewing third party correspondence, including correspondence with HMRC.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur by meeting with management from various parts of the business to understand where they considered there was susceptibility to fraud. We considered the controls that the organisation has established to address risks identified, or that otherwise prevent, deter and detect fraud and also reviewed how these had operated in the year.

Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk along with procedures to identify non-compliance with such laws and regulations identified in the paragraphs above along with areas where management override of controls may be relevant. These procedures included assessing the appropriateness of presentation of separately disclosed items with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the organisation. These procedures were designed to provide reasonable assurance that the financial statements were free from material fraud or error.

We also considered the risk associated with completeness of income and whether this could have a material impact on the financial statements. We also considered the risk associated with completeness of income and work in progress valuation and whether these could have a material impact on the financial statements. Work was targeted in these areas.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The audit was planned to ensure that the more complex areas were performed by more experienced members of the audit team and there were no areas of the audit which were considered to require external experts to be appointed by the audit team.

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 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.

Joanne Brown (Senior Statutory Auditor)

for and on behalf of Nicholsons Audit

Newland House

The Point

Weaver Road

Lincoln

Lincolnshire

LN6 3QN

30 September 2025

REVENUE

15,834,268

18,579,990

Cost of sales

10,213,305

9,731,000

GROSS PROFIT

5,620,963

8,848,990

Administrative expenses

6,367,955

4,463,695

(746,992

)

4,385,295

Other operating income

3,369

52,458

OPERATING (LOSS)/PROFIT

4

(743,623

)

4,437,753

Interest receivable and similar income

219

8,425

(743,404

)

4,446,178

Gain/loss on revaluation of assets

479,698

409,419

(263,706

)

4,855,597

Interest payable and similar expenses

5

507,968

267,254

(LOSS)/PROFIT BEFORE TAXATION

(771,674

)

4,588,343

Tax on (loss)/profit

6

(169,664

)

742,632

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(602,010

)

3,845,711

FIXED ASSETS

Intangible assets

8

-

-

Property, plant and equipment

9

11,617,926

11,392,721

Investments

10

4,716,500

2,587,500

16,334,426

13,980,221

CURRENT ASSETS

Inventories

11

1,761,719

3,052,891

Debtors

12

4,211,512

4,887,006

Cash at bank

2,067

41,264

5,975,298

7,981,161

CREDITORS

Amounts falling due within one year

13

7,141,209

5,900,395

NET CURRENT (LIABILITIES)/ASSETS

(1,165,911

)

2,080,766

TOTAL ASSETS LESS CURRENT LIABILITIES

15,168,515

16,060,987

CREDITORS

Amounts falling due after more than one year

14

(2,851,471

)

(2,972,269

)

PROVISIONS FOR LIABILITIES

18

(2,172,392

)

(2,342,056

)

NET ASSETS

10,144,652

10,746,662

CAPITAL AND RESERVES

Called up share capital

19

81

81

Share premium

20

24,902

24,902

Revaluation reserve

20

1,078,757

805,925

Capital redemption reserve

20

40

40

Retained earnings

20

9,040,872

9,915,714

SHAREHOLDERS' FUNDS

10,144,652

10,746,662

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

Mr D M J Howell - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2023

81

6,589,035

24,902

Changes in equity

Dividends

-

(195,000

)

-

Total comprehensive income

-

3,845,711

-

Transfers

-

(324,032

)

-

Balance at 31 December 2023

81

9,915,714

24,902

Changes in equity

Total comprehensive income

-

(602,010

)

-

Transfers

-

(272,832

)

-

Balance at 31 December 2024

81

9,040,872

24,902

Capital

Revaluation

redemption

Total

reserve

reserve

equity

£

£

£

Balance at 1 January 2023

475,811

40

7,089,869

Changes in equity

Dividends

-

-

(195,000

)

Total comprehensive income

-

-

3,845,711

Transfers

(54,209

)

-

(378,241

)

Deferred tax movement on

revaluation

6,082

-

6,082

Assets revaluation

378,241

-

378,241

Balance at 31 December 2023

805,925

40

10,746,662

Changes in equity

Total comprehensive income

-

-

(602,010

)

Transfers

-

-

(272,832

)

Deferred tax movement on

revaluation

(92,589

)

-

(92,589

)

Assets revaluation

365,421

-

365,421

Balance at 31 December 2024

1,078,757

40

10,144,652

Cash flows from operating activities

Cash generated from operations

1

3,300,356

4,317,124

Interest paid

(138,294

)

(44,251

)

Interest element of hire purchase payments paid

(369,674

)

(223,003

)

Tax paid

(21,620

)

(8,425

)

Net cash from operating activities

2,770,768

4,041,445

Cash flows from investing activities

Purchase of tangible fixed assets

(3,269,347

)

(4,391,494

)

Purchase of fixed asset investments

(1,992,758

)

(1,419,690

)

Sale of tangible fixed assets

1,649,337

566,250

Sale of fixed asset investments

225,000

152,000

Interest received

219

8,425

Net cash from investing activities

(3,387,549

)

(5,084,509

)

Cash flows from financing activities

New loans in year

(682,464

)

(411,246

)

Loan repayments in year

(131,660

)

(182,662

)

Capital repayments in year

63,003

2,315,711

Amount introduced by directors

2,522,861

455,888

Amount withdrawn by directors

(1,800,693

)

(1,066,120

)

Equity dividends paid

-

(195,000

)

Net cash from financing activities

(28,953

)

916,571

Decrease in cash and cash equivalents

(645,734

)

(126,493

)

Cash and cash equivalents at beginning of year

2

(138,949

)

(12,456

)

Cash and cash equivalents at end of year

2

(784,683

)

(138,949

)

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

(Loss)/profit before taxation

(771,674

)

4,588,343

Depreciation charges

1,346,917

1,349,806

Loss/(profit) on disposal of fixed assets

166,344

(50,966

)

Gain on revaluation of fixed assets

(479,698

)

(409,419

)

Finance costs

507,968

267,254

Finance income

(219

)

(8,425

)

769,638

5,736,593

Decrease/(increase) in inventories

1,291,172

(2,525,185

)

Decrease/(increase) in trade and other debtors

670,069

(94,252

)

Increase in trade and other creditors

569,477

1,199,968

Cash generated from operations

3,300,356

4,317,124

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

2,067

41,264

Bank overdrafts

(786,750

)

(180,213

)

(784,683

)

(138,949

)

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

41,264

-

Bank overdrafts

(180,213

)

(12,456

)

(138,949

)

(12,456

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

41,264

(41,264

)

2,067

Bank overdrafts

(180,213

)

(1,393,287

)

(786,750

)

(138,949

)

(1,434,551

)

(784,683

)

Debt

Finance leases

(5,270,476

)

(63,003

)

(5,333,479

)

Debts falling due

within 1 year

(142,960

)

13,945

(129,015

)

Debts falling due

after 1 year

(121,882

)

117,715

(4,167

)

(5,535,318

)

68,657

(5,466,661

)

Total

(5,674,267

)

(1,365,894

)

(6,251,344

)

1.	STATUTORY INFORMATION

DMJ Drainage Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Significant judgements and estimates

The directors make estimates and assumptions about the future. These estimates and assumptions impact recognised assets and liabilities, as well as revenue, expenses and other disclosures. These estimates are based on historical experience and on various assumptions considered reasonable under the prevailing conditions. The actual outcome may diverge from these estimates if other assumptions are made, or other conditions arise. The estimates and assumptions that may have a significant effect on the carrying amounts of assets and liabilities within the financial year include:

Tangible fixed assets are measured at cost, less accumulated depreciation and any impairments. Depreciation takes place over the estimated useful life, down to the assessed residual value. The carrying amount of the company's fixed assets is tested as soon as changed conditions show that the need for a revaluation or impairment review has arisen.

Turnover

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Website - amortisation rate - 33% straight line

Property, plant and equipment

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

not provided

Tenants improvements

-

1% on cost

Plant and machinery

-

15% on reducing balance

Drainage equipment

-

15% on reducing balance and 5% on cost

Motor vehicles

-

25% on reducing balance

Office equipment

-

33% on cost and 15% on reducing balance

Freehold property contains only land and as such is not depreciated.

Inventories and work in progress

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport and handling costs in bringing inventories to their present location and condition.

Work in progress is valued on the basis of direct costs plus attributable overheads based on a normal level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.