This strategic report outlines the performance, strategy, risks, and key priorities of the group for the financial period ended 31 December 2024. It is prepared in accordance with the Companies Act 2006 and reflects the group’s position as a large employer in the UK construction recruitment sector.
Our strategy focuses on delivering high-quality services to the construction industry, supporting clients with skilled labour across all project phases. We aim to grow sustainably by expanding our client base, investing in technology, and maintaining strong relationships with contractors and candidates.
Objectives
Strengthen market position in key regions
Enhance workforce experience and retention
Improve operational efficiency through the use of technology including our CRM and payroll software
Support clients in meeting ESG and compliance goals
Maintain high standards of service and safety
Key risks include:
Changes in legislation
Labour market shortages and skills gaps
Economic volatility impacting construction activity
Financial stability of our client base
Cybersecurity and data protection
Mitigation strategies include proactive workforce planning, compliance monitoring, and investment in secure systems.
Profit before tax was £256k during the period and turnover was £57.8m, which was primarily as a result of Exchequer Contracts Ltd purchasing the trade and assets of Exchequer Solutions Limited in July 2024. The Directors are pleased with how the integration of this trade has gone.
Gross margins remained stable and a key focus of the directors, with operational efficiencies and higher interest rates offsetting inflationary pressures. Cash flow and liquidity remain robust.
We expect continued demand for labour in construction, particularly in infrastructure and retrofit projects. Our focus will be on expanding our client base and on increasing the amount of trade we have with each client. This will be achieved by a focused sales force, targeting high quality and growing recruitment businesses delivering the highest quality of service at all times.
The directors recognise their duty under Section 172 of the Companies Act 2006 to promote the success of the group for the benefit of its members, while having regard to the interests of wider stakeholders. This duty is embedded in the group’s decision-making processes and strategic planning.
Consideration of Stakeholders
The board actively considers the views and interests of key stakeholders, including:
Employees: The management team meet weekly and in turn each department leader meets with their respective team members regularly. A software package is utilised to ensure quarterly one to ones are held and recorded alongside less formal monthly reviews. Regular engagement through surveys, team meetings, and performance reviews ensures that staff feedback informs operational decisions. Investment in training, wellbeing initiatives, and career development supports retention and morale. The directors recognise that the management and team members are vital to the ongoing delivery of good service.
Clients and Contractors: We maintain close relationships with clients and contractors. All clients are visited and communicated with on a regular basis, we speak to our contractor workforce constantly and service surveys enable us to quantify our service offering and identify areas for improvement. Feedback loops and account management structures help ensure responsiveness and quality.
Suppliers: Ethical sourcing and fair payment practices are central to our supplier relationships. We work collaboratively to ensure compliance with labour standards and contractual obligations.
Communities: As a business operating across multiple regions, we are mindful of our impact on local communities. We support employment initiatives, promote local hiring, and contribute to social value through our placements.
Environment: While our direct environmental footprint is modest, we support clients in meeting sustainability goals by sourcing candidates aligned with low-carbon and green construction practices.
Long-Term Decision Making
Strategic decisions are made with a view to long-term sustainability. This includes investing in digital platforms to improve operational efficiency, expanding into new market sectors, and aligning our services and product offerings with industry trends.
Ethical Conduct and Governance
The group maintains high standards of business conduct. Policies on anti-bribery, data protection, and equality are regularly reviewed and communicated across the business. The board receives regular updates on compliance and risk, ensuring governance remains robust.
Board Engagement and Oversight
Directors receive regular reports on stakeholder engagement, operational performance and ESG matters. These insights inform board-level decisions and help ensure that the group’s actions reflect its values and responsibilities.
Non-Financial and Sustainability Information Statement
As a large group, we disclose key non-financial information to demonstrate our commitment to responsible business practices:
Environmental Matters: We promote sustainable recruitment practices.
Employee Matters: We invest in training, promote diversity, and maintain strong health and safety standards across our workforce both head office and site based.
Social and Community Issues: We work with local partners to support employment initiatives and deliver social value through our placements, we partner with the The Lighthouse Club, a charity supporting physical and mental well-being and actively support and promote their work.
Human Rights: We uphold ethical standards in recruitment and ensure fair treatment across our supply chain.
Anti-Bribery and Corruption: Policies are in place to prevent unethical behaviour, with training provided to staff and contractors.
This statement reflects our commitment to transparency, sustainability, and long-term value creation.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 December 2024.
The results for the period are set out on page 9.
Ordinary dividends were paid amounting to £100,000. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and business relationships.
We have audited the financial statements of OTP Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect 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, we considered the following:
the nature of the industry and sector, control environment and business performance;
any matters we identified having obtained and reviewed the group’s documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether the directors were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether the directors have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team and involving relevant internal specialists, including tax, and industry specialists regarding how and where fraud might occur in the financial statements and any 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 identified the greatest potential for fraud in the following areas: payroll and revenue recognition, and, in common with all audits under ISAs (UK), the risk of management override.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to the Pensions legislation, UK tax legislation and UK employment legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or manipulate expenditure and management bias in accounting estimates.
Audit procedures performed by the audit engagement team included:
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
Review of the financial statement disclosures to underlying supporting documentation;
Challenging assumptions and judgements made by management in their significant accounting estimates;
In addressing the risk of fraud through revenue recognition, performing detailed cut-off testing around the year-end to ensure revenue is recognised in the correct period, and testing a sample of placements to underlying contracts and invoices;
In addressing the risk of fraud through payroll, testing the existence and validity of employees through reconciliation of payroll records to HR data, and performing analytical procedures on payroll costs to identify unusual trends or anomalies;
In addressing the risk of fraud through management override of controls, identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or posted by senior management.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent 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 parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £100,000.
OTP Holdings Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 3 St Johns Court, Vicars Lane, Chester, CH1 1QE.
The group consists of OTP Holdings Ltd and all of its subsidiaries.
The company was incorporated on 25 June 2024, and these financial statements cover the period from incorporation to 31 December 2024. As this is a shorter reporting period, the figures presented may not be directly comparable with those of a typical annual period.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the group and parent company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company OTP Holdings Ltd together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover represents the amounts receivable in the normal course of business for services provided net of trade discounts, VAT and other sales related taxes. In respect of specialist recruitment services the group recognises revenue when services are supplied to customers.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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 balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
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 deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
In the opinion of the directors, no judgements have a significant effect on amounts recognised in the financial statements and no estimates or assumptions have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.
All turnover arose within the United Kingdom.
Audit costs of the parent company are borne by the subsidiary.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
In addition, the average number of persons on hire to clients was 8,471. The associated costs were wages of £45,958,116.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3.
The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 December 2024 are as follows:
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At 31 December 2024 the amounts owed to the defined contribution scheme were £4,432.
The profit and loss reserve contains all retained profits less any distributions to shareholders.
On 15 July 2024, the group acquired the trade and assets of Exchequer Solutions Limited.
On 15 July 2024, the group acquired 100 percent of the issued share capital of Exchequer Contracts Limited.
Exchequer Contracts Ltd, a subsidiary of the group, granted a fixed and floating charge over its assets on 15 July 2024 in favour of Exchequer Solutions Limited (in administration) and its joint administrators, in connection with the acquisition of that business.
During the period, Meridian Business Support Limited was related by a common director until 13 August 2024 when the common directorship ceased. During the period, the group received £294,988 for sales of services provided. No amounts were due from the company at the year end.