The directors present the strategic report for the group for the year ended 31 January 2025.
The principal activity of the group is that of Construction Specialist Sub-Contractor, namely SFS & Drylining & Decorations.
There has been no significant change in these activities during the year.
Given the challenging market conditions in the UK construction sector, the Directors are satisfied with the business performance having maintained turnover levels whilst slightly improving margin %.
Turnover has decreased by 11% to £18.1m (2024: £20.4m). Overall, net profit before tax for the year ended 31st January 2025 increased by 13% to £1.2m compared to a net profit before tax of £1.1m for the previous year.
While the Directors acknowledge that turnover levels are behind the 5 year strategic plan, a decision was made to pause growth until trading conditions improve. With improved conditions and a high level of secured workload, a recovery in terms of both turnover and margin in the following year is expected, and to the extent that business will be ahead of it’s 5 year strategic growth plan by the end of 2025.
The emphasis going forward is on the successful delivery of existing contracts, further cementing existing relationships whilst adding further to the secured pipeline by winning projects from additional key target clients. This, in turn, ensures sustainable profitability and cash flow in order to achieve the following years financial targets.
Business Outlook
At the year end the secured order book was £29.2m. This high level of secured workload enables the business to focus on securing projects which best fit our ongoing growth strategy both in terms of turnover and project size as well as higher margins.
The business continues to invest in sourcing, developing and retaining its own personnel, primarily through in house training and development programmes as well as ongoing investment through vocationally recognised professional qualifications. Additionally, high performers have been identified and continue to undertake structured executive performance coaching programmes to further development their effective management of people, processes and business resources, further enhancing the business performance and efficiency.
The ongoing uncertainty of the UK economy and geopolitical landscape is recognised as is the potential impact of The Building Safety Act on the New Build Residential projects pipeline.
A number of additional risks are considered and managed in the execution of the business’s strategic objectives, namely;
Market Conditions affected by Building Fire Safety regulatory reform
Health & Safety – with a particular focus on Occupational Health
Impact of BSA on Client finance and risk of client insolvency
Inflationary pressures
Quality of performance
In terms of managing risk and uncertainty, the company is within the ownership of a responsive board which enables the business to be flexible, proactive and to act quickly and decisively where swift decision making is required, alongside making effective medium and long-term decisions to manage more visible and industry standard risks in line with the business strategy.
The Directors believe that performance will improve for the coming year as a result of securing new profitable contracts and through the development and expansion of it’s existing client base.
2025 2024
Gross Profit Margin 16% 13%
Net Profit Margin 6.8% 5%
Shareholders Equity £3,097,937 £2,909,584
Environment
The business recognises its responsibility to carry out its operations whilst minimising environmental impacts. It is the Directors’ continued aim to comply with all applicable environmental legislation, prevent pollution and reduce waste wherever possible.
Human resources
The Directors acknowledge and are acutely aware that the company's most important resource are our people. Their experience, knowledge and relationships are crucial to the company's ability to meet and to exceed our clients needs and expectations. Retention of our existing staff and attracting the most talented people within the industry are key to achieving the wider objectives of client base consolidation and growth. In line with the objectives of ensuring staff satisfaction and high levels of retention, the decision was made to introduce a dedicated HR resource which has now been completed.
Health & Safety
Keylon Group are committed to achieving and maintaining the highest practicable standards in health and safety management and strives to make its site and office environments safe and comfortable for employees and customers alike.
Outlook and Future Developments
Keylon Group Limited is committed to remaining an owner managed business and will continue with its strategy of prioritising business objectives ahead of shareholders’ interests. Ongoing strong cash generation combined with healthy, sustainable Gross and Net Profit percentages remain overarching objectives enabling the company to sustain sufficient headroom to allow ongoing investment as well as protection should there be any negative changes within it’s principal risks and uncertainties.
The Directors of Keylon Group Limited, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so, the Directors consider a range of matters when making decisions for the long term. Key decisions and matters that are of strategic importance to the Company are appropriately informed by s172 factors. The success of the Company is dependent on the support of all stakeholders. Working with stakeholders that share our values is important to us, towards shared long-term goals for sustainable success. The Board and senior leadership team make decisions with a long-term view in mind and with the highest of standards of conduct in line with our policies. Reports across all areas of the business are regularly made available to the Board to allow key decisions to be made with proper consideration and to assess the impact of decisions on stakeholders.
Customers
We have built a strong service orientated relationship with our key clients and the Directors maintain strong communications with their customers through both on, and off-site meetings. These meetings enable critical two way dialogue and the early identification and swift resolution of any issues or concerns – thereby further reinforcing those relationships and the value of the business to our clients which the Directors recognise as being key to the continued success of the business. Furthermore, these relationships provide Keylon’s Directors with early visibility of strategic pipeline and project opportunities.
Employees & Workforce engagement
The employees of Keylon are the most valuable resource of the company and are at the heart of everything the company does. Following the COVID-19 pandemic and the resultant hybrid system of working the business considered the impacts and benefits of remote working and consulted extensively with their staff in structuring a planned approach to hybrid working, achieving a balance between flexible working and collaboration within a central operational hub. This has enabled our staff to benefit from the best possible home/ life balance.
Suppliers
The Board recognises that our suppliers are integral to the success of the business and it is therefore essential that we build strong relationships in an ethical manner whilst meeting stringent quality, performance and delivery requirements. The Directors are experienced in supplier relationship management and procurement and maintain strong communication with our supply chain. Over a period of time the business has developed extremely good relationships with industry leading manufacturers and distributors and recognises the benefits arising from these relationships. The Company ensures that we pay suppliers in line with commercially agreed payment terms.
Community & Environment
We recognise the important role that our company plays in the local community. Social value principles are at the heart of the business, with a focus on creating opportunities in local employment and improving our environmental credentials. The Company has appointed relevant expert advisors to ensure that the Board are aware of, and the Company aims to meet, all relevant obligations in regard to laws and regulations whilst identifying potential opportunities for, and risks to the business.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 January 2025.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £340,000 (2024; £340,000). The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Despite upward cost pressures the business has continued to make significant investment into the development of value engineering and buildability solutions working alongside key clients and consultants to arrive at resolutions to often complex and multi-faceted blockers. Additionally we have continued to invest in the further development of digital quality management and project management systems.
There have been no significant post balance sheet events.
The group operates predominantly in the Greater London and South East of England new build market. There have been a number of negative articles in the press recently with regards to the potential impact of building regulatory reform, planning delays and the like will have on the New build private residential market and it would be remiss of the Directors to not acknowledge this. However, the businesses informed opinion is that whilst the new build private new build market is likely to slow this will be more than offset by an uptick in activity within a number of other sectors in which the business operates, giving rise to further significant growth opportunities - These being, but not limited to;
The burgeoning BTR market (particularly in London)
Large scale social regeneration & social housing projects
Ongoing roll out of the new build/ rebuild schools programme
Given the secured order book figures as shown within the Strategic report, the business focus is very much on securing higher value, high quality, best fit projects secured at improved margins
SCC Chartered Accountants Ltd were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
In accordance with Section 414C (11) of Companies Act 2006, the directors have elected to disclose details of the business review, principle risks and uncertainties, employment policy and future developments in the Strategic Report which would otherwise be required to be disclosed in the Directors' Report.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Keylon Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2025 which comprise the group profit and loss account, 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 year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company, we identified the principal risks of non-compliance with laws and regulations related to building and quality regulations and health and safety law. We also considered those laws that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and Financial Reporting Standards.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and determined that the principal risks related to fraudulent financial reporting and management bias in accounting estimates. We communicated the identified laws and regulations throughout the audit team and remained alert to any indication of non-compliance throughout the audit. Audit procedures performed by the auditors included, but were not limited to:
Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing key correspondence with external advisors;
Challenging assumptions and judgements made by management in their significant accounting estimates, and;
Identifying and testing unusual entries.
Owing to 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. The risk increases the more that compliance with a law or regulation is removed from the events and transaction reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 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 £600,000 (2024 - £600,000 profit).
Keylon Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .
The group consists of Keylon Group Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Keylon Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 January 2025. 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.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
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 is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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, associates and jointly controlled entities 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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
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 company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
There are no critical judgements in applying the company’s accounting policies.
There are no critical accounting estimates and assumptions.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 January 2025 are as follows:
As at 31 January 2025 there was a related party balance of £21,541 (2024: £21,541) owed from Shaw Wood Ltd (A company registered in England and Wales, registration number: 13914114). The party is related through common directors.
As at 31 January 2025 there was a related party balance of £279,835 (2024: £141,830) owed from Pines Carpentry Ltd (A company registered in England and Wales, registration number: 11825370). The party is related through common directors.
As at 31 January 2025 there was a related party balance of £308,500 (2024: £307,000) owed from JHKL Investments Ltd (A company registered in England and Wales, registration number: 12709655). The party is related through common directors.
The directors are regarded to be the key management personnel.
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.
There have been no significant events affecting the company since the year end.
As at 31 January 2025 the group owed the directors £185,461 (2024: £42,263 ). This balance is deemed to be interest free, unsecured and payable on demand.
The ultimate controlling party is deemed to be Mr Kyle Hunter & Mr Jonathan Lowe as they own 50% each of the ordinary share capital of the company.