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Registered number:
FOR THE YEAR ENDED 31 MARCH 2025
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COMPANY INFORMATION
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CONTENTS
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The directors present the strategic report for the year ended 31 March 2025.
The Company is a holding company. The Group brings together the longstanding independently managed design led practices and brands of HLM Architects and Llewelyn Davies.
In 2020, ownership of the group transitioned to Employee Ownership with 100% of the business now held in Trust on behalf of employees. With a stake and a say in our direction, our employees now benefit from our collective ambition, drive and successes.
The business continues to be well respected in its chosen marketplaces of Healthcare, Education, Justice & Emergency Services, Living & Communities, Asset & Workplace, Hospitality and Defence. We are delighted that the quality of our work and how we engage with our employees and wider community has again led to winning numerous awards during the year including being recognised as Architectural Practice of the Year 2023 by Building Magazine for the 3rd time in 4 years and listed No 39 in the Best Mid-sized Companies to Work for 2023 Awards and recently ranked 11th in Buildings 2025 annual Top 50 UK Architects.
We continue to achieve our targets for architectural design quality, business profile and financial performance. Our strategy of actively managing the business continues in a commercial manner based upon the provision of sustainable, high quality design services to our clients with the Directors leading the design process, encouraging, motivating and leading the team by example. This is reflected by the number of business awards and short listings achieved. Alongside this we continued to shape the business to reflect the volatile economic environment and market conditions by focusing on being creative, innovative and as flexible as possible about the way we work together. Our aim is to make the maximum social impact to society through our activities and the places we create. Through thoughtful design we consciously take account of economic, environmental and social elements to inform the collective decisions we make about where to invest our time and resources. It also helps us to understand and appreciate the positive difference we can make to the communities in which we operate.
Based in London, Llewelyn Davies continues to be a leader in healthcare design with an established reputation built up over half a century of delivering over 250 major hospitals in 75 countries, as well as delivering quality projects in master planning and international aviation.
We are delighted with the number of major opportunities that the team are generating and their assistance in securing projects for the wider Group.
Based in Dublin, our studio in is now well established and we have made great progress in establishing a strong team and securing new opportunities in the Republic of Ireland across several of our chosen sectors.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
The principal risks facing the Group relate to the ongoing economic uncertainty and inflationary pressures.
The Group continues to closely monitor the constantly changing economic outlook and potential impact in its key sectors. The key risks to our operations include:
∙Disruption to our key sectors through uncertainty of future demand;
∙Impact on existing client base and pressure on fee levels and cost base; and
∙Delay to project decisions.
Other risks and uncertainties facing the Group can be summarised as follows:
∙Brand reputation, product and service
∙Competition
∙Business interruption and infrastructure
∙Political uncertainty
∙Continuing to attract and retain the right staff and management team
∙Working capital management
∙Foreign exchange risk
∙IT systems, sensitive date and cyber risk
The group manages these risks through a process of policies and controls which are set by the group board and implemented and managed by the management team. All risks are assigned to owners and are reviewed regularly to further assess the extent and effectiveness of the controls.
The group seeks to diversify risks wherever possible, particularly through developing work in new business sectors and geographical areas.
The results for the year are shown in the consolidated profit and loss account on page 11.
The group profit for the year before taxation was £2,652,166 (2024: £1,838,662). Total comprehensive income for the year was £2,104,883 (2024: £1,534,029). The shareholders’ funds of the Group total £3,250,395 (2024: £3,241,434). The group’s performance during the year ended 31 March 2025 can be summarised by the following key performance indicators:
∙Turnover amounted to £29,274,664 (2024: £22,932,660)
∙Operating profit amounted to £2,600,222 (2024: £1,765,823)
∙Headcount of the group amounted to 253 (2024: 245)
∙Net current assets of the group amounted to £2,687,785 (2024: £2,730,731)
Emphasis continues to be placed on efficiencies and group synergies whilst maintaining flexibility within the businesses. The group has performed to the satisfaction of the Directors, despite challenging trading conditions.
The design market is highly competitive within several the sectors in which the Group operates. Many other businesses seek to operate in the market which leads to aggressive pricing. The impact of advances in technology has been enormous and it is essential that we keep abreast of advances in this area.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
The Group’s success is dependent on the proper selection of opportunities in the sectors in which it operates. We believe that having diversity in sectors, services and geographical spread enables us to maintain our position and market share.
The Group will continue to concentrate on achieving growth in its existing sectors whilst striving to improve efficiencies, exploitation of economies of scale and diversification.
This report was approved by the board on 11 December 2025 and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The directors present their report and the financial statements for the year ended 31 March 2025.
The directors who served during the year were:
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 profit for the year, after taxation, amounted to £2,104,883 (2024 - £1,534,029).
The company recognises the importance of keeping employees informed and engaged. Regular updates are provided through internal communications, staff meetings, and newsletters. Consultation with employees takes place through employee forums and surveys. Staff are encouraged to contribute ideas and feedback via our employee voice hub, and their views are considered in operational decision-making.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
In accordance with the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, the directors consider the disclosure of likely future developments in the business to be of strategic importance. This information has therefore been included in the Strategic Report.
The auditors, Shorts, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COVALENT GROUP LIMITED
We have audited the financial statements of Covalent Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2025, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COVALENT GROUP LIMITED (CONTINUED)
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.
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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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COVALENT GROUP 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:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the engagement team collectively had the appropriate competence, capabilities and skills to identify and recognise non-compliance with applicable laws and regulations; and
∙through discussions with the directors and other management and from our commercial knowledge, we identified the laws and regulations applicable to the Company.
∙focusing on the specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, we assessed the extent of compliance with those laws and regulations identified above through making enquiries of management and inspecting relevant correspondence.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙reviewed the general ledger entries during the year to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙reading the minutes of meetings of those charged with governance;
∙enquiring of management as to actual and potential litigation and claims;
∙considering relationships with HMRC and other relevant regulators; and
∙reviewing legal and professional costs to identify any indicators of litigation.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF COVALENT GROUP LIMITED (CONTINUED)
Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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 Auditor
Cedar House
63 Napier Street
South Yorkshire
S11 8HA
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
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CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 11 December 2025.
The notes on pages 18 to 35 form part of these financial statements.
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COMPANY BALANCE SHEET
AS AT 31 MARCH 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 18 to 35 form part of these financial statements.
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