The directors present the strategic report for the year ended 31 March 2025.
During the financial year, the group experienced a slight decrease in turnover, primarily attributable to delays in development decisions largely resulting from numerous external factors impacting market confidence including changes in regulations eg the introduction of the Building Safety Act and the Gateway process. Several projects progressed more slowly than anticipated, extending design phases and postponing the commencement of fee-generating stages.
Despite the challenges reported above, management are pleased with the results reported for the year. This has been achieved by continued and sustained hard work in winning new clients and projects, and maintaining strong relationships with ongoing clients. This continues to generate repeat business and maintain the reputation and profile of the group. The group has also taken the opportunity to deploy any available resource into key non-fee earning initiatives which will position us better for the future.
The directors are pleased to report that based on latest projections, the group is on track to return to 2024 fee levels for the year ended 31 March 2026.
Strategy
While the success of its completed work and strong reputation for design quality and integrity has allowed the practice to expand, Rachel and Ian remain personally involved in each project. Consequently, the inspiration in design and the attention to detail in construction that have stimulated the achievements of the practice so far will continue to guide the ambition and quality of its schemes in the future.
The group's success is dependent on the proper selection, pricing and ongoing management of the risks it accepts. The directors believe it is important to retain a diversified portfolio of risks to achieve maximum resilience and profitability in this highly competitive workplace.
The group always aims to improve efficiency in all areas of operation through effective project management. The financial statements report a gross profit of £5.75m (2024: £6.42m) and a profit before tax of £149k (2024: £2.1m). Profit before tax is reported after the inclusion of an exceptional impairment charge amounting to £1.2m in respect of property owned by the group. Turnover and gross margins reported are in line with expectations.
The process of risk acceptance and risk management is addressed through a rigorous framework of policies, procedures and internal controls. All policies are subject to board approval and ongoing review by the management team.
Compliance with regulations, legal and ethical standards is a high priority for the company and the finance department takes on an important oversight role in this regard, to ensure that a proper internal control framework is in place to manage financial risks and that controls operate effectively.
The company has developed an effective framework for identifying the risks and their impact on economic capital.
The directors consider that the principal risks arising from business activities relate to:
Inaccurate pricing
Ineffective cost management
Delays caused by regulatory changes
The risks are discussed in the directors' report within the section dealing with financial instruments and risk management.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2025.
The results for the year are set out on page 8.
No ordinary dividends were paid. 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:
The group's financial instruments comprise borrowings, some cash and liquid resources and various items such as trade debtors and trade creditors etc. that arise directly from its operations. The main purpose of these financial instruments is to provide working capital facilities to the group.
The group is exposed to a variety of financial risks that include the effects of changes in the state of the UK economy in the main, debt market prices, credit risk, liquidity risk, foreign currency risk and interest rate risk. The group has in place a risk management programme that seeks to limit adverse effects on the financial performance of the group by monitoring all foreseeable potential impacts.
Given the size of the group, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee. The policies set by the directors are implemented by the group's finance department.
The group manages its cash and borrowings requirements to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operational needs of the business.
The group is exposed to fair value interest rate risk on its fixed rate borrowing and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.
The group's principal, though limited, foreign currency exposures arise from trading with overseas companies.
Investments of cash surpluses, borrowings and any derivative instruments are made through banks and companies which must fulfil credit rating criteria by the directors. All clients who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are rigorously monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The group operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the limited company's activities.
In accordance with the company's articles, a resolution proposing that Smith & Goulding Limited be reappointed as auditor of the group will be put at a General Meeting.
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 SimpsonHaugh Holding Company Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 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 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.
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
We identified the laws and regulations applicable to the company and group through discussions with Directors and other management, and from our commercial knowledge and experience of the sector;
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company and group, including the Companies Act 2006, taxation legislation and data protection, employment, environmental and health and safety legislation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
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;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative or potential bias.
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; and
reviewing correspondence with relevant regulators and the company’s legal advisors.
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. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect that those that arise from error as they may involve deliberate concealment or 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 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 £1,641,533 (2024 - £124,105 profit).
SimpsonHaugh Holding Company Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Fifth Floor, 55 King Street, Manchester, M2 4LQ.
The group consists of SimpsonHaugh Holding Company 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 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 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
The consolidated group financial statements consist of the financial statements of the parent company SimpsonHaugh Holding Company 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 March 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.
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.
Revenue comprises sales of services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
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.
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 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.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes Merton model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
The expense in relation to options over the company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue is recognised as per the revenue accounting policy.
This policy requires forecasts to be made of the outcomes of long term contracts which require assessments and judgements to be made on recovery of pre-contract costs, changes in scope of work, contract programmes, maintenance and defects liabilities and changes in costs. This is recorded as accrued and deferred income in the financial statements. Deferred income arises on contracts in which the stage of completion is calculated to be lower than the percentage of the fees requested when compared to the total overall fees. In the opposite case, accrued income arises. There are a small number of long-term and complex projects which have required judgements over contractual entitlements. The range of potential outcomes as a result of uncertain future events could result in a materially positive or negative swing to profitability and cash flow.
The group operates a share-based payment scheme, under which certain employees receive equity-settled awards. The charge recognised in the financial statements is based on the fair value of the awards at the grant date, which involves significant judgement in the following areas:
Valuation Model and Key Inputs
The group uses the Black-Scholes Merton model to determine fair value. Key inputs include the expected option life, dividend yield, and grant-date share price. These require judgment in assessing assumptions that best reflect expected future conditions.
Vesting Conditions
The directors assess the likelihood of meeting performance and service conditions attached the awards. Judgements are made regarding future company performance and employee retention, which impact the proportion of awards expected to vest.
Changes in these assumptions could materially affect the share-based payment charge recognised in the financial statements.
The group assesses trade debtors for impairment at each reporting date. A provision for bad debts is recognised against trade debtors when there is objective evidence that the group will not be able to collect all amounts due under the original terms of the receivable.
An onerous contract provision is recognised when the unavoidable costs of fulfilling a contract exceed the expected economic benefits. The provision is measured at the lower of the cost of fulfilling the contract and the cost of terminating it. Costs used in assessing an onerous contract provision are based on the actual expected costs rather than internal charge-out rates. The provision is reviewed at each reporting date and adjusted as necessary.
Goodwill is amortised over its finite life and impaired if necessary. In some circumstances the accounting standard imposes an upper limit of a 10 year finite life for goodwill. Whilst the standard would not impose the upper limit for the group, the directors consider 10 years to be a reasonable estimate for when any goodwill resulting from the combination is expected to cease. This has been arrived at by considering the length of projects that the group undertakes.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The valuation of investment properties involves significant estimation uncertainty due to the reliance on external market data and assumptions regarding future market conditions. Key assumptions include estimated rental income, vacancy rates and sales of similar properties, which are influenced by factors such as the location of the property, its condition and market trends. Changes in these assumptions could materially impact the carrying value of investment property.
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on the physical condition of the assets and the market. The residual value of the freehold property is considered a source of significant estimation uncertainty. The directors consider the freehold property to have a residual value that is equal to its cost less impairment and therefore depreciation of £nil (2024: £nil) has been charged. See note 12 for the carrying value of the asset.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Included within wages and salaries is £293,053 £167,000) relating to share-based payment charges, see note 25 for more details.
Key management personnel are considered to be the directors only.
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:
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment charge recognised in the accounts relates to the impairment of the freehold property owned by the group, following a valuation obtained, as disclosed in note 13.
The goodwill relates to the purchase of the trade and assets of SimpsonHaugh and Partners Group LLP by SimpsonHaugh Architects Limited, which is being amortised over its useful economic life of 10 years. The goodwill has a carrying value of £2,448,827 and has a remaining amortisation period of 6 years and 7 months.
More information on impairment movements in the year is given in note 11.
The fair value of the investment property has been arrived at on the basis of a valuation carried out at September 2025 by OBI Property Ltd Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. Based on this valuation the directors have made a fair value adjustment to the carrying value of the asset in the accounts.
Details of the company's subsidiaries at 31 March 2025 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Included within trade debtors is a bad debt provision amounting to £802,770 (2024: £985,608) for amounts which management have assessed to be irrecoverable.
Amounts due to group undertakings are unsecured, interest free and repayable upon demand.
The group entered into a mortgage debenture dated 8 November 2011 in favour of The Royal Bank of Scotland PLC ("RBS") in respect of all monies due or becoming due to RBS on any account whatsoever.
The group has a legal charge over the freehold property dated 22 December 2022 in favour of C. Hoare & Co.
The group has one CBILS loan outstanding at the year end. The loan is repayable over 6 years from the date of drawdown (December 2020). The loan was interest only until December 2021 at which point capital repayments commenced. Interest is charged at 2.42% over the bank's base rate.
The group has another bank loan outstanding at year end. This loan is repayable in full 5 years from the date of drawdown (December 2022). Interest is charged at 8.37% per annum. In addition to the legal charge noted above, the directors have also provided a personal guarantee in respect of this loan.
Other loans include a facility entered into with Premium Credit for an amount of £660,575 which commenced in February 2025. The facility is unsecured and is payable over 12 months with interest charged at a rate of 7.94%.
Other loans also include a facility entered into with Braemar Finance for an amount of £500,000 which commenced in October 2024. The facility is payable over 12 months with interest charged at a rate of 14.34%. A personal guarantee has been provided by the company's directors in relation to this facility.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Estimated costs to completion in respect of loss making contracts have been provided for in accordance with FRS102 to ensure the profit and loss account incorporates the expected loss on all onerous contracts.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The company recognises deferred tax liabilities/(assets) for temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. These deferred tax balances are expected to reverse over time as the temporary differences are settled.
The deferred tax liability amounting to £99,563 is expected to reverse within 3 to 5 years and relates to accelerated capital allowances that are expected to mature in the same period. The deferred tax asset of £4,356 relating to retirement benefit obligations is expected to reverse within 12 months. The deferred tax asset of £140,787 relates to share-based payments and is expected to reverse in line with the vesting period of the share-based payment scheme.
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.
On 5 September 2023 the group implemented an equity settled share-based payment plan. This is an Enterprise Management Incentive plan ("EMI plan") for the benefit of employees and directors. 2,560 options are granted with a fixed exercise price set at the date of grant at £197.53 per share. The contractual life of the options is 10 years from the date of the grant. Exercise of an option is subject to continued employment with the company.
The share options are issued from the parent company, SimpsonHaugh Holding Company Limited, however the service received in relation to the share-based payment expense is received by SimpsonHaugh Architects Limited. As such, the share option reserve is recognised in the accounts of the parent company. The share-based payment expense is recognised by that company as an expense and capital contribution in other reserves.
The cost of the plan is spread proportionally over the vesting period, assuming a retention rate of 90%. The group recognised total expenses of £293,053 in the year ended 31 March 2025 in respect of the plan (2024: £167,000). No options have been forfeited or expensed in the year.
Other reserves
The group was formed by issuing shares at nominal value. On consolidation of the subsidiary companies, a fair value adjustment was made to the consideration paid on acquisition, and a net amount of £3,839,051 has been credited to other reserves.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
Capital commitments as at 31 March 2025 relate to expenditure committed in respect of fit-out costs for the group's new head office. This project was completed in August 2025.
During the year the group paid rent of £158,000 (2024: £158,000) to M J Field SIPP, an entity controlled by the Directors.
As at the year end, the Group and the Company was owed £156,684 (2024: £93,826) from related parties. These are related parties of the Group and the Company because the ultimate controlling parties have a common interest in these companies.
Company and group
Included in debtors as at 31 March 2025 is an amount of £62,671 (2024: nil) owed by a director in respect of a loan advanced. The loan is interest free and there are no fixed terms for repayment.
Included in creditors as at 31 March 2025 are amounts owed to the directors amounting to £1,015,634 (2024: £2,526,634).