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Registered number: SC350707 HFD CONSTRUCTION GROUP LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
HFD CONSTRUCTION GROUP LIMITED COMPANY INFORMATION
Directors | Mr W D Hill
| Mr W K Hill
Registered number | SC350707
Registered office | 177 Bothwell Street
| Glasgow
| G2 7ER
Independent auditor | Johnston Carmichael LLP
| 227 West George Street
| Glasgow
| G2 2ND
HFD CONSTRUCTION GROUP LIMITED CONTENTS
| Page
Group Strategic Report | 1 - 3
Directors' Report | 4 - 5
Independent Auditor's Report | 6 - 9
Consolidated Statement of Comprehensive Income | 10
Consolidated Balance Sheet | 11
Company Balance Sheet | 12
Consolidated Statement of Changes in Equity | 13
Company Statement of Changes in Equity | 14
Consolidated Statement of Cash Flows | 15
Consolidated Analysis of Net Debt | 16
Notes to the Financial Statements | 17 - 28
HFD CONSTRUCTION GROUP LIMITED GROUP STRATEGIC REPORT FOR THE YEAR ENDED 30 JUNE 2025
Introduction
The directors present the strategic report for the year ended 30 June 2025.
Business review
Group turnover for the financial year was £6.1m (2024: £23.8m). The reduction reflects the completion of the major Grade A city centre refurbishment project in the first quarter, after which activity levels were materially lower for the remainder of the year. The only significant new project to commence during the period was an £8.5m out of town commercial office refurbishment, which began in Q4, with limited revenue recognised before the year end. At the reporting date, the Group had shareholders’ funds of £23.1m (2024: £28.2m). Throughout the year, the construction division focused principally on planning, design and pre construction activities to support a substantial pipeline of datacentre developments scheduled to begin in the next financial year. This pipeline is underpinned by the designation of the HFD DataVita North Lanarkshire campus as Scotland’s first AI Growth Zone, a nationally significant initiative expected to stimulate large scale investment in hyperscale and AI enabled digital infrastructure. Two major datacentre projects, with a combined contract value of approximately £300m, have commenced in the year to June 2026, with an estimated 18 month delivery period. In addition to these contracted datacentre projects, the Group’s confirmed forward workload includes a diverse range of significant developments: ∙£60m Category B listed city centre hotel redevelopment ∙£40m nine-storey city centre commercial refurbishment ∙£12m Category B listed city centre office refurbishment ∙Up to £1bn of further potential datacentre works within the AI Growth Zone ∙£120m–£170m of renewables-related infrastructure projects Taken together, these projects represent a materially enhanced contracted and pipeline position compared with recent financial periods and reinforce the division’s strong market position and alignment with the wider Group strategy. Despite the reduced turnover, the loss reported for the year relates solely to a legacy subcontractor dispute, where the legal outcome did not conclude in accordance with the Directors’ expectations. The Directors confirm that the exceptional loss recognised relates to a historic matter and no further losses are expected to arise in connection with this issue. Operational Capability and Resourcing To ensure the Group is appropriately resourced to deliver both the contracted workload and the anticipated expansion arising from the AI Growth Zone, the Directors have taken proactive steps to strengthen operational capacity. Average staff numbers at the balance sheet date were 14, and by the date of signing this report the Group had increased its direct workforce to 21. This enhanced core team is further supported by a well established network of commercial, architectural, engineering and design consultants, enabling the Group to scale efficiently in line with project demands and maintain robust delivery capability across multiple major schemes. The Directors consider the combination of internal resource growth and the continued availability of trusted external partners to be a key factor in the Group’s ability to execute its expanded pipeline effectively. Page 1
HFD CONSTRUCTION GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2025
Principal risks and uncertainties
Health, safety and environmental risk The Group is subject to stringent health, safety and environmental regulations, Accordingly, the provision of adequate training is a top priority and every precaution is taken to minimise risk in this area. Revenue risk The Group has developed key relationships with customers. The Group continues to focus on building relationships with existing and potential customers and always performs to a high standard in order to minimise the risk of losing a trading customer. The Group is constantly seeking development opportunities and increase the number of third party customers in order to manage this risk. Credit risk The Group's principal financial assets trade debtors. The Group's credit risk is primarily attributed to its trade debtors. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The Group has no significant concertation of credit risk, with exposure spread over large number of counter parties and customers. The Group manages credit risk through its credit control procedures and review process. Competitive risk The Group operates in a competitive industry. The Group continues to focus on building key relationships with our customers and providing a quality service to distinguish ourselves from our competitors. The Group manages the risk of competition through providing the highest quality of services and maintaining excellent relationships. Liquidity risk The Group manages its liquidity risk through the day-to-day management of working capital. Forecast and budgets are in place and performance monitored on a regular basis to ensure that cash requirements are met and that liabilities can be paid as the fall due. Going concern The Directors have assessed the Group’s ability to continue as a going concern (see Note 2.3), based on cash flow forecasts and the strength of the Group’s secured project pipeline. Page 2
HFD CONSTRUCTION GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2025
Financial key performance indicators
The directors use a number of indicators to monitor and improve the position of the business. The directors consider the financial key performance indicators of the group to be profitability in the form of gross profit margin, operating profit margin, cashflow by reviewing cash position and net assets.
KPI | 2025 | 2024
Gross Profit Margin | -67% | -5%
Operating Profit Margin | -83% | -11%
Cash Position | £5,005,812 | £756,768
Net Assets | £23,106,301 | £28,179,520
Other key performance indicators
Non-financial key performance indicators include customer satisfaction levels. This report was approved by the board and signed on its behalf.
Mr W D Hill Director
Date: 19 March 2026
Page 3
HFD CONSTRUCTION GROUP LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 30 JUNE 2025 The directors present their report and the financial statements for the year ended 30 June 2025.
Directors' responsibilities statement
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. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. 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 judgements and accounting estimates that are reasonable and prudent; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.
Principal activity
The principal activity of the group continued to be that of property construction and development.
Results and dividends
The loss for the year, after taxation, amounted to £5,073,219 (2024 - loss £1,765,443). No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Directors
The directors who served during the year were:
Mr W D Hill
Mr W K Hill
Future developments
Given the strength and visibility of the forward order book, and in particular the strategic significance of the AI Growth Zone to the wider HFD Group, the Directors remain confident that the Group is well positioned to return to profitability in the financial year ending 30 June 2026. The recent expansion of internal resource, combined with the Group’s established consultant network, further enhances the Group’s ability to deliver its growing portfolio of large scale projects. Page 4
HFD CONSTRUCTION GROUP LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2025
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.
Post balance sheet events
There have been no significant events affecting the Group since the year end.
Auditor
The auditor, Johnston Carmichael LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board and signed on its behalf.
Mr W D Hill Director
Date: 19 March 2026
Page 5
HFD CONSTRUCTION GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HFD CONSTRUCTION GROUP LIMITED
Opinion
We have audited the financial statements of HFD Construction Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 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). In our opinion the financial statements: ∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 30 June 2025 and of the Group's loss for the year then ended; ∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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.
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 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. Page 6
HFD CONSTRUCTION GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HFD CONSTRUCTION GROUP LIMITED (CONTINUED)
Other information
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the 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.
Matters on which we are required to report by exception
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. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: ∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or ∙the parent Company financial statements are not in agreement with the accounting records and returns; or ∙certain disclosures of directors' remuneration specified by law are not made; or ∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. Page 7
HFD CONSTRUCTION GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HFD CONSTRUCTION GROUP LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's 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. 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 Auditor's Report Extent to which the audit was considered capable of detecting irregularities, including fraud 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: We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available. All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include: ∙Companies Act 2006; ∙UK Corporation Tax legislation; ∙UK VAT legislation; and ∙UK Generally Accepted Accounting Practice (FRS 102). We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections, relevant correspondence with regulatory bodies and board meeting minutes. We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to: ∙Management override of controls ∙Revenue Recognition Page 8
HFD CONSTRUCTION GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HFD CONSTRUCTION GROUP LIMITED (CONTINUED) Extent to which the audit was considered capable of detecting irregularities, including fraud (continued) In addition to the above, the following procedures were performed to provide reasonable assurance that the inancial statements were free of material fraud or error: ∙Reviewing minutes of meetings of those charged with governance for reference to breaches of laws and egulation or for any indication of any potential litigation and claims; and events or conditions that could dicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. ∙Reviewing the level of and reasoning behind the company’s procurement of legal and professional services. ∙Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias. ∙Revenue cut-off: We selected a sample of sales occurring in the month leading up to the year-end date and the first month of the new year-end date, in order to ensure that the sales were recorded within the correct accounting periods, assessing significant judgements and estimates in terms of revenue recognised in the period for management bias; ∙Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and ∙Agreement of the financial statement disclosures to supporting documentation. Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, ecognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not etecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or isrepresentation. There are inherent limitations in the audit procedures performed and the further removed on-compliance with laws and regulations is from the events and transactions reflected in the financial tatements, the less likely we would become aware of it.
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. James Hamilton (Senior Statutory Auditor) for and on behalf of Johnston Carmichael LLP 227 West George Street Glasgow G2 2ND 19 March 2026 Page 9
HFD CONSTRUCTION GROUP LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2025
| 2025 | 2024
Note | £ | £
Turnover | 4 | 6,141,085 | 23,828,709
Cost of sales |  | (10,272,636) | (24,999,964)
Gross loss |  | (4,131,551) | (1,171,255)
Administrative expenses |  | (939,720) | (1,451,721)
Operating loss |  | (5,071,271) | (2,622,976)
Amounts written off investments |  | - | 179,014
Interest receivable and similar income | 7 | - | 13,826
Interest payable and similar expenses | 8 | (1,948) | -
Loss before taxation |  | (5,073,219) | (2,430,136)
Tax on loss | 10 | - | 664,693
Loss for the financial year |  | (5,073,219) | (1,765,443)
Total comprehensive expenditure for the year |  | (5,073,219) | (1,765,443)
(Loss) for the year attributable to: |  |  |
Owners of the parent Company |  | (5,073,219) | (1,765,443)
The notes on pages 17 to 28 form part of these financial statements.
Page 10
HFD CONSTRUCTION GROUP LIMITED REGISTERED NUMBER: SC350707 CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2025
|  | 2025 |  | 2024
Note |  | £ |  | £
Current assets |  |  |  |  |
Stocks | 12 | 6,232,407 |  | 1,676,889 |
Debtors: amounts falling due after more than one year | 13 | - |  | 321,253 |
Debtors: amounts falling due within one year | 13 | 44,404,297 |  | 60,377,299 |
Cash at bank and in hand | 14 | 5,005,812 |  | 756,768 |
|  | 55,642,516 |  | 63,132,209 |
Creditors: amounts falling due within one year | 15 | (32,536,215) |  | (6,512,852) |
Net current assets |  |  | 23,106,301 |  | 56,619,357
Creditors: amounts falling due after more than one year | 16 |  | - |  | (28,439,837)
Net assets |  |  | 23,106,301 |  | 28,179,520
Capital and reserves |  |  |  |  |
Called up share capital | 17 |  | 1 |  | 1
Profit and loss account | 18 |  | 23,106,300 |  | 28,179,519
|  |  | 23,106,301 |  | 28,179,520
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
Mr W D Hill
Director
Date: 19 March 2026
The notes on pages 17 to 28 form part of these financial statements. Page 11
HFD CONSTRUCTION GROUP LIMITED REGISTERED NUMBER: SC350707 COMPANY BALANCE SHEET AS AT 30 JUNE 2025
|  | 2025 |  | 2024
Note |  | £ |  | £
Fixed assets |  |  |  |  |
Investments | 11 |  | 487,150 |  | 487,150
Current assets |  |  |  |  |
Stocks | 12 | 6,232,407 |  | 1,676,889 |
Debtors: amounts falling due after more than one year | 13 | - |  | 321,253 |
Debtors: amounts falling due within one year | 13 | 14,463,621 |  | 30,436,329 |
Cash at bank and in hand | 14 | 5,005,804 |  | 756,692 |
|  | 25,701,832 |  | 33,191,163 |
Creditors: amounts falling due within one year | 15 | (4,316,494) |  | (6,507,852) |
Net current assets |  |  | 21,385,338 |  | 26,683,311
Total assets less current liabilities |  |  | 21,872,488 |  | 27,170,461
Creditors: amounts falling due after more than one year | 16 |  | - |  | (225,116)
Net assets |  |  | 21,872,488 |  | 26,945,345
Capital and reserves |  |  |  |  |
Called up share capital | 17 |  | 1 |  | 1
Profit and loss account | 18 |  | 21,872,487 |  | 26,945,344
|  |  | 21,872,488 |  | 26,945,345
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
Mr W D Hill
Director
Date: 19 March 2026
The notes on pages 17 to 28 form part of these financial statements. Page 12
HFD CONSTRUCTION GROUP LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025
| Called up share capital | Profit and loss account | Total equity
| £ | £ | £
At 1 July 2024 | 1 | 28,179,519 | 28,179,520
Comprehensive income for the year |  |  |
Loss for the year | - | (5,073,219) | (5,073,219)
Total comprehensive income for the year | - | (5,073,219) | (5,073,219)
At 30 June 2025 | 1 | 23,106,300 | 23,106,301
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024
| Called up share capital | Profit and loss account | Total equity
| £ | £ | £
At 1 July 2023 | 1 | 29,944,962 | 29,944,963
Comprehensive expenditure for the year |  |  |
Loss for the year | - | (1,765,443) | (1,765,443)
Total comprehensive expenditure for the year | - | (1,765,443) | (1,765,443)
At 30 June 2024 | 1 | 28,179,519 | 28,179,520
| The notes on pages 17 to 28 form part of these financial statements.
Page 13
HFD CONSTRUCTION GROUP LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025
| Called up share capital | Profit and loss account | Total equity
| £ | £ | £
At 1 July 2024 | 1 | 26,945,344 | 26,945,345
Comprehensive expenditure for the year |  |  |
Loss for the year | - | (5,072,857) | (5,072,857)
Total comprehensive expenditure for the year | - | (5,072,857) | (5,072,857)
At 30 June 2025 | 1 | 21,872,487 | 21,872,488
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024
| Called up share capital | Profit and loss account | Total equity
| £ | £ | £
At 1 July 2023 | 1 | 28,890,519 | 28,890,520
Comprehensive expenditure for the year |  |  |
Loss for the year | - | (1,945,175) | (1,945,175)
Total expenditure income for the year | - | (1,945,175) | (1,945,175)
At 30 June 2024 | 1 | 26,945,344 | 26,945,345
| The notes on pages 17 to 28 form part of these financial statements.
Page 14
HFD CONSTRUCTION GROUP LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2025
|  |  | 2025 | 2024
|  |  | £ | £
Cash flows from operating activities |  |
Loss for the financial year | (5,073,219) | (1,765,443)
Adjustments for: |  |
Interest paid | 1,948 | -
Interest received | - | (13,826)
Taxation charge | - | (664,693)
(Increase) in stocks | (4,555,518) | (1,422,354)
Decrease in debtors | 16,306,660 | 3,403,104
(Decrease) in creditors | (2,416,474) | (1,414,251)
Corporation tax (paid)/received | (12,405) | 663,437
Disposals of share capital | - | (1)
Net cash generated from operating activities | 4,250,992 | (1,214,027)
Cash flows from investing activities |  |
Interest received | - | 13,826
Net cash from investing activities | - | 13,826
Cash flows from financing activities |  |
Interest paid | (1,948) | -
Net cash used in financing activities | (1,948) | -
Net increase/(decrease) in cash and cash equivalents | 4,249,044 | (1,200,201)
Cash and cash equivalents at beginning of year | 756,768 | 1,956,969
Cash and cash equivalents at the end of year | 5,005,812 | 756,768
Cash and cash equivalents at the end of year comprise: |  |
Cash at bank and in hand | 5,005,812 | 756,768
| 5,005,812 | 756,768
The notes on pages 17 to 28 form part of these financial statements.
Page 15
HFD CONSTRUCTION GROUP LIMITED CONSOLIDATED ANALYSIS OF NET DEBT FOR THE YEAR ENDED 30 JUNE 2025
|  | At 1 July 2024 | Cash flows | At 30 June 2025
|  | £ | £ | £
Cash at bank and in hand | 756,768 | 4,249,044 | 5,005,812
The notes on pages 17 to 28 form part of these financial statements.
Page 16
HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
1. | General information
HFD Construction Group Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 177 Bothwell Street, Glasgow, G2 7ER. The group consists of HFD Construction Group Limited and all of its subsidiaries. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3). The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. 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 following principal accounting policies have been applied:
| 2.2 | Basis of consolidation
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. Page 17
HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 2.Accounting policies (continued)
| 2.3 | Going concern
The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors have assessed the Group’s ability to continue as a going concern for a period of at least twelve months from the date of approval of the financial statements. During the year ended 30 June 2025, the Group reported a pre tax loss of £5.1 million, which relates solely to a one off legacy subcontractor dispute that did not settle in line with expectations. The Directors confirm that this matter is now fully concluded and that no further legal or commercial issues remain outstanding. The Group and Company maintain a strong liquidity position, with net current assets of £23.1 million (Company: £21.3 million) and net assets of £23.1 million (Company: £21.8 million), providing sufficient headroom to meet operational and working capital requirements. In considering the Group’s forward looking position, the Directors have also taken into account the substantial secured project pipeline described in the Strategic Report, which provides clear visibility over future trading activity. Cash flow forecasts and sensitivity analysis prepared by management demonstrate that the Group is expected to maintain adequate financial resources under both base and downside scenarios. Accordingly, the Directors have a reasonable expectation that the Group and Company will continue to operate as a going concern for the foreseeable future, and the financial statements have therefore been prepared on that basis. The company meets its day to day working capital requirements through its day to day trading. The company closely monitors and manages its funding position and liquidity risk throughout the year to ensure that it has access to sufficient funds to meet forecast cash requirements. The current and future financial position of the company, its cash flows and liquidity position have been reviewed by the directors and deemed satisfactory for going concern. The financial statements have therefore been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. The directors expect the company to achieve profitability in the future.
| 2.4 | Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Revenue from construction contracts is recognised by reference to the stage of completion of the contract at the reporting date, where the outcome of the contract, total contract revenue and costs to complete can be estimated reliably. The stage of completion is determined by comparing costs incurred to date with total estimated contract costs. Where the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of costs incurred that are probable of recovery. Contract costs incurred before the recognition criteria are met are carried forward as work in progress. Any expected losses on contracts are recognised in full as soon as they are identified. Amounts invoiced in advance of performance are recognised as deferred income. Revenue includes: ∙Income from property construction and development; ∙Income from property rental; and ∙Income from liquidated and ascertained damages. Page 18
HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 2.Accounting policies (continued)
| 2.5 | Interest income
Interest income is recognised in profit or loss using the effective interest method.
| 2.6 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
| 2.7 | Pensions
Defined contribution pension plan The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
| 2.8 | Taxation
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.
| 2.9 | Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment.
| 2.10 | Stocks
Stocks represent work in progress stated at the lower of acquisition cost and net realisable value.
| 2.11 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. Page 19
HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 2.Accounting policies (continued)
| 2.12 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
| 2.13 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 2.14 | Financial instruments
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of small company, or a public benefit entity concessionary loan. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income. Page 20
HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
3. | Judgements in applying accounting policies and key sources of estimation uncertainty
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. Key sources of estimation uncertainty 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. Liquidated damages As part of the Group's contractual arrangements, certain contracts contain provisions for liquidated damages in the event of delays or failure to meet specific performance criteria. Liquidated damages are pre-agreed amounts payable by the Group for non-compliance with contractual terms, such as delayed project completion or failure to meet quality standards. At the reporting date, the Group has assessed the potential liabilities related to liquidated damages under active contracts. The Group estimates that potential liabilities for liquidated damages may arise based on the terms of the contracts, the progress of the projects, and any risks associated with delays or breaches of contract. The Group recognises liquidated damages as a liability when it becomes probable that the amount will be payable, and the amount can be reliably estimated. This provision is also reviewed periodically to ensure it accurately reflects any changes in the expected outcome of the contracts. Accounting for construction contracts The group estimates the outcome of its construction contracts. This is normally measured by the proportion that contracts costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Estimated total contract costs are based on management's detailed budgets and projections. Where management judge that the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable they will be recoverable. Impairment provisions against stock and debtors In 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.
4. | Turnover
The whole of the turnover is attributable to property construction and development.
| All turnover arose within the United Kingdom.
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HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
5. | Auditor's remuneration
| During the year, the Group obtained the following services from the Company's auditor:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Fees payable to the Group's auditor for the audit of the Group's and Company's financial statements | 16,800 | 16,000
6. | Employees
|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | £ | £ | £ | £
| Wages and salaries | 1,020,479 | 923,362 | 1,020,479 | 923,362
| Social security costs | 121,195 | 107,369 | 121,195 | 107,369
| Cost of defined contribution scheme | 41,196 | 35,839 | 41,196 | 35,839
|  | 1,182,870 | 1,066,570 | 1,182,870 | 1,066,570
| The wages and salaires total incudes amount capitalised as development expenditure £1,051,250 (2024: £Nil). Contractually all employees of HFD Construction Group Limited (the group) sit within HFD Payroll Limited. However an average of 14 employees were dedicated to providing services on behalf of HFD Construction Group Limited (the group) during the year ended 30 June 2025 (2024: 14 employees). Remuneration costs were borne by HFD Payroll Limited and recharged to HFD Construction Group Limited (the group).
7. | Interest receivable
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Other interest receivable | - | 13,826
8. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Other interest payable | 1,948 | -
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HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
9. | Amounts written off investments
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Amounts written off investments | - | 179,014
10. | Taxation
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Group taxation relief | - | (664,693)
| Total current tax | - | (664,693)
| Factors affecting tax charge for the year
| The tax assessed for the year is higher than (2024 - lower than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Loss on ordinary activities before tax | (5,073,219) | (2,430,136)
| Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | (1,268,305) | (607,534)
| Effects of: |  |
| Expenses not deductible for tax purposes, other than goodwill amortisation and impairment | (8,995) | (57,159)
| Movement in deferred tax not recognised | 1,277,300 | -
| Total tax charge for the year | - | (664,693)
| Factors that may affect future tax charges
There were no factors which may affect future tax charges. Page 23
HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
11. | Fixed asset investments
| Company
|  | Investments in subsidiary companies
|  | £
| Cost or valuation |
| At 1 July 2024 | 487,150
| At 30 June 2025 | 487,150
| Subsidiary undertaking
| The following was a subsidiary undertaking of the Company:
| Name | Registered office | Class of shares | Holding
| Newhouse North Construction Limited | 177 Bothwell Street, Glasgow, G2 7ER | Ordinary | 100%
| Newhouse North Construction Limited have taken the exemption from the requirement to have their individual financial statements audited. The exemption is available under section 479A of the Companies Act 2006.
12. | Stocks
|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | £ | £ | £ | £
| Work in progress | 6,232,407 | 1,676,889 | 6,232,407 | 1,676,889
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HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
13. | Debtors
|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | £ | £ | £ | £
| Due after more than one year |  |  |  |
| Other debtors | - | 321,253 | - | 321,253
|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | £ | £ | £ | £
| Due within one year |  |  |  |
| Trade debtors | 20,382 | 2,222,840 | 20,382 | 2,222,840
| Amounts owed by group undertakings | 37,668,324 | 44,256,345 | 7,727,649 | 14,315,376
| Amounts owed by related parties | 1,151,768 | 6,450,127 | 1,151,768 | 6,450,127
| Other debtors | 1,641,878 | 1,862,226 | 1,641,877 | 1,862,225
| Prepayments and accrued income | 3,921,945 | 5,585,761 | 3,921,945 | 5,585,761
|  | 44,404,297 | 60,377,299 | 14,463,621 | 30,436,329
| Amounts owed by group undertakings are repayable on demand and are interest free.
14. | Cash and cash equivalents
|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | £ | £ | £ | £
| Cash at bank and in hand | 5,005,812 | 756,768 | 5,005,804 | 756,692
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HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
15. | Creditors: Amounts falling due within one year
|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | £ | £ | £ | £
| Trade creditors | 1,905,443 | 1,904,962 | 1,900,443 | 1,899,962
| Amounts owed to group undertakings | 287 | 187,747 | 287 | 187,747
| Amounts owed to related parties | 144,000 | 497,481 | 144,000 | 497,481
| Other taxation and social security | 44,713 | 2,542,502 | 44,713 | 2,542,502
| Other creditors | 282,799 | 233,071 | 282,799 | 233,071
| Accruals and deferred income | 30,158,973 | 1,147,089 | 1,944,252 | 1,147,089
|  | 32,536,215 | 6,512,852 | 4,316,494 | 6,507,852
| Amounts owed to group undertakings are repayable on demand and attract no interest.
16. | Creditors: Amounts falling due after more than one year
|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | £ | £ | £ | £
| Other creditors | - | 225,116 | - | 225,116
| Accruals and deferred income | - | 28,214,721 | - | -
|  | - | 28,439,837 | - | 225,116
| Amounts included within accruals and deferred income relate to amounts received in advance from customers in respect of contracted works not performed at the reporting date, these have now been classified as current liabilities.
17. | Share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 1 (2024 - 1) Ordinary share of £1.00 | 1 | 1
| The company has one class of Ordinary shares. There are no restrictions in respect to distribution of dividends and the repayment of capital.
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HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
18. | Reserves
Profit and loss account The profit and loss reserves represents cumulative profits and losses, less any dividends paid.
19. | Pension commitments
A defined contribution pension scheme is operated for all qualifying employees through HFD Payroll Limited. The assets of the scheme are held separately from those of the group in an independently administered fund.
20. | Related party transactions
| During the year, the group and company entered into transactions with related parties in the normal course of business. These transactions included: Group Sales to related parties: £3,706,677 (2024: £5,310,000) Purchases from related parties: £146,575 (2024: £33,000) Amounts receivable from related parties < 1 year: £1,151,768 (2024: £6,450,127) Amounts payable to related parties < 1 year: £144,000 (2024: £497,481) Company Sales to related parties: £3,706,677 (2024: £5,310,000) Purchases from related parties: £146,575 (2024: £33,000) Amounts receivable from related parties < 1 year: £1,151,768 (2024: £6,450,127) Amounts payable to related parties < 1 year: £144,000 (2024: £497,481) All transactions were conducted on an arm’s length basis and on normal commercial terms. No guarantees were given or received in respect of related party balances, and no provisions have been made for doubtful debts in respect of amounts owed by related parties. The company has taken advantage of the exemption available in FRS 102 whereby it has not disclosed transactions with the immediate parent or any wholly owned subsidiary undertaking of the group.
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HFD CONSTRUCTION GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025
21. | Controlling party
The controlling party and ultimate parent at the reporting date is HFD Holdco Limited, a company register in Scotland with a registered office address of 177 Bothwell Street, Glasgow, G2 7ER. HFD Holdco Limited is the largest group of companies for which group financial statements are prepared. Copies of group financial statements are available to the public from Companies House. HFD Construction Group Limited is the smallest group for which group financial statements are prepared. The Hill 2011 Trust and Alexander Trust and their members are considered to be the ultimate controlling party due to their majority shareholding in HFD Holdco Limited.
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