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Company Registration Number 03012678
| HARRON HOMES LIMITED |
| FINANCIAL STATEMENTS |
| 31 DECEMBER 2025 |
HARRON HOMES LIMITED COMPANY INFORMATION
Directors | Mr P A Harrison
| Mr S T Harrison
| Mr J Noble-Hawkins, Group EHS Director (appointed 13 October 2025)
Company secretary | Mr P Hayes
Registered number | 03012678
Registered office | Trueman House
| Capitol Boulevard
| Morley
| Leeds
| LS27 0TS
Independent auditor | Armstrong Watson Audit Limited
| Chartered Accountants & Statutory Auditor
| Third Floor
| 10 South Parade
| Leeds
| West Yorkshire
| LS1 5QS
Bankers | Santander UK plc
| 58-60 Briggate
| Leeds
| LS1 6AS
Solicitors | Knights plc
| Majestic
| City Square
| Leeds
| LS1 2EF
HARRON HOMES LIMITED CONTENTS
| Page
Strategic Report | 1 - 2
Directors' Report | 3 - 6
Independent Auditor's Report | 7 - 10
Statement of Comprehensive Income | 11
Statement of Financial Position | 12
Statement of Changes in Equity | 13
Notes to the Financial Statements | 14 - 28
HARRON HOMES LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2025
Introduction
The directors present their report and the financial statements for the year ended 31 December 2025.
Business review
Harron Homes Limited has had a satisfactory year of business operations during the year ended 31 December 2025. Turnover has decreased to £156,945,000 (2024: £160,854,000). Profit before tax has increased to £8,007,000 (2024: £7,524,000). The decrease in turnover is due to the number of homes being sold decreasing slightly. A lower level of cost price increases along with a continuation of higher sales incentive levels have persisted throughout 2025. Customer demand throughout 2025 overall reflected the prior year and we continue to monitor the progress of the sales market carefully. During the year Harron Homes successfully acquired several high-quality new sites within the Company’s areas of operations. These new sites ensure the continued future delivery of much-needed new homes to our customers. During the year, the Company appointed Jack Noble-Hawkins as a statutory director in the position of Group EHS Director (Group Environment Health & Safety Director). This appointment reflects the Board’s continued commitment to maintaining the highest standards of health and safety across all operations. Given the scale and nature of the Company’s construction activities, the Board recognises that effective oversight, timely decision-making and strong leadership in this area are critical to safeguarding employees, subcontractors, customers and the wider public. The principal objectives of this appointment are: ∙to strengthen and accelerate the Company’s responsiveness to health and safety requirements, including evolving regulatory expectations and site-level risks; ∙to further reinforce the Company’s clear and visible commitment to health and safety as a core business priority; ∙to ensure that the Board benefits from enhanced technical knowledge and experience in health and safety matters, supporting robust challenge and informed decision-making. The Board considers that elevating dedicated health and safety expertise to statutory director level enhances governance, accountability and transparency. It also supports the continued development of a proactive safety culture across the business. This step forms part of the Company’s broader approach to risk management and continuous improvement, ensuring that health and safety considerations remain fully embedded within strategic planning and operational execution. Page 1
HARRON HOMES LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Principal risks and uncertainties
The following are considered to be the principal risks and uncertainties affecting the Company: • Changes in the general economic climate, which could adversely impact the UK housing market; • Shifts in customer demand, requiring new product development or changes to existing products and scheme design criteria; • Sourcing sufficient new parcels of high quality land for future development; • Obtaining planning permission for new developments, in accordance with scheme appraisals and in a timely manner; • Recruiting enough skilled, qualified and experienced people to support the Company’s growth; • Maintaining and improving quality and customer service standards as the Company’s number of active developments increases; • Securing and maintaining committed borrowing facilities for the business on a long-term basis; and • Expanding the supply chain, whilst maintaining quality and controlling costs. The Board and management constantly monitor these risks and uncertainties and develop strategies to ensure that the business is able to respond swiftly and effectively to these and any other challenges as they arise.
Financial key performance indicators
Turnover for the year ended 31 December 2025 was £156,945,000 (2024: £160,854,000). Gross profit was £21,407,000 (2024: £19,855,000). Profit before tax was £8,007,000 (2024: £7,524,000). Financial risk management The Company’s activities expose it to a number of financial risks, including liquidity risk and market risk. Liquidity risk In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Company has access to a banking facility to support cash flows as required. Interest rates applicable to the facility are fixed and linked to bank base rates. Market risk A downturn in the UK housing market could have various impacts on the business, including downward pressure on sales prices and volumes, and consequently on profit margins. Management constantly monitor economic indicators in the economy as a whole, as well as detailed, up to date information on the current sales performance of the business. A range of forecasts of various sensitivities are prepared to assess the impact of various economic scenarios on the business and to ensure that at all times it is able to withstand the effects of any downturn. Mitigating measures available include restricting investment in land, slowing down construction and reducing the overhead base. This report was approved by the board and signed on its behalf.
Mr P A Harrison Director
Date: 26 March 2026
Page 2
HARRON HOMES LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2025 The directors present their report and the financial statements for the year ended 31 December 2025.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic Report, the Directors' Report and the 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 of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to: ∙select suitable accounting policies for the Company's financial statements and then apply them consistently; ∙make judgments and accounting estimates that are reasonable and prudent; ∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions. Page 3
HARRON HOMES LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Principal activity
The principal activity of the Company is house building. There have been no significant changes to the Company's principal activity in the year under review. The directors are not aware, at the date of this report, of any likely major changes in the Company's activities in the next year.
Results and dividends
The profit for the year, after taxation, amounted to £6,245,000 (2024: £5,584,000). Dividends of £3,330,000 have been paid in the year (2024: £4,259,000).
Directors
The directors who served during the year were:
Mr P A Harrison
Mr S T Harrison
Mr J Noble-Hawkins, Group EHS Director (appointed 13 October 2025)
Environmental matters
The Company aims to prevent any possible adverse effects upon the environment and people arising from its activities. Strict guidelines on cleaning up any land contamination and remediation are followed and only licensed, approved, specialist waste disposal contractors are used.
Future developments
The Directors intend to continue the ongoing operations of the current business model.
Going concern
The Directors have prepared forecasts covering the period to 31 December 2027, incorporating reasonable assumptions and scenario analyses based on current trading and market conditions. The Company has access to a banking facility to support cash flows as required. The Directors have assessed the ongoing availability of the facility and, having made appropriate enquiries, concluded that adequate facilities will be available to the Company over the forecast period. Based on the latest forecasts and cashflow modelling, the Directors are satisfied that the Company has adequate resources to continue to trade for a period of at least 12 months from the date of approval of the financial statements, and up to the end of the assessment period. The Directors have also considered the potential impact of current market conditions on the Company’s operations and cash flows, based on information available at the date of approval, and do not consider these to have a significant impact on the Company’s ability to continue as a going concern. The Directors therefore consider it appropriate to prepare the financial statements on a going concern basis. Page 4
HARRON HOMES LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Statement by the directors in performance of their statutory duties in accordance with section 172 of the Companies Act 2006
Under s172 of the Companies Act 2006 directors of UK companies have a duty to promote the success of their Company for the benefit of the members as a whole and, in doing so, have regard to: a. the likely consequences of any decision in the long term; b. the interests of the Company's employees; c. the need to foster the Company's business relationships with suppliers, customers and others; d. the impact of the Company's operations on the community and the environment; e. the desirability of the Company maintaining a reputation for high standards of business conduct; and f. the need to act fairly between members of the Company. The directors of Harron Homes Limited consider the following areas to be of key importance in its fulfilment of this duty: • carrying out detailed planning and forecasting to ensure the ongoing financial safety of the business; • seeking opportunities, by finding new locations to buy land and build new homes, to grow the business for the benefit of current and future employees, customers and suppliers as well as the wider UK economy; • maintaining the highest standards of integrity and honesty in the Company's dealings with employees, suppliers, the general public and local and national government; • prioritising the maintenance of the highest standards of health and safety and environmental protection through investment in training, equipment, monitoring and external support; • working to constantly maintain and improve the quality of the homes that we build, and providing the best possible aftersales support to our customers; and • listening to feedback from customers in order to identify scope for improvement and to drive to achieve the highest possible reputation for the quality of our designs, standards of construction and customer care. The results of the measures that we have taken in these areas can be seen in: our positive financial results, the increased strength of our Statement of Financial Position and land bank, our excellent health and safety and environmental records, and our improving quality ratings as measured by independent surveys.
Supplier payment policy
Supplier payment policy is to settle terms of payment with suppliers when agreeing the terms of each transaction, ensure that suppliers are made aware of the terms of payment and abide by the terms of payment. Trade creditors of the Company at 31 December 2025 were equivalent to 46 (2024: 55) days purchase, based on the average daily amount invoiced by suppliers during the year.
Employee involvement
The Company's policy is to keep employees informed on matters relevant to them as employees through regular meetings. All employees have access to some form of pension scheme.
Disabled employees
The Company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the Company's policy, wherever practical, to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.
Qualifying third-party indemnity provisions
During the financial year, a qualifying third party indemnity provision for the benefit of the directors was in force. Page 5
HARRON HOMES LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Greenhouse gas emissions, energy consumption and energy efficiency action
The Company's greenhouse gas emissions and energy consumption for the year are disclosed within the consolidated accounts of Harron Group Limited.
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'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's auditor is aware of that information.
Auditor
Under section 487(2) of the Companies Act 2006, Armstrong Watson Audit Limited will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier. This report was approved by the board and signed on its behalf.
Mr P A Harrison Director
Date: 26 March 2026
Page 6
HARRON HOMES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES LIMITED
Opinion
We have audited the financial statements of Harron Homes Limited (the 'Company') for the year ended 31 December 2025, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the 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 Company's affairs as at 31 December 2025 and of its profit 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 Company 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 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
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. Page 7
HARRON HOMES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES LIMITED (CONTINUED)
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 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or ∙the 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 3, 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 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 Company or to cease operations, or have no realistic alternative but to do so. Page 8
HARRON HOMES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES 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 financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below: ∙We obtained an understanding of laws and regulations that affect the company, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations. Key laws and regulations that we identified included the UK Companies Act, tax legislation and occupational health and employment legislation. ∙We enquired of the directors, reviewed correspondence with HMRC and reviewed directors meeting minutes for evidence of non-compliance with relevant laws and regulations. We also reviewed controls the directors have in place to ensure compliance. ∙We gained an understanding of the controls that the directors have in place to prevent and detect fraud. We enquired of the directors about any incidences of fraud that had taken place during the accounting period. ∙The risk of fraud and non-compliance with laws and regulations was discussed within the audit team and tests were planned and performed to address these risks. We identified the potential for fraud in the following areas: revenue recognition and management override of controls. ∙We reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above. ∙We enquired of the directors about actual and potential litigation and claims. ∙We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud. ∙In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities 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. Page 9
HARRON HOMES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARRON HOMES LIMITED (CONTINUED)
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. Steven Williams FCA (Senior Statutory Auditor) for and on behalf of Armstrong Watson Audit Limited Chartered Accountants & Statutory Auditor Leeds Date: 26 March 2026 Page 10
HARRON HOMES LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2025
| 2025 | 2024
Note | £000 | £000
Turnover | 4 | 156,945 | 160,854
Cost of sales |  | (135,538) | (140,999)
Gross profit |  | 21,407 | 19,855
Administrative expenses |  | (12,613) | (10,851)
Other operating income | 5 | - | 149
Operating profit | 6 | 8,794 | 9,153
Interest receivable and similar income |  | 176 | 135
Interest payable and similar expenses | 10 | (963) | (1,764)
Profit before tax |  | 8,007 | 7,524
Tax on profit | 11 | (1,762) | (1,940)
Profit for the financial year |  | 6,245 | 5,584
There was no other comprehensive income for 2025 (2024: £NIL).
The notes on pages 14 to 28 form part of these financial statements.
Page 11
HARRON HOMES LIMITED REGISTERED NUMBER: 03012678 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2025
|  | 2025 |  | 2024
Note |  | £000 |  | £000
Fixed assets |  |  |  |  |
Intangible assets | 13 |  | 24 |  | 67
Tangible assets | 14 |  | 839 |  | 560
|  |  | 863 |  | 627
Current assets |  |  |  |  |
Stocks | 15 | 187,982 |  | 184,244 |
Debtors | 16 | 2,487 |  | 3,141 |
Cash at bank and in hand | 17 | 13,421 |  | 14,060 |
|  | 203,890 |  | 201,445 |
Creditors: amounts falling due within one year | 18 | (33,509) |  | (31,743) |
Net current assets |  |  | 170,381 |  | 169,702
Total assets less current liabilities |  |  | 171,244 |  | 170,329
Creditors: amounts falling due after more than one year | 19 |  | (2,400) |  | (4,400)
Net assets |  |  | 168,844 |  | 165,929
Capital and reserves |  |  |  |  |
Called up share capital | 21 |  | 250 |  | 250
Profit and loss account | 22 |  | 168,594 |  | 165,679
|  |  | 168,844 |  | 165,929
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
Mr P A Harrison
Director
Date: 26 March 2026
The notes on pages 14 to 28 form part of these financial statements. Page 12
HARRON HOMES LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2025
| Called up share capital | Profit and loss account | Total equity
| £000 | £000 | £000
At 1 January 2024 | 250 | 164,354 | 164,604
Comprehensive income for the year |  |  |
Profit for the year | - | 5,584 | 5,584
Dividends: Equity capital | - | (4,259) | (4,259)
At 1 January 2025 | 250 | 165,679 | 165,929
Comprehensive income for the year |  |  |
Profit for the year | - | 6,245 | 6,245
Dividends: Equity capital | - | (3,330) | (3,330)
At 31 December 2025 | 250 | 168,594 | 168,844
| The notes on pages 14 to 28 form part of these financial statements.
Page 13
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
1. | General information
Harron Homes Limited is a private company limited by shares, incorporated and registered in England and Wales. Its registered office is located at Trueman House, Capitol Boulevard, Morley, Leeds, LS27 0TS. 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 presentation and functional currency is Pound Sterling (£). The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
| 2.2 | Financial Reporting Standard 102 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": ∙the requirements of Section 7 Statement of Cash Flows; ∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); ∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); ∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; ∙the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of Harron Group Limited as at 31 December 2025 and these financial statements may be obtained from Companies House.
| 2.3 | Going concern
The Directors have prepared forecasts covering the period to 31 December 2027, incorporating reasonable assumptions and scenario analyses based on current trading and market conditions. The Company has access to a banking facility to support cash flows as required. The Directors have assessed the ongoing availability of the facility and, having made appropriate enquiries, concluded that adequate facilities will be available to the Company over the forecast period. Based on the latest forecasts and cashflow modelling, the Directors are satisfied that the Company has adequate resources to continue to trade for a period of at least 12 months from the date of approval of the financial statements, and up to the end of the assessment period. The Directors have also considered the potential impact of current market conditions on the Company’s operations and cash flows, based on information available at the date of approval, and do not consider these to have a significant impact on the Company’s ability to continue as a going concern. The Directors therefore consider it appropriate to prepare the financial statements on a going concern basis. Page 14
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.4 | Revenue
Turnover represents revenue recognised by the Company from the sale of new homes and related customer extras during the financial year. Revenue is stated net of Value Added Tax and after deducting any sales incentives or discounts. Revenue from housebuilding activities is recognised at the point of legal completion, when ownership and the associated risks and rewards transfer to the purchaser. Turnover also includes any gain or loss arising on the disposal of part exchange properties, measured as the difference between the cost of the part exchange property and its net realisable value. Customer deposits received in advance of legal completion are recorded as deferred income until the sale legally completes.
| 2.5 | Finance leases and hire purchase
Assets obtained under hire purchase contract and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Profit and Loss Account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
| 2.6 | Operating leases: the Company as lessee
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
| 2.7 | Interest income
Interest income is recognised in profit or loss using the effective interest method.
| 2.8 | 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.
| 2.9 | Pensions
Defined contribution pension plan The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds. Page 15
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.10 | Current and deferred taxation
The tax expense for the year comprises current and deferred tax. 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 reporting date in the countries where the Company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
| 2.11 | Intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years. Amortisation is provided on the following bases:
|  |  |  | Software | - | 25% | per annum straight line
Page 16
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.12 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. Depreciation is provided on the following basis:
|  |  |  | Plant and machinery | - | 25% | per annum straight line
|  |  |  | Motor vehicles | - | 25% | per annum reducing balance
|  |  |  | Office equipment | - | 25% | per annum straight line
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
| 2.13 | Stock
Stock includes work in progress and part-exchange properties held for sale. Work in progress balances represent costs incurred on specific developments, net of amounts transferred to cost of sales. Profit on legally completed sales is only recognised when the outcome of the whole development can be assessed with reasonable certainty.
| 2.14 | Part-exchange properties
Part-exchange properties are stated at the lower of cost and net realisable value. Net realisable value is based on estimated selling prices less all further costs to completion and all relevant marketing and selling costs.
| 2.15 | Shared equity debtors
Shared equity debtors consist of loans made to customers which are secured by second charges over the properties sold to them. The loans are recorded at fair value, being the amount receivable by the Company discounted to present day values. The difference between the nominal amount and the fair value is credited over the deferred term to the profit and loss account, with the debtor increasing to its full expected cash settlement value on the anticipated receipt date. Credit risk is accounted for in determining fair values and appropriate discount factors are applied.
| 2.16 | Trade and other 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 17
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.17 | 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. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
| 2.18 | 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.
| 2.19 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss.
| 2.20 | Financial instruments
Financial assets and liabilities are offset, with 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 Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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. Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. Other financial assets Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment. Impairment of financial assets At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. Page 18
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.20 | Financial instruments (continued)
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Basic financial liabilities 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 Company after the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
| 2.21 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Page 19
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
3. | Judgments in applying accounting policies and key sources of estimation uncertainty
Preparation of the financial statements requires the directors to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include the carrying value of work in progress and the valuation and recoverability of debts. The assessment of the carrying value of work in progress relies upon calculations of the cost of sales of each development which are based on detailed forecasts of expected remaining revenues and scheme costs. Such forecasts require judgements to be made, on a development by development basis, about the anticipated revenues on unreserved plots. These judgements are based upon sales experience to date combined with an assessment of market conditions as at the measurement date. Judgements are also required of remaining expenditure on each development. These are based upon an expert knowledge of the current state of completion of each development together with a detailed understanding of the specific outstanding costs to be expended. These judgements together may have a material impact on the carrying value of work in progress balances in the Statement of Financial Position and the amount charged to the Profit and Loss account as cost of sales in each accounting period. The carrying value of work in progress as at 31 December 2025 was £177,826,000 (2024: £174,098,000).
4. | Turnover
The whole of the turnover is attributable to the principal activity of the Company.
| All turnover arose within the United Kingdom.
5. | Other operating income
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Other operating income | - | 149
6. | Operating profit
| The operating profit is stated after charging:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Depreciation of tangible fixed assets | 328 | 309
| (Profit)/loss on sale of tangible fixed assets | 2 | 5
| Operating lease rentals - motor vehicles, plant and machinery | 349 | 309
| Operating lease rentals - land and buildings | 591 | 401
| Amortisation of intangible assets | 43 | 44
Page 20
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
7. | Auditor's remuneration
| During the year, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 37 | 36
| Fees payable to the Company's auditor in respect of: |  |
| Taxation compliance services | 7 | 7
| Other services | 8 | 8
8. | Employees
| Staff costs, including directors' remuneration, were as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Wages and salaries | 12,792 | 12,133
| Social security costs | 1,638 | 1,334
| Cost of defined contribution scheme | 387 | 395
|  | 14,817 | 13,862
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | 2025 | 2024
|  |  | No. | No.
|  | Construction | 86 | 93
|  | Sales and Marketing | 47 | 49
|  | Administration | 99 | 95
|  |  | 232 | 237
Page 21
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
9. | Directors' remuneration
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Directors' emoluments | 138 | 112
| The highest paid director received remuneration of £56,648 (2024: £55,820). No directors (2024: none) were members of Company pension schemes, and no pension contributions were made in respect of the directors in either year.
10. | Interest payable and similar expense
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Bank interest payable | 963 | 1,764
11. | Taxation
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Corporation tax |  |
| Current tax on profits for the year | 1,855 | 1,767
| Adjustments in respect of previous periods | (40) | 204
| Total current tax | 1,815 | 1,971
| Deferred tax |  |
| Origination and reversal of timing differences | (45) | (31)
| Adjustments in respect of prior periods | (8) | -
| Total deferred tax | (53) | (31)
| Taxation on profit on ordinary activities | 1,762 | 1,940
Page 22
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 11.Taxation (continued)
| Factors affecting tax charge for the year
| The tax assessed for the year is lower than (2024: higher than) the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Profit on ordinary activities before tax | 8,007 | 7,524
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25.00% (2024: 25.00%) | 2,002 | 1,881
| Effects of: |  |
| Expenses not deductible for tax purposes | 15 | 64
| Fixed asset differences | 1 | -
| Adjustments to tax charge in respect of prior periods | (40) | 204
| Additional deduction for land remediation expenditure | (208) | (176)
| Adjustments to tax charge in respect of previous periods - deferred tax | (8) | (33)
| Total tax charge for the year | 1,762 | 1,940
| Factors that may affect future tax charges
There were no factors that may affect future tax charges.
12. | Dividends
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Dividends Issued | 3,330 | 4,259
Page 23
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
13. | Intangible assets
|  | Software
|  | £000
| Cost |
| At 1 January 2025 | 422
| Disposals | (10)
| At 31 December 2025 | 412
| Amortisation |
| At 1 January 2025 | 355
| Charge for the year on owned assets | 43
| On disposals | (10)
| At 31 December 2025 | 388
| Net book value |
| At 31 December 2025 | 24
| At 31 December 2024 | 67
Page 24
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
14. | Tangible fixed assets
|  | Plant and machinery | Motor vehicles | Office equipment | Total
|  | £000 | £000 | £000 | £000
| Cost |  |  |  |
| At 1 January 2025 | 1,740 | 6 | 1,227 | 2,973
| Additions | 25 | - | 586 | 611
| Disposals | (7) | - | (588) | (595)
| At 31 December 2025 | 1,758 | 6 | 1,225 | 2,989
| Depreciation |  |  |  |
| At 1 January 2025 | 1,432 | 2 | 979 | 2,413
| Charge for the year on owned assets | 152 | - | 176 | 328
| Disposals | (6) | - | (585) | (591)
| At 31 December 2025 | 1,578 | 2 | 570 | 2,150
| Net book value |  |  |  |
| At 31 December 2025 | 180 | 4 | 655 | 839
| At 31 December 2024 | 308 | 4 | 248 | 560
15. | Stocks
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Work in progress | 177,826 | 174,098
| Part exchange properties | 10,156 | 10,146
|  | 187,982 | 184,244
Page 25
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
16. | Debtors
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Due after more than one year |  |
| Shared equity debtors | 54 | 54
| Due within one year |  |
| Trade debtors | 249 | 200
| Amounts owed by group undertakings | - | 505
| Other debtors | 713 | 794
| Prepayments and accrued income | 832 | 477
| Tax recoverable | 522 | 1,047
| Deferred taxation | 117 | 64
|  | 2,487 | 3,141
17. | Cash and cash equivalents
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Cash at bank and in hand | 13,421 | 14,060
18. | Creditors: Amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Trade creditors | 24,396 | 23,217
| Amounts owed to group undertakings | 104 | -
| Other taxation and social security | 536 | 702
| Other creditors | 465 | 471
| Accruals and deferred income | 8,008 | 7,353
|  | 33,509 | 31,743
19. | Creditors: Amounts falling due after more than one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Trade creditors | 2,400 | 4,400
Page 26
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
20. | Deferred taxation
|  | 2025 | 2024
|  | £000 | £000
| At beginning of year | 64 | 33
| Utilised in year | 53 | 31
| At end of year | 117 | 64
| The deferred tax asset is made up as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Depreciation in excess of capital allowances | 54 | 30
| Other short term timing differences | 63 | 34
|  | 117 | 64
21. | Share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
|  | Allotted, called up and fully paid |  |
|  | 250,000 (2024: 250,000) Ordinary shares of £1.00 each | 250 | 250
22. | Reserves
Profit and loss account This reserve includes all current and prior period retained profits and losses.
23. | Contingent liabilities
The Company provides a cross guarantee in respect of the Group’s banking facility, which was undrawn at the reporting date and is secured against Group assets. Page 27
HARRON HOMES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
24. | Pension commitments
The Company operates a defined contribution retirement benefit schemes for all qualifying employees. The assets of the scheme are held separately from those of the Company. The Company's only obligations with respect to the schemes is to contribute specified percentages of payroll costs to the schemes to fund the benefits. The total cost charged to income of £387,000 (2024: £395,000) represents contributions payable to the schemes at rates specified in the rules of the plans. As at 31 December 2025, contributions of £120,000 (2024: £62,000) due in respect of the current reporting period had not been paid over to the schemes.
25. | Commitments under operating leases
| At 31 December 2025 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Not later than 1 year | 625 | 593
| Later than 1 year and not later than 5 years | 1,179 | 492
|  | 1,804 | 1,085
26. | Related party transactions
| The company has taken advantage of the exemptions allowed under FRS102 not to disclose transactions with other group companies.
27. | Controlling party
The ultimate parent company is Harron Group Limited, a company registered in England and Wales. The accounts of Harron Group Limited are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
Page 28