Hannon Brothers Limited - Limited company accounts 25.1

REGISTERED NUMBER: 05660221 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2025

FOR

HANNON BROTHERS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

13

DIRECTORS:

C Clark

D W Hannon

W J Hannon

REGISTERED OFFICE:

Stonebridge Golf Club

Somers Road

Meriden

Coventry

CV7 7PL

REGISTERED NUMBER:

05660221 (England and Wales)

AUDITORS:

Flint & Thompson

Statutory Auditors

2 Manor Square

Solihull

West Midlands

B91 3PX

ACCOUNTANTS:

Thursfield & Co

Holbeche House

437 Shirley Road

Birmingham

B27 7NX

The directors present their strategic report for the year ended 31 August 2025.

REVIEW OF BUSINESS

Hannon Brothers Limited's principal activity continues to be that of Groundworks and Civil Engineering.

The company's turnover has increased despite the continued effects of the global pandemic and challenging business conditions. The company continues to trade profitably and as such the business is in a healthy position.

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the business as a whole, these being turnover and operating margin.

The company had a turnover of £20.7 million (2024: £24.5 million), gross profit margin of 5.4% (2024: 7.4%) and operating profit of 0.7% (2024: 1.9%). Net assets increased by £113k.

PRINCIPAL RISKS AND UNCERTAINTIES

We continue to monitor the principal risks and uncertainties which the business and the wider industry are subject to such as:-

- Unforeseen events or circumstances. The continued effects of the Ukraine war has impacted many local economies and businesses around the globe due to the inflation of goods and services. Since the year end, the Iran war has impacted inflation and has impacted the economy significantly with the cost of goods and services increasing inflation above expected levels and is expected to continue to do so for a period of time. However the company has continued to trade at capacity and continues making profit.

- Risk of bad debts. There is a continued risk of bad debts due to the risk of the economy.

- Slow down or recession in the economy. There is a noticeable slowdown in the economy, however we are prepared incase of recession.

-Cost of living crisis. The cost of living crisis is continuing to impact on the business as well as many other businesses, but plans are in place to adapt

The outlook for the business is promising as it continues to be engaged in profitable contracts.

ON BEHALF OF THE BOARD:

C Clark - Director

6 May 2026

The directors present their report with the financial statements of the company for the year ended 31 August 2025.

DIVIDENDS

No dividends will be distributed for the year ended 31 August 2025.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 September 2024 to the date of this report.

C Clark

D W Hannon

W J Hannon

Other changes in directors holding office are as follows:

A Llewellyn ceased to be a director after 31 August 2025 but prior to the date of this report.

POLITICAL DONATIONS AND EXPENDITURE

The company made no political donations during the year.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 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 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 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Flint & Thompson, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C Clark - Director

6 May 2026

Opinion

We have audited the financial statements of Hannon Brothers Limited (the 'company') for the year ended 31 August 2025 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, 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 August 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 Auditors' 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 UK, including the FRC'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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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.

Opinions 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 Report of the Directors.

We have nothing to report in respect of the following matters where 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 Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach was as follows:

- We assessed the risks of material misstatement in respect of fraud by making enquiries to management during the audit.

- Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with such laws and regulations identified below:

- We corroborated our enquiries through review of documentation from external inspection.

We considered the risk of fraud through management override and, in response, we incorporated testing of manual journal entries throughout the period into our audit approach.

We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant is that which relates to The Health and Safety at Work Act 1974 and as compliance is fundamental to the operating aspects of the company to continue its business, or to avoid material penalties.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Peter Haughton FCCA MAAT (Senior Statutory Auditor)

for and on behalf of Flint & Thompson

Statutory Auditors

2 Manor Square

Solihull

West Midlands

B91 3PX

6 May 2026

TURNOVER

20,719,823

24,555,996

Cost of sales

19,583,265

22,733,615

GROSS PROFIT

1,136,558

1,822,381

Administrative expenses

991,951

1,351,281

OPERATING PROFIT

4

144,607

471,100

Interest receivable and similar income

-

4,428

PROFIT BEFORE TAXATION

144,607

475,528

Tax on profit

5

31,415

113,529

PROFIT FOR THE FINANCIAL YEAR

113,192

361,999

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

113,192

361,999

FIXED ASSETS

Tangible assets

6

43,404

57,320

CURRENT ASSETS

Debtors

7

6,197,291

5,124,105

Cash at bank

1,805,428

3,290,901

8,002,719

8,415,006

CREDITORS

Amounts falling due within one year

8

3,340,922

3,870,204

NET CURRENT ASSETS

4,661,797

4,544,802

TOTAL ASSETS LESS CURRENT
LIABILITIES

4,705,201

4,602,122

PROVISIONS FOR LIABILITIES

9

10,851

20,964

NET ASSETS

4,694,350

4,581,158

CAPITAL AND RESERVES

Called up share capital

10

100

Retained earnings

11

4,694,250

4,581,058

SHAREHOLDERS' FUNDS

4,694,350

4,581,158

The financial statements were approved by the Board of Directors and authorised for issue on 6 May 2026 and were signed on its behalf by:

C Clark - Director

Called up

share

Retained

Total

capital

earnings

equity

£

Balance at 1 September 2023

100

4,219,059

4,219,159

Changes in equity

Total comprehensive income

-

361,999

Balance at 31 August 2024

100

4,581,058

4,581,158

Changes in equity

Total comprehensive income

-

113,192

Balance at 31 August 2025

100

4,694,250

4,694,350

Cash flows from operating activities

Cash generated from operations

1

(1,354,225

)

1,573,413

Tax paid

(127,748

)

(47,888

)

Net cash from operating activities

(1,481,973

)

1,525,525

Cash flows from investing activities

Purchase of tangible fixed assets

(3,500

)

(1,767

)

Sale of tangible fixed assets

-

87,099

Interest received

-

4,428

Net cash from investing activities

(3,500

)

89,760

(Decrease)/increase in cash and cash equivalents

(1,485,473

)

1,615,285

Cash and cash equivalents at beginning of
year

2

3,290,901

1,675,616

Cash and cash equivalents at end of year

2

1,805,428

3,290,901

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2025

2024

£

Profit before taxation

144,607

475,528

Depreciation charges

12,902

14,929

Loss on disposal of fixed assets

4,515

7,109

Finance income

-

(4,428

)

162,024

493,138

(Increase)/decrease in trade and other debtors

(1,073,187

)

847,940

(Decrease)/increase in trade and other creditors

(443,062

)

232,335

Cash generated from operations

(1,354,225

)

1,573,413

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 August 2025

31/8/25

1/9/24

£

Cash and cash equivalents

1,805,428

3,290,901

Year ended 31 August 2024

31/8/24

1/9/23

£

Cash and cash equivalents

3,290,901

1,675,616

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/9/24

Cash flow

At 31/8/25

£

Net cash

Cash at bank

3,290,901

(1,485,473

)

1,805,428

3,290,901

(1,485,473

)

1,805,428

Total

3,290,901

(1,485,473

)

1,805,428

1.	STATUTORY INFORMATION

Hannon Brothers Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

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 revision and future periods where the revision affects both current and future periods.

It is the opinion of the directors that there are no material estimates or judgements.

Turnover

Revenue is recognised on construction contracts by reference to the services performed to date. Where the outcome of the contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract at the balance sheet date (determined by surveys of work performed by quantity surveyors in conjunction with clients).

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write down the value of each asset over its useful economical life or, if held under a financing lease, over the lease term, whichever is shorter

Plant and machinery - 15% or 25% per annum of the net book value

Computer costs - 25% of the net book value

Fixtures and fittings - 25% of the net book value

Financial instruments

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Impairment

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash generating unit to which the asset belongs. The cash generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or group of assets.

3.	EMPLOYEES AND DIRECTORS

2025

2024

£

Wages and salaries

455,926

445,290

Other pension costs

7,132

8,061

463,058

453,351

The average number of employees during the year was as follows:

2025

2024

Managerial and office

7

Directors

4

11

2025

2024

£

Directors' remuneration

-

4.	OPERATING PROFIT

The operating profit is stated after charging:

2025

2024

£

Hire of plant and machinery

3,873,408

5,815,980

Depreciation - owned assets

12,901

14,929

Loss on disposal of fixed assets

4,515

7,109

Auditors' remuneration

10,250

9,995

5.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2025

2024

£

Current tax:

UK corporation tax

41,528

127,875

Deferred tax

(10,113

)

(14,346

)

Tax on profit

31,415

113,529

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2025

2024

£

Profit before tax

144,607

475,528

Profit multiplied by the standard rate of corporation tax in the UK of 25%
(2024 - 25%)

36,152

118,882

Effects of:

Expenses not deductible for tax purposes

1,897

1,914

Depreciation in excess of capital allowances

3,479

7,079

Deferred tax

(10,113

)

(14,346

)

Total tax charge

31,415

113,529

6.	TANGIBLE FIXED ASSETS

Fixtures

Plant and

and

machinery

fittings

Totals

£

COST

At 1 September 2024

212,694

20,358

233,052

Additions

3,500

-

3,500

Disposals

(27,641

)

-

(27,641

)

At 31 August 2025

188,553

20,358

208,911

DEPRECIATION

At 1 September 2024

161,084

14,648

175,732

Charge for year

11,457

1,444

12,901

Eliminated on disposal

(23,126

)

-

(23,126

)

At 31 August 2025

149,415

16,092

165,507

NET BOOK VALUE

At 31 August 2025

39,138

4,266

43,404

At 31 August 2024

51,610

5,710

57,320

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2025

2024

£

Trade debtors

4,747,013

3,724,927

Other debtors

370,220

VAT

922,830

888,212

Prepayments

157,228

140,746

6,197,291

5,124,105

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2025

2024

£

Trade creditors

3,151,129

2,784,891

Corporation tax

41,718

127,938

Social security & other taxes

22,777

16,183

Other creditors

5,086

3,923

Wages account

1,124

20

Accrued expenses

119,088

937,249

3,340,922

3,870,204

9.	PROVISIONS FOR LIABILITIES

2025

2024

£

Deferred tax

10,851

20,964

Deferred

tax

£

Balance at 1 September 2024

20,964

Credit to Statement of Comprehensive Income during year

(10,113

)

Balance at 31 August 2025

10,851

10.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2025

2024

value:

£

100

Ordinary

£1

100

11.

RESERVES

Retained

earnings

£

At 1 September 2024

4,581,058

Profit for the year

113,192

At 31 August 2025

4,694,250

12.	RELATED PARTY DISCLOSURES

During the year the company entered into the following transactions with related parties:

Sales

Purchases

Balance
owed by

2025

2024

2025

2024

2025

2024

£

HCL Services Limited

73,143

-

3,339,883

4,416,883

205,588

356,000

The company is related by virtue of being controlled by common Directors.

13.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is D W Hannon and W J Hannon.