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

Andrew Dawson, Managing Director

It has given me great pride to review this year’s Annual Report and to see how far we are continuing to advance as a specialist, multidisciplined, regional and national business.

We continue to place great emphasis on investment in people and technology, with all our colleagues being encouraged to innovate and be solutions driven.

I would like to thank all of my team across the business for the unbelievable drive and commitment they have shown throughout the year.

My thanks also to my fellow Board of Directors and the senior leadership team for the vision, energy and clarity they have all shown during a year of real success for the business.

We would be nothing without our customers and strategic partners, all of whom continue to place their trust in us to deliver outstanding work, often in very challenging circumstances. A huge thank you to them.

I hope you find the Annual Report informative and that it provides real evidence that Castle is a great business to work for and to do business with.

The Castle Building Services Organisation Limited provides design, supply, installation, commissioning, setting to work and maintenance of construction services as specialist multidisciplined, regional and national business throughout the United Kingdom.

Our Head Office is based in Hebburn, Tyne and Wear, where we have been for 23 years. All our central support staff and department are based here, and we also have regional delivery offices strategically positioned to support projects at various locations across the UK.

2025 marks another of record of achievements for the company as we announce our financial reporting for the year ended 31 December 2025.

Included within the 2024 annual report we announced secured turnover for 2025 of approximately £73 million and can confirm we have achieved marginally over £66 million, which although doesn’t quite reach our assessment 12 months ago, it galvanises our growth strategy indicating we are on course to reach our goal of £100 million turnover by 2027.

In doing so, we have decided to restructure our business to allow even more adaptability to the different market sectors we are operating in and have included a full update on this later in the report.

As well as turnover, gross profit remains immensely strong at 23.88% and with an exceptional pre-tax margin at 14.21%.

We understand these results are vastly different to industry norms, however, are achieved from our unique and balance approach to work winnings and project cost controls.

Yearend cash balance remained strong more than 10% of group revenue the forecasted order book has now surpassed £200M for revenue into 2029.

Forward Outlook

Group restructure and investment

In line with our strategic plans, we can reveal our intention to proceed with the restructuring of the business and increased investment.

As an established Principal Contractor, this reflects our desire to build on the very strong momentum we have achieved in recent years and to ensure we are in the very best position to meet our highly ambitious plans for the business.

The restructure will be the catalyst for a significant increase in investment across the company in critical areas such as people development, technology and processes.

The new structure is headed by Castle Group which will provide leadership, direction and investment for five dedicated divisions - Castle Build, Castle Design, Castle Building Services, Castle Facilities Management and Castle Sustainability.

Looking to the future, there is also the potential to add additional divisions, including Castle Homes.

Sitting above the divisions will be a raft of central support services including procurement, finance, commercial, HSEQ compliance, pre-contract technical MEP, business development and pre-contract and technical build.

Strategic direction and leadership will be driven via a Group Board consisting of Andrew Dawson, Tony Lister and Simon Groom. A Delivery Board, with Craig Muldoon as Chair and including Richard Farrel, Andrew Heron, Leanne Robinson and Ben Fawcett will provide management, guidance and support to the divisional companies.

In addition to the new operational structure, we will also introduce Castle Foundation, which will focus on the positive social and economic impact we have on the local communities in which we operate and through which we will provide financial and other support to charities and worthy causes.

While this is a very important development for the business, it will, as they say, be business as usual, but with five separate divisions united by the Castle ethos and values.

Productivity soars as colleagues embrace transformational office space

Investing heavily in our people is not just about training and personal development, it’s about creating a transformational working environment and culture.

That was the vision we had when we imagined what our new office refurbishment should look like at our headquarters.

In line with our growing team, we have created a space colleagues look forward to each day and which stimulates good communication and collaboration. From the perspective of the business, we also have an environment that enables greater productivity.

Many thanks to our senior design lead/ architect, Sarah Sabin, for the great work that she has done in delivering our vision for this project.

From a staff wellbeing viewpoint, we have received constant positive feedback that colleagues appreciate the highly flexible and interactive layout, open plan areas to work, with collaboration zones and booths to break off to take virtual meetings or calls.

In terms of productivity, our teams are working more closely together and that day-to day operational items such as reports, documents and project updates are moving more freely and at a faster pace across the business. This has a had a positive impact on decision making.

There is also clear evidence the new environment is stimulating colleagues to be more innovative, creative and solutions driven. Confidence to think and act in such a way is, we believe, directly linked to the investment we have made and the message this sends to staff that they are, indeed, our greatest assets.

The office combines the Castle corporate brand with softer finishes and high-quality design and furnishings. The kitchen is a real highlight, occupying a central space on the ground floor, providing a friendly, welcoming area for colleagues to converse.

The upper level also offers lots of open space and with a large modern boardroom, it is ideal for client and team meetings. Sustainability and environmental considerations were a key driver for this project, seamlessly incorporated within a truly outstanding working environment.

Whilst there is always some level of risk and uncertainty within the apparent volatile world we are now living in, thankfully, we are seeing the risk and uncertainties subside within our industry. With inflation stabilising, material and sub-contracting prices are far easier to predict, and entering longer term fixed price contracts with our supply chain is becoming easier and standard market conditions. Material shortages and longer deliveries are also on the decline, and we are benefiting from receiving materials more swiftly. Clients are learning, and we are now engaging with more flexible terms further de-risking our projects.

Gross profit percentage: 2025: 23.88%; 2024: 19.39%

Net profit before tax percentage: 2025: 14.21%; 2024: 7.99%

Current ratio: 2025: 1.28; 2024: 1.12

Energy and Carbon report

Sustainability is fundamental to our business operations, from our office to the projects we build. We monitor our sustainability in all aspects of the work we do from sourcing Low carbon materials, the reduction and reuse of waste, the carbon monitoring of our vehicle fleet, to the utilisation of alternative forms of energy on projects by obtaining Client buy in at design stage where practical. This allows us to look at how we can influence and increase a projects sustainability and carbon footprint.

Castle records their waste recycling performance as part of the Quality Environmental Management System (QEMS). These measures also form part of our executive dashboard and are monitored monthly. We set a target for <2% of our waste going to landfill, which we have achieved consistently since September 2019. Currently we are achieving a level of recycling at 99% (by weight) and are noticing increasing levels of our waste being used for ‘refuse derived fuel’ (diverting 4% of waste produced away from landfill) or ‘energy from waste’ (diverting another 5% of waste). This helps to keep our waste to landfill at significantly low levels.

Each construction site is governed by a Site Waste Management Plan (SWMP) and the Aspects and Impacts Register. Both documents are tailored for its site and are working documents for the life of the project. Before a project commences on site the SWMP is drawn up by our management team along with the Aspects and Impacts Register, as both documents feed into each other to ensure a unified approach to our waste management and material reuse goals. Targets for waste reduction and recycling are defined during this planning and design stage of the project and we work closely with our list of approved waste contractors to ensure that all parties involved, work to reduce the environmental and carbon impacts that our business has. Supporting this activity are the checks carried out by our Health, Safety and Environmental Managers.

In line with our QEMS, Castle considers the whole lifecycle of a potential project before establishing best practice. We consider the lifecycle of components that make up the whole project, from buying low carbon materials through to anticipated maintenance which will eventually lead to replacement and final disposal. For example, all timber products within the build will only be purchased from sustainable & validated sources and concrete products will be used with constituent recycled stone etc. The anticipated energy use of the completed project is also considered when deciding upon preferred insulation products, alternative energy sources and boiler types etc.

When evaluating the information provided, it can be proven that Castle places a significant amount of time and effort into reducing the company’s overall carbon footprint and general environmental impact. In fact, our Plant & Transport Department are currently underway with the longer-term replacement of traditional diesel vehicles with an electric fleet, the first of which arrived last year. With initiatives on our sites, without fleet of vehicles and the office environment, we are improving and will continue to improve upon our own carbon footprint as well as the on sites and within buildings we deliver for clients.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

Ordinary dividends were paid amounting to £4,477,475. The directors do not recommend payment of a further dividend.

No preference dividends were paid.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Please see the strategic report.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors are responsible for preparing the annual 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 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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• 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.

We have audited the financial statements of The Castle Building Services Organisation Limited (the 'company') for the year ended 31 December 2025 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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 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 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

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.

As explained more fully in the directors' responsibilities statement, 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.

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.

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

Fraud and breaches of laws and regulations - ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud ("fraud risks") we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

- Enquiring of Directors, the Audit and Risk Committee, internal audit, compliance officers and inspection of policy documentation as to the Company's high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Company's channel for "whistleblowing", as well as whether they have knowledge of any actual, suspected or alleged fraud.

- Reading Board and all relevant Committee minutes.

- Considering remuneration incentive schemes (primarily the annual incentive plan) and performance targets for management and Directors, including underlying profit from operations targets for management remuneration.

- Using analytical procedures to identify any unusual or unexpected relationships.

- Using our own forensic specialists to assist us in identifying fraud risks based on discussions of the circumstances of the Company.

We communicated identified fraud risk factors throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Company component audit teams of relevant fraud risks identified at the Company level and request to component audit teams to report to the Company audit team any instances of fraud that could give rise to a material misstatement at the Company.

As required by auditing standards, and taking into account possible pressures to meet profit targets and our overall knowledge of the control environment, we performed procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular the risk that revenue earned from construction and support services is recorded in the wrong period and the risk that Company and component management may be in a position to make inappropriate accounting entries, and the risk of bias in accounting estimates and judgements such as the estimation of forecast costs and the recognition of variable consideration.

On this audit we do not believe there is a fraud risk related to revenue recognition in the Infrastructure Investments segment based on the contractual nature of the segment's revenue with no significant judgement or estimation required in recognising revenue.

We also performed procedures including:

- Identifying journal entries and other adjustments to test for all full scope components based on specific risk-based criteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts, those posted by users who post journals infrequently and those with missing user identification; and

- Assessing significant accounting estimates for bias.

We discussed with the Audit and Risk Committee matters related to actual or suspected fraud, for which disclosure is not necessary, and considered any implications for our audit.

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the Directors and other management (as required by auditing standards), and from inspection of the Company's regulatory and legal correspondence and discussed with the Directors and other management the policies and procedures regarding compliance with laws and regulations.

As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity's procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. This included communication to audit teams of relevant laws and regulations identified at the Company level, and a request to report any instances of non-compliance with laws and regulations that could give rise to a material misstatement at the Company.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related company legislation), distributable profits legislation, and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Company's license to operate. We identified the following areas as those most likely to have such an effect: health and safety, anti-bribery, employment law and environmental law. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

We discussed with the Audit and Risk Committee matters related to actual or suspected breaches of laws or regulations, for which disclosure is not necessary, and considered any implications for our audit.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

· Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures, and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 23 to 36 form part of these financial statements.

The notes on pages 23 to 36 form part of these financial statements.

The notes on pages 23 to 36 form part of these financial statements.

The notes on pages 23 to 36 form part of these financial statements.

The notes on pages 23 to 36 form part of these financial statements.

The Castle Building Services Organisation Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6 Merchant Court, Monkton Business Park South, Hebburn, Tyne and Wear, NE31 2EX.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the entity.

The financial statements have been prepared under the historical cost convention.

The principal accounting policies adopted are set out below.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The turnover shown in the statement of income represents amounts applied for during the year in respect of mechanical and electrical services provided, based upon the value of work completed to date, exclusive of Value Added Tax.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered. Bank interest accruing on capital borrowed to fund the production of long term contracts is carried forward within long term contract balances.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

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

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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2024: 5).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Details of the company's subsidiary at 31 December 2025 are as follows:

Short term creditors are measured at the transaction price.

Included in creditors is a bank loan of £166,667 (2024: £400,000) which is secured by fixed and floating charges on the assets of the company.

Long term creditors are measured at the transaction price.

Included in creditors is a bank loan of £Nil (2024: £166,667) which is secured by fixed and floating charges on the assets of the company.

The following are the major deferred tax liabilities and assets recognised by the company:

The deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances that are expected to mature within the same period.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the year management charges of £1,839,044 (2024: £1,155,300) to Castle Building Services (South) Limited. Both companies are included within the consolidated accounts.

Advances or credits have been granted by the company to its directors as follows:

The company's ultimate controlling party is CBSO Holdings Limited, whose registered office address is 6 Merchant Court, Merchant Court, Monkton Business Park South, Hebburn, Tyne and Wear, NE31 2EX.

The company is exempt from the requirement to prepare consolidated accounts by virtue of section 400 of the Companies Act 2006. The results of the company and its subsidiaries are included in the consolidated accounts of CBSO Holdings Limited, a company registered in England, whose consolidated accounts are publicly available from Companies House.