The Directors present their Strategic Report for Alfred Bagnall and Sons Limited (the business) for the year ended 31 December 2025.
This report offers a balanced and comprehensive overview of our business’s performance during the year and its position at the year end. The review is consistent with the scale and nature of our business and is written in the context of the risks and uncertainties we face. Overall, the Directors are satisfied with the progress made during this trading period.
The Directors have continued to pursue a business strategy focused on the development of a diverse portfolio of customers across a wide range of market sectors. This approach is intended to support sustainable growth and profitability while reducing exposure to sector-specific downturns. The Group’s reputation as a leading specialist painting, decorating, and coatings contractor continues to provide a strong platform for success. During the year, the Group further strengthened its long-standing relationships with large national customers and secured significant new contracts at both regional and local levels across a variety of sectors.
Investment in learning and development programmes for employees continued throughout the year, with these programmes being expanded to support individuals at all stages of their careers. The focus on behavioural change and leadership development has delivered tangible benefits, including enhanced customer engagement and improvements in health and safety performance. The Group has continued to invest in its apprenticeship programmes and Training Academy, as well as the Management Trainee Programme, to support the development of future talent.
During the year, the Directors and employees marked the Company’s 150-year anniversary, which was celebrated through a number of events. The Group also celebrated the relocation and upgrading of its Head Office to a new bespoke campus in Cleckheaton.
The business continued to receive external recognition during the year, including achievements such as:
World Sustainability Awards – shortlisted for scope 3 reduction award
Painting & Decoration Association Awards – winner of both the senior and junior Apprentice of the Year Awards
Sunday Times Top 100 Apprenticeship Employers – ranked 68
Princess Royal Training Award
Business Desk Yorkshire Business Awards – Employer of the Year
Apprenticeship and Training Awards – Winner of the Large Employer of the Year and Employer support for Social Mobility
Following the strong financial performance achieved in 2023 and 2024, the Group delivered a satisfactory performance in 2025, particularly in the context of a challenging economic environment and the impact of increased payroll taxes introduced in April. Profit before tax fell from £4.4m to £2.5m, while Group turnover reduced by £3.1m from £56.4m to £53.3m. The gross margin remained stable at 37%. Overheads increased by £0.6m (3.5%) as the Group continued to invest in its central support functions to underpin and strengthen the contracting businesses.
The Consolidated Statement of Financial Position shows that Group net assets increased from £23.5m in 2024 to £25.0m in 2025.
Cash balances remained strong, with the Group generating £4.9m of cash from operating activities. During the year, the Group invested £1.4m in properties (2024 – £1.2m) and £2.1m in motor vehicles (2024 - £2.8m). The Group continues to operate without external debt.
The Directors wish to express their appreciation to all employees for their considerable efforts throughout the year and thank each and every one of them for their contribution to the Group’s success.
Principal risks and uncertainties
Despite the reduction in turnover during 2025, subdued economic growth forecasts for 2026 and ongoing geo-political uncertainty, the Directors remain optimistic that the current strategies will deliver growth in both the short and medium term.
The Group operates within a competitive business environment and, while it differentiates itself through its strong health and safety culture, high standards of quality and customer service, it remains exposed to normal commercial and operational risks. We operate in a competitive business environment and, although we differentiate ourselves with our strong health and safety culture, quality, and customer service standards, the Group and its plans remain susceptible to normal business risks.
In response to these risks and challenges, the Board remains committed to strengthening the resilience of the business over the long term. This will be achieved through continued investment in people, specialist services and the expansion of the Group’s presence in new markets to secure new customers. Particular attention is given to improving the performance of under-performing businesses within the Group and to attracting, developing, and retaining high-calibre employees.
Key performance indicators
The Directors consider that effective financial performance is achieved by ensuring contracts are delivered safely, profitably and to a high level of customer satisfaction, thereby supporting long-term customer relationships. The performance of individual contracts represents one of the Group’s most significant risks, and monthly management information is used to identify potential issues at an early stage so that appropriate corrective action can be taken.
The Group’s key financial performance indicators include cash flow, turnover, gross margin and overhead recovery. Key non-financial performance indicators relate to health, safety and environmental performance, quality and customer service and include accident frequency rates, customer satisfaction and customer retention.
The Directors of the Company believe that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, having regard to Section 172 (a)‐(f) of the Companies Act 2006.
Stakeholder engagement
The Group’s success depends on maintaining strong relationships with a range of stakeholders, both internal (employees and shareholders) and external (including customers and suppliers). These stakeholders have an interest in, and may be affected by, the decisions taken by the Board. The Group’s approach to engaging with these stakeholders is described below.
Employees
The Directors regard the Group’s loyal, dedicated and skilled workforce as fundamental to its continued success. Investment in employees, alongside a strong focus on safety, wellbeing and regular engagement, remains central to the Group’s management philosophy.
The Group relies on the skills and commitment of its employees at all levels to achieve its objectives. Employees are encouraged to contribute fully through participation in training and development programmes. Communication is maintained through line management channels, and employees are encouraged to raise and discuss matters of concern openly.
Customers
Delivering a high- quality service to our customers is critical to the Group. Customer feedback is actively sought through a number of channels to ensure service standards are maintained and improved. The Group differentiates itself through its commitment to health and safety, quality and customer service.
Suppliers
Strong relationships with the Group’s supply chain, particularly key materials suppliers, are essential to its ability to deliver high-quality and innovative services. The Group engages regularly with suppliers as part of its day-to-day operations.
Shareholders
The Board maintains ongoing communication with shareholders through a range of channels, including an annual meeting and informal dialogue as appropriate.
Communities and Environment
The Directors recognise the Group’s responsibilities to the communities in which it operates and take these responsibilities seriously. The Group supports local employment and apprenticeship schemes and aims to operate in a safe, ethical and environmentally responsible manner. Since 2012, the “Community Paintbrush” programme has been a central element of the Group’s social value strategy, supporting local projects and charitable initiatives through donations of materials, employee volunteering and fundraising activities. See https://www.bagnalls.co.uk/about-us/community-paintbrush/
Disabled employees
The Board is committed to promoting an inclusive culture that is free from discrimination and harassment and actively support the Group’s Equality and Diversity policy. Proper consideration is given to applications for employment from disabled candidates. Where practicable, employees who become disabled during their employment are retained in their current or an alternative role, following appropriate retraining. Disabled employees are provided with the same opportunities for training, development and promotion as other employees. The Group is committed to equality of opportunity for all employees, regardless of ethnic origin, religion, political opinion, gender, marital status, disability, age or sexual orientation.
On behalf of the board
The directors present their report and the financial statements for the year ended 31 December 2025.
The results for the year are set out on page 12.
Ordinary dividends were paid amounting to £622,104. The directors do not recommend payment of a further dividend.
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Directors will continue to implement business strategies focused on safety performance, growth, margin improvement, customer service, sustainability and the development of major national customers.
Saffery LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. A resolution proposing that they be re-appointed will be put at a General Meeting.
The Companies (Directors Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 implement the government’s policy on Streamlined Energy and Carbon Reporting (SECR). The Regulations came into effect on 1 April 2019 and the Company has been required to report the emissions and energy consumption for this year to 31st December 2025 to coincide with the reporting period.
Our primary function as a business is the completion of painting and decorating contracts, the effective completion of which is driven by our directly employed workforce. As an intensity measure, the Directors consider tonnes of CO2e per employee to be most appropriate.
The business has once again seen Carbon usage per employee reduced, this year by 3.7% in the year, with a total gross reduction of 3.9%.
Gas Usage reduced by 24.3% in 2025 due to this being the first full year that the relocation of our Head Office to Cleckheaton has been included in our emissions figures. There is no gas supply at the new location, so we anticipated this fall in usage.
Electricity consumption increased in the year by 8.9%, due primarily to our continued drive to electrify our fleet. Electric Vehicles (EV’s), Plug-in-Hybrids (PHEV) and Mild Hybrid Electric Vehicles (MHEV) now make up 71% (2024 69%) of our car fleet and 26% (2024 - 23%) of our total fleet. Additionally two of our business locations have moved from gas to electric power for light and heating.
We continue to evaluate the suitability of electric vans for our operations and are exploring opportunities to reduce our commercial fleet emissions further.
These financial statements have been prepared on a going concern basis.
The UK economic outlook presents risks for all businesses in the near to medium term. In response to such conditions, the Directors have carefully considered these risks, including an assessment of future trading for a period of at least 12 months from the date of signing the financial statements, and the extent to which any risks might affect the preparation of the financial statements on a going concern basis. The forecasts show that the Group will continue to trade well within its available facilities and the Directors consider that the going concern basis of accounting remains appropriate.
United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company 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 group and parent company, and of the profit or loss of the group for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable United Kingdom 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 group and parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of Alfred Bagnall and Sons Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group or the parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other information
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 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.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,316,522 (2024 - £2,968,685 profit).
Alfred Bagnall and Sons Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is Penkridge, Dyehouse Drive, West 26 Industrial Estate, Cleckheaton, BD19 4TY.
The group consists of Alfred Bagnall and Sons Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Alfred Bagnall and Sons Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The financial statements have been prepared on the going concern basis.
The Directors have a reasonable expectation that the Group and Parent Company have adequate resources to continue in operational existence for the foreseeable future based on the forecasts prepared. The Directors have identified no material uncertainties related to events or conditions that may cast doubt over the ability of the Group and Parent Company to continue as a going concern. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Turnover for the year represents applications or invoices to customers for payment for work carried out, adjusted where necessary for any accrued income relating to long-term contract balances, exclusive of VAT and trade discounts.
Profit is recognised on long-term contracts, if the final outcome can be assessed with reasonable certainty, by including in the Statement of Comprehensive Income revenue and related costs as contract activity progresses. Revenue is calculated as that proportion of total contract value which costs to date near to total expected costs for that contract.
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The 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.
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.
The Group operates a defined contribution scheme for its employees. A defined contribution scheme is a pension scheme under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the scheme are held separately from the Group in independently administered funds.
The Group operates two defined benefit schemes for certain employees. The schemes were closed to future accrual of benefits from 28 February 2011. A defined benefit scheme defines the pension benefit that the employee will receive on retirement, usually dependant upon several factors including but not limited to age, length of service and remuneration. A defined benefit scheme is a pension scheme that is not a defined contribution scheme.
The liabilities of the Schemes are measured by discounting the best estimate of future cash flows to be paid out of the Schemes using the projected unit method. This amount is reflected in the surplus of deficit in the Statement of Comprehensive Income. The projected unit method is an accrued benefits valuation method in which the liabilities make allowance for projected salaries, future revaluation of deferred benefits and projected future pension increases.
The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
The fair value of scheme assets is measured in accordance with the FRS102 fair value hierarchy and in accordance with the Group's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on scheme assets, less amounts included in net interest, are disclosed in other comprehensive income.
The cost of the defined benefit scheme recognised in the Statement of Comprehensive Income as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of scheme introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of scheme assets. This cost is recognised in the profit or loss as a 'finance expense'.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each scheme of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of scheme assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Statement of Financial Position date and carried forward to future periods. This is measured at the undiscounted wage cost of the future holiday entitlement so accrued at the Statement of Financial Position date.
In the application of the group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
In assessing whether there have been any indicators of impairment of assets, the Directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts or assets and liabilities within the next financial year are discussed below.
Where an indication of impairment exists, the Directors have carried out an impairment review to determine the recoverable amount of an asset, being the higher of fair value less cost to sell and value in use. The value in use calculation has required the Directors to estimate future cash flows expected to arise from the asset or the cash generating unit and determine a suitable discount rate in order to calculate present value.
The Group established a provision for receivables that are estimated not to be recoverable. When assessing the recoverability the Directors have considered factors such as the ageing of receivables, past experience of recoverability and the credit profile of individual or group of customers.
The Group estimates the stage of completion of a contract with reference to the proportion that the incurred costs bear to the total contract costs. In order to perform this calculation the Group is required to estimate costs to complete on all existing contracts at year end.
The average monthly number of persons (including directors) employed by the group and 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 6 (2024 - 6).
The highest paid Director received remuneration of £385,293 (2024: £381,944).
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:
In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:
Included in freehold property and long-term leasehold property respectively are land values of £1,250,750 and £25,000 (2024: £1,222,500 and £25,000) which are not depreciated.
The fair value of the investment property has been arrived at on the basis of a valuation carried out at 31 December 2024 by Michael Steel & Co, Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the company's subsidiaries at 31 December 2025 are as follows:
All subsidiaries have the registered office address of Penkridge, Dyehouse Drive, West 26 Industrial Estate, Cleckheaton, BD19 4TY.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The ordinary shares all have full and equal rights to dividends, voting and capital.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The Employer operates two defined benefit pension schemes in the UK. The disclosures set out below are based on calculations carried out at the measurement date by an independent qualified actuary.
The assets are held in separate trustee-administered funds to meet long-term pension liabilities to past and present employees. The Trustees of the Scheme are required to act in the best interests of the beneficiaries. The appointment of Trustees is determined by the trust documentation.
The liabilities of the schemes are measured by discounting the best estimate of future cash flows to be paid out of the schemes using the projected unit method. The amount is reflected in the surplus or deficit in the Balance Sheet. The project unit method is an accrued benefits valuation method in which liabilities make allowance for projected salaries, future revaluation of deferred benefits and projected future pension increases.
The liabilities set out in this note have been based on liabilities calculated as at 28 February 2025 using data provided for the initial results of the actuarial valuation at the same date, and then rolled forward to the measurement date.
Contributions are payable to the Schemes by the company at the rates set out in the schedule of contributions. The total employer contribution assumed to be made in the year commencing 1 January 2025 is £Nil plus expenses and levies payable to the Pension Protection Fund and the Pensions Regulator.
The schemes have been accounted for as defined benefit schemes in the parent company's group financial statements and detailed disclosures may be found in those financial statements. The pension scheme valuation prepared by the scheme actuary as at 31 December 2025 showed the scheme to be in a significant surplus position. No asset has been recognised in the balance sheet in relation to this surplus position at the year end date and therefore the aggregate net pension position in the Schemes, after deferred tax was £Nil.
Assumed life expectations on retirement at age 65:
The amounts included in the statement of financial position arising from obligations in respect of defined benefit schemes are as follows:
The Employer operates two defined benefit pension schemes in the UK. The disclosures set out below are based on calculations carried out at the measurement date by an independent qualified actuary.
The assets are held in separate trustee-administered funds to meet long-term pension liabilities to past and present employees. The Trustees of the Scheme are required to act in the best interests of the beneficiaries. The appointment of Trustees is determined by the trust documentation.
The liabilities of the schemes are measured by discounting the best estimate of future cash flows to be paid out of the schemes using the projected unit method. The amount is reflected in the surplus or deficit in the Balance Sheet. The project unit method is an accrued benefits valuation method in which liabilities make allowance for projected salaries, future revaluation of deferred benefits and projected future pension increases.
The liabilities set out in this note have been based on liabilities calculated as at 28 February 2025 using data provided for the initial results of the actuarial valuation at the same date, and then rolled forward to the measurement date.
Contributions are payable to the Schemes by the company at the rates set out in the schedule of contributions. The total employer contribution assumed to be made in the year commencing 1 January 2025 is £Nil plus expenses and levies payable to the Pension Protection Fund and the Pensions Regulator.
The schemes have been accounted for as defined benefit schemes in the parent company's group financial statements and detailed disclosures may be found in those financial statements. The pension scheme valuation prepared by the scheme actuary as at 31 December 2025 showed the scheme to be in a significant surplus position. No asset has been recognised in the balance sheet in relation to this surplus position at the year end date and therefore the aggregate net pension position in the Schemes, after deferred tax was £nil.
Assumed life expectations on retirement at age 65:
The amounts included in the statement of financial position arising from the company's obligations in respect of defined benefit plans are as follows:
Amounts recognised in the income statement
Amounts taken to other comprehensive income
Movements in the present value of defined benefit obligations
The defined benefit obligations arise from schemes which are wholly or partly funded.
Movements in the fair value of scheme assets
The actual deficit on scheme assets was £594,000 - (2024: £1,713,000 return).
Fair value of scheme assets at the reporting period end
The share premium account represents the amount above the nominal value received for issued share capital less transaction costs.
The capital redemption reserve relates to the repurchase by the company of its ordinary share capital.
Profit and loss account
The profit and loss account represents cumulative profits and losses less any dividends paid, adjusted for actuarial gains and losses on the defined benefit pension scheme.
The Company and Group are party to a Composite Accounting Agreement, providing a guarantee to Barclays Bank authorising them to set-off interest and credit balances within the Composite Accounting System.
The Company and Group have a debenture held with Barclays Bank PLC. The guarantee is secured by a charge on the Group and Company’s assets.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
The company has taken advantage of the exemption permitted by Section 33 'Related Party Disclosures' of FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" from the requirement to disclose transactions between wholly owned group companies of Alfred Bagnall and Sons Limited Group on the grounds that consolidated financial statements are prepared by the ultimate parent company.
During the year the group performed work to the value of £2,280 (2024: £10,865 ) for Directors of the Group and there is £Nil (2024: £Nil) amounts outstanding at the year end in respect of these transactions.