The directors present the strategic report for the year ended 30 November 2025.

Principal activity

The principal activity of the company continued to be that of the construction of commercial buildings and related works.

The Company delivered a strong performance during the year, achieving continued growth in turnover. This was supported by the retention of long-standing clients together with new contract wins secured through competitive tendering. Despite operating in an increasingly competitive UK construction market and ongoing economic uncertainty, the Company maintained a healthy level of trading throughout the year and has secured a number of projects for the forthcoming financial period.

During the year, the Company achieved a gross profit margin of 10.33%, compared with 10.99% in the previous year. The reduction in gross profit margin reflects continued cost pressures and the impact of the changes in revenue recognition following the adoption of the amended FRS 102 requirements during the year. As explained in Note 1, due to the adoption of the amended FRS 102 requirements, the comparative figures are not entirely comparable. The Directors continue to focus on effective project management, commercial discipline and cost control, while closely monitoring project performance, procurement costs and pricing strategies to support sustainable margins.

Administrative expenses increased by £761k, from £3.28 million in 2024 to £4.04 million in 2025. The increase primarily reflects higher operating costs, particularly staff costs, driven by the continued growth of the Company and the need to strengthen its workforce to support increased business activity and operational requirements. Costs have also increased as a result of continued investment in systems, digitalisation and process improvements aimed at enhancing operational efficiency and supporting the Company’s future growth. The Directors remain committed to maintaining effective cost controls while continuing to invest in people, technology and systems that support the long-term development and scalability of the business.

The Company's financial position continued to strengthen during the year. Net current assets increased from £22.7 million to £26.7 million, reflecting continued profitability and effective working capital management. Cash and cash equivalents also increased from £7.31 million to £8.65 million, supported by positive operating cash flows and ongoing focus on cash collection and liquidity management.

The UK construction sector continues to operate within a challenging economic environment. Inflationary pressures, labour shortages, increasing employment costs and fluctuations in material prices continue to present challenges across the industry. Notwithstanding these factors, the Directors remain confident in the Company's business model, strong client relationships and secured order book, which provide a solid platform for future growth.

The Company remains committed to maintaining the highest standards of health and safety. A dedicated Health and Safety Manager continues to oversee compliance with applicable legislation and promote a strong health and safety culture throughout the organisation.

Further details of the Company's financial performance and position are set out in the Statement of Comprehensive Income and Balance Sheet on pages 10 and 11, respectively.

The Company has identified continued cost pressures, ongoing geopolitical uncertainty, rising labour and material costs, energy price volatility and labour shortages as the primary drivers of increased expenses, posing a significant risk to operations. A strategic approach has been adopted, involving careful negotiations with clients to recover higher costs. The Company aims to safeguard its financial stability by proactively addressing these challenges.

Financial risk

The Directors have recognised that the Company faces financial risks arising from rising construction and labour costs and the resulting pressure on profit margins within the industry. The Company continues to minimise these challenges through effective cost management and, where appropriate, negotiating cost increases on individual contracts.

Reputational risk

Customer claims continue to pose a reputational risk. The Company responds to these claims promptly and settles them where necessary. The Company diligently records all claims, carries out reviews to identify lessons learned and implements procedures aimed at preventing similar issues from recurring.

Economic risk

The Directors acknowledge the importance of maintaining strong relationships with customers to identify potential financial difficulties at an early stage. Contracts are carefully reviewed throughout their duration and close relationships are maintained with key customers. The Company continues to mitigate supply chain risks by carefully screening suppliers and diversifying its supplier base. The Directors also continue to monitor wider economic conditions, including inflationary pressures, interest rates and uncertainty within the UK construction sector.

Development and performance

Safety

Safety is a priority for the Directors and all company employees due to the inherent hazards associated with the Company’s activities. The Company rigorously monitors its health, safety and environmental practices through regular meetings of key management. Compliance is regularly reviewed by third parties. The Company takes pride in its strong safety record and continues to foster a safety-first culture.

People

The Company relies on a skilled and motivated executive team and workforce and places great importance on providing excellent training and development opportunities to maintain high standards.

The Company's key financial performance indicators during the year were as follows:

The directors believe there are no non-financial KPIs that are of strategic importance to the Company.

Future developments

The Company's future growth will be driven by its continued commitment to innovation, digital transformation and operational excellence. The Company is investing in AI-driven internal systems, automation and digital technologies to improve project management, operational efficiency, reporting and decision-making. It also remains committed to researching and developing modern construction methods, sustainable building techniques and innovative solutions to enhance safety, quality and project delivery.

Sustainability: The Company continues to maintain its ISO 14001 certification and remains committed to meeting the requirements of the standard through effective environmental management and continuous improvement. The Company continues to focus on reducing its environmental impact by improving resource efficiency, lowering its carbon footprint and adopting sustainable construction practices.

Quality and Health & Safety: The Company continues to maintain its ISO 9001 and ISO 45001 certifications, demonstrating its ongoing commitment to quality, customer satisfaction and high standards of health and safety. The Company continues to review and develop its management systems and processes to ensure that the required standards are maintained.

The Company has also applied for NERS accreditation and is currently progressing through the accreditation process. Once obtained, the accreditation is expected to strengthen the Company's capabilities and support future growth within the utilities sector.

Supply Chain and Operational Resilience: The Company continues to strengthen its supply chain by diversifying its supplier base and investing in robust operational systems to improve resilience, reduce risk and ensure the reliable delivery of projects for its clients.

In line with Companies (Miscellaneous Reporting) Regulations 2018, the Directors of the Company are required to give an annual statement on how they have discharged their duty under section 172 of the Companies Act 2006 to promote the success of the Company for the benefit of its members as a whole and with regard to broader stakeholder interests. This section of the Strategic Report states how the Directors have had regard to the matters set out in section 172 1) (a) to (f) during the year as required by section 414CZA, of the Companies Act 2006.

The Company is a direct, wholly owned subsidiary of Faircloth Holdings Limited as explained in note 21 Ultimate Controlling Party. Individual subsidiary companies are used for the operation of the business. Notwithstanding this, the Board of the Company undertakes engagement activities with the employees and external stakeholders.

The Company has identified their stakeholders as being their customers, employees, suppliers, subcontractors, surveyors, and the communities in which they operate.

The Directors acknowledge that effective and meaningful engagement with stakeholders and employees is key to promoting the success of the Company. Details of the action taken to support these objectives are set out as follows:

• The Company continues to develop strengths, credit and relationships with suppliers and subcontractors. Customer relationships remain a priority to the Directors in negotiating ongoing and future contracts.

• The interest of all employees, their health and safety, safety in the workplace and wellbeing are the key responsibilities of the Directors. All employees are encouraged to contribute actively towards achieving a work environment that is free of accidents, incidents, and ill health.

• The Company has a wealth of in-house resources and prides itself on quality workmanship and shares its customers' goals and visions, ensuring a personal and first-class service.

• The Company has not been subject to any environmental fines to date. The Company is fully committed to minimising its impact on climate change and mitigating the business risk that climate change presents. Optimising environmental performance forms a key component of the Company’s new sustainability strategy and is essential for driving efficiencies and winning work.

• Whilst infrastructure already has a hugely positive impact on people’s lives, markets now require the Company to demonstrate the social value of its operations in economic terms. To benefit local areas, the Company uses local supply chain partners, employees, and materials wherever possible, and invests in future talent through rigorous staff training led by experienced Project Managers and Directors.

• Whilst short term performance is very important, the Directors run the business for the long term, to enhance and generate more value and mitigate risk. They are committed to delivering on their priorities in a responsible and sustainable way, which makes a positive contribution to all stakeholders. This approach is integrated into their business decision making, including a commitment to health and safety and investments in building good quality commercial properties and in developing their people.

• The Directors are aware that in some situations, stakeholder interests will be conflicted. The Directors work closely with the stakeholders, this enables them to fully understand the key issues relevant to each stakeholder and the stakeholders are encouraged to provide feedback and opinions into the decision makings of the Directors.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 November 2025.

The principal activity of the company continued to be that of construction of commercial buildings and related works.

The results for the year after taxation are shown on the Statement of Comprehensive Income of the financial statements. Further commentary is given in the Strategic Report.

Ordinary dividends were paid amounting to £1,840,900. The directors do not recommend payment of a final dividend.

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

The Company's principal financial instruments comprise debtors, creditors and bank balances. The primary purpose of these financial instruments is to finance the Company's operations.

The financial risk management objectives & policies and information on exposure to various risks are described in detail in Principal risks and uncertainties section in the Strategic Report.

The most significant risk identified by the company is an increase in costs as a result of inflation, the Ukrainian war, and rising energy costs. To reduce risk, a deliberate and controlled negotiation with Clients was carried out to recover increased costs in the short and long term.

In respect of bank balances, the liquidity risk is managed by managing working capital between payment to suppliers and receipts from debtors. Funds are maintained to maximise cash whilst not impacting on the immediate financial needs of the company.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Liquidity risk in respect of creditors is managed by ensuring sufficient funds are available to meet amounts due.

The company's strengths, credit, and relationships with suppliers and subcontractors are all growing. In negotiating ongoing and future contracts, the Directors continue to prioritise customer relationships. The Directors' primary responsibilities include the interests of all employees, their health and safety, workplace safety, and well-being.

This is described in detail in Section 172 statement section in the Strategic Report.

There are no post-reporting date events that occurred.

Future developments are described in detail in Future developments section in the Strategic Report.

The company has taken the exemption not to report on their greenhouse gas emissions, on the basis they are a subsidiary undertaking, and their results are incorporated within the group accounts of Faircloth Holdings Limited.

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.

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.

We have audited the financial statements of Faircloth Construction Limited (the 'company') for the year ended 30 November 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 FRS 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 30 November 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 and the directors' report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

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.

As part of our planning process:

• We enquired of management the systems and controls the company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.

• We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006, Management of Health and Safety at Work Regulations 1999, Provision and Use of Work Equipment Regulations 9198, Health and Safety Regulations 1992, Manual Handling Operations Regulations 1992, Personal Protective Equipment at Work Regulations 1992, Workplace (Health, Safety and Welfare) Regulations 1992 and Fire Safety Regulations.

• We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.

• Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

• Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.

• Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.

• Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates including revenue recognition of construction contracts, and provisions for litigation, onerous contracts, remedial work and warranty work.

• Assessing the extent of compliance, or lack of, with the relevant laws and regulations.

• Testing key revenue lines, in particular cut-off, for evidence of management bias.

• Obtaining third-party confirmation of material bank balances.

• Documenting and verifying all significant related party balances and transactions.

• Reviewing documentation such as the company board minutes for discussions of irregularities including fraud.

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. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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 member 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 member those matters we are required to state to the member 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 member, 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 Company has elected to early adopt the amendments to FRS 102 introduced by the Financial Reporting Council's 2024 Periodic Review. The amendments have been applied in the current financial year ending 30 November 2025 using the modified retrospective approach. Accordingly, the prior-year comparative figures have not been restated and, as a result, are not directly comparable with the amounts reported for the current financial year.

The revised standard introduces a revenue recognition model based on performance obligations and the transfer of control to customers. Management has reviewed the company's revenue recognition policies for construction contracts and concluded that revenue should continue to be recognised over time as performance obligations are satisfied and control of the works transfers to customers. The directors consider that application of the revised accounting policy provides more reliable and relevant information as it aligns revenue recognition with the transfer of control of construction services to customers and enhances consistency with the revised requirements of FRS 102.

The Company's revised accounting policies are set out in note 2.

In accordance with paragraph 1.63(b) of FRS 102, the Company has not quantified the effect of applying revised Section 23 on revenue and profit or loss for the current financial year as it is impracticable to determine these amounts. Under the previous revenue recognition methodology, the determination of revenue required project-by-project estimates and judgements regarding expected margins and costs to complete. These estimates were not prepared or maintained at 30 November 2025 following the Company's transition to the revised Section 23 requirements. The contemporaneous information necessary to reliably reconstruct those historical estimates is not available and, given the subsequent progress or completion of the relevant projects, recreating the estimates retrospectively would involve the use of hindsight and would not reliably represent the estimates and judgements that would have been made at the reporting date.

In the current year, the FRS 102 Periodic Review 2024 was applied by the company for the first time and affects the financial statements as follows.

The company has applied the FRS 102 Periodic Review 2024 amendments to Section 23 Revenue as an adjustment to the opening balance of retained earnings at the date of initial application. Comparative information is not restated.

The company’s revised accounting policies for revenue are set out in note 2.4 and the adjustment for each financial statement line item affected by the application of the Periodic Review 2024 is set out below.

Faircloth Construction Limited is a private company limited by shares incorporated in England and Wales.

The registered office is:

The Old Library

Dudley Road

Tunbridge Wells

Kent

TN1 1LE

The nature of the Company's operations and its principal activities are set out in the Strategic Report.

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.

These financial statements have been prepared using the historical cost convention. 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 £1.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

In these financial statements, the Company has applied the exemptions available under FRS102 in respect of the following disclosures:

1. A cash flow statement and related notes (Section 7) – The Company has taken advantage of the exemption from preparing a cash flow statements, on the basis that it is a qualifying entity and it’s ultimate parent Company, Faircloth Holdings Limited, includes the Company’s cash flows in its consolidated financial statements.

    

2. Related party transaction notes (Section 33) – The Company only discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with its parent or with members of the same group that are wholly owned.

    

3. Disclosures in respect of the compensation of key management personnel (Section 33) – The Company has taken the advantage of the exemption from the requirements to disclose key management personnel when the key management personnel and directors are the same.

The financial statements of the company are consolidated in the financial statements of Faircloth Holdings Limited. These consolidated financial statements are available from Companies House.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

The financial statements have been prepared on a going concern basis. In accordance with the amendments to FRS 102, the Directors' going concern assessment includes consideration of relevant information about the future, including the Company's forecasts, projections and the principal risks that may affect its ability to continue as a going concern.true

When making their assessment, the Directors considered the current economic conditions, including supply chain constraints, price inflation, increasing labour and material costs and wider economic and geopolitical uncertainties. These risks are managed through regular monitoring of project costs and cash flows, maintaining close relationships with customers and suppliers, and negotiating cost increases with customers where appropriate.

The Directors have also considered the Company's secured order book, underlying market demand and available cash resources. The Directors will continue to monitor these matters and take appropriate action to mitigate their effects.

The Directors have a reasonable expectation that the Company will have adequate resources to continue for the foreseeable future at the time of approving the financial statements for the following reasons:

1. a.    The Company has a strong and growing order book which will provide a pipeline of secured work over the going concern assessment period.

2. b.    There continues to be strong underlying demand in commercial constructions in the UK.

3. c.    The Company has sufficient internally generated cash resources to meet its liabilities as they fall due for the next 12 months from the date of approval of these financial statements.

Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue represents the value of work performed during the year, net of value added tax. Revenue from construction contracts is recognised over time as performance obligations are satisfied and control of the works transfers to the customer. Progress towards satisfaction of performance obligations is measured primarily by reference to certified valuations, together with estimates of work completed but not yet certified at the reporting date. Further details are provided in note 2.7.

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

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

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.

Revenue from construction contracts is recognised over time as performance obligations are satisfied and control of the works transfers to the customer.

Progress towards complete satisfaction of performance obligations is measured using an output method, primarily by reference to certified quantity surveyors' reports of work completed. The output method measures progress by reference to the value of construction work completed to date relative to the total work required under the contract. Where reporting dates do not coincide with valuation dates, management estimates the value of work performed between the latest valuation date and the reporting date using project-specific information and recent valuation trends.

Contract revenue comprises the amount of consideration to which the company expects to be entitled in exchange for transferring goods and services to the customer, including approved variations and claims where recovery is considered probable and the amount can be estimated reliably. Expected deductions, including liquidated damages and other contractual adjustments, are reflected in the measurement of revenue where appropriate.

Materials purchased for specific contracts but not incorporated into the works at the reporting date are recognised as inventory and are excluded from the measure of progress until the related goods or services have been transferred to the customer.

When it is expected that the costs required to satisfy a contract will exceed the consideration expected to be received, the expected loss is recognised immediately in the profit and loss account.

At the balance sheet date, where the Company has transferred goods or services to a customer before the customer pays consideration or before payment is due, the amount is presented as a contract asset, excluding any amounts presented as a receivable. Contract assets represent the Company's right to consideration in exchange for goods or services transferred to the customer where that right is conditional on something other than the passage of time, in accordance with paragraph 23.15(b) of FRS 102. Amounts invoiced in excess of revenue recognised are presented as contract liabilities within creditors.

The Company's construction contracts are generally satisfied over time as the construction services are provided. Customers are typically billed through interim applications for payment based on the value of work performed. The Company engages independent valuers to assess the value of work completed for the purposes of determining amounts to be billed to customers. Payment is due in accordance with the payment terms specified within the relevant contract.

Progress billings not yet paid by customers and retentions by customers are included within debtors.

Advances received from customers are included within creditors.

Accrued income is estimated by project managers by reference to work performed, project programmes, customer instructions and other available evidence at the reporting date.

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

All financial assets and liabilities are initially measured at transaction price.

Non-current debt instruments, which meet the conditions set out in paragraph 11.9 of FRS 102, are subsequently measured at amortised cost using the effective interest method.

Debt instruments that have no stated interest rate and are classified as payable or receivable within one year and which meet the above conditions are initially measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

Financial assets

Financial assets 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 the profit and loss account. 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 value does not exceed what the carrying value would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.

Financial liabilities

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

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.

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 for the period comprises current tax 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.

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Provisions include the cost of anticipated remedial & warranty work based on the status of the site at year end and other claims against the company. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

At the commencement date of a lease, the Company recognises a right-of-use asset and a corresponding lease liability, except for:

- short-term leases with a lease term of 12 months or less; and

- leases of low-value assets.

Payments associated with short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.

Retention

Retention income is recognised once there is sufficient certainty over the probability it will be received and the amount to be received can be measured reliably.

Retention expense is recognised when it is paid.

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the income and expenses and the carrying amounts of assets and liabilities within the next financial year are addressed below.

The Company's revenue recognition policies, which are set out in note 2, are central to how the Company measures revenue and contract assets arising from construction contracts in each financial year. Revenue is recognised over time as performance obligations are satisfied and, accordingly, estimates and judgements are required in determining the value of work completed at the reporting date. Many construction contracts span more than one financial period.

These policies require estimates and judgements to be made in determining the extent of work completed at the reporting date and the amount of revenue to be recognised. Revenue is measured primarily by reference to certified valuations and estimates of work completed but not yet certified at the reporting date. Where reporting dates do not coincide with valuation dates, management estimates the value of work completed between the latest valuation date and the reporting date using project-specific information and subsequent valuation data where available.

Estimates and judgements are also made in relation to variations, claims, liquidated damages and other contractual adjustments which may affect the amount of consideration ultimately receivable under the contract.

These estimates and judgements may be affected by uncertainties that depend on the outcome of future events and may require revision as contracts progress and uncertainties are resolved.

The recoverability of debtors especially trade debtors, accrued income, retentions and gross amount due from customers for contract work, are regularly reviewed in the light of the available economic information specific to each receivable and specific provisions are recognised for balances considered to be irrecoverable.

In prior years, the provision for remedial works was estimated as 10% of outstanding retentions at the reporting date. For the year ended 30 November 2025, management revised the estimation methodology to focus on retentions that are overdue at the reporting date.

Overdue retentions are considered to provide a more relevant indicator of potential remedial obligations than applying a fixed percentage to all outstanding retentions. Where overdue retentions were released shortly after the reporting date, this information has been considered in estimating the provision.

More specifically, in relation to onerous contracts, where the unavoidable costs of meeting the obligations under a contract exceed the economic benefits expected to be received under it, the present obligation under the contract is recognised and measured as a provision.

The Company recognises provisions for remedial and warranty work relating to defects arising during the contractual latent defects and warranty periods. The provision for remedial works reflects the Company's present obligation to rectify defects on completed contracts in order to recover retentions withheld by customers.

The provisions remain subject to estimation uncertainty as the ultimate cost of remedial and warranty works, losses arising from onerous contracts and the timing of retention releases depend on future events.

The Company has recognised provisions of £929,671 (2024: £1,254,559). Please refer to note 15

The Company also considers Going Concern as a significant area of judgement and has included specific disclosure in relation to this within note 2.3.

All turnover arose from trading activities within 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 pension schemes amounted to 7 (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:

Included in other debtors is amount owed from customers for contract work of £Nil (2024: £2,103,989). Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

Included in other creditors is amount due to customers for contract work of £Nil (2024: £3,346,966).

Provision for litigation

There was no litigation provision during the current year. The litigation provision recognised in earlier periods was fully utilised in the prior year, and no further provision was required during the current year.

Provision for onerous contract

When it is probable that the total contract costs will exceed the total contract revenue on construction contracts, the Company recognises the expected losses as an expense immediately with a corresponding provision for losses. These provisions are expected to be utilised within one year after the balance sheet date.

Provision for remedial work

The Company has a present obligation to rectify the work defects on completed contracts in order to recover retentions withheld by customers. These provisions are expected to be utilised within two years after the balance sheet date.

Provision for warranty

There was no warranty provision during the current year. The warranty provision recognised in earlier periods was fully utilised in the prior year, and no further provision was required during the current year.

The above provisions are made when a reliable estimate can be made based on the management's best estimate of known loss making contracts, remedial work, defects and warranties on contracts and legal actions.

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 year end £54,075 (2024: £66,558) was payable to the scheme and is included in creditors.

Financial commitments and guarantees

Performance guarantees were provided by the bank to customers covered by indemnities given to the bank. The amount of the financial guarantee contract is £8,731,581 (2024: £3,475,932).

Contingent liabilities

Provisions have been made for the Directors’ best estimate of known legal claims, remedial work and warranty work for any defects work and contract losses. No provision is made where the Directors consider, based on legal advice and past practice that the claims or action are unlikely to succeed or that the Company can not make a sufficiently reliable estimate of the potential obligations.

The Company in the normal course of business has given guarantees in respect of bonds relating to the Company’s own contracts. Guarantees are treated as contingent liabilities until such time as it becomes probable payment will be required under the terms of the guarantee.

Charges

The company's bankers hold a fixed and floating charge over the undertaking and all property and assets present and future, including goodwill, uncalled capital, buildings, fixtures, fixed plant and machinery.

The Company’s parent company is Faircloth Holdings Limited, which is registered in England and Wales, with its registered office at The Old Library, Dudley Road, Tunbridge Wells, Kent, TN1 1LE.

The ultimate parent company and controlling party is Faircloth Holdings Limited, which is 100% owned by the director, Darren Stephen Faircloth.

The group consolidated financial statements of Faircloth Holdings Limited, are available publicly from Companies House.

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

a) During the year the Company received services amounting to £167,080 (2024: £135,463) from a company owned by a family member of the Directors. At the year-end, the outstanding amount owed by the Company was £31,260 (2024: £17,633).

b) At the end of the year an outstanding amount was due to the Company of £461,560 (2024: £449,753) from a company of which a Director is also a director and the ultimate controlling party of that company. There was an increase in the amount due to new advances in the year. The loan is interest free and repayable on demand.

c) During the year the Company invoiced construction work of £13,773 (2024: £7,673), paid rent of £Nil (2024: £11,031) and advanced an amount of £1,431,726 to a company of which some of the Directors and their family are also the directors and the ultimate controlling party of that company. At the end of the year the outstanding amount due to the Company was £6,115,230 (2024: £4,683,504). The loan is interest free and repayable earliest 1 December 2026.

Pension Scheme

The Directors who are members of the Faircloth family are the Trustees and the Members of an independently administered Pension Scheme. During the year the Company invoiced interest on a loan of £1,045 (2024: £2,533) to the Pension Scheme. The Pension Scheme charged office rent of £38,000 (2024: £38,000) to the Company. At the end of the year the amount due to the Company was £66,207 (2024: £23,745). The loan is repayable on demand.

The key management personnel are the also the directors of the Company. Please see note 7 Directors' Remuneration.