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

The Group delivered a strong and resilient trading performance in 2025, with turnover increasing to £100.71 million, compared with £84.50 million in 2024, representing an increase of £16.21 million (19.2%). This growth reflects continued client retention, the securing of new contracts and tenders and the Group's ability to maintain a strong level of activity despite a highly competitive UK construction market and wider economic and geopolitical uncertainty.

This performance reflects the Group's ability to continue delivering high-quality projects and maintaining strong and trusted relationships with its customers across the construction sector.

Gross profit increased to £10.73 million, compared with £9.59 million in 2024. However, the gross profit margin reduced from 11.34% in 2024 to 10.65% in 2025. The 2025 results also reflect the impact of the early adoption of the revised FRS 102 revenue recognition requirements, which has affected the timing of revenue and profit recognition and is relevant when comparing the results with the prior year. Further details of the accounting policy and the impact of early adoption are set out in Note 1 to the financial statements. The reduction in margin also reflects continued pressure and uncertainty surrounding subcontractor and material costs within the construction industry. The Group continues to closely monitor project costing, pricing strategies, contract performance and supplier costs to manage these pressures and maintain sustainable margins.

Administrative expenses increased by £1.56 million, from £4.20 million in 2024 to £5.76 million in 2025. The increase reflects higher operating costs, including continued increases in staff costs, fuel and insurance costs, together with investment in people, systems and operational infrastructure required to support the increased level of activity and future growth of the Group. Management remains focused on maintaining effective cost controls and improving operational efficiency.

Profit for the year amounted to £5.17 million, compared with £5.63 million in 2024, a decrease of approximately £0.46 million. Despite the significant increase in turnover, profitability was impacted by pressure on gross profit margins and increased administrative expenses. The Directors continue to focus on project selection, contract pricing, cost management and operational efficiencies to manage these pressures.

The Group continues to operate in a challenging construction environment, with uncertainty surrounding material and subcontractor costs, together with increasing staff, fuel and insurance costs and wider economic and geopolitical uncertainty. The Group continues to manage these challenges through careful project and contract evaluation, regular monitoring of costs, maintaining strong relationships with customers and suppliers and negotiating contract terms where appropriate.

The Group remains committed to improving operational efficiency and continues to invest in its people, processes, systems and digital infrastructure. These investments are intended to strengthen project management and reporting, support effective decision-making and provide the operational capacity required to undertake larger and more complex projects.

The Group also remains fully committed to the health and safety of its employees and those working across its sites. Health and safety practices are regularly monitored and reviewed, with the Group continuing to promote a strong safety-first culture throughout its operations.

The Group's performance in 2025 demonstrates its ability to achieve significant turnover growth in a challenging market. Although increased costs and pressure on margins have affected profitability during the year, the Directors remain focused on disciplined cost management, careful project selection, operational efficiency and continued investment in the Group's long-term development.

The Group has identified continued cost pressures, rising labour and material costs, energy price volatility, supply chain pressures and ongoing geopolitical conflicts and uncertainty as factors which may increase operating costs and present risks to its operations. To mitigate these risks, the Group continues to closely monitor project costs and, where appropriate, engage with customers to recover increased costs through contract negotiations. Through these measures, the Group remains focused on protecting margins, maintaining financial resilience and supporting the long-term sustainability of its operations.

Financial Risk

The Directors have identified increased construction costs, including labour and material costs, inflationary pressures, energy price volatility and wider economic and geopolitical uncertainty as key financial risks to the Group. These factors may place pressure on project margins and profitability. The Group manages these risks through regular monitoring of project costs, effective cost control and negotiations with customers where appropriate.

Reputational Risk

The Directors are aware of the ongoing reputational risk to the Group arising from customer claims. The Group responds promptly to such claims and settles them where appropriate. To reduce the risk of future claims, the Group records and reviews claims to identify lessons learned and implements appropriate procedures and controls aimed at preventing recurrence.

Economic Risk

The Group places strong emphasis on maintaining close relationships with its key customers to identify potential financial or commercial difficulties at an early stage. The Directors continue to monitor wider economic conditions and their potential impact on the construction sector and the Group's customers.

Safety and People

Safety remains a core priority for the Group, and all employees, including the Directors, are deeply committed to ensuring a safe working environment. Given the inherent hazards associated with the Group's activities, regular meetings of key management are held to monitor health, safety, and environmental aspects. Compliance reviews conducted by a trusted third party, combined with rigorous ongoing training for all staff, further reinforce the Group's commitment to maintaining high safety standards.

The Group recognises that its success hinges on a skilled and motivated executive team and workforce. To foster excellence, the Group places strong emphasis on providing comprehensive training and development opportunities. Investing in its team's growth and professional development is essential to sustaining the Group's continued success.

The Group'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 group.

Future developments

The Group's future growth will be supported by its continued commitment to innovation, digital transformation and operational excellence. The Group continues to invest in AI-driven internal systems, automation and digital technologies to enhance project management, operational efficiency, reporting and decision-making. It also remains focused on developing and adopting modern construction methods, sustainable building practices and innovative solutions to improve safety, quality and project delivery.

The Group 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 Group continues to focus on reducing its environmental impact through improved resource efficiency, reducing its carbon footprint and adopting sustainable construction practices across its operations.

The Group continues to maintain its ISO 9001 and ISO 45001 certifications, reflecting its ongoing commitment to quality, customer satisfaction and high standards of health and safety. The Group regularly reviews and develops its management systems, procedures and controls to ensure that the required standards continue to be maintained.

The Group has also applied for NERS accreditation and is currently progressing through the accreditation process. Once obtained, the accreditation is expected to enhance the Group's capabilities and provide further opportunities for growth within the utilities sector.

The Group continues to strengthen its supply chain by maintaining relationships with key suppliers and diversifying its supplier base where appropriate. It also continues to invest in operational systems and processes to improve resilience, manage supply chain risks and support the reliable and efficient delivery of projects to its customers.

The Directors of Faircloth Holdings Limited are fully aware of their statutory duties under Section 172 of the Companies Act 2006, which requires them to act in a way that they consider, in good faith, would most likely promote the success of the Group for the benefit of its members as a whole. In fulfilling this duty, the Directors take into account, where applicable, the likely long-term consequences of their decisions, the interests of the Group’s employees, the need to foster strong business relationships with suppliers, customers and others, and the impact of the Group’s operations on the community and the environment.

General confirmation of Directors’ duties:

In making decisions, the Directors of the Group ensure that they act in a manner they believe, in good faith, will best promote the success of the Group and its subsidiary. The following considerations are made in that context:

• The Parent is primarily an investment holding entity with an operational subsidiary in the UK. The Directors have consistently made decisions they believe best support the long-term strategic and financial success of the Parent and its subsidiary. While the Parent itself does not engage in trading activities, its subsidiary is active in the UK market and continues to build on strengths in operational delivery, customer service, and stakeholder engagement.

• The subsidiary maintains strong relationships with suppliers, subcontractors, and customers. Customer satisfaction remains a core priority, and the Directors encourage the operating company to uphold high standards of quality workmanship and deliver a first-class, personalised service aligned with clients’ goals.

• Although the Parent does not employ staff directly, the subsidiary does. The Directors are committed to supporting employee wellbeing, health, and safety across the wider Group. Employees are encouraged to foster a safe, incident-free work environment and are supported through ongoing training and development initiatives led by experienced managers and directors.

• Environmental and social responsibility are important components of the Parent’s overall sustainability strategy. While the Parent’s own activities have minimal environmental impact, the operating subsidiary is fully committed to minimising its environmental footprint, optimising environmental performance, and addressing the risks and opportunities presented by climate change. The Parent has not been subject to any environmental fines to date.

• The subsidiary also contributes to local communities by engaging local supply chain partners, employing local labour, and investing in future talent. This includes robust staff development programmes that support long-term career growth and help ensure continuity of quality and values across projects.

• The Directors adopt a long-term strategic view in their decision-making, balancing short-term performance with sustainable value creation. In managing stakeholder relationships, the Directors acknowledge that competing interests may arise. Open dialogue and stakeholder feedback are encouraged to ensure that decisions are well-informed, responsible, and aligned with the Parent’s commitment to professionalism, integrity, and high standards of business conduct.

Conclusion

The directors of Faircloth Holdings Limited believe that they have fulfilled their duties under Section 172 of the Companies Act 2006 during the financial year. Collectively, they remain committed to promoting the long-term success of the Group and its subsidiary while continuing to consider the interests of all relevant stakeholders in their decision-making processes.

On behalf of the board

The Directors present their annual report and financial statements of the Company and the Group for the year ended 30 November 2025.

The principal activity of the Company is of a holding company. The principal activities of its subsidiaries are as follows:

Faircloth Construction Limited – Construction of commercial buildings and related works.

Fox Holdings Sussex Limited – Hiring of equipment and a holding company. (Dissolved on 13 May 2025)

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 £840,900. 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 Group's principal financial instruments comprise of debtors, creditors and bank balances. The main purpose of its financial instrument is to finance the Group'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 risks identified by the Group include continued cost pressures arising from inflation, rising labour and material costs, energy price volatility, supply chain pressures and ongoing geopolitical conflicts and uncertainty. To mitigate these risks, the Group continues to closely monitor costs and, where appropriate, undertake careful negotiations with clients to recover increased costs in both the short and long term.

In respect of bank balances, liquidity risk is managed through effective working capital management, including the timing of payments to suppliers and receipts from debtors. Funds are managed to maximise available cash whilst ensuring that the immediate financial requirements of the Group are met.

Trade debtors are managed in respect of credit and cash flow risk through policies concerning the credit offered to customers and regular monitoring of outstanding balances, including both payment terms and credit limits.

Liquidity risk in respect of creditors is managed by ensuring that sufficient funds are available to meet liabilities as they fall due.

The Group'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.

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

Streamlined Energy and Carbon Reporting

During the year, the Group engaged a RICS regulated energy and sustainability consultancy firm to prepare a report for the Group's SECR reporting requirements. Base data was provided to the consultancy firm and DEFRA 2025 Conversion Factors (2024: DEFRA 2024 Conversion Factors) were used in line with the Government Environmental Reporting Guidelines (2019) to calculate the Group's energy usage and associated carbon emissions.Gas usage data was collated from invoices totalling 86,111.30 kWh (2024: 41,248.10 kWh) and the 2025 DEFRA conversion factor of 0.18494 kgCO2e/kWh (2024: 0.18449 kgCO2e/kWh) was applied. Electricity usage totalled 20,593.70 kWh (2024: 23,543.10 kWh) and the 2025 DEFRA conversion factor of 0.17700 kgCO2e/kWh (2024: 0.20705 kgCO2e/kWh) was applied.Transport fuel used by Company vehicles totalled 119,004.93 litres of diesel, with the 2025 DEFRA conversion factor of 2.57082 kgCO2e/litre (2024: 2.51279 kgCO2e/litre) applied. On-site diesel fuel consumption totalled 277,695 litres, with the relevant 2025 DEFRA conversion factor of 2.57082 kgCO2e/litre (2024: 2.51279 kgCO2e/litre) applied. Well-to-Tank emissions associated with fuel consumption were also included using the relevant DEFRA 2025 conversion factors.

During the year, the Group continued to take measures to reduce its energy consumption and carbon emissions. A new internal environmental inspection sheet was implemented across all sites, site managers received additional environmental training and environmental toolbox talks were delivered throughout the business. Tailored Construction Environmental Management Plans (CEMPs) were also produced for every site.

A substantial proportion of the Group's emissions arise from site operations and road travel. Van sharing continues to be promoted and, where suitable, accommodation is provided to minimise unnecessary travel. Driver awareness training is provided to encourage safer and more fuel-efficient driving. During the year, the Group continued to invest in cleaner transport through new EURO 6 vehicles with stop-start technology and replaced seven older vehicles. Environmental awareness continues to be promoted across all sites through signage and communication. Welfare units were reviewed and upgraded with PIR-controlled systems, heating timers and improved insulation to reduce energy consumption. Machinery is regularly maintained, with older equipment replaced by more efficient models where appropriate

Emissions are analysed as follows:

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £100,000 turnover, the recommended ratio for the sector.

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 prepared 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.

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 auditor of the company is unaware. Additionally, the directors have individually 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 auditor of the company is aware of that information.

We have audited the financial statements of Faircloth Holdings Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 November 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, 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 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 group’s and the parent company’s affairs as at 30 November 2025 and of the group’s 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 group and parent 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 group’s 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

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 group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company’s 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 group’s and the parent 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 parent 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 group and parent 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. Neither the group nor the parent company informed us of any known, suspected or alleged fraud.

• We obtained an understanding of the legal and regulatory frameworks applicable to the group and parent 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 group and parent 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 group and parent company, together with the discussions held with management 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 on 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 and consolidated balances and transactions.

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

• Testing all material consolidation adjustments.

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 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.

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

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 £1,353,355 (2024 - £1,685,780 profit).

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

In accordance with paragraph 1.63(b) of FRS 102, the group 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 group'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.

The group 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 group’s revised accounting policies for revenue are set out in note 1 and the adjustment for each financial statement line item affected by the application of the Periodic Review 2024 is set out below.

Faircloth Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Old Library, Dudley Road, Tunbridge Wells, Kent, United Kingdom, TN1 1LE.

The group consists of Faircloth Holdings Limited and all of its subsidiaries. The nature of the group’s principal activities and its operations are set out in the Directors' Report and 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 group. 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 group’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 Group has applied the exemptions available under FRS102 in respect of the following disclosures:

1. The Parent Company has taken advantage of the exemption in section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures.

    

2. Related party transaction notes - The Company and the Group 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 – The Company and the Group have 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 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.

These group and company financial statements for the year ended 30 November 2025 are the first financial statements of Faircloth Holdings Limited and the group prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The financial statements for the preceding period were prepared in accordance with previous UK GAAP. The date of transition to FRS 102 was 1 December 2024. An explanation of how transition to FRS 102 has affected the reported financial position and financial performance is given in note 1.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The consolidated group financial statements consist of the financial statements of the parent company Faircloth Holdings Limited together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 30 November 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 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 Group's forecasts, projections and the principal risks that may affect its ability to continue as a going concern.

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 Group'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 Group will have adequate resources to continue for the foreseeable future at the time of approving the financial statements for the following reasons:

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

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

3. The Group 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 continues to adopt the going concern basis of accounting in preparing the financial statements.

Turnover represents the value of work done during the year net of value added tax. The value of work done is calculated as the certified work, plus the amount anticipated to be certified, adjusted for over and under measure. As described in more detail in the Construction contract note 1.9, revenue and costs are recognised by reference to the stage of completion of construction contracts where it can be reliably measured.

Goodwill represents the excess of the cost of a business combination over the fair value of the group’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition.

It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life of 10 years.

Estimates of the useful economic life of goodwill are based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Where the cost of the business combination exceeds the fair value of the group’s interest in the assets, liabilities and contingent liabilities acquired, negative goodwill arises. The group, after consideration of the assets, liabilities and contingent liabilities acquired and the cost of the combination, recognises negative goodwill on the balance sheet and releases this to profit and loss, up to the fair value of non-monetary assets acquired, over the periods in which the non-monetary assets are recovered and any excess over the fair value of non-monetary assets in the income statement over the period expected to benefit.

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

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

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

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 and intangible 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 group 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.

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, work performed, and recent valuation trends.

Contract revenue comprises the amount of consideration to which the Group 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.

Where the costs required to satisfy a contract are expected to exceed the consideration expected to be received, the expected loss is recognised immediately in the profit and loss account.

Where the Group has transferred goods or services to a customer before the customer pays consideration or before payment becomes due, the amount is recognised as a contract asset, excluding amounts presented as receivables. Contract assets represent the Group's right to consideration for goods or services transferred to the customer where that right is conditional on something other than the passage of time. Amounts invoiced in excess of revenue recognised are presented as contract liabilities within creditors.

Customers are generally billed through interim applications for payment based on the value of work performed. Independent valuers are engaged to assess the value of work completed for the purpose of determining amounts to be billed. Payment is due in accordance with the terms of the relevant contract.

Progress billings due from customers and retentions are included within debtors. Advances received from customers are included within creditors.

Where work has been performed but has not yet been included within a certified valuation, the amount recognised 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 Group 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.

Impairment of financial assets

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 Group'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 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 for the period comprises of current and deferred tax and is recognised in the profit & loss account.

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 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 represents the future tax consequences of transactions and events recognised in the financial statements of current and tax on acquisition. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences. Deferred tax on revalued non-depreciable tangible fixed assets and investment properties is measured using the rates and allowances that apply to the sale of the asset.

Provisions are recognised when the Group has an obligation at the reporting date as a result of a past event, it is probable that the Group 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 and warranty work based on the status of the site at year end and other claims against the group. 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 Group 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 Group 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.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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 Group 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 Group’s accounting for contract and margin recognition policies, which are set out in note 1, are central to how the Group values the work it has carried out in each financial year. Contract accounting requires estimates to be made and in many cases these contractual obligations span more than one financial period.

These policies require forecast to be made of the outcome of the construction obligations which require both estimates and judgements to be made of both cost and income recognition on each contract. No margin is recognised until the outcome of the contract can be estimated with reasonable certainty. On the cost side, estimates of budgeted and irrecoverable costs are made on each contract in addition to potential costs to be incurred for any maintenance and defects liabilities. On the income side, estimates and judgements are made on variations to consideration which typically include variations due to changes in scope of work, recoveries of claim income from customers, and potential liquidated damages that may be levied by the customers.

These income and costs may be affected by a number of uncertainties that depend on the outcome of future events and may need to be revised as events unfold 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.

Provisions are liabilities of uncertain timing or amount and are recognised where the Group has a present obligation arising from past events and a reliable estimate can be made. In determining the amount and timing of provisions, management applies judgement based on the best information available at the reporting date. Estimates are reviewed at each reporting date and revised where necessary. Due to the inherent uncertainty surrounding future events, actual outcomes may differ from the estimates and could have a material impact on the Group's results and cash flows.

More specifically, in relation to the Group's provision for onerous contracts, a provision is recognised for all known or expected losses on individual contracts once such losses become foreseeable.

The Group also 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 Group's present obligation to rectify defects on completed contracts in order to recover retentions withheld by customers.

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 also been considered in estimating the provision.

The provision for warranty work reflects the present obligation to rectify defects on completed contracts during the warranty period, which may extend for up to 12 years after completion. A provision for warranty work is recognised only where a reliable estimate of the obligation can be made.

The Group recognised provisions of £929,671 (2024: £1,254,559). Further details are provided in Note 19 – Provisions for Liabilities.

The Group also considers Going Concern as a significant area of judgement and has included specific disclosure in relation this within note 1.3.

The Directors have applied judgement in determining the useful economic life of goodwill arising on consolidation. Goodwill is amortised over a period of 10 years, which represents the Directors' best estimate of the period over which the Group expects to derive economic benefits from the acquired businesses.

In determining this useful life, the Directors have considered the expected use and performance of the acquired businesses, the nature and expected life of the underlying operations, relevant legal, regulatory and contractual factors, and the useful lives that market participants would consider appropriate for similar businesses. The estimated useful life is reviewed where there are indicators that the underlying circumstances have changed.

An analysis of the group's turnover is as follows:

All turnover arose from trading activities within the United Kingdom.

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 1 (2024 - 1).

There is no directors' remuneration paid by the Company.

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:

Goodwill arising on consolidation is being amortised over the Directors' estimate of its useful life of 10 years.

This estimate is based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.

Details of the company's subsidiaries at 30 November 2025 are as follows:

Included in other debtors is amount due 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). Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

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 Group 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. The provision for onerous contracts was £387,678 (2024: £917,752) as at the balance sheet date.

Provision for remedial work

The Group has a present obligation to rectify the work defects on completed contracts in order to recover retention 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 following are the major deferred tax liabilities and assets recognised by the Group and movements thereon:

The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. At the year end £54,075 (2024: £66,558) was payable to the scheme and is included in creditors.

The type A ordinary shares have full voting rights with dividend participation and rights to participate in capital distribution, including on winding up.

The type B ordinary shares are non-voting shares with dividend participation and rights to participate in capital distribution once a hurdle is reached. The type B ordinary shares are not redeemable.

The merger relief reserves have arisen on a past business combination that was accounted under section 612 of the Companies Act 2006 when shares were issued in consideration for the shares of the acquired subsidiary.

Called up share capital reserve represents the nominal value of the shares issued.

Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.

Group:

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

The Group's provisions have been made for the Directors' best estimate of known legal claims, remedial & warranty 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 Group can not make a sufficiently reliable estimate of the potential obligations.

Charges

The Group's bankers also 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.

Company:

Related Party's Limited Liability Partnership & company

At the end of the year, there was an amount of £Nil (2024: £1,156,710) owed by a limited liability partnership (LLP) of which a Director is also a Member. During the year, the LLP was transferred to a company under common control as part of an internal reorganisation. At the end of the year, an amount of £1,165,030 (2024: £8,322) was owed by the company under common control. The loan is interest free and repayable on demand.

During the year, the Company disposed of a fixed asset with proceeds of £833 (2024: £nil) to a company owned by a Director.

Family Members of the Director

At the end of the year there was a total amount of £Nil (2024: £111,916) owed from a Director and family member of a Director. During the year, the outstanding balance was settled and taken over by the Director personally.

Director

During the year the Company declared a dividend payment of £840,900 (2024: £372,000) to a Director who is also the ultimate controlling party of the Company and the Group as explained in Controlling party note 26. The amount due to the Director at the year end is £Nil (2024: £Nil). The loan is interest free and repayable on demand.

Group:

Related Party's Group

1. During the year, the Group received services amounting to £167,080 (2024: £135,463) from a company owned by a family member of a Director. At the end of the year, the outstanding amount owed by the Group was £31,260 (2024: £17,633). During the year, the Group disposed of a fixed asset with proceeds of £833 (2024: £Nil) to a company owned by a Director.

2. At the end of the year an outstanding amount due to the Group of £914,285 (2024: £449,753) was 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.

3. During the year the Group 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 Group was £6,115,230 (2024: £4,683,504). The loan is interest free and repayable earliest 1 December 2026.

4. At the end of the year, there was an amount of £Nil (2024: £1,156,710) owed by a limited liability partnership (LLP) of which a Director is also a Member. During the year, the LLP was transferred to a company under common control as part of an internal reorganisation. At the end of the year, an amount of £1,165,030 (2024: £Nil) was owed by the Group under common control. The loan is interest free and repayable on demand.

5. At the end of the year there was a total amount of £ Nil (2024: £111,916) owed from a Director and family member of a Director. The loan is interest free and repayable on demand.

6. During the year the parent company declared a dividend payment of £840,900 (2024: £372,000) to a Director who is also the ultimate controlling party of the Group as explained in Controlling party note 27. The amount due to the Director at the year end is £41,319 (2024: £Nil). The loan is interest free and repayable on demand.

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 Group 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 Group. At the end of the year the amount due to the Group 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 8 Directors' Remuneration.

The ultimate controlling party is one of the directors, Darren Stephen Faircloth, who owns the majority of the shares of the Company.

There are no restrictions over the use of the cash and cash equivalents balances which comprises cash at bank and in hand.