The financial statements have been prepared on the going concern basis. In reaching this conclusion, the directors have given careful consideration to the financial position of the company and the principal risks and uncertainties facing the business over a period of at least 12 months from the date of approval of these financial statements.
Financial position at the balance sheet date
For the 16-month period ended 31 December 2025, the company reported a loss before taxation of £712,397. As at 31 December 2025, the company had net liabilities of £783,257 and net current liabilities of £628,906.
Nature of the losses - non-recurring exceptional items
The directors draw attention to the fact that the loss for the period includes two significant non-recurring charges totalling £571,729 which are not expected to recur in future periods:
-
Write-off of loan receivable - A loan receivable from Carbon Neutral Communities Limited (“Carbon”), a related company which entered liquidation during the period, was written off in full, resulting in a charge of £371,288. This amount had previously been disclosed as an intercompany balance. Following a detailed review, the directors reclassified a significant proportion of the original balance as trading transactions (purchases of goods and services provided by Carbon on behalf of the company), with the remaining irrecoverable balance being written off.
-
Irrecoverable VAT - As a consequence of the same reclassification exercise, the company submitted a VAT reclaim of £200,441 in respect of VAT on purchases previously routed through Carbon. HMRC has disputed this claim and, on the basis of professional advice received, the disputed amount of £200,441 has been recognised as an expense in the period. The directors have engaged a specialist VAT adviser, and the matter remains under active appeal with HMRC. Should the appeal be successful in whole or in part, any recovery would represent upside not reflected in the current financial statements.
Excluding these two exceptional items, the underlying trading loss for the 16-month period was approximately £140,668, representing a loss of approximately £105,500 on an annualised basis. Whilst the directors acknowledge that this underlying position also requires improvement, it represents a materially different position to that implied by the reported loss, and one which the directors believe is capable of being addressed through the operational actions described below.
Actions taken and planned by the directors
The directors have taken, and continue to implement, the following measures to stabilise and improve the financial position of the company:
Operational consolidation: The company has consolidated all operations into a single premises in Orpington, having previously operated across two separate sites (Medway and Orpington). This consolidation eliminates duplication of overhead costs and is expected to improve the coordination and efficiency of the installation process.
Supplier restructuring and margin improvement: The company has restructured its supplier base and entered into new supply arrangements with Joedan Holdings Limited and established trade suppliers. These arrangements are expected to deliver improved gross margin on product purchases. Joedan Holdings Limited is scheduled to commence in-house PVC window and door manufacturing in January 2027, which is anticipated to provide further material cost savings to the company.
Pricing: A revised customer pricing structure has been implemented with effect from July 2025. Customer discounts have been reduced from 35% to 25%, with a further reduction to 20% planned. This is expected to improve gross margin on new orders accepted from that date.