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Generation Two Limited
Company Information
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Generation Two Limited
Contents
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Generation Two Limited
Group Strategic Report
For the year ended 31 December 2025
The Directors present their Strategic Report for Generation Two Limited (the 'Parent Company') and subsidiary companies ("The Group" or "Coolair") for the year ended 31 December 2025.
The focus of the business is the supply, installation, service and maintenance of air conditioning systems and commercial heating products.
The results for 2025 are disappointing. However, rather than being indicative of failings internally to Coolair, the Board considers them to be a reflection of international & geopolitical issues which affected the whole UK economy during the year. The main factor impacting on results was a 17% fall in turnover compared with the previous year. Whilst the order book at the start of the year was extremely healthy we saw many projects delayed until the political situations in the UK and USA stabilised. Additionally, and for the same reason, new projects were very slow to be given the green light. Despite the fall in turnover the Board have a number of reasons to be pleased with the outcome in 2025. Firstly, despite continual upward cost pressures on both materials and labour, Coolair still maintained a healthy gross margin. This was in large part due to a comprehensive review of material costs and a re-alignment of key suppliers to ensure our buying power is maximised. Secondly, through reliance on our strong internal credit control procedures cash flow remained strong throughout the year and bad debts suffered were significantly reduced compared with 2024. Finally, our aftersales department continues to go from strength to strength attracting new customers and seeing turnover grow by 14% year-on-year. Turnover was again achieved largely from across our existing client portfolio. Our core business continued to be generated from small works orders, with 88% of all new contracts obtained during 2025 having a value less than £50,000. This is a key element of our business model aimed at reducing exposure to any significant bad debts. Pipeline orders predict a very strong start to 2026 and the Board are confident of a swift return to profitability.
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Generation Two Limited
Group Strategic Report (continued)
For the year ended 31 December 2025
The Group uses financial instruments including cash, a bank overdraft and other items including trade debtors and trade creditors that arise directly from its operations. The existence of these financial instruments exposes the Group to a number of financial risks which are described in further detail below.
Liquidity Risk The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash safely and profitably. Credit Risk The Group’s principal financial assets are cash deposits, cash, trade debtors and intercompany debtors. The credit risk associated with cash and intercompany debtors is limited. The principal credit risk arises, therefore, from its trade debtors. In order to manage credit risk, the directors set limits for customers based on a combination of payment history and third-party references. Credit limits are reviewed by the credit control manager on a regular basis in conjunction with the debt ageing and credit history. Contract Profitability Management review all contracts on a monthly basis relevant to both actual and forecasted costs to complete and report against anticipated gross margin, investigating variances against budget. Additionally, all potential contracts exceeding £500,000 are peer-reviewed by two directors prior to acceptance.
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Generation Two Limited
Group Strategic Report (continued)
For the year ended 31 December 2025
In addition to the universal KPIs of turnover and gross margin the company considers its specific KPIs to be:
∙Order levels
∙Sales generated per salesman
∙Average cash levels
Levels of secured orders are crucial to short-term planning of labour requirements & purchasing levels but more importantly provide the key indication of upturn or downturn in future workload, enabling management to react quickly and make appropriate changes on a strategic level. Average monthly order levels over the last 5 years have been £7.3M (2024 £7.3M) and levels at each of the last two year-ends were:
December 2025 December 2024 Secured orders £6,159,206 £5,351,000 Coolair firmly believe that our sales force is our best asset. Average sales per salesman is an indicator of the state of the market plus when this figure drops it also indicates that there may be problems with individual performance which need to be rectified. We would not expect this figure to drop below £1M without good reason, and at each of the last two year ends the levels were: December 2025 December 2024 Average sales per salesman £1.63M £1.95M Average monthly cash levels are the key indicator not just of trading conditions but of the strength and durability of our customer base. Average cash holdings (measured on a monthly basis) over the last 5 years have been (£87,402) (down from £41,690 last year) and holdings at each of the last two year-ends were: December 2025 December 2024 Average monthly cash balance £115,890 (£193,226)
This report was approved by the board and signed on its behalf.
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Generation Two Limited
Directors' Report
For the year ended 31 December 2025
The directors present their report and the financial statements for the year ended 31 December 2025.
The loss for the year, after taxation, amounted to £696,214 (2024 -loss £31,869).
The directors who served during the year were:
The directors are responsible for preparing the group strategic report, the directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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Generation Two Limited
Directors' Report (continued)
For the year ended 31 December 2025
These financial statements have been prepared on a going concern basis. The current economic conditions present risks for
all businesses. In response to such conditions, the directors have carefully considered these risks, including an assessment of uncertainty on future trading projections for a period of at least 12 months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis. The directors have confirmed that they believe that Coolair Equipment Limited is financially secure and has more than adequate resources to trade successfully. Both demand from existing customers and the Group’s current enquiry level remain strong. The Group has a number of banking facilities available to them to cover any additional funding requirements should these be needed. The Statement of Financial Position is strong reflecting a net current asset position. Based on this assessment, the directors consider that the Group maintains an appropriate level of liquidity sufficient to meet the demands of the business. In addition, the Group's assets are assessed for recoverability on a regular basis, the directors consider that the Group is not exposed to losses on these assets which would affect their decision to adopt the going concern basis. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubt upon the Group's ability to continue as a going concern. Thus the directors have continued to adopt the going concern basis of accounting in preparing these financial statements.
The Board are optimistic about the long term future growth and direction of Coolair and have developed a Mission Statement: “To create the ideal indoor environment for people to live, work and play, now and always.”
This emphasises our commitments to:
∙partnering with our customers and suppliers to provide the best solutions for their needs;
∙quality installation and after care of both cooling and heating products in the commercial environment;
and
∙sustainability of both the environment and of Coolair as a company long into the future.
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Generation Two Limited
Directors' Report (continued)
For the year ended 31 December 2025
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Generation Two Limited
Independent auditors' report to the members of Generation Two Limited
We have audited the financial statements of Generation Two Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2025, which comprise the consolidated statement of comprehensive income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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.
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Generation Two Limited
Independent auditors' report to the members of Generation Two Limited (continued)
The other information comprises the information included in the Annual Report other than the financial statements and our auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the group 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 group 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 its environment obtained in the course of the audit, we have not identified material misstatements in the group strategic report or the directors' report.
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Generation Two Limited
Independent auditors' report to the members of Generation Two Limited (continued)
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 auditors' 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Antibribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Generation Two Limited
Independent auditors' report to the members of Generation Two Limited (continued)
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
SK1 3GG
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Generation Two Limited
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2025
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Generation Two Limited
Registered number: 08008574
Consolidated Statement of Financial Position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 18 to 33 form part of these financial statements.
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Generation Two Limited
Registered number: 08008574
Company Statement of Financial Position
As at
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statementsl.
The result for the parent company for the year was £154,969 (2024:£99,999). The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 18 to 33 form part of these financial statements.
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Generation Two Limited
Consolidated Statement of Changes in Equity
For the year ended 31 December 2025
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Generation Two Limited
Company Statement of Changes in Equity
For the year ended 31 December 2025
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Generation Two Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2025
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Generation Two Limited
Consolidated Analysis of Net Debt
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
Generation Two Limited ('the Company') is a private company limited by shares incorporated in England and Wales (registered number 08008574). The address of the registered office and principal place of business is Coolair House, Globe Lane, Dukinfield, Cheshire, SK16 4UJ.
The Company is the ultimate parent company of Coolair Management Company Limited and Coolair Equipment Limited, both of which are incorporated in England and Wales. The principal activity of the Company is that of a holding company. The principal activity of the Group is the supply and installation of air conditioning systems and commercial heating products.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of income and retained earnings and cashflow statement in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of income and retained earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
2.Accounting policies (continued)
These financial statements have been prepared on a going concern basis. The current economic conditions present risks for all businesses. In response to such conditions, the directors have carefully considered these risks, including an assessment of uncertainty on future trading projection for a period of at least 12 months from the date of signing the financial statements, and the extent to which they might affect the preparation of the financial statements on a going concern basis.
The directors have confirmed that they believe that the Group is financially secure and has more than adequate resources to trade successfully. Both demand from existing customers and the Group’s current enquiry level remain strong. The Group has a number of banking facilities available to them to cover any additional funding requirements should these be needed. The Statement of Financial Position is strong reflecting a net current asset position. Based on this assessment, the directors consider that the Group maintains an appropriate level of liquidity sufficient to meet the demands of the business. In addition, the Group's assets are assessed for recoverability on a regular basis, the directors consider that the Group is not exposed to losses on these assets which would affect their decision to adopt the going concern basis. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and that there are no material uncertainties that lead to significant doubt upon the Group's ability to continue as a going concern. Thus the directors have continued to adopt the going concern basis of accounting in preparing these financial statements.
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
2.Accounting policies (continued)
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the consolidated statement of comprehensive income over its useful economic life, which is 10 years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
2.Accounting policies (continued)
In the consolidated statement of cash flows, cash is shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's statement of financial position when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
2.Accounting policies (continued)
rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
affect amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the period. Actual outcomes may differ from these judgements, estimates and assumptions. The directors believe that judgements, estimates and assumptions do not have a significant risk of causing a material difference to the carrying amounts of the assets and liabilities within the next financial year.
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
The company has no tangible assets.
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
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Generation Two Limited
Notes to the Financial Statements
For the year ended 31 December 2025
Share premium account
Profit and loss account
The Group operates a defined contribution pension scheme for the benefit of employees. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge for the year represents contributions payable by the group to the fund and amounted to £190,549 (2024: £176,899). There were outstanding contributions of £8,672 (2024: £8,469) at the end of the year which are included within creditors.
The Company has no ultimate controlling party.
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