REGISTERED NUMBER: 01873478 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

For The Year Ended

31 December 2025

for

LESTER CLADDING LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Statement of Directors' Responsibilities

6

Report of the Independent Auditors

7

Profit and Loss Account

11

Other Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

DIRECTORS:

Mr S Lester

Mr M Lester

Mr K Lester

Miss K Lester

REGISTERED OFFICE:

Globe Way

Off Spencer Ind Est

Buckley

Flintshire

CH7 3FH

REGISTERED NUMBER:

01873478 (England and Wales)

SENIOR STATUTORY AUDITOR:

Steven John Collings FCCA

AUDITORS:

Leavitt Walmsley Associates Limited

Chartered Certified Accountants and

Statutory Auditors

8 Eastway

Sale

Cheshire

M33 4DX

The directors present their strategic report for the year ended 31 December 2025.

REVIEW OF BUSINESS

The directors are satisfied with the company's performance during the year.

The company continues to specialise in roofing, cladding and envelope solutions for the construction industry. During 2025, the effects of high inflation over the previous year began to subside and gross margins returned to normal levels. Inflation is not as high, but remained fairly unsettled, and this had an impact on gross margins in the financial year.There was also a general slowdown across the industry which has given rise to a reduced level of turnover and profitability in the year; although the company had planned for this eventuality.

Strong proactive management performance ensured that negative impacts of the above were reduced as far as possible through strong relationships with our suppliers, staff and contractors.

Turnover saw a decrease of just over 35% from 2024. This was partly attributable to a general slowdown within the industry; however, it also reflects a deliberate and disciplined approach to project selection. Competitive pricing within the market resulted in certain opportunities being tendered at margins which the company did not consider commercially viable. The company therefore chose not to pursue turnover for turnover's sake, instead focussing on projects offering an appropriate balance of margin, complexity and commercial risk.

Administrative expenses have seen an decrease of just under 3% which has been largely driven by a reduction in some general overheads and a decrease in depreciation charges. Staff numbers have also reduced during the year given the slowdown in the industry.

The reduction in sales volumes and decrease in gross profit margin allowed operating profit to reduce to £212k compared to £3.1m in the prior year.

Despite the industry slowdown affecting revenue, gross margins and profitability, the company remains in a healthy financial position, reporting cash balances of £5.5m compared to £5.0m in the prior year.

The directors are hopeful the balance sheet position will continue to show improvements during the 2026 financial year. Highlights of the results for 2025 show net current assets increasing from £4.9m in 2024 to £5.3m in 2025. The company's overall net assets remain unchanged at £9.8m (2024: £9.8m).

The company continued to invest in and retain its workforce throughout the period, despite the lower level of turnover. As a result, staffing levels and associated costs remained higher than would ordinarily be required for the level of activity experienced during the year. This was a deliberate strategic decision to preserve the company's experienced workforce and operational activity, positioning the business to respond effectively as activity increases. The company anticipates turnover recovering towards the levels achieved in 2024 during 2026 and into 2027.

PRINCIPAL RISKS AND UNCERTAINTIES

Other than general economic risks, the principal risks faced by the company remain those relating to a highly competitive tendering market, inflation in the supply chain costs, increasing employment costs and wider wage pressures across the industry, and changes in regulations and government planning. Increases in the National Minimum Wage and other employer costs have placed additional pressure on the company's cost base, whilst also contributing to increased salary expectations across the wider construction industry.

The company enters into long-term contracts in the normal course of business which introduces further commercial, inflation, customer and supply chain risks to the business which can impact on revenue and profit recognised on each contract. Significant levels of our current activity continue to relate to the building and construction sector, which remains impacted by fierce competition, rising material prices and increasing labour costs.

The directors actively manage this risk through careful tendering, cost management and by working with selected clients in the private sector.

The continuing conflict between Russia and Ukraine has disrupted worldwide supply chains and has resulted in significant increases in both inflation and interest rates to the UK economy. The future trends in both inflation and interest rates remains uncertain and has generated volatility in both our customer base and supply chain.

The directors continue to monitor the potential impact of the above issues on our customers.

KEY PERFORMANCE INDICATORS

The directors have monitored the progress of the company with reference to certain financial key performance indicators:

Revenue

£11.8m (2024: £18.2m)

Gross profit

£2.5m (2024: £5.4m)

Operating profit

£212k (2024: £3.1m)

Profit before tax

£386k (2024: £3.3m)

Net current assets

£5.3m (2024: £4.9m)

Net assets

£9.8m (2024: £9.8m)

Cash and cash equivalents

£5.5m (2024: £5.0m)

Key performance indicators (KPIs) include revenue, gross profit and operating profit. These KPIs are selected as 'key' on the basis that the company is driven by gross margins on construction contracts and the directors strive to keep margins as high as possible in order to preserve profit. Operating profit is also a KPI on the grounds that it is an indicator of business performance, whereas profit before tax may include exceptional items.

FUTURE DEVELOPMENTS

The company has devised a competitive pricing model for key materials and has mitigated exposure to logistical and product price increases by a formulaic pricing matrix. This will ensure the company maintains its margins on key products. A bespoke construction contract costing system is in place to ensure that profitability is maintained on construction contracts.

Management is looking to further develop relations with its key customer base and take on new partners during the course of 2026 to strengthen business activity in the sector.

The directors remain confident in the long-term prospects of the business. Whilst market conditions remained challenging during 2025, the company has retained the resources, expertise and operational capacity required to respond to increased demand as construction activity and project pipelines recover.

ON BEHALF OF THE BOARD:

Mr S Lester - Director

3 September 2026

The directors present their report with the financial statements of the company for the year ended 31 December 2025.

DIVIDENDS

Interim dividends were paid on the Ordinary £1 shares on 31 December 2025 amounting to £295,000

FUTURE DEVELOPMENTS

Future developments are addressed in the strategic report.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

Mr S Lester

Mr M Lester

Mr K Lester

Other changes in directors holding office are as follows:

Miss K Lester - appointed 8 April 2025

FINANCIAL INSTRUMENTS

The company uses financial instruments. These comprise trade and other debtors, trade and other creditors, directors' loans and bank balances. The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below:

Liquidity risk

The company seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash safely and profitably.

Interest rate risk

The company finances its operations primarily through retained profits and bank accounts. The interest rate exposure of the financial assets and financial liabilities of the group as at 31 December 2024 is shown below. The table includes trade debtors, amounts recoverable on contracts and trade creditors which do not attract interest and therefore are subject to fair value interest rate risk:

Fixed

Floating

Zero

Total

£

£

£

£

Financial assets

Cash

-

5,505

-

5,505

Trade debtors

-

-

1,728

1,728

Other debtors

-

-

335

335

Fixed

Floating

Zero

Total

£

£

£

£

Financial liabilities

Trade and other creditors

-

-

2,347

2,347

Accruals

-

-

61

61

Credit risk

The company's principal financial assets are cash deposits, cash and trade debtors. The credit risk associated with cash is linked to the impact of long-term contracts with our customers where certain contract receipts are deferred for several months. The directors manage this risk through a detailed customer approval and acceptance process.

GOING CONCERN

As at 31 December 2025, the company had cash and cash equivalents of £5.5m and a strong forward order book. The company does not have any borrowings.

The financial statements have been prepared on a going concern basis, which the directors believe is appropriate for the following reasons. The company currently meets its day-to-day working capital requirements through cash balances and working capital. The directors have prepared and reviewed budgets and forecasts for the current financial year, which they consider to be achievable given the current trading levels. The directors are confident the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen, in accordance with Companies Act 2006, s.414C(11) to set out in the strategic report information required by The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch 7 to be contained in the directors' report. It has done this in respect of future developments.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Leavitt Walmsley Associates Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr S Lester - Director

3 September 2026

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Opinion

We have audited the financial statements of Lester Cladding Limited (the 'company') for the year ended 31 December 2025 which comprise the Profit and Loss Account, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, 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).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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:

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primarily responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

- obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the company operates in and how the company is complying with the legal and regulatory frameworks;

- inquired of management, and those charged with governance, concerning their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud; and

- discussed matters concerning non-compliance with laws and regulations and how fraud may occur including an assessment of how, and where, the financial statements may be susceptible to fraud.

Significant laws and regulations having a direct impact on the financial statements

As a result of these procedures, we consider the most significant laws and regulations that have a direct impact on the financial statements are:

- FRS 102;

- Companies Act 2006; and

- Tax legislation.

We performed audit procedures to detect any non-compliance which may have a material impact on the financial statements. These included reviewing financial statement disclosures, inspecting correspondence with local tax authorities and evaluating advice from external tax advisers.

Significant laws and regulations having an indirect impact on the financial statements

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health and safety. We performed audit procedures to inquire of management and those charged with governance as to whether the company is in compliance with these laws and regulations and reviewed noticed published by the Health and Safety Executive. We also made inquiries with those charged with governance to identify any live and material claims or disputes with subcontractors or clients.

Other risks relating to irregularities, including fraud

The audit engagement team identified the risk of management override of controls, revenue recognition and estimates made in the valuation of amounts recoverable of contracts as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included, but were not limited to:

- Testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and assessing whether the judgements made in making those accounting estimates are indicative of potential bias.

- Testing a sample of revenue transactions recognised either side of the balance sheet date to determine whether revenue was recorded in the correct period.

- Challenging judgements and estimates applied in the valuation of amounts recoverable on contracts by discussing contract performance, reviewing post-year-end performance of projects and comparing the outturn of projects with the estimates made in preparing the prior year's financial statements.

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 Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

Steven John Collings FCCA (Senior Statutory Auditor)

for and on behalf of Leavitt Walmsley Associates Limited

Chartered Certified Accountants and

Statutory Auditors

8 Eastway

Sale

Cheshire

M33 4DX

3 September 2026

TURNOVER

3

11,822,845

18,207,474

Cost of sales

9,372,677

12,786,958

GROSS PROFIT

2,450,168

5,420,516

Administrative expenses

2,409,958

2,481,928

40,210

2,938,588

Other operating income

172,015

141,756

OPERATING PROFIT

5

212,225

3,080,344

Interest receivable and similar income

173,913

211,692

PROFIT BEFORE TAXATION

386,138

3,292,036

Tax on profit

7

94,777

852,916

PROFIT FOR THE FINANCIAL YEAR

291,361

2,439,120

PROFIT FOR THE YEAR

291,361

2,439,120

OTHER COMPREHENSIVE INCOME

Transfer to retained earnings

Transfer non-distributable reserve

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

291,361

2,439,120

FIXED ASSETS

Tangible assets

9

4,971,118

5,546,037

CURRENT ASSETS

Debtors

10

2,388,613

3,806,484

Cash at bank and in hand

5,505,042

4,960,578

7,893,655

8,767,062

CREDITORS

Amounts falling due within one year

11

2,557,655

3,887,695

NET CURRENT ASSETS

5,336,000

4,879,367

TOTAL ASSETS LESS CURRENT LIABILITIES

10,307,118

10,425,404

PROVISIONS FOR LIABILITIES

12

485,755

600,402

NET ASSETS

9,821,363

9,825,002

CAPITAL AND RESERVES

Called up share capital

13

300

300

Revaluation reserve

14

128,250

128,250

Retained earnings

14

9,692,813

9,696,452

SHAREHOLDERS' FUNDS

9,821,363

9,825,002

The financial statements were approved by the Board of Directors and authorised for issue on 3 September 2026 and were signed on its behalf by:

Mr S Lester - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2024

300

9,735,482

128,250

9,864,032

Changes in equity

Dividends

-

(2,478,150

)

-

(2,478,150

)

Total comprehensive income

-

2,439,120

-

2,439,120

Balance at 31 December 2024

300

9,696,452

128,250

9,825,002

Changes in equity

Dividends

-

(295,000

)

-

(295,000

)

Total comprehensive income

-

291,361

-

291,361

Balance at 31 December 2025

300

9,692,813

128,250

9,821,363

1.	STATUTORY INFORMATION

Lester Cladding Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with the provisions of FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

The directors have considered the working capital requirements of the business for a period of at least 12 months from the date of approval of the financial statements and consider these to be adequate to enable the company to meet its day-to-day obligations.

After reviews of forecasts, cash resources and consideration of other support available from associated entities, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of approval of these financial statements.

Accordingly, the directors continue to adopt the going concern basis in the preparation of these financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical accounting judgements include the following:

Useful lives of property, plant and equipment

The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of assets. The useful economic lives and residual values are re-assessed annually and are amended, when necessary, to reflect current estimates. Changes in residual values and useful economic lives are accounted for as a change in accounting estimate in line with FRS 102, Section 10 'Accounting Policies, Estimates and Errors'.

Revenue recognition

The company enters into long-term contracts in the normal course of business. The nature of such contracts introduces judgement and uncertainty into the recognition of revenue and profit for the business.

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, VAT and other sales taxes.

Construction contracts

Turnover on long-term construction contracts is recognised in accordance with the stage of completion of contractual obligations to the customer. The stage of completion of the contract at the balance sheet date is assessed by reference to the value of work done.

When the outcome of a contract can be assessed reliably, contract turnover and associated costs are recognised as turnover and costs respectively by reference to the stage of completion of the contract activity at the balance sheet date. Full provision is made for losses on all contracts in the year in which the loss is first foreseen.

Where the outcome of a contract cannot be estimated reliably, contract turnover is recognised only to the extent of contract costs incurred that it is probable will be recoverable, and contract costs are recognised in the period in which they are incurred.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

2% on cost

Improvements to property

-

10% on cost

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

33% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on cost

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes costs which are directly attributable in bringing the asset to its location and condition so that it is capable of operating in the manner intended by management.

Assets under construction are recognised at cost and are not depreciated until they are brought into use by the entity.

Residual values used in the calculation of depreciable amount are the expected amounts which would currently be obtained from disposal of assets, after deducting the estimated costs of disposal, if the assets were already of the age and in the condition expected at the end of their useful lives.

Profits and losses on the disposal of fixed assets are included in the calculation of profit for the period.

Impairment of fixed assets

The directors assess the company's tangible assets for evidence of impairment at each reporting date. Where there are indicators of impairment, the directors calculate recoverable amount of the asset(s) and compare this with the carrying amount. If recoverable amount is lower than carrying amount, the asset is written down to recoverable amount by way of an impairment loss which is recognised in profit or loss for the period. Impairment losses are reversed when there is evidence that the reasons giving rise to the original impairment have ceased to apply. Impairment losses are reversed through profit and loss but only to the extent that the reversal does not increase the carrying amount of the asset to the amount which would have been stated, net of depreciation, had no impairment loss been recognised.

Debtors

Short-term debtors are measured at transaction price, less any impairment.

Contract assets

Contract asset balances are stated at the amount recoverable based on certified applications, after provision has been made for any foreseeable losses and the deduction of applicable payments on account.

Financial instruments

The company has elected to apply (where applicable) the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument.

Financial assets 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, amounts recoverable on contracts and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently measured at amortised cost using the effective interest rate, unless the arrangement constitutes a financing transaction, where the financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

Amounts recoverable on contracts

Long-term contract balances included in amounts recoverable on contracts are stated at cost plus attributable profit, after provision has been made for any foreseeable losses and the deduction of applicable payments on account.

Impairment of financial assets

Financial assets, other than those held at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to a third party that is able to sell the asset in its entirety to an unrelated party.

Classification of 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 company after deducting all its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade and other creditors and accruals are initially recognised at transaction price unless the arrangement constitutes a financing arrangement, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Debt instruments are subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

Equity instruments

Equity instruments issued by the company are recorded at the fair value of the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, except that:

- The recognition of deferred tax assets is limited to the extent that it is probable (more likely than not) that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

- Any deferred tax balances are reversed if, and when, all conditions for retaining associated tax allowances have been met.

Deferred tax is calculated using timing difference plus approach.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Employee benefits

Short-term employee benefits are measured at the undiscounted amount expected to be paid in exchange for the employee's services to the company. Where employees have accrued short-term benefits which the entity has not paid by the balance sheet date, an accrual is recognised within creditors: amounts falling due within one year with an associated expense in profit or loss.

Government grants

Government grants are recognised when the entity expects to receive the grant and will comply with the grants conditions and are accounted for using the accrual model.

Grants which become repayable are recognised as a liability in the balance sheet.

Provisions for liabilities

Provisions are made where an event has taken place that gives the company a legal or constructive obligation and it is probable that settlement of a transfer of economic will be required and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.

Increases in provisions are charged as an expense in profit or loss.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

31.12.25

31.12.24

£

£

Contract work

11,822,170

18,206,410

Supply

675

1,064

11,822,845

18,207,474

All turnover arose within the United Kingdom.

4.	EMPLOYEES AND DIRECTORS

31.12.25

31.12.24

£

£

Wages and salaries

1,795,783

1,907,241

Social security costs

212,748

185,202

Other pension costs

206,332

328,463

2,214,863

2,420,906

The average number of employees during the year was as follows:

31.12.25

31.12.24

Management

3

3

Administrative

17

19

Direct

27

34

47

56

31.12.25

31.12.24

£

£

Directors' remuneration

37,386

33,792

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

4

3

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.12.25

31.12.24

£

£

Hire of plant and machinery

97,466

170,075

Depreciation - owned assets

761,080

793,116

Profit on disposal of fixed assets

(19,329

)

(65,858

)

Motor expenses

215,326

268,356