Registered number: 01460044
COMPANY INFORMATION
CONTENTS
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present their Strategic Report for the year ended 31 December 2025.
Drumgrange Limited is a specialist engineering business operating primarily in the defence sector. The company undertakes design, development, integration and qualification activities across maritime and land-related capabilities, together with ongoing support work. The company operates from sites in Chertsey and Portland and delivers work both directly to government customers and through major prime contractors.
The company continued to benefit from demand for specialist engineering and support capabilities during the year. Revenue also continued to be supported by recurring and longer-term support activities, providing a degree of stability in the forward order position. The company continues to undertake research and development activity in support of its technical capabilities and future opportunities.
Turnover increased by 8.0% (2024 – 23.6%) to £29.1 million (2024 - £26.9 million). Profit before tax increased to £3.5 million (2024 – £3.3 million), profit after tax at £2.6 million (2024 - £2.9 million). The directors consider that the company maintained a strong operational and financial position during the year.
The company continued to invest in its people, systems and operating infrastructure to support its growth. During the year the business further developed its senior management structure and continued investment in core systems and processes to improve connectivity, reporting and operational effectiveness.
The principal financial measures for the year were as follows:
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors recognise that the company operates in a specialist market and that a number of external and operational factors could affect future performance. The principal risks identified by the directors and the principal measures used to manage them are set out below.
Financial risk management, objectives and policies
The company monitors its financial risks as part of its normal management processes. Liquidity risk is managed through regular monitoring of cash balances and working capital requirements. The company maintained a strong cash position at the year-end and has historically funded its operations primarily from retained profits and operating cash flows.
The principal financial sensitivities for the business relate to the timing of customer receipts and payments, wage and supplier cost inflation and, where relevant, movements in interest rates. The company seeks to manage these exposures through routine cash-flow monitoring, commercial management and prudent financial controls. The company had no bank borrowings at 31 December 2025.
The principal financial sensitivities for the business relate to the timing of customer receipts and payments, wage and supplier cost inflation and, where relevant, movements in interest rates. The company seeks to manage these exposures through routine cash-flow monitoring, commercial management and prudent financial controls. The company had no bank borrowings at 31 December 2025.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors use a range of financial and operational information to monitor the performance of the business. The principal financial key performance indicators for 2025 were turnover growth of 8.0%, gross profit margin of 23.41%, operating profit of £3.4 million, profit before taxation of £3.5 million and year-end cash of £7.6 million. These measures are reviewed regularly alongside project, customer and resource information to assess performance and support management decisions.
Going concern
The directors have assessed the company's ability to continue as a going concern, taking into account its cash resources, expected operating cash flows, existing contracted activity, anticipated expenditure and the principal risks and uncertainties facing the business. The directors remain satisfied that the company has adequate resources to meet its liabilities as they fall due and to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.
The company's strategy for the period ahead is focused on sustainable growth and resilience. The principal areas of focus are improving profitability and operational efficiency, investing in people and systems, broadening the customer base and maintaining a strong approach to environmental, social and governance matters.
The company intends to continue investing in its specialist technical capabilities, research and development, systems and people. It will also continue to strengthen delivery processes, succession planning, supply chain resilience and the development of new customer relationships and opportunities within its core markets.
The directors recognise that defence procurement, customer requirements, technology and wider economic conditions can change, sometimes at short notice. The company therefore reviews its strategy and principal risks regularly and will adjust its priorities as appropriate. The company does not disclose detailed information on individual prospective contracts, customers, programme opportunities or bid values where publication would be commercially prejudicial.
This report was approved by the board and signed on its behalf.
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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 directors who served during the year were:
P Abraham (passed away 11 September 2025)
The profit for the year, after taxation, amounted to £2,641,145 (2024 - £2,887,383).
Dividends of £495,557 (2024 - £330,413) were paid during the year.
Dividends of £495,557 (2024 - £330,413) were paid during the year.
Drumgrange provides Research and Development activities in a number of specialist areas. These include Sonar signal processing, VLF communications and Training and Simulation. Core to these activities is the provision of mathematical modelling and simulation services, Technical and Feasibility Studies, System Prototyping and Evaluation and the Provision of System Simulators and Stimulators.
The company has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) regulations 2013 to set out within the company's Strategic Report, the Company's Strategic Report Information required by Schedule 7 of the large and Medium Sized Companies and Groups (Accounts and Report) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties and future developments.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRUMGRANGE LIMITED
We have audited the financial statements of Drumgrange Limited (the 'Company') for the year ended 31 December 2025, which comprise the Statement of Income and Retained Earnings, the Analysis of Net Debt, the Statement of Financial Position, the Statement of Cash Flows 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).
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.
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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRUMGRANGE LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRUMGRANGE 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 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.
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:
∙The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including UK Companies Act, employment law and tax legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
∙We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the company secretary.
∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
°Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
°Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; and
°Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
°Posting of unusual journals out of the normal course of business that may inflate revenue; and
°Estimates used in calculating amounts recoverable on long term contracts in relation to final costs to complete.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditor's Report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DRUMGRANGE LIMITED (CONTINUED)
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 Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's 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 Auditor
2nd Floor, Midas House
62 Goldsworth Road
Surrey
GU21 6LQ
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2025
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 24 form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Drumgrange Limited is a private company limited by shares, registered in England and Wales. The
address of its registered number and registered office can be found on the Company Information page.
address of its registered number and registered office can be found on the Company Information page.
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 management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
Functional and presentation currency
Transactions and balances
In respect of long-term contracts and contracts for on-going services, revenue represents the value of work done in the year, including estimates of amounts not invoiced. Revenue from the rendering of these services are measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable based on costs incurred to date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on both a straight line and reducing balance basis.
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.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Amounts recoverable on contracts represent the excess of the value of work carried out to the balance sheet
date over cumulative payments on account.
date over cumulative payments on account.
Deferred income included in creditors represent the excess of payments on account received over the
value of work carried out to the balance sheet date.
value of work carried out to the balance sheet date.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The estimates that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:
Revenue and profit on long-term contracts are recognised by reference to the stage of completion of each contract. This requires management to estimate both the total costs expected to be incurred over the life of the contract and the total contract revenue to which the Group expects to be entitled.
Expected costs to complete are determined at the tender stage using detailed project budgets based on estimated labour hours and direct project costs. These budgets are reviewed regularly throughout the life of the contract and updated for changes in project scope, productivity, procurement costs, customer variations and other known risks and opportunities.
Expected total contract revenue is based on the agreed contract value together with customer-approved variations and other amounts that management considers highly probable of recovery based on contractual entitlement and the status of negotiations. Revenue estimates are reassessed throughout the contract as additional information becomes available.
Changes in the estimated costs to complete or expected contract revenue directly affect the stage of completion and therefore the amount of revenue and profit recognised in the current and future reporting periods. Where revised estimates indicate that a contract will be loss-making, the full expected loss is recognised immediately.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The company is controlled by G. Howe, a director, by virtue of his majority interest in the issued ordinary share
capital of the company.
capital of the company.
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