The directors have pleasure in presenting their report and the financial statements of the company for the year ended 31st December 2025.
STRATEGY AND OBJECTIVES
Howorth Air Technology Limited (Howorth) is internationally recognised as a leading innovator of Air Containment and Management solutions for the Healthcare and Life Sciences sectors. The principal activities of the company continue to be the design, manufacture and installation of:
ultra clean air products and building systems for the healthcare sector
toxic substance containment equipment for the pharmaceutical industry
aseptic pharmaceutical manufacturing solutions
decontamination products and services
aftersales service, maintenance and spare part sales covering all sectors.
Howorth entered 2025 with a strong opening order position of £17.0m and achieved record order intake of £40.6m during the year (2024: £25.1m; 2023: £25.7m). This performance provides a solid platform for future growth and reflects continued demand across the Group's core Healthcare and Life Sciences markets.
The key financial metrics for the year were:
Order intake at £40.6m in 2025 (2024: £25.1m; 2023: £25.7m).
Revenue increased by 20.1% to £28.3m (2024: £23.5m).
Gross profit increased to £6.2m (2024: £5.2m), representing a gross margin of 21.8% (2024: 22.1%).
Operating profit improved significantly to £0.4m (2024: £0.1m).
Profit before taxation was £0.3m compared with a loss before taxation of £0.1m in 2024.
EBITDA improved to £1.0m (2024: £0.5m). EBITDA represents operating profit before depreciation and amortisation.
Net cash inflow from operating activities was £0.9m (2024: £2.1m).
Net assets increased to £3.24m at 31 December 2025 (2024: £3.18m).
Overseas revenues represented approximately 64% of total turnover, reflecting the continued importance of international markets to the Group's growth strategy.
The improvement in revenue and profitability reflects the benefits of investments made in recent years, including strengthening the leadership team, expanding the Group's international presence and continuing to develop innovative solutions that meet the evolving needs of customers. Despite ongoing inflationary and economic pressures across a number of markets, the Group returned to profitability whilst continuing to invest in people, product development and operational capability.
BUSINESS MODEL
The Group structure remained unchanged during 2025, with Howorth Air Technology Limited focused on all international geographic markets, except for North America and Canada which are managed through the wholly owned subsidiary, Howorth Air Technology, Inc. Design, engineering and manufacturing continue to be delivered from the UK, supported by local market knowledge and customer relationships in key overseas territories.
International markets remain central to the Group's strategy. Approximately 64% of Group revenue in 2025 was derived from overseas contracts, demonstrating the continued importance of export markets and the strength of the Group's position in Healthcare and Life Sciences sectors outside the UK.
In North America and Canada, the Group has continued to strengthen its leadership capability and market presence. This geography remains a key area of opportunity for the business, and the Board continues to focus on increasing the Group's offering and customer reach in this strategically important market.
At the end of 2025, the Group refocused its business unit structure around its core markets of Pharmaceutical Manufacturing and Healthcare, and created a new Specialist Environments business unit focused on the design and build of specialist environments. These include operating theatres, clinical areas and other projects requiring specialised ventilation. During 2025, the Group observed an improved sense of confidence in the Healthcare sector, which is expected to continue as NHS capital investment budgets begin to be released. The Group remains well positioned in this market, with steady demand for its Ultra Clean Ventilation systems and a continuing pipeline of future opportunities.
The Group's business model is supported by a combination of project delivery, technical expertise, product innovation and recurring service, maintenance and spare parts activity. This mix provides resilience across market cycles, supports long-term customer relationships and enables the Group to support customers across the full lifecycle of its installed solutions.
BUSINESS ENVIRONMENT
TRENDS AND FACTORS
Within UK Healthcare, market activity during 2025 reflected a gradual improvement in customer confidence following delays experienced in the prior year across parts of the capital project market. The timing of project approvals remains linked to public sector investment cycles and customer decision-making processes, and the Board continues to monitor these factors closely when assessing near-term opportunities and delivery priorities.
The Group continues to experience strong demand from strategic international markets, particularly in North America and Life Sciences. The pipeline of international opportunities remains encouraging, supported by the Group's technical expertise, reputation and ability to provide specialist engineered solutions.
The business continued to manage cost pressure during the year, including labour, energy, material and logistics costs. Given the project-based nature of the Group's activities, commercial discipline, early supplier engagement and careful contract management remain important in protecting project profitability.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board considers the principal risks and uncertainties facing the Group on an ongoing basis. These risks are managed through regular review of operational performance, project delivery, financial KPIs, customer demand, working capital and the wider external environment.
Project delivery and contract execution risk: the Group delivers complex engineered projects, often over extended timeframes. Delays, specification changes, site access constraints or cost overruns can affect profitability and customer satisfaction. The Group mitigates this through project governance, regular margin review, design control and operational planning.
Supply chain, tariff and geopolitical risk: the Group remains exposed to global supply chain disruption, including the potential impact of international conflicts, changes in trade policy, tariffs, shipping disruption and availability of specialist components. These factors can affect lead times, input costs and project delivery. The Group seeks to mitigate this through supplier engagement, forward planning, careful procurement and commercial terms that reflect current market conditions.
Inflation and cost pressure: materials, labour, energy and logistics costs remain important areas of focus. The project-based nature of the business means that cost increases may not always be recoverable in full on existing contracts. The Board continues to monitor pricing, margin discipline and contract terms to protect profitability.
Working capital and cash management: the Group's projects can involve significant timing differences between procurement, production, customer invoicing and cash collection. The Board monitors cash, debtor recovery, stock, work in progress and banking facilities to ensure the Group maintains appropriate liquidity.
Market and political risk: demand in Healthcare and Life Sciences remains supported by long-term structural drivers, but timing can be affected by public sector funding cycles, customer investment decisions, political uncertainty and wider economic conditions. The Group mitigates this by maintaining a diversified pipeline across sectors and geographies.
People and capability risk: the Group depends on skilled employees across design, engineering, project management, manufacturing, installation, service and sales. Recruitment, retention, training and engagement remain important to the Group's ability to deliver operational excellence and support growth.
Regulatory, quality and health and safety risk: the Group operates in highly regulated environments where compliance, quality and safe working practices are essential. The Group continues to maintain governance processes, accreditations, training and internal controls to support compliance and continuous improvement.
The Board believes these risks are appropriately understood and managed, whilst recognising that the external environment remains uncertain. The Group's focus remains on maintaining operational resilience, protecting margins, supporting customers and investing in the capability required to deliver sustainable growth.
The Company maintains its ISO 9001:2015 and ISO 45001:2018 accreditations and successfully upheld its accreditation status in 2025. These standards support the Group's commitment to quality, safe working practices, continuous improvement and effective governance.
The Group continued to invest in its people during the year, with the average number of employees increasing to 143 (2024: 133). The Board recognises that employee engagement, technical capability and operational discipline are central to delivering customer satisfaction and sustainable growth.
Formalised training for the workforce was maintained during the year, with online and practical health and safety training remaining a priority. The Group has also continued its policy of supporting apprentices, sponsoring external training and creating opportunities for internships and industrial placements with local further education institutions.
Employee engagement and wellbeing remain important areas of focus. The Group continues to use employee feedback to support improvements in communication, culture and ways of working, with the aim of being an employer of choice within its sector and local community. The business has also maintained its focus on mental fitness and wellbeing, including its continued links with Rugby League Cares.
The Group recognises its responsibilities to the communities in which it operates. During the year, the business maintained its support for Bolton Lads & Girls Club as a bronze patron and continued to support fundraising activity. The Board recognises the importance of contributing positively to the Bolton area and supporting organisations that make a practical difference to young people and the wider community.
Environmental management remains a key strategic focus. The Group's procedures and operating systems include controls covering non-conformance, sustainability, waste control, emergency preparedness, training, recycling, operational control and energy monitoring. These procedures are reviewed regularly and are subject to audit by Achilles and ISOQAR as part of the Group's integrated operating systems.
Environmental considerations also form part of construction site audits and workplace inspections. The Group remains committed to reducing waste, segregating and recycling materials where practical, monitoring energy usage and identifying opportunities to improve the sustainability of its operations and product lifecycle impact.
The Board is committed to conducting business responsibly, with appropriate policies and governance in relation to employees, anti-bribery, social responsibility, environmental matters and human rights. These areas remain embedded within the Group's operating culture and are reviewed as part of its wider governance framework.
BUSINESS PERFORMANCE
ANALYSIS OF PERFORMANCE AND POSITION
2025 represented a year of significant progress for the Group, with revenue increasing by 20.1% to £28.3m (2024: £23.5m). This growth reflects the continued strength of the Group's position within the Healthcare and Life Sciences sectors and the success of its international growth strategy, with overseas revenues accounting for approximately 64% of total turnover during the year.
Gross profit increased to £6.2m (2024: £5.2m), whilst the Group continued to invest in its people, product development and operational capabilities. Operating profit improved significantly to £0.4m (2024: £0.1m), resulting in a profit before taxation of £0.3m compared with a loss before taxation of £0.1m in the previous year.
The Group generated positive cash inflows from operating activities of £0.9m during the year and closed the year with net assets of £3.24m. Whilst operating cash generation was lower than the exceptionally strong prior year performance, the business maintained a robust financial position and continued to invest in strategic initiatives to support future growth.
During the year, the Group continued to experience encouraging levels of demand across its core markets, particularly within North America and the international Life Sciences sector. Order intake reached a record £40.6m (2024: £25.1m), providing a strong foundation for future growth and enhancing revenue visibility entering 2026.
The Board remains focused on delivering sustainable and profitable growth through operational excellence, product innovation, international expansion and continued investment in its people. Whilst macroeconomic and geopolitical uncertainties remain within certain markets, the Group enters 2026 with a strong order position, a healthy opportunity pipeline and confidence in its medium-term prospects.
PERFORMANCE WITH REGARD TO KPIS
The Group monitors a range of financial and non-financial key performance indicators to assess performance against its strategic objectives and to support operational decision-making.
KPI | 2025 | 2024 | Commentary |
Order Intake* | £40.6m | £25.1m | Record order intake providing strong visibility for future growth. |
Revenue | £28.3m | £23.5m | Revenue increased by 20.1%, reflecting strong demand across key markets. |
Gross Profit | £6.2m | £5.2m | Gross profit increased in line with revenue growth. |
Gross Margin | 21.8% | 22.1% | Margin remained resilient despite ongoing cost pressures. |
Operating Profit | £0.4m | £0.1m | Significant improvement compared with the prior year. |
Profit/(Loss) Before Tax | £0.3m | (£0.1m) | Return to profitability following the prior year loss. |
EBITDA** | £1.0m | £0.5m | Strong improvement in operational profitability. |
Net Assets | £3.24m | £3.18m | Strong balance sheet maintained. |
Operating Cash Inflow | £0.9m | £2.1m | Positive cash generation supporting continued investment. |
Overseas Revenue | 64% | 56%*** | International markets remain a key driver of growth. |
Average Number of Employees | 143 | 133 | Continued investment in people and capability to support future growth. |
* Order intake is a management KPI and is not reported within the statutory financial statements.
** EBITDA represents operating profit before depreciation and amortisation.
*** 2024 overseas revenue percentage is based on management information.
The Board reviews these measures regularly and believes they provide an appropriate assessment of the Group's operational effectiveness, financial performance and progress towards its long-term strategic objectives.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2025.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, DJH Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Identification of the information for which the company has chosen, in accordance with S414C(11) of the Companies Act, to set out in the company's strategic report which would otherwise be required by Schedule 7 of the 'Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008' to be contained in the directors' report.
This report has been prepared in accordance with the provisions applicable to groups and companies entitled to the exemptions of the small companies regime.
We have audited the financial statements of Howorth Air Technology Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or parent company or to cease operations, or have no realistic alternative but to do so.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the group has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the group. We determined that the following were most relevant: FRS 102, Companies Act 2006, Health and Safety at Work 1974, Employment Act 2002, Construction Design and Management Regulations 2015 and General Data Protection Regulations (GDPR).
We considered the incentives and opportunities that exist in the group, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the group, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to the calculation of depreciation, capitalisation of development costs, turnover recognition on long term contracts and the valuation of stock.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations in particular those that are central to the entities ability to continue in operation.
Testing key turnover lines, in particular cut-off, for evidence of management bias.
Performing a physical verification of key assets, including stock.
Obtaining third-party confirmation of material bank and loan balances.
Documenting and verifying all significant related party and consolidated balances and transactions.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £62,148 (2024 - £41,085 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Howorth Air Technology Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is F2/C Multiply Lomax Way, Logistics North, Bolton, United Kingdom, BL5 1FQ.
The group consists of Howorth Air Technology Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Howorth Air Technology Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group and parent company have adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
At 31 December 2025 the Group reported profits before tax in the current year of £284,063 and has positive shareholder funds of £3,146,888. Within the Group's debtors are shareholder and related party loans totalling £1,032,819.
The Group has a strong pipeline of work post year end. As at the 28 February 2026 the company's management accounts reflect a positive Profit and loss account and are forecasting profits for the year ended 31 December 2026. The Group meets its day to day working capital requirement through overdraft facilities. In respect of the overdraft facility the Group continues to enjoy the support of its lender post year end. The providers have indicated there is no known reason for them to withdraw their support. The directors are in negotiations to secure a long term facility.
Turnover comprises the value of sales (excluding VAT, similar taxes and trade discounts) of goods and services provided in the normal course of business.
Turnover is recognised when goods are despatched, which is the same day as goods are delivered and hence is the point at which the risks are rewards of ownership pass to the buyer.
Turnover from the rendering of services is 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, turnover is recognised only to the extent that it is probable the expenses recognised will be recovered.
Turnover derived from long term contracts reflect the value of work in the period as a proportion of the total contract value.
The amount by which turnover exceed payments on account is classified as accrued income in debtors, to the extent that payments on account exceed relevant turnover, the excess is included as a creditor.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in joint ventures and associates are carried in the group balance sheet at cost. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply 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 in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
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 deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
On consolidation, the results of overseas operations are translated into GBP at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and accumulated in the foreign exchange reserve.
Exchange differences are recognised in the income statement in the Group entities' separate financial statements on the translation of long-term monetary items. These form part of the Group's net investment in the overseas operation concerned, and are reclassified to other comprehensive income and accumulated in the foreign exchange reserve on consolidation.
Work in progress
Turnover is recognised at the period end of each project and is based on costs incurred to date as a proportion of the estimated total costs of the project. The total cost is estimated in relation to previous construction runs with the assumption that common projects will likely incur similar costs. For new projects an evaluation is made into the design and production requirements of the project at commencement with the assumption that management have the experience to accurately predict the total costs.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in the income statement unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in the income statement in the period it arises.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Estimating the useful economic life of an asset and the anticipated residual value are considered the key judgement in calculating an appropriate depreciation charge.
Making a judgement that the expenditure incurred related to development costs is captialised based on the technical and economic feasibility of the project. In addition, in determining the amount of costs to be capitalised, the management has made assumptions into the future cash generation of the development assets.
Making judgement based on historical experience on the level of provision required for impairment of stocks.
Making a judgement on the level of income to be recognised on long term contracts in accordance with the accounting policy below. The key assumption in confirming the profitability and the turnover to be recognised at the period end of each project is based on costs incurred to date as a proportion of the estimated total cost of the project. The total cost is estimated in relation to previous construction runs with the assumption that common projects will likely incur similar costs. For new projects an evaluation is made into the design and production requirements of the project at commencement with the assumption that management have the experience to accurately predict the total costs.
This related to the write off of development costs previously classified as fixtures and fittings.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2024 - 3).
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for 2025.
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:
All tangible assets are pledged as security for the group's bank overdraft and bank loan under a floating charge in favour of HSBC Bank PLC.
Details of the company's subsidiaries at 31 December 2025 are as follows:
Details of associates at 31 December 2025 are as follows:
All tangible assets are pledged as security for the group's bank overdraft and bank loan under a floating charge in favour of HSBC Bank Plc.
All tangible assets are pledged as security for the group's invoice discounting facility under a floating charge in favour of IGF Invoice Finance Limited. The amount secured as at 31 December 2025 was £651,707 (2024: £452,837).
Hire purchase liabilities are secured on the assets to which they relate.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The pension creditor as at 31 December 2025 was £47,151.
Retained earnings - All other net gains and losses and transactions with owners not recognised elsewhere.
Currency translation reserves - Gains/losses arising on retranslating the net assets of overseas subsidiaries into GBP.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
Included within the balance is an amount owed by Howorth Westbury Holidngs Limited which is controlled by A Parker, the majority shareholder and director of Howorth Air Technology Limited. These amounts have been loaned to the company on an interest free basis but have no formal repayment terms.
The below advance is unsecured, interest free and repayable on demand. There were no individual advances that were considered material. The maximum overdrawn balance during the year was £1,213,188 (2024: £1,302,885).