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

The principal activity of the Company continued to be the delivery of specialist construction works for commercial and residential developments, with particular expertise in groundworks, reinforced concrete frames, structural alterations and associated civil engineering works.

The Company delivered a strong financial performance in 2025, with multiple projects operating concurrently and profitably. Growth was achieved while maintaining a disciplined approach to project selection, commercial risk and cash management. The directors consider the result to reflect the Company’s developing reputation, technical capability, operational delivery and established relationships with clients and the supply chain.

Turnover increased by 34.7% to £20.0 million. Gross profit increased by 69.5%, with the gross margin improving from 17.5% to 22.0%. Profit before tax increased to £2.3 million. Cash at bank increased to £4.2 million and shareholders’ funds more than doubled to £2.4 million. The stronger cash position and balance sheet provide the Company with greater resilience and support continued investment in plant, systems, people and project delivery capability.

Health, safety and occupational health

The health, safety and wellbeing of the Company’s employees, operatives and supply chain remain a key priority. Risks are managed through effective planning, competent supervision, training, regular inspections and continued investment in health and safety standards across the business.

Client funding, insolvency and credit risk

The Company recognises that funding constraints, client insolvency, delayed payment and disputed accounts could affect cash flow and profitability. This exposure is managed through client credit assessments, careful review of contractual and payment terms, regular monitoring of outstanding balances and maintaining a spread of work across a number of established clients. Where appropriate and commercially available, the Company also considers credit insurance to provide additional protection against the risk of client insolvency or non-payment.

Inflationary pressures

Increases in labour, materials, plant and supply-chain costs may affect project margins. The Company manages these risks through detailed tendering, current supply-chain quotations, early procurement where appropriate and careful consideration of programme duration and price validity before entering into contracts.

Quality and project delivery

Maintaining a consistently high standard of performance is central to the Company’s reputation and continued growth. Quality and delivery risks are managed through experienced project teams, early planning, regular operational and commercial reviews, and close involvement from senior management throughout each project.

The Company benefits from a responsive and closely involved board, enabling the business to remain flexible, proactive and able to make timely decisions. Operational, commercial and financial risks are regularly reviewed, allowing potential issues to be identified early and appropriate action to be taken.

The directors believe that the Company’s financial strength, experienced management team, diverse capabilities and disciplined approach to project selection leave the business well positioned to manage these risks while continuing to pursue sustainable and profitable growth.

The directors are not anticipating any significant changes in the Company's operational activities in the coming year.

Measurement of the Company's performance is consistently applied and control is exercised by Company management. The company uses the following key performance indicators to evaluate its performance:

• Budgets -​ The company works on a project based budgeting system in place whereby projects are individually assessed on actual performance against budget.

• Gross Profit Margins –​ Projects are compared using gross profit margin to assess success.

• Cash Position -​ cash flow forecasts are used for future planning

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The directors are responsible for preparing the annual report 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; and

• 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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

We have audited the financial statements of City Grey Limited (the 'company') for the year ended 31 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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).

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 Auditor's 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 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our 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.

We have nothing to report in respect of the following matters in relation to which 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.

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 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.

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.

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.

Other matters which we are required to address

The corresponding figures for the year ended 31 December 2024 were not audited. As permitted by section 477 of the Companies Act 2006, the company was exempt from the requirement to have an audit for that year, and the directors did not otherwise require an audit to be carried out. As explained in note 25, the comparative figures have been restated from those previously reported. Our opinion is not modified in respect of these matters.

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 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

City Grey Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pendragon House, 65 London Road, St Albans, Hertfordshire, AL1 1LJ.

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.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has 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.

The Company's turnover is derived from construction contracts for specialist construction works, including groundworks, reinforced concrete frames, structural alterations and associated civil engineering works. Revenue from construction contracts is recognised by reference to the stage of completion of contract activity at the reporting end date, provided the outcome of the contract can be estimated reliably. The stage of completion, and the value of work recognised as revenue, is assessed by reference to the Company's internal valuation of the work performed to date.

Applications for payment are made, and amounts are invoiced to customers, on the basis of valuations certified externally (typically by the customer's quantity surveyor). Where the amount invoiced on the external valuation exceeds the value of work recognised as revenue on the Company's internal valuation, the excess is included within creditors as deferred income. Where the value of work recognised as revenue exceeds the amount invoiced, the excess is included within debtors as amounts recoverable on contracts.

Amounts recoverable in respect of contract retentions are included within debtors and recognised at the amount expected to be recovered, having regard to the judgements set out in note 2.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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 credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible 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).

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 is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 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.

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

The company has elected to apply the provisions of Section 11 and Section 12 of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price 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 fair value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, which include trade and other payables and bank loans, are initially measured at transaction price and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present fair value of the future payments discounted at a market rate of interest.

Equity instruments issued by the company are recorded at 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.

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 company’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.

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. Deferred tax assets and liabilities are offset when the company has 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 lease asset are consumed.

In the application of the company’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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The Company's turnover is derived from construction contracts for specialist construction works, including groundworks, reinforced concrete frames, structural alterations and associated civil engineering works. Revenue from construction contracts is recognised by reference to the stage of completion of contract activity at the reporting end date, provided the outcome of the contract can be estimated reliably. The stage of completion, and the value of work recognised as revenue, is assessed by reference to the group's internal valuation of the work performed to date.

Applications for payment are made, and amounts are invoiced to customers, on the basis of valuations certified externally (typically by the customer's quantity surveyor). Where the amount invoiced on the external valuation exceeds the value of work recognised as revenue on the group's internal valuation, the excess is included within creditors as deferred income.

Retentions held by the group are recognised within contract debtors/accrued income at the amount expected to be recoverable, discounted where the time value of money is material. Judgement is required in assessing (a) the probability that retention monies will be received in full, having regard to the counterparty's payment history, any disputed defects or claims, and the contractual retention release terms; and (b) whether the retention represents an unconditional right to consideration (recognised as a debtor) or a conditional right dependent on future performance (e.g. satisfactory completion of a defects period), which affects timing of recognition under FRS 102. Where recovery is uncertain, a specific provision is made against the retention balance based on management's best estimate, informed by past experience with similar contracts and correspondence with customers.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Finance lease payments represent rentals payable by the company for certain items of plant and machinery on hire purchase agreements. All leases are on a fixed repayment plan.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The immediate and ultimate parent company is City Grey Holdings Limited, a company incorporated in the United Kingdom whose registered office is Pendragon House, 65 London Road, St Albans, Hertfordshire, United Kingdom, AL1 1LJ. In the opinion of the directors there is no ultimate controlling party.

The consolidated accounts of the parent company are publicly available from Companies House, Crown Way, Cardiff, CF14 3UZ.

During the year the company entered into the following transactions with related parties:

Salaries paid to connected parties of the directors:

The following amounts were outstanding at the reporting end date:

Deferred tax on accelerated capital allowances had not been recognised in the financial statements for the year ended 31 December 2024 as previously reported. This has been corrected by way of a prior period adjustment.