PP O'Connor Group Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02545561 (England and Wales)

Page

Company Information  

1

Group Strategic Report  

2

Report of the Directors  

5

Report of the Independent Auditors  

7

Consolidated Income Statement  

9

Consolidated Other Comprehensive Income  

10

Consolidated Statement of Financial Position  

11

Company Statement of Financial Position  

12

Consolidated Statement of Changes in Equity  

13

Company Statement of Changes in Equity  

14

Consolidated Statement of Cash Flows  

15

Notes to the Consolidated Statement of Cash Flows  

16

Notes to the Consolidated Financial Statements  

17

DIRECTORS:

P P O'Connor

Ms C M O'Connor

J P O'Connor

SECRETARY:

Mrs C H O'Connor

REGISTERED OFFICE:

The Exchange

5 Bank Street

Bury

BL9 0DN

REGISTERED NUMBER:

02545561 (England and Wales)

AUDITORS:

DTE Business Advisers Limited

Chartered Accountants

Statutory Auditors

The Exchange

5 Bank Street

Bury

BL9 0DN

The directors present their strategic report of the company and the group for the year ended 31 October 2019.

BUSINESS OVERVIEW

Established in 1990 PP O'Connor Group Limited is a leading force in the construction industry specialising in civil engineering, bulk earthworks, remediation, complex deconstruction and demolition.

The group has maintained its strategy to increase the proportion of work won directly with customers. However, there has been a refocus by the Board of Directors to winning projects that best compliment the business model, and to be more selective on the projects taken on. This has resulted in a reduction in revenue by 5.0% compared with 2018 however an increase in operating profit margin by 2.3%

Another impact on 2019 revenue figure was the uncertainty surrounding the UK leaving the European Union. At this point the medium-term economic outlook will depend on the terms of the UK's negotiated trade agreement with the EU and the effect this will have on businesses and the overall economy.

MARKETS AND TRENDS

Although the group's main geographic area of operation remains the North West it has continued to operate outside of this core area when profitable opportunities have arisen.

The group's impressive record of delivering projects safely and on time is continuing to generate opportunities both within its core geographic area and beyond.

BUSINESS MODEL

The group continued to deliver on new projects for both new and existing clients throughout the year and looks positively towards the challenges for the industry in the coming year.

The group continues to maintain good working relationships with both customers and suppliers. It is the intention of the directors to maintain, consolidate and build upon this position going forward by focusing on winning new profitable contracts and continuing to deliver high quality services to its customers in order to ensure that it continues to have a significant presence in the construction and excavation industry.

The group's key differentiators are its project delivery capability, its operational excellence and its investment in its people, its technology and its equipment which enable the group to remain at the forefront of new developments.

PEOPLE

The group continues to invest in its people, through both on the job training and through more formal external training programmes, in order to ensure staff have the appropriate skills to deliver the level of excellence to customers which the group expects. It continues to invest in additional staff where appropriate and as and when demand requires.

OBJECTIVES

The group's objective for 2020 is to continue to target profitable projects without increasing the risk profile of the projects undertaken. The group will continue to develop its current procedures, including those for Health and Safety and the environment, in order to remain a leader in the industry. Such commitment to investment is seen as a deciding factor in the growth of the business.

Through the management of integrated value chains, the group is able to combine the ability to meet increasing market demands and challenges to deliver projects effectively and efficiently in line with client requirements with the objective of delivering growth to the business.

RISK FACTORS

The group is always cognisant of the principal risks and uncertainties that are present within the industry. All financial and operational risks inherent in contracts are managed through the careful selection and appropriate due diligence when tendering for a contract.

The group is exposed to various elements which can have an adverse effect on its operational performance, financial performance, and cash flows. Examples being fuel costs, aggregate prices and supply of materials. PP O'Connor Group seek to manage the impact of such risks without eroding their competitive position.

The group seeks to eliminate financial loss from the failure of its customers to honour their obligations under their contract. The credit worthiness of new customers is assessed by the group prior to entering a contract and the indebtedness of all customers is actively managed to ensure prompt payment in line with the contract terms. In certain exceptional circumstances the group may consider insuring customers against default but this continues to be the exception rather than the norm.

The nature of the industry in which the group operates requires careful cash-flow management. The business monitors and forecasts cash requirements on a regular basis, both for tactical short-term cash flow purposes but also for its medium and longer term forecasting and reporting. The group continues to utilise an invoice discounting facility for its main source of funding.

The nature of some projects exposes the group to health, safety and environment risks. Any breach of laws and regulations would incur fines, penalties and costs, whilst also damaging the reputation of the group. The group ensures that they employ, either directly or by way of professional services contracts, the relevant professionals to provide the oversight to all activities and that where appropriate they carry suitable levels of insurance to indemnify the group against financial loss.

The other key business risks affecting the group are considered to relate to competition, regulation, customer acquisition and working capital management. The directors actively monitor trends in trading and, with the help of management, makes strategic decisions to mitigate any material threat to the long-term stability of the group.

Since the year end there has been an outbreak of Coronavirus which has developed into a global pandemic. The directors are taking active measures to ensure the safety of all staff, including allowing staff to work from home where practical, and where not ensuring that the Government guidelines on hygiene, safe distancing and the issuing of PPE are followed in full.

The group has continued to trade during this period but has taken advantage of the Government support for business for example in the form of the employee furlough scheme and VAT deferral option to help manage its cost base and maintain liquidity. Turnover during the period has been lower than normal as some projects were delayed or suspended for a period and the business has sort to eliminate all non-essential expenditure.

PERFORMANCE

The group analyses its financial performance in the year by its ability to make an accounting profit, to generate a sustainable cash flow and to control its receivables. To this end it sets itself three main KPI's an operating profit target, a free cash flow target and a debtor day's target. The operating profit margin is 2.8%, cash reduced by £247k, and debtor days were 81.

The group continues to work extensively on the management of its operational performance and the management of costs and will endeavour to increase the performance from capital employed in the business thus improving its financial returns and cash flows.

In addition, the group looks to project delivery; being the capability of delivering projects to budget and other set targets, as a key indicator.

PP O'Connor Group are confident that their strategy, together with the dedication of the workforce will allow delivery of all targets and objectives for the coming year.

The Directors are confident that their strategy, together with the dedication of the workforce will allow the group to develop into a key player within the industry over the next few years.

ON BEHALF OF THE BOARD:

P P O'Connor - Director

16 October 2020

The directors present their report with the financial statements of the company and the group for the year ended 31 October 2019.

PRINCIPAL ACTIVITY

DIVIDENDS

The total distribution of dividends for the year ended 31 October 2019 will be £ 141,250 .

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 November 2018 to the date of this report.

P P O'Connor

Ms C M O'Connor

J P O'Connor

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

-

select suitable accounting policies and then apply them consistently;

-

make judgements and accounting estimates that are reasonable and prudent;

-

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

DTE Business Advisers Limited has indicated its willingness to be reappointed for another term and appropriate arrangements are being made for it to be deemed reappointed as auditor in the absence of an Annual General Meeting.

ON BEHALF OF THE BOARD:

P P O'Connor - Director

16 October 2020

Opinion

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report.  We are independent of the group 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-

the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

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

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.  We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-

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

-

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

Matters on which we are required to report by exception

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

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

-

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

-

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

-

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

-

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the 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 the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Fiona O'Loughlin (Senior Statutory Auditor)

for and on behalf of DTE Business Advisers Limited

Chartered Accountants

Statutory Auditors

The Exchange

5 Bank Street

Bury

BL9 0DN

16 October 2020

REVENUE

3

38,138,305

40,132,204

Cost of sales

(33,798,736

)

(37,080,138

)

GROSS PROFIT

4,339,569

3,052,066

Administrative expenses

(3,262,322

)

(2,829,794

)

OPERATING PROFIT

5

1,077,247

222,272

Interest receivable and similar income

-

299

1,077,247

222,571

Interest payable and similar expenses

6

(70,609

)

(71,575

)

PROFIT BEFORE TAXATION

1,006,638

150,996

Tax on profit

7

(215,790

)

(41,045

)

PROFIT FOR THE FINANCIAL YEAR

790,848

109,951

Profit attributable to:

Owners of the parent

790,848

109,951

PROFIT FOR THE YEAR

790,848

109,951

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME

FOR THE YEAR

790,848

109,951

Total comprehensive income attributable to:

Owners of the parent

790,848

109,951

FIXED ASSETS

Property, plant and equipment

10

53,681

182,005

Investments

11

-

-

53,681

182,005

CURRENT ASSETS

Inventories

12

118,103

49,198

Debtors

13

11,993,773

9,560,099

Cash at bank

1,120,883

1,368,034

13,232,759

10,977,331

CREDITORS

Amounts falling due within one year

14

(8,200,577

)

(6,721,235

)

NET CURRENT ASSETS

5,032,182

4,256,096

TOTAL ASSETS LESS CURRENT

LIABILITIES

5,085,863

4,438,101

CREDITORS

Amounts falling due after more than one

year

15

-

(1,836

)

NET ASSETS

5,085,863

4,436,265

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

5,085,763

4,436,165

SHAREHOLDERS' FUNDS

5,085,863

4,436,265

The financial statements were approved by the Board of Directors and authorised for issue on 16 October 2020 and were signed on its behalf by:

P P O'Connor - Director

FIXED ASSETS

Property, plant and equipment

10

53,681

182,005

Investments

11

100

100

53,781

182,105

CURRENT ASSETS

Inventories

12

36,263

49,198

Debtors

13

11,578,119

9,616,563

Cash at bank

1,088,744

1,321,983

12,703,126

10,987,744

CREDITORS

Amounts falling due within one year

14

(7,205,011

)

(6,710,629

)

NET CURRENT ASSETS

5,498,115

4,277,115

TOTAL ASSETS LESS CURRENT

LIABILITIES

5,551,896

4,459,220

CREDITORS

Amounts falling due after more than one

year

15

-

(1,836

)

NET ASSETS

5,551,896

4,457,384

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

5,551,796

4,457,284

SHAREHOLDERS' FUNDS

5,551,896

4,457,384

Company's profit for the financial year

1,235,762

128,784

The financial statements were approved by the Board of Directors and authorised for issue on 16 October 2020 and were signed on its behalf by:

P P O'Connor - Director

Called up

share

Retained

Total

capital

earnings

equity

£   

£   

£   

Balance at 1 November 2017

100

4,326,214

4,326,314

Changes in equity

Total comprehensive income

-

109,951

109,951

Balance at 31 October 2018

100

4,436,165

4,436,265

Changes in equity

Dividends

-

(141,250

)

(141,250

)

Total comprehensive income

-

790,848

790,848

Balance at 31 October 2019

100

5,085,763

5,085,863

Called up

share

Retained

Total

capital

earnings

equity

£   

£   

£   

Balance at 1 November 2017

100

4,328,500

4,328,600

Changes in equity

Total comprehensive income

-

128,784

128,784

Balance at 31 October 2018

100

4,457,284