WHISTLER_TOPCO_LIMITED - Accounts

The directors present the strategic report for the year ended 31 May 2020.

The group, which was established on 9 February 2018 and began trading on 28 March 2018, is headed up by Whistler Topco Limited, providing high quality end to end services within the mobile telecommunications network and fixed line including acquisition, design, deployment and maintenance of sites. The service offering is unique in this market space and allows the group to trade with all the mobile networks operators, as well as key equipment vendors, tower companies, infrastructure owners, and managed service providers.

The group comprises two main trading companies in addition to several intermediate holding companies.

The Board of Directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole, and in doing so have regard to a range of matters when making decisions for the long term. Key decisions and matters that are of strategic importance to the Group are appropriately informed by s172 factors.

Details of the Group’s key stakeholders and how we engage with them are set out below.

Shareholders

Maximising the long-term value for our shareholders, comprising both private equity investment and management, is very important. We have monthly meetings with our main investor which cover not only financial performance but also operational outputs and strategic options available to the group. During the year this resulted in the acquisition of Sitec Infrastructure Services Limited, which has allowed the group to further enhance its professional services offering and enter the fixed line telecommunications market.

Colleagues

Our people are crucial to our success as a group and, with that in mind, we have continued to engage closely with them and invest in appropriate training and development. We ensure that all appropriate policies and procedures are in place to promote employee wellbeing and that employees have access to support where needed, be that via health schemes or confidential whistleblowing lines. The group has obtained Investors In People status and also introduced a group-wide staff incentive scheme linked to both the group’s financial performance and individual appraisals, which in turn are based on agreed objectives and group-wide values and behaviours.

Customers

We strive to ensure that our customers receive class-leading service across their networks, built on our long-standing and deeply embedded relationships. We use our knowledge of their networks to ensure that our service proposition and programme management best serves their needs and that our detailed customer account plans are aligned with their requirements.

Suppliers

We engage closely with our suppliers to ensure that our relationships are mutually beneficial and long lasting. We onboard suppliers in a controlled manner to ensure they have appropriate insurances, risk assessments and qualifications that will allow them to be best placed to help us deliver our customers’ requirements across their networks.

Communities

We aim to work closely with the communities in which we operate and have ensured that where possible we support charitable work carried out by our employees. We also ensure that all staff are aware of the Modern Slavery Act 2015 policy and statement.

In terms of supporting the environment, the group is ESOS (Energy Savings Opportunity Scheme) compliant and is currently in the process of sourcing its office energy requirements from carbon-free suppliers.

Government and regulators

A key area of focus for the business is ensuring compliance with all applicable laws and regulations. To that end we have a dedicated Safety, Health, Environment and Quality (SHEQ) department which ensures compliance and that the group also retains all applicable ISO accreditations including 9001, 14001, 27001 and 45001. The group is also Safe Contractor and Achilles registered.

The board is kept fully abreast of any legal and regulatory developments as and when they arise.

The group has reported record financial results for the year ended 31 May 2020, as the market in which it operates has emerged from 18 months of significant change. This includes the impact of the Electronic Communications Code, increasing complexity of site designs to enable the roll out of 5G networks and the finalisation of spending plans by the mobile network operators.

Turnover in the year grew by £10.3m to £87.8m, driven by increased spend from H3G, MBNL and the roll out of work on the Scottish 4G Infill program. The acquisition of Sitec Infrastructure Services Limited (“Sitec”) also contributed £7.7m of additional turnover.

The reported operating profit of the group in the consolidated statement of comprehensive income is £0.9m. After adding back amortisation charges (£8.2m), depreciation charges (£0.4m), and onerous lease charges (£0.1m), the underlying trading operating profit for the year is £9.6m.

During the year the group incurred interest charges of £11.2m being bank interest of £0.2m, interest on vendor supply chain arrangements of £0.8m and interest on other loans and investment loan notes of £10.2m.

On 6 December 2019 the company completed the acquisition of Sitec Infrastructure Services Limited (“Sitec”). This acquisition will allow the group to further enhance its existing service offering to the mobile telecommunications network while strategically allowing the group to enter the fixed line marketplace and grow the existing customer base of Sitec.

Principal risks and uncertainties include competition and loss of customers, loss of key employees, product liability, public and employer liability, health and safety, I.T. failure, and loss of reputation.

Competitors are monitored for new products and services. Great attention is paid to customer service, with regular and frequent visits to customers by company representatives (both sales and technical).

The group sets out to attract capable employees, and to retain and motivate them once they are employed. It does so by a combination of offering market rates of pay and benefits in kind, and training, together with involvement in some of the decision making process, and consultation about major changes.

Product, public and employee liability are covered by the group's insurances, which are arranged by independent brokers with reputable underwriters, and the cover is reviewed annually.

The group has a Health & Safety policy, which is reviewed annually by the Board. The directors are responsible for its implementation. Health & Safety is of paramount importance to the business.

I.T. failure is covered by the use of standard hardware and software, which are regularly monitored and maintained by reliable outside professionals and by staff training. Computer equipment is written off very fast and renewed or updated at least every 4 years. Critical data and records are backed up daily, and stored securely offsite.

Reputational risk is managed by careful design and quality assurance processes, and compliance with industry standards. The group responds rapidly to any problems which may arise, and continuously pays close attention to customer needs, and also to UK industry codes of practice.

The Board, having reviewed the above risk management policies and procedures, confirm that the procedures comply with the policies, and that no significant failures or weaknesses have been identified during the past year.

The company is the ultimate holding company that supports a group of operational companies, each with their own principal risks and uncertainties. These include competitive pressure, loss of customers, loss of key employees, product liability, Health and Safety, and loss of reputation.

The key risk to Whistler Topco Limited is the performance of its 100% wholly owned subsidiary, Whistler Midco Limited and the key trading company within the group, WHP Telecoms Limited. The continued positive performance of WHP Telecoms Limited ensures that the group is able to service its debt as payments fall due. As referenced in that company, the directors assess, actively manage and have policies in place to mitigate key identified risks.

Following the resignation of the position of the United Kingdom from the European Union on 31 January 2020, the UK and the EU have entered a transitional period to 31 December 2020. During this period, the trading relationship between the UK and the EU is expected to remain unchanged, however the terms of the future relationship from 1 January 2021 onwards are still unknown. The directors have considered factors that could impact the business including access to skilled labour, the supply of materials and the location of customers. None of these factors are expected to be adversely impacted by the UK leaving the EU and as a result the directors do not believe there to be any significant risk to the group going forward.

Impact of Covid-19

The group has been fortunate not to have suffered any significant financial or operational impact as a result of the Covid-19 pandemic. All office-based staff have successfully operated from either their own home environment or returned to office-based working, where the directors have implemented safety measures, including social distancing, temperature checks and the provision of appropriate personal protective equipment (“PPE”). For field-based staff, the sector in which the group operates has been classified as part of the United Kingdom’s critical infrastructure and appropriate permissions have been gained from all customers to allow continuous working on their respective networks. Investment has been made to ensure availability of all appropriate PPE for those staff. The directors have also put in place return-to-work policies and risk assessments are made at all sites before work commences.

Overall, the directors are satisfied with the measures put in place and will continue to monitor the situation closely to minimise any potential financial or operational impacts to the business.

Management use a range of performance measures to monitor and manage the group. Key financial indicators are:

-Revenue per FTE - £220,728

-Operating profit (before amortisation) - £9,070,311

-Working Capital measurement:

• Debtor days - 97 days

• Creditor days - 91 days

For Whistler Topco Limited specifically, the key financial indicator is to ensure that the carrying value of its subsidiary undertaking is free from impairment. A review of the main group trading entity, WHP Telecoms Limited, supports the carrying value of the investments. During the year the company received dividends of £2,000.

Non-financial indicators which are used by the group include:

-Conformance against client Health and Safety requirements

-Measurement of the compliance with Health & Safety regulations and quality assurance by subcontractors

-Output of key delivery milestones including but not limited to site access levels, quantity of design outputs (general arrangement drawings, detailed designs), site build completes, handover packs and final accounts

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 May 2020.

The principal activity of the company is to act as a holding company.

The principal activity of the group is to provide high quality end to end services in the acquisition, design, deployment, upgrade and maintenance of the mobile and fixed line telecommunication networks and infrastructure.

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

The loss for the year, after taxation, amounted to £11,257,187 (2019: £17,508,585).

The directors have not recommended the payment of a dividend.

The group's operations expose it to a variety of financial risks that principally include the effects of changes in price risk, credit risk and liquidity risk.

The group operates under a series of framework contracts with its end clients and to agreed schedules of rates which minimises the group exposure to any significant price risk.

The group has policies that require appropriate credit checks on customers to be made before trading commences. The nature of the group's customers are such that any credit risks are deemed low.

The group's policy throughout the year has been that, to ensure continuity of funding, the repayment profile for its borrowings is such that repayments can be adequately satisfied from forecast future cash surpluses generated from operations.

The group has access to a revolving credit facility that is designed to ensure sufficient funds are available for operations and planned expansion.

It is the group's policy to promote the health, safety and welfare of its employees; to provide equal opportunity in recruitment; and to maximise the opportunities for the employment, retention and development of its employees. The group has continued to place a high priority on the training and development of its employees and considerable emphasis has been placed on reviewing and improving health and safety procedures.

The board recognises the need for effective communication with, and the involvement of, employees to ensure good relations and the improvement of the group's performance and will continue to hold briefings, training and presentations when required.

There have been no post balance sheet events impacting the group or company.

The group remains very well placed to capitalise on the continued 5G and fibre roll out plans, all of which now have significant momentum behind them. With successful program wins now delivering across the MNO’s, opportunities regarding the £1 billion Single Rural Network and the requirement to remove Huawei kit across several networks, the directors are confident that the group will deliver record financial results over the next financial year.

Continued investment in the Salesforce project management platform and the operation of the group’s design academy, launched in early 2020, will also help to ensure that ongoing customer requirements are met by the group.

Mazars LLP resigned as auditor on 9th January 2020. DSG were appointed as auditor to the company on 9th January 2020 and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they will be re-appointed will be put at a general meeting.

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 auditor of the company 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 auditor of the company is aware of that information.

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 group and company, 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;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Whistler Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2020 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 a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 group's and the parent company's affairs as at 31 May 2020 and of the group's loss 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

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 or the parent company’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 included in the annual report, other than the financial statements and our auditor’s report 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 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

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.

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 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.

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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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 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.

As permitted by s408 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 £2,000 (2019 - £10,000 profit).

Whistler Topco Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Faraday Court, 401 Faraday Street, Birchwood Park, Warrington, WA3 6GA.

The group consists of Whistler Topco 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 company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated financial statements incorporate those of Whistler Topco Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 May 2020. 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.

The group accounts have been prepared on a going concern basis not withstanding losses incurred in the year of £11,257,187 and a deficit in shareholders' funds at 31 May 2020 of £27,845,953. A significant proportion of the losses in the period are attributable to the non-cash amortisation charge on intangible assets in the period of £8,182,173. Although the group has a deficit in shareholders' funds at 31 May 2020, £108,500,000 of its borrowings are made on a long term basis falling due in 2 - 5 years from the balance sheet date.

Preparation of accounts on a going concern basis assumes that the group will have sufficient funds to continue to pay its debts as and when they fall due and thus continue to trade. The directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future based on its forecasts and projections.

In making their assessment the directors have reviewed and considered the expected performance across the group's key projects using their understanding of expected volumes and pricing. They have also taken into consideration the timing of key debts when they fall due and the impact these have upon expected cash flows. This has been modelled for a period covering 12 months from the date of signing these financial statements.

The directors have considered the impact of Covid-19 on the group. The group operates within the critical infrastructure sector and has not suffered any significant financial or operational impact as a result of the Covid-19 pandemic. The directors therefore do not deem Covid-19 to be a significant risk to the group or parent company’s ability to continue as a going concern.

The company accounts are also prepared on a going concern basis as it has a strong balance sheet and support from other trading group companies.

Revenue is recognised over the course of projects as activity progresses. Revenue is based on estimated total turnover (project value) and the degree of estimated stage of completion (measured as total costs incurred compared to total costs forecast to the end of the project) for each individual project. Where calculated revenue exceeds the value that has been invoiced this is disclosed as amounts recoverable on projects in debtors, where revenue is below amounts invoiced this is disclosed as payments on account in creditors.

Profit on projects is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated to reflect the proportion of the work carried out at the year end date. Full provision is made for losses on all projects in the year in which they are first foreseen.

Management fee income is recognised in the period in which it is invoiced.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

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:

Assets under construction are not depreciated. Assets transferred to plant and equipment from assets under construction were completed immediately prior to the year-end date so are not depreciated.

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 profit or loss.

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.

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.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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 assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

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

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

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

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 and loans from fellow group companies 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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group 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 group.

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.

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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.

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.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Finance costs

Finance costs are charged to the Income Statement over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

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

The group has entered into leases as a lessee obtaining the use of land and buildings and other tangible fixed assets. The classification of such leases as operating or finance lease requires management to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the Balance Sheet.

The acquisition of Sitec Infrastructure Services Limited on 6 December 2019 has been accounted for as a business acquisition in accordance with FRS 102. Under FRS 102, the group is required to evaluate the fair value of the assets and liabilities of the acquired party. The directors assessment of fair values requires detailed judgement alongside consideration of the useful economic life of the goodwill.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Amounts recoverable on projects are based on a stage of completion determined by the group on the basis of expected total revenue and expected total costs on projects. The recoverability of such amounts are subject to negotiation with customers which may cause adjustments up and down in determining final accounts.

Where an indication of impairment exists, the directors will carry out an impairment review to determine the recoverable amount, being the higher of fair value less cost to sell and value in use. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.

The group establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the receivables, past experience of recoverability and the credit profile of individual or groups of customers.

The group depreciates tangible assets, and amortises intangible assets, over their estimated useful lives. In determining appropriate useful lives of assets, the directors have considered historic performance as well as future expectations for factors such as expected usage of the asset, physical wear and tear, technical and commercial obsolescence and legal limitations of the usage of the asset, such as lease terms. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

Judgement is applied to determine the residual values for tangible assets. When determining the residual values, the directors have assessed the amount that the group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. At each reporting date, the directors have also assessed whether there have been any indicators, such as a change in how the asset is used, significant unexpected wear and tear and changes in market prices, which suggest previous estimates may differ from current expectations. Where this is the case, the residual value and/or useful life is amended and accounted for on a prospective basis.

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

Their aggregate remuneration comprised:

The service contracts for the directors are held with subsidiary entities which settled the salaries, benefits, and pension contributions directly during the period.

During the year retirement benefits were accruing to 6 (2019: 6) directors in respect of defined contribution pension schemes.

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

Factors that may affect future tax charges

Finance Act 2016 included provisions to reduce the corporation tax rate from 19% to 17% with effect from 1 April 2020. However, in the Budget of 11 March 2020, the Chancellor of the Exchequer announced that this rate reduction will no longer take place; the rate will instead remain at 19%. This cancellation of the reduction in tax rate was substantively enacted on 17 March 2020, before the balance sheet date, and as such deferred tax balances as at the balance sheet date have been calculated based on timing differences reversing at the 19% rate.

The following were subsidiary undertakings of the company. Those marked with an asterisk are held indirectly through the direct investment in Whistler Midco Limited. Sitec Infrastructure Services Limited is held indirectly through the direct investment in Whistler Bidco Limited.

Amounts owed by group undertakings are unsecured, interest free, and repayable on demand.

Amounts owed to group undertakings are unsecured, interest free, and repayable on demand.

Within bank loans falling due in less than one year is a Revolving Credit Facility ("RCF") of £7,000,000 which was drawn on 28 March 2018 (£5,000,000) and 31 March 2020 (£2,000,000) and which falls due for repayment on 28 March 2021. Interest is charged on the RCF at the rate of 3.5% per annum over LIBOR. Total interest charged in the year on the loan was £223,348 (2019: £253,672).

Within other loans falling due 2-5 years is a loan of £50,000,000 which was drawn on 28 March 2018 (£45,000,000) and 6 December 2019 (£5,000,000) and which falls due for repayment on 6 July 2023. Interest is charged on the loan at the rate of 6.75% per annum over LIBOR. Total interest charged in the year on the loan was £3,624,722 (2019: £4,003,517).

The company has further undrawn loan facilities in place on which interest of £136,442 (2019: £233,972) was charged in the year.

Security for the loans takes the form of (i) a debenture; (ii) an intercreditor agreement supporting the group debenture in place.    ·

Also within other loans falling due 2-5 years are the following:

Loan Notes falling due in more than one year of £36,796,795 represent Fixed Rate Unsecured Ten Per Cent Investor Loan Notes from shareholders Equistone Partners. Interest charged in the period was £4,120,559 (2019: £4,387,465). The loan notes are due for redemption on 6 July 2024. The loan notes are secured by way of an intercreditor deed between the company and Whistler Topco Limited and Whistler Bidco Limited. Until the loan notes are redeemed or repaid interest will accrue, compounding annually on 28 March, and be paid on the redemption date.

Loan Notes falling due in more than one year of £7,892,074 represent Fixed Rate Unsecured Ten Per Cent Investor Loan Notes from shareholders Palatine Private Equity. Interest charged in the period was £883,766 (2019: £941,011). The loan notes are due for redemption on 6 July 2024. The loan notes are secured by way of an intercreditor deed between the company and Whistler Topco Limited and Whistler Bidco Limited. Until the loan notes are redeemed or repaid interest will accrue, compounding annually on 28 March, and be paid on the redemption date.

Loan Notes falling due in more than one year of £13,811,131 represent Fixed Rate Unsecured Ten Per Cent Investor Loan Notes from directors and senior management. Interest charged in the period was £1,491,829 (2019: £1,610,385). The loan notes are due for redemption on 6 July 2024. The loan notes are secured by way of an intercreditor deed between the company and Whistler Topco Limited and Whistler Bidco Limited. Until the loan notes are redeemed or repaid interest will accrue, compounding annually on 28 March, and be paid on the redemption date.

Dilapidation provisions are recognised as an estimate of costs required to return vacated leased property to its original state and condition under the terms of the lease agreement with the landlord.

Onerous lease provisions are recognised where the unavoidable costs of meeting the obligations of certain leases exceed the economic benefits expected to be received from them, measured at the least net cost of exiting the contract determined as the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The onerous lease provision is discounted where the effect is material to the financial statements.

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

The group has gross tax losses carried forward at 31 May 2020 of £8,398,340. These losses have not been recognised as a deferred tax asset calculated at 19% of £1,595,685 as there is uncertainty around the timing of their utilisation.

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.

As at 31 May 2020 there were contributions outstanding of £98,811 (2019: £68,326).

During the year the company issued 5,513 ordinary C2 shares of 1p each at a total premium of £15,657, and repurchased 2,429 ordinary B shares of 1p at their original issue price of £1.

Dividends

Profits may be distributed subject to shareholder approval and shall be applied pari passu amongst the holders of the ordinary A shares, ordinary B shares, and ordinary C1 and C2 shares.

Return of assets on liquidation, capital reduction or otherwise

The assets of the company remaining after the payment of its liabilities shall be applied:

• First in paying the issue price to the ordinary A and ordinary B shares;

• Then in dividing the surplus (if any) between the ordinary A shares, ordinary B shares, and ordinary C1 and C2 shares

Voting rights

Ordinary A, ordinary B, and ordinary C1 shares each have one vote save that ordinary A shares account for a minimum of 50.1% of the votes capable of being cast on any resolution of the Company. Holders of ordinary C1 shares will account for 30% of votes capable of being cast on any resolution of the Company.

Ordinary C2 shares do not carry any voting rights.

The share premium accounts includes any premium received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

This reserve represents the nominal value of the company's own shares that were repurchased during the period.

Profit & loss account

The profit and loss reserve includes all current period retained profits and losses.

On 6 December 2019 Whistler Bidco Limited entered into an asset purchase agreement for the acquisition of Sitec Infrastructure Services Limited.

The following tables set out a summary of the assets and liabilities assumed during the transaction together with details of how the purchase consideration was settled.

Whistler Topco Limited has given a debenture to Glas Trust Corporation Limited (the security agent for the "Lenders": Permira Credit Solutions and The Royal Bank of Scotland Plc) to secure a cross guarantee given under an intercreditor deed in respect of loan borrowings owed to the Lenders due from Whistler Midco Limited, Whistler Bidco Limited, Cooper Topco Limited, Cooper Bidco Limited, WHP (Holdings) Limited, WHP Telecoms Limited, Paragon Telecoms Limited, and Sitec Infrastructure Services Limited.

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 group has taken advantage of the reduced disclosure exemption available under Financial Reporting Standard 102 relating to the disclosure of related party transactions between wholly owned group companies.

No transactions with related parties were undertaken such as are required to be disclosed under Financial Reporting Standard 102.

The ultimate controlling party of the group is Equistone LLP, a limited liability partnership registered in England and Wales, registration number 0C360196. The registered address of Equistone LLP is One New Ludgate, 60 Ludgate Hill, London, England, EC4M 7AW.