O'Connor Holdings Limited - Limited company accounts 22.3

REGISTERED NUMBER: 10410955 (England and Wales)

O'CONNOR HOLDINGS LIMITED

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD 1 OCTOBER 2021 TO 31 OCTOBER 2022

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

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

18

DIRECTORS:

P P O'Connor

J P O'Connor

C M O'Connor

REGISTERED OFFICE:

The Exchange

5 Bank Street

Bury

BL9 0DN

REGISTERED NUMBER:

10410955 (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 group for the 13 month period ended 31 October 2022.

BUSINESS OVERVIEW

The business continues to strategically focus on haulage and plant hire activities which has led to a second consecutive period of growth in revenue and activity.

BUSINESS MODEL

It is the intention of the Directors to maintain, consolidate and grow the business and focus on developing a greater presence in the construction plant hire industry. The group's key differentiators are its ability to meet customer demands through its continued development of its people and investment in new equipment and technology.

Investment is a deciding factor in the growth of the business especially as supply chains continue to be disrupted by global macroeconomic events, making hire more attractive.

RISK FACTORS

The principal risk factors for the business are the general macroeconomic environment, interest rates, liquidity, and the creditworthiness of its customers.

The record revenue achieved in the period to 31 October 2022 has been achieved against a backdrop of both domestic and international economic uncertainty, including significant fluctuations in the fuel price, and, whilst the Directors remain confident of continuing to be able to operate profitably in this economic environment, the Directors continue to monitor the level of plant utilisation with the aim of mitigating the effects of any downturn in demand and minimising costs associated with any further macroeconomic turbulence.

The group requires access to new capital to replace assets and grow the fleet. The group uses a diversified portfolio of funding sources when purchasing plant and all agreements are on a fixed interest rate basis to avoid the risk of movement in the base rate.

The nature of the industry in which the company 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 Directors believe the group has sufficient funding facilities for the medium term.

The creditworthiness of new customers is assessed by the group prior to commencing a new hire agreement and the indebtedness of all customers is managed to ensure prompt payment in line with the contract terms. In certain exceptional circumstances the company may consider insuring customers against default, but this continues to be the exception rather than the norm.

OBJECTIVES

The group's key objective for the year ending 31 October 2023 is to maintain sustainable growth whilst minimising any negative impact on the business from the uncertainty caused by the effects of the global macroeconomic environment.

PERFORMANCE

Revenue for the period is (on a pro-rata basis) up 13.1% in comparison to 2021 at £20.5m, reflecting the increasing economic activity in the construction sector in the northwest of England. Most of the activity was for plant hire and haulage activities.

The group took advantage of VAT deferral options to help maintain liquidity throughout the period.

The Directors expect the general level of activity to continue to improve into 2023 and are confident that their strategy, together with the dedication of the workforce will allow to company to develop into a key player within the industry over the next few years.

ON BEHALF OF THE BOARD:

P P O'Connor - Director

23 December 2022

The directors present their report with the financial statements of the company and the group for the period 1 October 2021 to 31 October 2022.

PRINCIPAL ACTIVITY

The principal activity of the group in the period under review was that of plant hire and haulage.

The principal activity of the company was that of a holding company for its trading subsidiary.

DIVIDENDS

No dividends will be distributed for the period ended 31 October 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 October 2021 to the date of this report.

P P O'Connor

J P O'Connor

C M 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

23 December 2022

Opinion

We have audited the financial statements of O'Connor Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 October 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 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 group's and of the parent company affairs as at 31 October 2022 and of the group's profit for the period 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 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

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 group's and the parent 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 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 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 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 four, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

As part of our planning process:

-

We enquired of management the systems and controls the group has in place, the areas of the financial statements
that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or
alleged fraud. The group did not inform us of any known, suspected or alleged fraud.

-

We obtained an understanding of the legal and regulatory frameworks applicable to the group. We determined
that the following were most relevant: FRS 102, Companies Act 2006, Health and Safety At Work 1974,
Employment Act 2008, Environmental Protection Act 1990 and General Data Protection Regulations (GDPR).

-

We considered the incentives and opportunities that exist in the group, including the extent of management bias,
which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment
accordingly.

-

Using our knowledge of the group, together with the discussions held with the group at the planning stage, we
formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures
according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

-

Identifying and testing journal entries, in particular those that were significant and unusual.

-

Reviewing the financial statement disclosures and determining whether accounting policies have been
appropriately applied.

-

Reviewing and challenging the assumptions and judgements used by management in their significant accounting
estimates, in particular in relation to determining the useful life and residual values of plant and equipment,
determining the expected outcome of long term contracts, and categorising leases as finance or leases.

-

Assessing the extent of compliance, or lack of, with the relevant laws and regulations in particular those that are
central to the entity's ability to continue in operation.

-

Testing key revenue lines, in particular cut-off, for evidence of management bias.

-

Performing a physical verification of key assets , including property, plant and equipment.

-

Obtaining third-party confirmation of material bank and loan balances.

-

Documenting and verifying all significant related party and consolidated balances and transactions.

-

Reviewing documentation such as the group board minutes, correspondence with solicitors, for discussions of
irregularities including fraud.

-

Testing all material consolidation adjustments.

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

23 December 2022

O'CONNOR HOLDINGS LIMITED (REGISTERED NUMBER: 10410955)

CONSOLIDATED

INCOME STATEMENT

FOR THE PERIOD 1 OCTOBER 2021 TO 31 OCTOBER 2022

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

Notes

£

REVENUE

3

20,450,624

16,690,819

Cost of sales

(19,177,415

)

(15,845,630

)

GROSS PROFIT

1,273,209

845,189

Administrative expenses

(499,492

)

(370,687

)

773,717

474,502

Other operating income

-

31,690

OPERATING PROFIT

5

773,717

506,192

Interest payable and similar expenses

6

(522,498

)

(426,055

)

PROFIT BEFORE TAXATION

251,219

80,137

Tax on profit

7

248,738

18,119

PROFIT FOR THE FINANCIAL PERIOD

499,957

98,256

Profit attributable to:

Owners of the parent

499,957

98,256

O'CONNOR HOLDINGS LIMITED (REGISTERED NUMBER: 10410955)

CONSOLIDATED

OTHER COMPREHENSIVE INCOME

FOR THE PERIOD 1 OCTOBER 2021 TO 31 OCTOBER 2022

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

Notes

£

PROFIT FOR THE PERIOD

499,957

98,256

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD

499,957

98,256

Total comprehensive income attributable to:

Owners of the parent

499,957

98,256

FIXED ASSETS

Property, plant and equipment

9

15,113,195

13,293,557

Investments

10

-

15,113,195

13,293,557

CURRENT ASSETS

Inventories

11

108,309

88,271

Debtors

12

11,818,648

3,210,978

Cash at bank

224,939

700,787

12,151,896

4,000,036

CREDITORS

Amounts falling due within one year

13

(19,244,761

)

(9,269,776

)

NET CURRENT LIABILITIES

(7,092,865

)

(5,269,740

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

8,020,330

8,023,817

CREDITORS

Amounts falling due after more than one
year

14

(6,386,844

)

(6,641,550

)

PROVISIONS FOR LIABILITIES

17

(43,599

)

(292,337

)

NET ASSETS

1,589,887

1,089,930

CAPITAL AND RESERVES

Called up share capital

18

2,000,000

Retained earnings

(410,113

)

(910,070

)

SHAREHOLDERS' FUNDS

1,589,887

1,089,930

The financial statements were approved by the Board of Directors and authorised for issue on 23 December 2022 and were signed on its behalf by:

P P O'Connor - Director

FIXED ASSETS

Property, plant and equipment

9

-

Investments

10

2,000,000

TOTAL ASSETS LESS CURRENT
LIABILITIES

2,000,000

CAPITAL AND RESERVES

Called up share capital

18

2,000,000

SHAREHOLDERS' FUNDS

2,000,000

Company's profit for the financial year

-

The financial statements were approved by the Board of Directors and authorised for issue on 23 December 2022 and were signed on its behalf by:

P P O'Connor - Director

Called up

share

Retained

Total

capital

earnings

equity

£

Balance at 1 October 2020

2,000,000

(1,008,326

)

991,674

Changes in equity

Total comprehensive income

-

98,256

Balance at 30 September 2021

2,000,000

(910,070

)

1,089,930

Changes in equity

Total comprehensive income

-

499,957

Balance at 31 October 2022

2,000,000

(410,113

)

1,589,887

Called up

share

Retained

Total

capital

earnings

equity

£

Balance at 1 October 2020

2,000,000

-

2,000,000

Changes in equity

Balance at 30 September 2021

2,000,000

-

2,000,000

Changes in equity

Balance at 31 October 2022

2,000,000

-

2,000,000

O'CONNOR HOLDINGS LIMITED (REGISTERED NUMBER: 10410955)

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD 1 OCTOBER 2021 TO 31 OCTOBER 2022

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

Notes

£

Cash flows from operating activities

Cash generated from operations

1

3,830,226

3,340,021

Interest paid

(1,070

)

(3,556

)

Interest element of hire purchase and finance
lease rental payments paid

(521,428

)

(422,499

)

Government grants

-

31,690

Tax paid

304,087

-

Net cash from operating activities

3,611,815

2,945,656

Cash flows from investing activities

Purchase of property, plant & equipment

(689,507

)

(749,983

)

Sale of property, plant & equipment

1,769,440

1,926,715

Net cash from investing activities

1,079,933

1,176,732

Cash flows from financing activities

Capital repayments in year

(5,167,596

)

(4,019,504

)

Net cash from financing activities

(5,167,596

)

(4,019,504

)

(Decrease)/increase in cash and cash equivalents

(475,848

)

102,884

Cash and cash equivalents at beginning of
period

2

700,787

597,903

Cash and cash equivalents at end of
period

2

224,939

700,787

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

£

Profit before taxation

251,219

80,137

Depreciation charges

2,817,287

3,200,597

Profit on disposal of fixed assets

(767,376

)

(216,793

)

Government grants

-

(31,690

)

Finance costs

522,498

426,055

2,823,628

3,458,306

Increase in inventories

(20,038

)

(61,125

)

(Increase)/decrease in trade and other debtors

(8,911,757

)

1,955,048

Increase/(decrease) in trade and other creditors

9,938,393

(2,012,208

)

Cash generated from operations

3,830,226

3,340,021

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Period ended 31 October 2022

31.10.22

1.10.21

£

Cash and cash equivalents

224,939

700,787

Year ended 30 September 2021

30.9.21

1.10.20

£

Cash and cash equivalents

700,787

597,903

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.10.21

Cash flow

changes

At 31.10.22

£

Net cash

Cash at bank

700,787

(475,848

)

224,939

700,787

(475,848

)

224,939

Debt

Hire purchase and

finance leases

(10,487,034

)

5,167,596

-

(10,268,920

)

(10,487,034

)

5,167,596

-

(10,268,920

)

Total

(9,786,247

)

4,691,748

-

(10,043,981

)

1.	STATUTORY INFORMATION

O'Connor Holdings Limited is a private company, limited by shares, registered in England and Wales. The company's registered number is 10410955 and the registered office is located at The Exchange, 5 Bank Street, Bury, BL9 0DN.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

The group has reported a profit before tax of £251,219 for the period and has net assets of £1,589,887 (2021 - £1,089,930) at the statement of financial position date.

The directors have prepared forecasts for the next 12 months which indicate that the group will have sufficient funds, through funding support from a related entity, PP O'Connor Group Limited, to meet its liabilities as they fall due.

Included within creditors due within one year is an amount due to PP O'Connor Group Limited of £12,421,278 (2021: £3,156,433).

PP O'Connor Group Limited has confirmed that this amount need not be repaid until the group is in a position to do so. PP O'Connor Group Limited has indicated its intention to continue to make available such funds as are needed by the group for the period covered by the forecast, to enable the group to continue its operations and to meet its liabilities and commitments as they fall due. As with any company placing reliance on related entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

The group meets its day to day working capital requirement though an invoice discounting facility and continues to enjoy the support of its lenders post year end. The facility providers have indicated that there are no known reasons why the facility would not be made available for at least another 12 months.

After making enquires the directors have reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The directors therefore continue to adopt the going concern basis in preparing group's financial statements.

Basis of consolidation

The consolidated financial statements incorporate the results of O'Connor Holdings Limited and its subsidiary undertaking as at 31 October 2022 using the acquisition method of accounting. The results of the subsidiary undertaking are included from the date of acquisition.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less impairment.

Significant judgements and estimates

In the application of the group's accounting policies, the directors are required to make estimates and judgements. The estimates are based on historical experience and other relevant factors. Actual results may differ from these estimates.

The estimates are continually evaluated. Revisions to accounting estimates are recognised in the period in which the estimate is revised.

The estimates and assumptions which have the most significant impact on the carrying values of assets and liabilities are outlined below.

1) Determining the useful life of plant and equipment.

2) Determining the residual values of plant and equipment.

3) In categorising leases as finance or operating leases, the directors make judgements as to whether significant risks and rewards of ownership have transferred to the company as lessee.

4) Assessment of recovery of related party debt.

Revenue

Revenue represents the aggregate of the fair value of plant hire and haulage services provided as well as contract work in the form of civil engineering and groundwork projects, net of value added tax, refunds and discounts. Revenue is recognised as follows:

Plant hire revenue is recognised over the lease term of the assets provided.

Haulage service revenue is recognised when the company has delivered the transported products to the customer.

Contract revenue is ascertained by reference to the valuation of the work carried out to date based on submitted payment applications and previously certified work. The contract stage of completion is assessed with reference to the value of completed works in comparison to the total contract price, as amended for known variations.

Property, plant and equipment

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

- 12.5% to 33.33% on cost

Motor vehicles

- 25% to 35% on reducing balance

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each statement of financial position date. The effects of any revision are recognised in the income statement when the change arises.

Government grants

Grants are accounted for under the accruals model as permitted by FRS 102.

In the prior year the company benefitted from the Government Coronavirus Job Retention Scheme ('Furlough'). Furlough income was recognised in "other income" in the same period as the related wage costs.

Inventories

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost represents actual purchase price.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the statement of financial position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

All other leases are treated as operating leases. The annual rentals are charged to profit or loss in the period in which they become payable.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to the income statement in the period to which they relate.

Financial instruments

The group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties and loans to related parties.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement.

Basic financial liabilities are initially measured at transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled.

3.

REVENUE

The revenue and profit before taxation are attributable to the one principal activity of the group.

An analysis of revenue by class of business is given below:

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

£

Contract revenue

28,372

464,135

Plant hire & haulage

19,416,781

15,926,934

Other services

1,005,471

299,750

20,450,624

16,690,819

Substantially all revenue is generated in the United Kingdom.

4.	EMPLOYEES AND DIRECTORS

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

£

Wages and salaries

4,549,211

3,410,275

Social security costs

444,239

319,083

Other pension costs

82,609

58,178

5,076,059

3,787,536

The average number of employees during the period was as follows:

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

Directors

3

Direct labour

86

76

89

79

The average number of employees by undertakings that were proportionately consolidated during the period was 89 (2021 - 79 ) .

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

£

Depreciation - owned assets

581,216

306,733

Depreciation - assets on hire purchase contracts and finance leases

2,236,071

2,893,864

Profit on disposal of fixed assets

(767,376

)

(216,793

)

Audit fee

13,000

15,000

Government grants

-

(31,690

)

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

£

Invoice discounting charges

628

3,556

Interest payable

442

-

Hire purchase interest

521,428

422,499

522,498

426,055

7.

TAXATION

Analysis of the tax credit

The tax credit on the profit for the period was as follows:

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

£

Deferred tax:

Accelerated capital allowances

1,342,039

136,728

Unrelieved tax losses

(1,590,777

)

(154,847

)

Total deferred tax

(248,738

)

(18,119

)

Tax on profit

(248,738

)

(18,119

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The difference is explained below:

Period

1.10.21

to

Year Ended

31.10.22

30.9.21

£

Profit before tax

251,219

80,137

Profit multiplied by the standard rate of corporation tax in the UK of 19 %
(2021 - 19 %)

47,732

15,226

Effects of:

Adjustments to tax charge in respect of previous periods

-

(5,662

)

Loss on disposal of ineligible assets

-

13,349

Depreciation on ineligible assets

-

22,659

Remeasurement of deferred tax for changes in tax rates

10,547

-

Super deduction for capital allowances

(307,017

)

(63,691

)

Total tax credit

(248,738

)

(18,119

)

Tax rate changes

The Finance Bill 2021 has set out measures to maintain the corporation tax rate for financial years beginning 1 April 2021 and 2022. For financial years beginning after 1 April 2023, the corporation tax rate will be increased to 25% for profits over £250,000. A small profits rate (SPR) will also be introduced for companies with profits of £50,000 or less so that they will continue to pay corporation tax at 19%. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by marginal relief. The directors are not aware of any other factors that will materially affect the future tax charge.

Deferred tax has been calculated and provided for at a rate of 25% (2021 - 19%).

8.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

9.	PROPERTY, PLANT AND EQUIPMENT

Group

Plant and

Motor

machinery

vehicles

Totals

£

COST

At 1 October 2021

18,050,042

1,187,748

19,237,790

Additions

5,389,414

249,575

5,638,989

Disposals

(3,503,650

)

(166,913

)

(3,670,563

)

At 31 October 2022

19,935,806

1,270,410

21,206,216

DEPRECIATION

At 1 October 2021

5,246,395

697,838

5,944,233

Charge for period

2,599,422

217,865

2,817,287

Eliminated on disposal

(2,590,936

)

(77,563

)

(2,668,499

)

At 31 October 2022

5,254,881

838,140

6,093,021

NET BOOK VALUE

At 31 October 2022

14,680,925

432,270

15,113,195

At 30 September 2021

12,803,647

489,910

13,293,557

Fixed assets, included in the above, which are held under hire purchase contracts and finance leases are as follows:

Plant and

Motor

machinery

vehicles

Totals

£

COST

At 1 October 2021

12,842,995

952,347

13,795,342

Additions

4,865,182

84,300

4,949,482

Disposals

(378,830

)

-

(378,830

)

Transfer to ownership

-

(278,726

)

(278,726

)

At 31 October 2022

17,329,347

757,921

18,087,268

DEPRECIATION

At 1 October 2021

2,739,285

436,696

3,175,981

Charge for period

2,086,550

149,521

2,236,071

Eliminated on disposal

(238,960

)

-

(238,960

)

Transfer to ownership

-

(117,667

)

(117,667

)

At 31 October 2022

4,586,875

468,550

5,055,425

NET BOOK VALUE

At 31 October 2022

12,742,472

289,371

13,031,843

At 30 September 2021

10,103,710

515,651

10,619,361

10.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertakings

£

COST

At 1 October 2021

and 31 October 2022

2,000,000

NET BOOK VALUE

At 31 October 2022

2,000,000

At 30 September 2021

2,000,000

The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Subsidiary

PP O'Connor Plant Limited

Registered office: The Exchange, 5 Bank Street, Bury, BL9 0DN.

Nature of business: Civil engineering and groundwork projects

%

Class of shares:

holding

Ordinary

100.00

11.	INVENTORIES

Group

2022

2021

£

Consumable stores

108,309

88,271

12.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

2022

2021

£

Trade debtors and amounts recoverable on
contracts

544,014

652,492

Other debtors

11,230,719

2,206,089

Corporation tax

-

304,087

Prepayments

43,915

48,310

11,818,648

3,210,978

13.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

2022

2021

£

Hire purchase contracts and finance leases (see note 15)

3,882,076

3,845,484

Trade creditors

414,604

281,088

Social security and other taxes

110,477

63,711

VAT

250,696

455,774

Other creditors

14,375,157

4,095,823

Accrued expenses

211,751

527,896

19,244,761

9,269,776

14.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

Group

2022

2021

£

Hire purchase contracts and finance leases (see note 15)

6,386,844

6,641,550

15.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Hire purchase contracts

Finance leases

2022

2021

2022

2021

£

Net obligations repayable:

Within one year

3,796,810

3,763,673

85,266

81,811

Between one and five years

6,386,844

6,549,325

-

92,225

10,183,654

10,312,998

85,266

174,036

16.	SECURED DEBTS

The following secured debts are included within creditors:

Group

2022

2021

£

Hire purchase contracts and finance leases

10,268,920

10,487,034

Obligations under hire purchases contracts and finance leases are secured on the assets to which they relate.

The invoice discounting creditor is secured on the associated trade debt.

17.	PROVISIONS FOR LIABILITIES

Group

2022

2021

£

Deferred tax

Accelerated capital allowances

1,810,872

454,512

Unrelieved tax losses

(1,767,273

)

(162,175

)

43,599

292,337

Group

Deferred

tax

£

Balance at 1 October 2021

292,337

Movement in the year

(248,738

)

Balance at 31 October 2022

43,599

18.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2022

2021

value:

£

1,000,000

Ordinary A

£1

1,000,000

Ordinary B

£1

1,000,000

2,000,000

The A ordinary shares and B ordinary shares rank pari passu in all respects except that the directors may at any time resolve to declare different dividends in relation to each class of share and may also resolve to declare a dividend on one class of share and not the other class.

19.	RELATED PARTY DISCLOSURES

Entities subject to common control

During the year the group:-

i) Made sales on a commercial basis totalling £19,868,115 (2021 - £15,963,045) to related parties.

ii) Purchased goods and services totalling £3,182,447 (2021 - £7,606,478) from related parties.

iii) Was charged a management fee totalling £471,695 (2021 - £325,504) by a related party in respect of central overheads and management services provided.

Included within debtors falling due within one year are amounts due from related parties totalling £11,202,957 (2021 - £2,205,989). These advances are unsecured, interest free and repayable upon demand.

Included within creditors falling due within one year are amounts due to related parties totalling £13,892,985 (2021 - £3,999,603). These advances are unsecured, interest free and repayable upon demand.

In respect of the bank facilities afforded, there is a composite company unlimited unilateral guarantee provided for the related entities.

20.	ULTIMATE CONTROLLING PARTY

The group is jointly controlled by the O'Connor family, comprising P P O'Connor, Ms C M O'Connor, J P O'Connor and Mrs C H O'Connor.