ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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FOR THE YEAR ENDED 31 MAY 2023
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KENDALL KINGSCOTT LIMITED
COMPANY INFORMATION
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KENDALL KINGSCOTT LIMITED
CONTENTS
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KENDALL KINGSCOTT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
The Directors present their Strategic Report for Kendall Kingscott Limited (the Company or Kendall Kingscott) for the year ended 31 May 2023.
In 2022/23, the company achieved a turnover of £14.64 million, representing a 11.79% increase from the previous year's £13.095 million. The gross profit, inclusive of direct sub-consultant appointments totalling £1.61 million, amounted to £5.425 million, or 37.1%, compared to the prior year's £4.6 million and 35.3%. Notably, the gross profit margin attributable to trading activity advanced to 41.6%, surpassing our established target of 40%.
The operating profit for the year followed a positive trajectory, and EBITDA growth exceeded our target productivity ratios, in line with our growth objectives.
The year-end balance sheet stood at £2.32 million, compared to £1.76 million in the previous year, with cash in bank at £1.63 million, down from £2.92 million. This financial position reflects our prudent management and strategic initiatives aimed at sustaining growth and navigating market challenges.
The Board is pleased to report that the company has continued to progress positively across all metrics, despite the challenging macro-economic conditions faced throughout the year. We have successfully managed above inflation cost increases in various operational areas, including professional indemnity insurance, employee health and life policies, IT equipment and subscriptions, travel, energy costs, and notably, in enhancing support for our staff amid rising living costs. Strategic improvements aimed at increasing efficiency have effectively mitigated the impact of heightened cost pressures, alongside general fee inflation.
The industry has shown resilience in our core sectors — health, education, and niche luxury and discount retail throughout 2022/23. However, a slowdown was observed in the residential sector as developers scaled back on projects due to decreased demand, primarily attributed to escalating interest rates and falling house prices.
Our competitive advantage is underpinned by our rich heritage, diversified client base, scale, interdisciplinary structure, and regional focus across the South of England and Wales. Long-standing relationships with clients in the health and education sectors, some extending over a decade, form the cornerstone of our business model. These relationships are further strengthened by our commitment to cultural and developmental training programs, encapsulated in The KK Way. This framework is designed to empower our staff to realise their full potential through a series of carefully selected training programmes to aid surpassing client expectations.
Our unique interdisciplinary approach, branded as 1-Team, delivers comprehensive, team-centric services that cover the entirety of a project's lifecycle from a single point of responsibility. This approach, coupled with enhanced marketing efforts following the launch of our new brand, has significantly raised our industry profile, and started to yield tangible benefits.
We have intensified our promotional activities, celebrating our achievements and analysing our performance to highlight our industry-leading metrics, especially in staff retention and training. The feedback from clients, staff, and prospective employees has been overwhelmingly positive, signalling strong alignment with our growth and operational strategies.
Our strategic roadmap is focused on a purpose-driven ethos, with several initiatives underway that promise to contribute to our long-term success. These projects include:
∙Increasing our visibility in the market
∙Hiring and keeping the best people
∙Making our office practices more uniform
∙Centralising our corporate services team
∙Creating new job roles that are focused on driving growth
∙Ensure we are best placed to capitalise on the green revolution
∙Formulating our strategy to net-zero before the end of the decade
∙Supporting initiatives that provide social value
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KENDALL KINGSCOTT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
∙Expanding our range of services to include areas like sustainability, fire safety, health and safety,and geomatics
We also aim to grow our presence outside the southern regions, applying our industry expertise in new areas.
The first five months of the current fiscal year to May 2024 have seen robust trading, with sales reaching £7.3 million and a gross profit margin of 43%, excluding sub-consultant costs. Despite market uncertainties and rising interest rates, our diverse client base and ‘safe’ sector-focused approach underpin a strong order book, though tempering of higher value new-build projects has been evident compared with recent years. Refurbishment, retrofit and renewal projects in occupied campus environments account for a significant proportion of our work, and opportunities remain fluid driven by ongoing revenue expenditure pressures.
The company adheres to a rigorous liquidity and cash flow risk management policy, meticulously forecasting short and medium-term working capital needs while ensuring ample liquidity through effective debtor management, secured credit lines, and available borrowing options, which, thus far, have not been necessitated.
The prevailing macro-economic environment, characterised by high inflation and interest rates, remains a point of concern, albeit there are indications of potential easing, with a highly speculated reduction in interest rates later this year. Such a development is anticipated to enhance the attractiveness of financing, thereby favouring investment in housebuilding and large-scale commercial projects. We expect to see greater appetite return in this arena as confidence returns.
Geopolitical tensions, notably in the Middle East, but also Ukraine, remain a risk that could lead to disruption, or impact on oil prices that drive inflation, reversing the current downward trend.
As we approach the 2024 general election in the second half of the year, UK markets are expected to adopt a more assertive stance. A potential change in government is likely to accentuate this shift, affecting public-sector projects as new policies are implemented. This period will require strategic agility to navigate the resultant market and regulatory changes.
Kendall Kingscott's broad client base, geographical reach, and versatile project capabilities provide a robust buffer against market fluctuations in specific sectors. Our commitment to maintaining a diverse client portfolio across various sectors remains unwavering.
In response to evolving market trends and intelligence, we are continuously exploring new service offerings to adapt our delivery and capabilities. This proactive approach ensures our strategic positioning to secure new, long-term consultancy advisory engagements, reinforcing our commitment to innovation and client service excellence.
The Building Safety Act 2022 necessitates operational adjustments in our Lead Designer role. We've established a cross-practice working group and are advancing our training, systems, and methodologies to meet the Act's competence and diligence standards to ensure we can offer this service to our clients competently. This Act also presents a valuable opportunity to cultivate a new specialisation within our interdisciplinary team structure.
Kendall Kingscott identifies its principal performance metrics as revenue, gross profit, operating profit, and cash reserves. To ensure these key performance indicators (KPIs) meet our targets, we employ a range of monitoring tools, including monthly management accounts, dashboard reports, profit and loss statements, cash flow forecasts, departmental ratio analyses, gap analyses, debtor days, work in progress, order book size, prospect sensitivity analysis, new project acquisitions, and enquiry reports, all reviewed monthly.
In addition to financial KPIs, the company places a high emphasis on non-financial metrics such as regular staff engagement, personal development reviews, client satisfaction, and health and safety performance.
Regular board meetings and other forums are convened to discuss operations, business development,
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KENDALL KINGSCOTT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
marketing strategies, information technology, human resources, and new initiatives, including the adoption of emerging technologies like artificial intelligence.
Kendall Kingscott has committed to the advancement of a customised Practice Management system, currently being enhanced with the support of our in-house software development team. This investment will enable comprehensive data capture across the business, including financial details, thereby facilitating the maintenance of our KPIs. The system is designed to be an immediate reference tool for reporting, supporting our aim for a consistent, harmonised upscale that should provide significantly greater insight into company performance and company-wide efficiencies.
Agile working
Our firm has successfully implemented a hybrid, agile, and flexible working policy that balances the needs of the business with the well-being of our staff. This policy has been embraced by our team, who appreciate the learning opportunities and mentorship available within our office environment. A healthy equilibrium has emerged, marked by increased training opportunities, cultural development days, and events focused on social interaction and well-being, all of which underscore the importance of work-life balance.
Sustainability & Social Value
Our commitment to a purpose-led culture is gaining traction, building on our legacy, and demonstrated through formalising our charitable and community activities. This has been highlighted by the appointment of a dedicated Social Value and Sustainability Coordinator.
The implementation of the Social Value Accreditation Platform (THRIVE) marks a significant stride in acknowledging and tracking our contributions to social value on a project-by-project basis.
In line with our Carbon Reduction Policy, we aim for net zero emissions before the decade's end. Recent initiatives include upgrading our pool vehicle fleet to branded electric vehicles (EVs), installing charging points, introducing an EV salary exchange scheme, and planning renewable energy installations at our regional offices. In 2024, we will offset our carbon footprint by investing in a recognised tree planting programme, ensuring a responsible path to Net Zero.
Brand Development
The launch of our new brand in August 2023 was a resounding success. To strengthen our marketing efforts, we have expanded our team with the addition of a Graphic Designer, Communications Executive, and Marketing Assistant. Our campaigns are now more targeted and leverage social media and public events to bolster our strategic goals. The new brand has been enthusiastically received, and we continue to evolve it to capture attention and promote our services, with the aim of increasing market share.
IT Investment
Our investment in IT infrastructure is robust, with recent upgrades to high-speed fibre connections across all offices. This facilitates a shift towards a centralised virtual cloud server, maintaining physical servers at two locations for redundancy. The adoption of cloud servers promises multiple efficiencies, including streamlined IT maintenance.
We have also implemented JAMF for enterprise-level mobile device management and introduced two factor authentication for added security, practice-wide.
Our bespoke in-house platform, Sirius, is being developed to enhance our Practice Management System, enabling scalable growth, and providing reliable financial, marketing, quality, and personnel data. We are exploring compatible self-file email systems for quality assurance and are excited about the potential of Artificial Intelligence to drive business development, as explored by our dedicated working group.
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KENDALL KINGSCOTT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
Workload and Accreditation
We maintain a balanced portfolio of public and private sector projects, consistently delivering beyond expectations. Our project pipeline is strong, with continued success in securing new contracts and maintaining existing relationships.
We uphold ISO 9001 and ISO 14001 accreditations, and in response to the omnipresent cyber security threats, we retain Cyber Essentials certification and are progressing towards Cyber Essentials Plus, reflecting our continued investment in IT security.
This report was approved by the board and signed on its behalf.
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KENDALL KINGSCOTT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
The directors present their report and the financial statements for the year ended 31 May 2023.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgments 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 transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £618,033 (2022: £319,355).
The directors who served during the year were:
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KENDALL KINGSCOTT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
The Directors remain fully committed to build on the continuing successful growth of the practice over the last 12 months. The strong balance sheet, cash positive position, robust ongoing pipeline allied with accurate financial projections and modelling provides the confidence to continue progression with the 5 - 10 year business plan for the practice.
Our trading position has allowed the acknowledgement of staff effort with ongoing payment of bonus, dividends for shareholders and regular salary reviews for all staff. We see this as an important part of retaining our staff cohort and has been financially planned and budgeted for in our future cashflow, balance sheet and profit and loss projections.
There have been no significant events affecting the company since the year end.
The auditors, Bishop Fleming LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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KENDALL KINGSCOTT LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENDALL KINGSCOTT LIMITED
We have audited the financial statements of Kendall Kingscott Limited (the 'company') for the year ended 31 May 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, 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).
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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KENDALL KINGSCOTT LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENDALL KINGSCOTT LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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KENDALL KINGSCOTT LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENDALL KINGSCOTT LIMITED (CONTINUED)
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 Auditors' 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙The nature of the industry and sector, control environment and business performance;
∙Results of our enquires of management and directors in relation to their own identification and assessment of the risks of irregularities within the Company; and
∙Any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or noncompliance with laws and regulations.
As a result of these procedures, we have considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in accounting for revenue relating to long term
contracts.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We have also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focussing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures within the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and UK tax legislation. In additions we considered provision of other laws and regulations that do not have a direct effect on the financial statements but compliance with may be fundamental for the Company’s ability to operate or avoid a material penalty. These included building regulation laws, health and safety legislation, environmental legislation and employment legislation.
Our audit procedures performed to respond to the risks identified included, but were not limited to:
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess the recognition of revenue;
∙Challenging assumptions and judgements made by management in their significant accounting estimates; Identifying and testing journal entries, evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; and
∙Review of board meeting minutes.
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KENDALL KINGSCOTT LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENDALL KINGSCOTT LIMITED (CONTINUED)
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery,misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
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 Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
10 Temple Back
BS1 6FL
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KENDALL KINGSCOTT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
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KENDALL KINGSCOTT LIMITED
REGISTERED NUMBER:04605743
STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 26 form part of these financial statements.
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KENDALL KINGSCOTT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2022
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KENDALL KINGSCOTT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
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KENDALL KINGSCOTT LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
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KENDALL KINGSCOTT LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2023
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Kendall Kingscott Limited is a private limited company, limited by shares, incorporated within the United Kingdom and registered within England and Wales. The Company's registered office is Glentworth Court, Lime Kiln Close, Stoke Gifford, Bristol, BS34 8SR and its registered number is 04605743.
The functional currency of Kendall Kingscott Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.
2.ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The directors have assessed the Statement of Financial Position and likely future cash flows at the date of approving these financial statements. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and to meet its financial obligations as they fall due for at least 12 months from the date of signing these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Director’s report. The Company's forecasts and projections show that the company should be able to operate within the level of its current facilities. Therefore, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.ACCOUNTING POLICIES (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the following methods.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.ACCOUNTING POLICIES (continued)
DEFINED CONTRIBUTION PENSION PLAN
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in other creditors as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
2.ACCOUNTING POLICIES (continued)
estimates. The items in the financial statements where these judgments and estimates have been made include: Amounts recoverable on contracts are recognised on the proportion of work completed to date on the project. The attributable profit is recognised once the outcome of the project can be assessed with reasonable certainity.
The whole of the turnover is attributable to the principal activity of the company.
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Page 21
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
From the 1st April 2023 the main rate of corporation tax increased from 19% to 25%.
Page 22
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Page 23
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Page 24
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
In the current year, consideration of £28,125 was received for the repurchase of 2,500 shares. In addition 10,800 shares were issued for consideration of £137,700.
Share premium account
Capital redemption reserve
Profit and loss account
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KENDALL KINGSCOTT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Pension commitments:
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £
Page 26
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