Hercules plc

("Hercules", the "Company" or the "Group")

Final Results and H1 Trading Update

Lifting of Suspension of Trading on AIM

Hercules plc (AIM: HERC), a leading UK infrastructure and construction services group, announces its audited results for the year ended 30 September 2025 ("FY 2025"). The Company's Annual Report is available to download from the Hercules website at: https://herculesplc.com/results-reports-presentations/, and is being posted to shareholders electing to receive hard copies today.

Following the publication of the FY 2025 Annual Report, the suspension of the Company's securities from trading on AIM is expected to be lifted at 7.30 a.m. on 22 May 2026.

Information regarding the Company's forthcoming Annual General Meeting will be announced in due course.

FY 2025 Financial Highlights:

·    19% increase in revenue to a record £121.2m, ahead of expectations (FY 2024: £101.9m)

·    Underlying EBITDA* increased 34% to a record £6.4m (FY 2024: £4.7m)

·    Underlying pre-tax profit** of £4.0m (FY 2024: £2.6m)

·    Statutory PBT from continuing activities of £0.9m (FY 2024: £2.2m) reflecting amortisation of acquisition-related intangibles, all share-based charges and exceptional acquisition related items, IT system implementation costs and business development expenditure

·    Underlying EPS*** increased to 4.74p (FY 2024: 3.47p)

·    Cash generated in the year £7.6m (FY 2024: £7.5m)

Operational Highlights:

·    Labour Supply: Successful acquisition of Advantage NRG saw Hercules enter the Power and Energy sector

o  Strong demand and delivery, supplying labour resources to 65 clients (FY 2024: c.40) and c. 540 (FY 2024: c.300) different project locations during FY2025, not including Advantage NRG

o  Increase in the average number of operatives deployed by the Labour Supply business to 1,230 (FY 2024: average of 1,150)

o  App downloads (Recruitment and Onboarding) increased year on year to c. 20,000 (FY 2024: c. 16,000)

·    Construction Services: Acquisition of Quality Transport Training Ltd ("QTT") increased capacity of the Hercules Academy, and, post period end, Lyons Power Services was acquired providing additional capability in the Power and Energy sector.

o  Civil Projects leveraged its water sector experience to win significant levels of repeat work, mainly for key delivery partners for the AMP 8 water industry investment programme (AMP 8 infrastructure spend is £104bn, double that in AMP 7 at £51bn)

o  Anglian Water Civils Framework continued at pace, with sizeable projects being allocated to Hercules

o  Construction Academy has trained more than 2,000 individuals since opening in January 2024. The integration of QTT has helped scale the Hercules Academy training operations to support the UK's growing infrastructure project pipeline with a skilled, job-ready workforce

Shareholders will note that the Annual Report contains a qualified audit opinion relating to historical matters involving a limited number of training and consultancy suppliers. The Group has fully cooperated with the review process and has strengthened its internal controls and procedures going forward. Further information is contained in the Chairman's Statement and audit report.

H1 Trading Update:

·    Unaudited revenue increased to £59.2m for the six months ended 31 March 2026 (H1 2025: £54.6m)

o  Includes the impact of recently acquired Advantage NRG business where revenue is heavily weighted to the second half of the year 

o  The Civil Projects division has benefitted from expenditure connected with the new AMP 8 investment cycle

o  Labour Supply business, which is also traditionally weighted to the second half of the year, has been impacted by delays to some key infrastructure projects. This has been partially mitigated through expanding the range of clients supplied

·    The Company will announce its Interim Results in mid-June 2026

*Underlying EBITDA definition - adjusted for profit/loss on sale of fixed assets, exceptional items and R&D expenditure.

**Underlying pre-tax profit definition - same adjustments as for EBITDA but also excluding impairment and amortisation of intangibles.

***Underlying EPS definition - same adjustments as for pre-tax profit but also excluding prior year tax charges.

Brusk Korkmaz, Chief Executive Officer, commented:

"We have significantly expanded our operational capabilities across our Labour Supply and Construction Services businesses during the period, and our underlying performance in FY 2025 reflects this. We have been investing in our IT systems and acquired new expertise, adding to the long-term durability of our business.

"The long-term market backdrop is positive with at least £725 billion of government funding for infrastructure over the coming decade in our target sectors, including nationally significant programmes across power, water, transport and nuclear. Although we have seen delays across some key projects in H1, we have started the year with a strengthened market position and platform through which we can execute on the substantial market opportunities available to Hercules.

"In particular, the acquisition of Advantage NRG has enhanced our capability in the Power and Energy sector where the UK is embarking on a major upgrade of its electrical infrastructure focused on extending and modernising the country's transmission and distribution networks. Advantage NRG's deep expertise in overhead electrical transmission, and its ability to source, train and mobilise specialist linesmen, both in the UK and internationally, perfectly complements our strategy.  

"Growing our business rapidly both organically and through acquisitions to achieve revenue of over £120m in FY 2025 is a fantastic achievement but has placed strains on our systems and controls which has led to a thorough review of our internal processes. Going forward we are confident that we now have in place robust procedures across the Group to handle our future needs as we drive the business forward.

"We remain committed to disciplined, selective expansion, ensuring that growth is delivered safely, sustainably and in a way that maximises long-term shareholder value."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. 

Retail Investor Webinar

Brusk Korkmaz, CEO, and Paul Wheatcroft, CFO, will deliver a live presentation relating to the Full-Year Results via Investor Meet Company on Thursday 28 May 2026 at 10.30 a.m.

The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9.00 a.m. the day before the meeting, or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet Hercules via:

https://www.investormeetcompany.com/hercules-plc/register-investor

Investors who already follow Hercules on the Investor Meet Company platform will automatically be invited.

For further information and enquiries, please contact:

CHAIRMAN'S REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2025

FY2025 has been an important year for Hercules. Group revenue rose by 19% to £121.2m,(FY2024: £101.9m), underlying EBITDA increased by 34% to £6.4m(FY2024: £4.7m), and statutory PBT was £0.9m (FY2024: £2.2M), all in line with market expectations.

The reduction in statutory PBT reflects amortisation of acquisition-related intangibles, share-based charges and exceptional acquisition related items, IT system implementation costs, and business development expenditure. Record revenue and underlying EBITDA reflect strong operational delivery and the early benefits of our strategic expansion.

During the year we successfully implemented our strategy through targeted acquisitions and by the sale of our Vacuum Excavator business, positioning the Group to benefit from the significant investment being made in UK infrastructure in the coming years.

However, following the end of the financial year we unexpectedly had to devote significant management time and cost to remediating a number of operating process and internal control matters that were identified. Although this work was time-consuming and costly, the results have provided a valuable opportunity to strengthen the Group's operational systems and controls and ensure that future expansion will be supported by a more robust, scalable and resilient platform. It is important to say that none of the individual items identified during the review were of themselves significant, and the Board are satisfied that the expenditure items that were queried were properly incurred. However, in aggregate, these items spoke to a clear need to improve and enhance controls over the Group's operational expenditure.

At the time of the Company's admission to the AIM market in April 2022, management introduced a set of enhanced accounting procedures, processes and controls that were satisfactory for a company coming to the public markets at that time. Since the IPO, the scale and range of the Company's activities have grown and evolved substantially, both organically and by way of acquisition, with overall revenue growth of around 300% during this period. By way of example, two acquisitions were made during FY2025, alongside a significant disposal, another acquisition was completed early in October 2025. The accounting work arising from these transactions was greater than originally expected.

During the course of the FY2025 audit concerns were raised that some of the company's systems, procedures and controls relating to the risk profiling and onboarding of a small subset of training and consultancy providers had not developed, or had not been followed appropriately, in line with the requirements of the Group. The operating processes, procedures and controls of fast-growing companies require ongoing review and enhancement to ensure they continue to match the operating demands of an expanding business. Historically some new supplier requirements were controlled on site or were automatically classified as 'negligible-risk,' and the on-boarding procedures for these suppliers did not consider the increased scale and sophistication of our business or the requirement for more robust risk-assessment and processing at a central level.

As a result, audit evidence was, at times, inconsistent or incomplete, and in some cases a complete audit trail was not available for a limited amount of expenditure relating to these suppliers, particularly in respect of a small number of external training and consultancy providers. Source data from certain suppliers was found to be incomplete and, in some cases, lacked the level of sophistication or integration required to align effectively with the Company's accounting records. The Board took this seriously, particularly given the resulting difficulties in obtaining sufficient independent evidence to verify the relevant expenditure. Accordingly, following discussion with the auditors, the Board engaged specialist investigating accountants and independent lawyers to provide further clarity on the training and consultancy expenditure and to advise on the appropriate remediation of the related systems, procedures and controls. This meant that the additional investigation and review procedures required to resolve these matters absorbed time that would otherwise have been spent completing the year end audit. The Board and the auditors required these matters to be fully investigated and addressed before the FY2025 audit could progress. The Board also wanted to ensure that they had comfort in the adequacy of the Company's systems and controls going forward.

Following extensive internal review and external investigation, the Board recognises that some gaps in audit evidence remain and that, in some cases, the audit trail is incomplete. However, the specialist accounting and legal workstreams, and the detailed remediation work commissioned across the Company's systems, processes, and controls, have provided the Board with confidence the relevant systems and processes have been largely remediated and expects the remaining remediation work to be completed by 30 September 2026.

Due to the lack of audit evidence, and the difficulties in recreating a complete audit trail, and despite the significant additional work undertaken, the Auditors' Report is qualified in connection with the validity and legitimacy of certain training and consultancy expenditure in order to allow the Auditors to reach an opinion on the external costs referred to above. Additionally, the scope of the audit work has been necessarily limited by the Board's wish to complete the audit process and publish the FY2025 financial statements for shareholders without further delay.

While the Board regrets the underlying control issues, and the subsequent delay they have caused in the signing and publishing of the FY2025 accounts, we see this an opportunity to ensure that the Company and the Group will have the core procedures, processes and controls that can be maintained and further enhanced to future-proof the Group's accounting and governance systems, that will allow us to continue our growth path from a sound, remediated foundation.

We very much appreciate the support and advice provided by our external advisors during this complicated and important process.

STRATEGIC ACQUISITIONS

During 2025 we completed a series of significant acquisitions that have materially broadened the Group's capabilities and positioned Hercules to participate more fully in the long-term, government-backed investment programmes across critical national infrastructure.

The acquisition of Advantage NRG (June 2025) marks Hercules' entry into the strategically important Power & Energy Transmission and Distribution sector. Work continued throughout the year towards a further acquisition of Lyons Power Services which completed post year end (October 2025). In addition, acquiring the business and assets of Quality Transport Training Ltd (QTT) (June 2025) enhanced the capacity of the Hercules Academy, enabling us to scale training provision and support the UK's expanding infrastructure pipeline with a skilled, job-ready workforce.

The Board has maintained a strong focus on disciplined expansion. Acquisitions create sustainable value only when they are well selected and aligned with Hercules' culture and operational rigour. In approving these transactions, we assess strategic fit, increased profitability, leadership strength, risk profile, integration readiness and above all, high standards of governance and safety.

OUR MARKET

Our strategy is underpinned by a positive long-term outlook for UK infrastructure investment. In June 2025, the Government outlined a 10‑year national infrastructure plan supported by at least £725bn of funding. This commitment is now translating into momentum across our target sectors, including power, water, transport and nuclear.

Key regulatory and investment frameworks reinforce this outlook. Ofgem's RIIO‑3 price control, running from 1 April 2026 to 31 March 2031, supports the next phase of network investment across electricity transmission and gas. In the water sector, Ofwat's final determinations provide for £104bn of investment during the 2025-2030 Asset Management Period (AMP8). In nuclear, the Government's Final Investment Decision for Sizewell C in June 2025 strengthens the long-term prospects for major nuclear programmes, alongside opportunities emerging from Small Modular Reactors.

These sector programmes sit alongside a pipeline of nationally significant projects, including the Lower Thames Crossing, the A66 Northern Trans-Pennine upgrade and energy transition initiatives such as Net Zero Teesside.

DIVIDEND

Due to our continuing acquisition activity and investments into our systems to support the continued growth of the business, no final dividend will be paid in respect of FY2025 (FY2024: 1.12p). The Board will keep the Company's dividend policy under review.

OUTLOOK

Our underlying performance in FY2025 reflects the strength of our operational strategy and the growing momentum across the Group. We enter FY2026 with a broader capability set, a strengthened market position and a solid platform for continued growth.

In H1 FY2026 there have been significant delays in the commencement of a number of key projects. However, the Board believes that the market opportunities ahead for Hercules are both substantial and durable. We remain committed to disciplined, selective expansion, ensuring that growth is delivered safely, sustainably and in a way that maximises long-term shareholder value.

The Labour Supply division remains the Group's largest revenue contributor and is central to our delivery model and client relationships. The labour supply market has held up very well, although we have seen some margin pressure.

Advantage NRG has been a very successful acquisition. It has enhanced our capability and broadened our exposure in Power & Energy, particularly in Transmission and Distribution. In December 2025, we announced plans to expand these services into Scotland, further extending our geographic reach.

Hercules intends to continue to explore appropriate acquisition opportunities, particularly within the Power & Energy Transmission and Distribution sector and the Water sector where we see significant potential. All opportunities will be assessed against the clear criteria already outlined, with Board oversight of integration planning and execution.

I would like to thank all colleagues across the Group, including those who joined us through recent acquisitions, for their professionalism, dedication and adaptability during a year of significant change. I also extend my thanks to our clients and partners for their continued trust and collaboration, and to our shareholders for their ongoing support.

Henry Pitman, Non-executive Chairman

 Date: 21/05/2026

CHIEF EXECUTIVE OFFICER'S REVIEW FOR THE YEAR ENDED 30 SEPTEMBER 2025

This year Hercules has continued its strategic expansion. The acquisition of Advantage NRG (June 2025) marks Hercules' entry into the strategically important Power & Energy Transmission and Distribution sector. Work continued throughout the year towards a further acquisition of Lyons Power Services which completed post year end (October 2025). Our ambition is clear: to build a Group with the scale, delivery discipline and expertise required to support clients working on essential infrastructure.

We delivered record revenue in FY2025 of £121.2m (FY2024: £101.9m, +19%), underlying EBITDA was £6.4m (FY2024: £4.7m, +34%) and statutory PBT was £0.9m (FY2024: £2.2M), all in line with market expectations.

While acquisitions are an important step, the real work begins with integration. Our focus has been to bring these businesses into the Group in a way that protects what makes them strong: customer relationships, specialist expertise and local leadership, while aligning to consistent standards in safety, operational planning, commercial controls and governance. We are taking a structured approach with clear priorities, leadership accountability and consistent reporting so that we can track progress and address issues early.

Safety and wellbeing remain central to how we operate. As we extend our footprint and bring new teams into the Group, our standards must be consistent everywhere. We continue to reinforce practical controls, leadership visibility and learning behaviours that seek to prevent incidents before they occur, supported by training and clear expectations.

Our strategy is supported by long-term investment programmes across UK infrastructure. In June 2025, the Government set out a 10-year infrastructure strategy backed by at least £725bn of government funding over the coming decade. In power networks, RIIO-3 will run from 1 April 2026 to 31 March 2031, shaping the next regulatory cycle for electricity transmission and gas networks. In water, Ofwat's PR24 final determinations support £104bn of investment for 2025-2030 (AMP8). In nuclear, the Government has taken a Final Investment Decision for Sizewell C, while Great British Nuclear continues its small modular reactor technology selection process, together reinforcing the longer-term pipeline in the sector.

Alongside these programmes is a visible pipeline of intended major schemes and upgrades referred to above, including Lower Thames Crossing, the A66 Northern Trans-Pennine upgrade, and decarbonisation initiatives such as Net Zero Teesside. Our focus is to convert these opportunities into controlled growth by deepening client relationships, integrating capability effectively, and ensuring rigorous operational and commercial discipline.

Our Labour Supply division remains the Group's largest contributor to revenue and continues to perform strongly. With the addition of Advantage NRG, we are well positioned to accelerate growth in Power & Energy Transmission and Distribution, expanding our capability and deepening customer relationships in this sector. We have moved into Scotland post year end, which will extend our reach and support further growth, underpinned by consistent standards, strong controls and safe, reliable delivery.

I want to thank all our colleagues for their commitment during a year of significant change, and I extend a warm welcome to those who have joined through acquisition. I also thank our clients and partners for their continued collaboration and trust. We have entered FY2026 with expanded capability, and a clear plan to deliver the benefits of our investments safely and sustainably.

Brusk Korkmaz, Chief Executive Officer

Date: 21/05/2026

CHIEF FINANCIAL OFFICER'S REVIEW FOR THE YEAR ENDED 30 SEPTEMBER 2025

Introduction

The Group has again grown revenue in FY2025, while also investing in long term business opportunities throughout the year.

The Group acquired Advantage NRG Ltd and purchased the assets of QTT in June 2025.

Discontinued operations (suction excavator services subsidiary):

Hercules Site Services (Suction excavators) Ltd was in the process of being sold when the FY2024 accounts were compiled. The sale was concluded in February 2025. The results of this subsidiary have been disclosed separately both for FY2024 and FY2025 within these accounts and included in the discontinued operations line in the income statement.

Alternative performance measures

Underlying EBITDA, profit before and after tax have been calculated as alternative performance measures in order to provide a more meaningful measure and year-on-year comparison of the profitability of the underlying business. Underlying performance measures exclude amortisation of acquisition related intangibles, all share-based charges, acquisition costs, some exceptional items, and strategic business development and IT systems development costs.

During the year from continuing operations the Company delivered:

An increase in gross profit % from14.7% to 15.0%.

Underlying post-tax profit increased to £3.8m (2024: £2.2m).

Statutory post-tax profit was £0.6m (2024: £1.6m).

The discontinued operation produced a post-tax loss of £0.7m (2024: £3.3m loss).

This reduced the "All operations" statutory post-tax loss to £0.1m (2024: £1.7m loss).

Underlying EBITDA from continuing operations (Page 12) - increased by 34% to £6.4m (2024: £4.7m).

Net cash generated from operations of £7.6m in the year (2024: £7.5m) and labour supply debtor days reduced slightly to 33 (2024: 39) days.

Financial Performance

In the year ended 30 September 2025, revenue from continuing operations increased to £121.2m (2024: £101.9m) representing a 19% increase year-on-year.

Inflation is still expected to be moderate over the medium term; however, the outlook for FY2026 has become more uncertain following the escalation of the Iran conflict. UK forecasters (LSE) have revised expectations upwards, with inflation now projected to average around ~4% in 2026 before easing in subsequent years as energy prices stabilise and demand softens. Interest rates have also been reducing but more slowly, and further significant reductions are unlikely until well after the Iran conflict is resolved. We don't currently however see this affecting the level of work in the infrastructure sector in the next decade.

The increase in employers' national insurance contributions from April 2025 reduced FY2025 profits by circa £0.6m, and a further £0.6m reduction of profits (total £1.2m) is expected in FY26, reflecting charges for a full year. This "hit" arises from the threshold changes across the Board and additional NIC rate changes for administrative staff. The main rate changes for operatives were covered by clients.

The Directors anticipate continued growth for the Group driven by continuing significant investment in infrastructure: - nuclear, renewables, power and energy and water, in particular.

Administrative costs from continuing operations were £16.4m (2024: £11.6m). The majority of this increase is due to £0.7m acquisition costs, circa £0.6m additional employers NIC costs, £0.6m on new business development, £0.9m amortisation and impairment (intangibles from acquisitions), and £0.8m IT systems upgrade development. The Group must look to the future by investing heavily in key business systems, regional expansion (Scotland, Ireland, and elsewhere), and widening the client base.

Strategic business development

Hercules PLC is a business that has been built on creating and maintaining strong client relationships. Hercules primarily responds to the growth opportunities created by expansion within individual clients. This means that larger projects such as HS2 can have a disproportionate and uneven impact on the Group's results over their lifetime. These projects are expected to be replaced by similarly large projects, for example Sizewell C, Net Zero Teesside, and the Lower Thames crossing. However, the timing of when the next wave of large projects will start, and end, and the depth of the requirements, is impossible to know in advance with any degree of accuracy.

The investment cycles in each sector (rail, water, and power and energy) are mostly five years long, start at different times, and can't be used to aid short term forecasting and planning. However, they do give a very good guide and provide support as to the long-term direction of travel.

Hercules has a duty to its shareholders to develop the business to smooth such "project timing" risk by undertaking initiatives outside the normal course of the Company's core operating development activities. The objective is to support long-term growth, geographic expansion and sector diversification, using the direction of travel in the investment cycles as guidance.

These initiatives relate primarily to the exploration of new markets, new geographies and potential strategic opportunities. We embarked on such initiatives significantly in FY2025.

Namely:

-       Creation of a strategic business development team, to identify and assess potential new markets, develop new strategic partnerships and evaluate opportunities for expansion that falls outside the Group's current operational focus.

-       Following a strategic review, to assess and establish a presence in new geographic markets, most notably Scotland, with Ireland currently at an earlier stage of evaluation. This includes market research, relationship development with potential new clients and supply chain partners, engagement with industry stakeholders, and assessment of commercial and operational considerations associated with market entry.

-       As part of the Group's broader strategy to explore and evaluate potential inorganic growth opportunities, assessing potential strategic acquisitions and strategic investments that could expand or complement the Group's existing service offerings. Hercules has completed four acquisitions in the last two years, and it is vital such activity continues.

-  Investing time and resources in assessing opportunities within industry sectors where Hercules has historically had limited or no presence, including power and energy infrastructure, rail, aviation and nuclear.

- 

As these activities are significant and not part of the cost base required to deliver the Company's existing operations, these costs are presented separately to provide additional transparency over the Group's

underlying trading performance.

IT Systems

The Group's core business systems (excluding the Hercules app) were put together between 2008 and 2016 and have not changed materially since. The Enterprise Resource Planning (ERP) system implemented in 2016 has struggled to keep up with the growth in the last 9 years, especially given the growth in the business (245% increase in revenue) since 2022.

It became increasingly clear that major investment was required to prepare Hercules for the next 10-15 years of growth - both organic and by acquisition, and two years ago we started to look for replacement systems. Utilising external specialists, it became clear that there was not one system available that would cater for our current and medium-term requirements, so we eventually settled on two key systems, with add-ons and enhancements planned alongside.

They key new systems are:

RSM Pay and Bill

Microsoft Dynamics 365 Business Central

We now have two subsidiaries live on Pay and Bill, and the core business is scheduled to go live in summer 2026. The ERP system will then become the remaining key implementation target scheduled for live running in 2027. Both of these systems require complete business transformation, so take time, effort, resources and a degree of patience. This expenditure is essential as the Board and management focus on the future growth of the business..

We expect costs relating to the upgrade of our IT systems to continue into 2027 but then reduce to a more normal level of ongoing development after that.

Underlying profits analysis - EBITDA

Underlying profit after tax analysis

Underlying earnings per share

Statement of Financial Position

As of 30 September 2025, the Group's net assets were £12.2m (2024: £11.7m) of which £7.2m (2024: £6.4m) were cash and cash equivalents.

Non-current assets at 30 September 2025 were £24.1m (2024: £9.8m). Current assets as at 30 September 2025 were £30.1m (2024: £25.9m).

Net current assets at 30 September 2025 were £4.4m (2024 net assets re-stated: £5.6m, see Note 22).

The change in share premium in FY2025 over FY2024 reflects the net proceeds received from an issue of new shares of £2.2m on 2 October 2024.

The intention was to declare a dividend from Advantage NRG subsidiary of £2.5m (which would have increased the Company's retained earnings balance to negative £78k) before 30 September 2025. However, as this was not possible the dividend was actually declared in January 2026.

Group loans & borrowings were £12.1m as at 30 September 2025 (2024: £7.3m). £6.1m of this is the balance utilised of a working capital facility provided by IGF of £16m that was introduced in November 2023. The remaining £6m reflects the loan provided in June 2025 by Wasdell Holdings Ltd ("Wasdell"), a related party (the Company's Non-executive Director Martin Tedham is the owner of Wasdell). (See Note 21).

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HERCULES PLC

Qualified Opinion

We have audited the financial statements of Hercules PLC (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2025 which comprise the Group statement of comprehensive income, the Group and Parent Company statement of financial position, the Group and Parent Company statement of changes in equity and the Group and Parent Company statement of cash flow and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion, except for the possible effects of the matter described in the Basis of Qualified Opinion section of our report:

·    the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 30 September 2025 and of the group's loss for the year then ended; 

·    the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

·    the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance with the provisions of the Companies Act 2006; and

·    the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

During our audit work, we were approached by an individual who raised concerns relating to payments made to a limited number of training and consultancy services providers. Following investigations by management, certain irregularities were identified in respect of a number of related transactions within the group and parent company.

These transactions have been categorised within the Group's accounting records as being in respect of training and consultancy costs. However, we were:

·      unable to confirm that sufficient appropriate supplier onboarding processes had been followed

·      unable to confirm whether the companies were bona fide suppliers

·      unable to confirm that related appropriate training or consultancy services had been provided or that amounts paid in respect thereof properly related to the provision of training or other expenditure made for the benefit of the business

We raised our concerns with management and the directors who engaged an external forensic review and legal advice to assist them to perform further work to verify the nature of these transactions. Management have set out a description of the steps they have taken on pages 5-6.

In responding to the irregularities, we:

·      enhanced audit procedures in relation to risk factors in respect of the legitimacy and validity of costs charged to income statement

·      extended journals testing to incorporate updated search terms arising from audit findings

·      inspected reports prepared by experts engaged by management to seek to reconcile expenditure to supporting records or other evidence of training and consultancy services received

·      obtained and read legal letters from the Group's legal representatives

·      consulted with our own internal and external legal experts

·      considered management's disclosures in the Annual Report and Financial Statements

This work and the procedures we have performed in response, have not adequately addressed our concerns. We sought to obtain further evidence but were unable to do so because management decided against concluding further investigative efforts into the transactions prior to the signing of the financial statements and thus imposed a limitation of our scope. We requested that the Board remove management's limitation, which they did not. Management and those charged with governance are of the view that although the necessary work should be completed, due to anticipated difficulties in obtaining information from suppliers who are no longer engaged by the Company, the proposed procedures are unlikely to generate further or better-quality evidence to address our concerns, and this exercise would not be completed within the timescale that the Board has set for the publication of the Annual Report and Financial Statements. The Board has therefore prevented us from undertaking further work in the area.

We have concluded that this matter is material to the Group Financial Statements. In respect alone of this matter, we were unable to determine whether any adjustments to amounts or disclosures in the financial statements are necessary, or whether there have been any breaches of applicable laws or regulations. In addition, were any adjustments to be required, the strategic report would also need to be updated.

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 group and parent 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 as applied to listed entities, 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 qualified opinion.

Our approach to the audit

Of the group's five reporting components, we subjected one to a full scope audit and two to specific audit procedures where the extent of our audit work was based on our assessment of the risk of material misstatement and of the materiality of that component. One of the two specific scope audits was not individually significant enough to require an audit for group reporting purposes but was still material to the group, the other was disposed of part way through the year.

The components within the scope of our work covered 97.7% of group revenue, 100% of group profit before tax, and 96.7% of group net assets.

For the remaining two components, we performed analysis at a group level to re-examine our assessment that there were no significant risks of material misstatement within these.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period, and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.  These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the basis for qualified opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report:

Our application of materiality

The materiality for the group financial statements as a whole ("group FS materiality") was set at £2,470,000. This has been determined with reference to the benchmark of the group's turnover, which we consider to be one of the principal considerations for members of the company in assessing the group's performance.  Group FS materiality represents 2% of the group's turnover. The majority of the group's turnover is generated through labour supply and civil projects.

The materiality for the parent company financial statements as a whole ("parent FS materiality") was set at £2,220,000.  This has been determined with reference to the benchmark of the parent company's turnover at 2%. The company is the main trader within the group, with turnover relating to labour supply and civil projects. 

At planning, performance materiality for the group financial statements was set at 80% of group FS materiality, for purposes of assessing the risks of material misstatement and determining the nature, timing and extent of further audit procedures.  After becoming aware of the matters detailed in our basis for qualified opinion, we reconsidered our assessment and updated performance materiality to set it at £1,600,000 being 65% of group FS materiality. It was set at this amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds group FS materiality.

We judged this level to be appropriate based on our understanding of the group and its financial statements, as updated by our risk assessment procedures and our expectation regarding current period misstatements. It was

set at 65% to reflect our updated assessment of the likelihood of expected misstatements and the fact that there are limited levels of judgement or estimation within the financial statements.

Performance materiality for the parent company financial statements was set at £1,599,999 being capped at one less than Group performance materiality due to the relative size of the parent component.

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. 

Our evaluation of the directors' assessment of the group and parent company's ability to continue to adopt the going concern basis of accounting included:

·    Challenging the assumptions used in the detailed budgets and forecasts prepared by management for the financial years ending 2026 and 2027;

·    Considering historical trading performance by comparing recent growth rates of both revenue and operating profit across the group's geographical and market segments;

·    Assessing the appropriateness of the assumptions concerning growth rates and inputs to the discount rate against latest market expectations and macro-economic assumptions;

·    Comparing the forecast results to those actually achieved in the 2026 financial period so far;

·    Reviewing bank statements to monitor the cash position of the group post year end, and obtaining an understanding of significant expected cash outflows (such as capital expenditure) in the forthcoming 12-month period;

·    Considering the group's funding position and requirements;

·    Considering the sensitivity of the assumptions and re-assessing headroom after sensitivity.

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 and 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 other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon.  The directors are responsible for the other information contained within the annual report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.  If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.  If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning certain transactions included in the income statement. We have concluded that where the other information refers to the income statement, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the Basis of Qualified Opinion section of our report, 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.

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

Arising solely from the limitation on the scope of our work relating to certain transactions referred to above:

·    we were unable to determine whether adequate accounting records have been kept by the parent company; and

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

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

·    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.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 48, 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.

Auditor's 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below and above in the Basis for qualified opinion section and Key audit matters section.  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. 

We obtain a general understanding of the group's legal and regulatory framework through enquiry of management in respect of their understanding of the relevant laws and regulations. We also drew on our existing understanding of the group's industry and regulation.

We understand that the group complies with requirements of the framework through:

·      Engaging external experts to ensure the Group remains in line with regulatory expectations and is aware of any updates to legislation.

·      Given the management structure and reporting lines, any litigation or claims would come to the Directors' attention and are considered at board meetings.

In the context of the audit, we considered those laws and regulations which determine the form and context of the financial statements, which are central to the group's ability to conduct its business and where failure to comply could result in material penalties. We have identified the following laws and regulations as being of significance in the context of the group:

·      The Companies Act 2006 and UK-adopted international accounting standards in respect of the preparation and presentation of the financial statements

·      AIM rules and the UK Market Abuse Regulation

·      Bribery Act 2010

·      Health and safety regulations

·      Criminal Finances Act 2017

·      Housing Grants, Construction and Regeneration Act 1996 (as amended by the Local Democracy, Economic Development and Construction Act 2009)

We performed the following specific procedures to gain evidence about compliance with the specific laws and regulations defined above:

·      Inspected board meeting minutes to ensure there are no reports of non-compliance with health and safety regulations or other laws and regulations

·      Reviewed legal expense accounts to identify any potential legal issues which may indicate instances of non-compliance

·      Reviewed the bribery policy to understand and consider how this supports the prevention of instances of bribery occurring within the group

·      Reviewing correspondence with external legal advisers and evaluating the work performed by legal experts engaged by those charged with governance, including considering their opinions and conclusions in relation to compliance with applicable laws and regulations

The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the group's financial statements to material misstatement, including how fraud might occur. The key areas identified as part of this discussion were:

·      Manipulation of the financial statements through the posting of manual journals

·      Valuation of intangible assets, goodwill and investments where estimates are made by management

·      Incorrect recognition of revenues, especially on the Group's civil project contracts

The procedures we carried out to gain evidence in the above areas included:

·      Testing a sample of manual journals back to supporting documentation

·      Testing the basis on which revenues have been reported on the Group's civil projects contracts, by reference to the requirements of IFRS 15

·      Testing the valuation of intangibles, goodwill and investment balances

Overall, the senior statutory auditor was satisfied that the engagement team collectively had the appropriate competence and capabilities to identify or recognise irregularities. In particular, both the senior statutory auditor and the audit manager have a number of years' experience in dealing with companies in the construction industry, and also with companies listed on the AIM market of the London Stock Exchange.

A further description of our responsibilities is available on the FRC's website at: 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 parent 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 parent 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Carl Deane

Senior Statutory Auditor, for and on behalf of                                                                            

S&W Audit

Statutory Auditor                                                                                                                               

Chartered Accountants                                                                                                                   

4^th Floor EQ Building,

111 Victoria Street

Bristol

BS1 6AX

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

There are no further items of comprehensive income other than those shown above.