2021
Annual Report and Financial Statements
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TClarke
Annual Report and Financial Statements 2021
Who we are
Engineering Services
Leading in mechanical, electrical and
technology infrastructures, offsite manufacture
(DfMA) and digital systems integration.
Incorporating Modern Methods of Construction
(MMC) that deploy prefabrication,
pre-assembly and design standardisation.
Technologies
We design and deliver the critical
mechanical and electrical infrastructure for
data centres. We are a leader in smart
buildings technologies.
Infrastructure
We focus on healthcare, education, defence
and growth areas of public sector infrastructure
where high-level skills are most valued.
Residential & Hotels
This sector is a comparable size to
Infrastructure and covers all types of
residential accommodation including luxury
hotels, affordable homes, student
accommodation and private residential.
Facilities Management
We operate in the higher value and specialist
areas of FM, with clients like Canary Wharf
Contractors, BAE Systems, CBRE and UK and
USA Airforce Bases.
TClarke remains at the forefront of the Building Services industry. Our innovation
and expertise are employed in the design, installation, integration and maintenance
of the mechanical and electrical systems and technologies that a 21st century
building needs for control, performance and sustainability.
We currently operate from twenty locations serving the whole of the UK. We are a
proud employer of local people in the towns and cities that we serve.
Our reputation for high quality and the successful application of new technologies
has been built over 130 years operating in five market sectors:
Contents
Strategic Report
Chairman’s Statement 01
Chief Executive’s Report 02
Market Sectors 06
Our Strategy 08
Group Financial Review 09
Business Model 12
Section 172 Statement 14
Environmental, Social and Governance Report 16
Principal Risks 26
Long-term Viability Statement 30
Governance
Board of Directors 31
Corporate Governance Report 32
Statement of Compliance 33
Audit Committee Report 37
Nomination Committee Report 40
Remuneration Committee Report 41
Directors’ Remuneration Policy 42
Annual Report on Remuneration 49
Directors‘ Report 57
Statement of Directors‘ Responsibilities 60
Independent Auditors‘ Report 61
Financial Statements
Consolidated Financial Statements 68
Company Financial Statements 105
Shareholder Information 109
ABERDEEN
NEWCASTLE
LEEDS
MANCHESTER
PETERBOROUGH
HUNTINGDON
COLCHESTER
SITTINGBOURNE
EUROCENTRAL
DUMFRIES
LIVERPOOL
DERBY
BIRMINGHAM
NEWPORT
PORTISHEAD
PLYMOUTH
ST. AUSTELL
STANSTED
LONDON
LONDON
UK SOUTH
UK NORTH
OXFORD
Strategic Report
01
TClarke has continued to grow and deliver outstanding
performance and results in 2021. Our revenue of £327m
has exceeded the target of £300m that we set at the start of
2021. Our operating profit is £8.8m; over £6.5m of which was
delivered in the last 6 months of the year at a margin of 3.3%
as our revenues accelerated.
The success of our strategies and deliveries, the quality of our
products, services and methods, and the strength and depth
of our client relationships have enabled significant progress
to be made in the achievement of our medium term revenue
target of £500m.
While we continue to grow and deliver in our core
Engineering Services markets, we are also delivering
significant growth and performance in our strategic growth
sectors, particularly Technology, in which we have developed
capabilities, leadership and new client relationships. These
are making a significant and growing contribution to our
revenue growth and target. This growth and performance is
supported by strong financial, management and delivery
disciplines which are constantly and consistently applied
across the Group. The forward order book stands at a record
level of £534m, an increase of 17% on the year, of which
£379m represents committed revenue for 2022. The
proportion of the order book represented by Technology has
risen to 25% from 10% in 2020.
We know that our shareholders and investors value our
progressive dividend stream. We continue to be fully
committed to a progressive dividend policy while at the same
time balancing the needs and interests of all stakeholders.
We are proposing a 2021 final dividend of 4.1p per share,
which together with the interim dividend paid in October
2021 brings the full 2021 dividend to 4.85p per share – an
increase of 10%.
TClarke is committed to becoming a more sustainable
business, delivering improved environmental and
sustainability targets and performance. It is TClarke’s
ambition to be a Business Champion with Build UK
demonstrating our commitment to the Construction
Leadership Council’s zero carbon change programme
CO
2
nstruct Zero
. The Environmental, Social and Corporate
Governance section of the report sets out to explain in
detail our approach.
Our growth and success is delivered through the skills,
experiences, focus and commitment of our people,
subcontractors and suppliers in all areas of the business.
We continue to invest heavily in our resources to ensure
we have the capacity to deliver our growth ambitions.
We are strongly committed to developing and adding to
the skills and experience of our people through our national
apprenticeship schemes and our personal and management
development frameworks, and to be the employer of choice
in our markets. For example, we currently have 195
apprentices representing 16% of our people whilst the
industry norm is just 5%. This is a significant investment made
with the long term belief in TClarke.
I look forward to 2022 and beyond, confident in our ability to
deliver our growth strategy. We have the capacity, a healthy
order book and many opportunities. The TClarke brand is
very strong, built upon our reputation for high quality
engineering, reliability, and delivery on time. This is made
possible through the collective efforts of all our people. It is
their outstanding effort that has allowed us to be so
optimistic for the future and I want to thank them all for their
hard work and dedication.
Iain McCusker
Chairman
8th March 2022
Chairman’s Statement
TClarke
Annual Report and Financial Statements 2021
For further information and for a definition of underlying, forward order book and dividend, see page 09 of the Group Financial Review.
See page 101 for definition and calculation of net cash.
Group Revenue
£327.1m
2020: £231.9m
Underlying
Operating Margin
2.7%
2020: 2.6%
Underlying
Operating Prot
£8.8m
2020: £6.0m
Prot
Before Tax
£7.
8 m
2020: £1.2m
Underlying Earnings
Per Share
14.99p
2020: 10.29p
Earnings
Per Share
14.99p
2020: 2.87p
Forward Order Book
£534.2m
2020: £456m
Dividend
4.85p
2020: 4.4p
Net Cash
£5.3m
2020: £10.2m
2021 in Numbers
2021 underlying and reported numbers are the same
as there are no non-underlying items.
Strategic Report
TClarke
Annual Report and Financial Statements 2021
02
03
Chief Executive’s Report
Ready to Deliver
TClarke is a trusted engineering partner to blue chip clients
and principal contractors. Within this report I set out our
strategic plans and achievements for the past year but more
importantly describe with confidence how the business is
achieving its goals.
Last year we committed to a strategy of moving TClarke to
the next level and we described very clearly and concisely
our ambitions, whilst adapting quickly and decisively to the
continually changing circumstances that the country faced.
TClarke aims to be a £500m revenue business with
sustainable margins of 3% supporting a progressive dividend
policy. Our business is underpinned by strict financial and
operational controls and strong governance. Our growth
ambitions are supported and financed without the need for
often risky and distracting acquisitions.
New Revenue Streams
Within our business model we target five market sectors
(the breakdown of which can be found on pages 6 and 7).
Our established annual revenues for the business are around
£330m and our strategy to reach revenues of £500m is based
upon these five established sectors and the new revenue
streams described below which should easily generate an
additional £170m of annual revenues.
• Securing larger projects outside of London with typical
• Securing data centres particularly in the UK, with typical
• Securing healthcare projects across the UK with typical
• Developing innovative smart building solutions which
I am confident that our £500m revenue target can be
achieved by organic growth whilst remaining true to the
established engineering strengths of the business.
This strategy is evidenced by the continuous growth of our
forward order book; our order book stood at a record £534m
as at 31st December 2021 (£456m 31st December 2020). The
order book growth has been achieved whilst continuing to
follow our selective tendering approach.
Investing in the Best People
Differentiated by the quality of our people and their
relentless drive to deliver the most successful projects, the
ability to grow our business and meet our ambitions could
not be achieved without the dedication of our great teams.
Our careful attention to resource planning will ensure we
always match our capacity to our available teams.
Being one of the few industry trainers of apprentices across
the UK leads to a wealth of future talent, designed to deliver
both engineering operatives and future leaders in volume
and quality to meet our needs. The ability to deliver projects
primarily with a trusted reliable workforce ensures that our
£170m
Target Growth
£330m
Established Business
Strength
£500m Revenue Roadmap
reputation for quality and delivery on time is more secure
compared to that of our competitors whose models are
dependent upon the use of sub-contractors.
Scale and Resource Across the UK
TClarke is very well established in its London heartland and
2021 has seen significant progress in ensuring that we can
offer our clients the same scale and breadth of services
across the UK. During 2021 we expanded our capacity in our
Engineering Services Divisions in Falkirk, Peterborough and
Newcastle; the increased opportunities are now translating
into additional revenues for these locations.
Our teams in Manchester and Peterborough have been
successful in securing four projects valued in excess of £25m
for an international financial institution at several locations
including two solar farm projects covering 1,800 m
2
and our
new Oxford office celebrated its successful opening by
securing a project at the prestigious Oxford Saïd
Business School.
We continue to invest in our own purpose-built facility at
Stansted, that supports Modern Methods of Construction
(MMC). The use of offsite prefabrication benefits our clients
and can bring programme certainty and factory standard
quality, and by utilising less on-site resources gives us more
capacity to deliver additional revenues as a part of our
strategy to achieve £500m revenue.
Previously our regional teams would have focused on the
smaller to medium sized projects, often teaming up with local
partners. Today from our three operating divisions that serve
20 UK locations, we offer the full range of Engineering
Services, alongside all the complementary technology and
smart building solutions, backed up by technical expertise.
TClarke is proud to be based in the communities it serves
and wants to ensure that we offer our teams the best
environments to collaborate, share knowledge and build
exciting careers. In October our team in Manchester moved
to larger premises in Salford Quays, in early 2022 our teams
in Falkirk will be moving to new offices in Eurocentral,
Scotland and our London Head Office will relocate to
30 St Mary Axe whereby our teams will operate from a single
productive floor space.
Exponential Growth in Data Centre Opportunities
The growth in the demand for data centres has been
fuelled by the needs of cloud storage, more devices being
connected to the internet (IoT), gaming, streaming services,
e-commerce, the arrival of 5G and the working from
home revolution.
The UK data centre market is the largest in Western Europe.
Brexit and the switch to new UK specific data protection
•
Data Centres
• Healthcare
•
Smart Buildings
• Large Projects Outside London
•
Engineering Services
• Technologies
•
Infrastructure
• Residential and Hotels
•
Facilities Management
£330m is the normalised annual turnover revenue for our core markets
and is not a forecast for turnover in 2022
£500m
Strategic Report
TClarke
Annual Report and Financial Statements 2021
04
05
Chief Executive’s Report
continued
collaborative approach is highly valued and has led to
TClarke becoming the preferred contractor on significant
hotel schemes in London’s West End.
Our UK North and UK South teams both won significant
major residential projects as part of our targeted tendering
approach. Building our order book with these quality
residential projects and quality relationships is key to
sustainable long-term growth and repeat business. The
trend towards more complex, high value residential
developments featuring a range of luxury facilities has
substantially increased the complexity and value of package
of works in those projects.
Our Infrastructure teams remain focused on the major areas
of public sector infrastructure where complexity and new
technologies play to our skill and quality advantages. During
the year we enjoyed ongoing success in education, delivering
63 education projects and adding 36 new education projects
in the forward order book.
Educational projects that were completed last year include:
• Foxgrove School, Leatherhead
• Nanksar Primary School, Hillingdon
• Pinner High School, Harrow
• Tring School, Hertfordshire
• Turing House, Richmond
• Uckfield College, East Sussex
In summer 2021, a further 50 new schools were announced
within the second round of the UK government’s School
Rebuilding Programme which is due to deliver 500
rebuilding projects over the next decade we are confident
that this sector will continue to be a good revenue stream.
Summary and Outlook
Our people share our vision for the future of TClarke. We are
a business with people on the ground delivering our projects.
Their innovation, commitment and dedication is something
that this business is rightly proud of.
Our order book will translate to record revenues; TClarke can
offer our clients the widest possible solutions from a single
contractor, utilising our resources so that they are assured
we have the ability to deliver. That’s why we believe TClarke
remains the contractor of choice for so many and we remain
focused on maintaining our market leading position.
We start 2022 in excellent shape and well placed to deliver
a strong future performance.
Mark Lawrence
Group Chief Executive Officer
8th March 2022
legislation has led many organisations to open or expand
data centre facilities. Several large-scale developers have
entered the data centre market in the last 12 months. Arizton
Advisory and Intelligence predict the UK data centre market
size to reach £6bn by 2026.
At the end of 2021 TClarke were active on 5 data centre
projects with a collective value of £150m with further
opportunities of additional phases. Depending on the pace
of our clients’ expansion plans this value could grow by
negotiation by an additional £75m. Through 2022 we are
aware of and tracking bidding opportunities of circa £900m
and a further pipeline of project opportunities that will build
out well into 2026.
The strength of the TClarke balance sheet and the depth of
our engineering resources means we expect to see strong
growth within our revenues in the technologies sector. This
could represent at least 30% of our expanded annual
revenues in 2022 and beyond.
Healthcare, Healthcare, Healthcare
The 2021 UK Government Spending Review confirmed a
total of £100bn of investment in economic infrastructure up
to 2024-25. The Chancellor of the Exchequer announced
that this includes a £5.9bn capital investment in the National
Health Service (NHS) in addition to the £12bn per year that
was promised in September 2021. The NHS has launched a
six year National Framework Agreement for the provision of
Smart Building Solutions, TClarke has successfully secured a
place on this framework agreement.
Secured orders in healthcare schemes now stand at £42m.
In addition, we have preferred bidder status for a further £63m
of projects. Whilst it takes longer to convert a tender to a
secured order in this sector there are tremendous
opportunities both as a participant in one of the seven
frameworks we are on, but also from standalone capital projects.
Example of secured projects within the Group include:
• Modernising Medicine - Kings College Hospital NHS
• Emergency Department Refurbishment - Royal Devon
• New MRI and Oncology Unit – Royal Cornwall
• Infrastructure Upgrade – University Hospitals Bristol and
• Emergency Department Refurbishment - Luton and
A Smart New World
Our clients are setting ambitious decarbonisation plans.
Smart Buildings - new or retrofits - will be integral to UK
plans to reduce its carbon footprint and control energy
consumption. The global smart building market is projected
to triple in the next decade. The increasing costs of energy
and legislation related to the environment in areas such as
carbon emission and pollution are all driving building owners
towards smart building solutions.
Our technologies business recently secured the Smart
Buildings contract for the European Bank of
Redevelopment at One Bank Street, including the role of
Master Systems Integrator.
Taking part in the smart buildings revolution involves the
design and installation of the building’s mechanical, electrical,
security and safety systems – all existing TClarke strengths.
As we move forward each project opportunity that we bid
has the ability to lead to a Smart Building Opportunity for our
Technologies Division. Furthermore, by utilising our shared
workforce and project teams, the more of our services from
our Mechanical, Electrical and Technologies teams that are
selected, the more compelling the value engineering solu-
tions we can offer to our clients.
The Specialist Contractor of Choice
Risks and rewards are highest for larger, more complex
projects such as commercial offices, luxury hotel and
leisure complexes, hospitals and major education or research
facilities. This drives clients and principal contractors
towards engineering services providers such as TClarke which
have the necessary skills governance and financial strength
required to mitigate those risks.
In London the excellent performance of our engineering
services teams has not only completed significant schemes
such as Project Green and 1 Newman Street, but has also
been rewarded with landmark wins such as the Apple fit out
at Battersea Power Station, Plot A2 at Canada Water and
Building S4 at the International Quarter London, our 4th
successive project win at this development in Stratford.
TClarke has experienced a mini boom in luxury and high-end
hotels. We successfully completed the Pan Pacific Hotel, and
the Hilton City Canopy Hotel in London and work continues
on the Peninsular Hotel at Hyde Park Corner. This is another
major market sector where the quality of our work and
£104m
Forward order book
2020: £100m
Infrastructure
Defence
8 10
Education
63 36
Healthcare
56 36
Prisons
4 3
Other
Government
16 8
Totals
147 93
£79m
2021 Revenue – 2020 £59m
£174m
Forward order book
2020: £175m
Engineering
Services
Commercial
Ofces
36 31
Leisure
15 13
Retail
22 18
Other
18 9
Totals
91 71
£116
m
2021 Revenue – 2020 £81m
£103m
Forward order book
2020: £115m
Residential
& Hotels
Hotels
5 4
New Build
102 76
Refurbishment
6 5
Totals
113 85
£56m
2021 Revenue – 2020 £42m
£13 5 m
Forward order book
2020: £47m
Technologies
Manufacturing
and Prefabrication
6 7
Data Centres
6 7
Smart
Buildings
20 19
Other
4 5
Totals
36 38
£50m
2021 Revenue – 2020 £32m
£18m
Forward order book
2020: £19m
Facilities
Management
Long Term
Frameworks
1,614 1,128
Planned and
Reactive
Maintenance
16,820 11,752
Totals
18,434 12,880
£26m
2021 Revenue – 2020 £18m
On our Journey to £500m Turnover
Our ve market sectors can support a step change
in scale
for TClarke and 2021’s wins have set us in
a strong position.
Strategic Report
TClarke
Annual Report and Financial Statements 2021
06
07
The Group has delivered a very strong set of results for the
year, with revenue returned to 2019 levels and a record run
rate in quarter 4 of £100m revenue providing confidence
for our prospects for 2022 and beyond. We end 2021 with
a record order book of £534m (2020: £456m), with £379m
of this due for delivery in 2022 alone (2020: £257m due for
delivery in 2021). The rate of growth is particularly strong
within the Technologies sector where we are currently
working on five large data centre schemes totalling £150m.
Technologies are forecast to represent a third of the Group’s
turnover for 2022, up from c.15% at present. We reported
at the outset that revenue and profit for 2021 would be
slanted towards the last six months of the year and this has
proved to be the case, with revenue and profit both
accelerating rapidly during the period. The operating
margin of 3.3% for the second half of the year restores
profit margin. Our growth has not been driven by
acquisitions and this will remain our policy going forward.
Performance
Underlying operating profit was £8.8m (2020: £6.0m) on
revenue of £327.1m (2020: £231.9m). There have been no
non-underlying items in 2021 (2020: £3.9m) and therefore
underlying and reported numbers are the same for 2021.
Earnings per share were 14.99p for the year (2020: 2.87p) on
an operating margin of 2.7% (2020: 2.6%). TClarke remains
financially secure, ending the year with net cash of £5.3m
with £25m of bank facilities at its disposal.
Finance costs were £1.0m (2020: £0.9m), comprising: a
£0.2m increase in bank interest and facility fees to £0.5m
(2020: £0.3m); the Group’s defined benefit pension scheme
interest charge of £0.4m (2020: £0.5m); and an interest
charge of £0.1m arising from IFRS 16 (2020: £0.1m).
The tax charge for the year was £1.5m (2020: nil),
reflecting a more representative effective rate of tax for
the Group, with the 2020 charge having been heavily
impacted by prior year tax adjustments. TClarke maintains
an open and collaborative working relationship in all
interactions with HMRC.
The Group paid its 2020 final dividend in full in May 2021
and has maintained its interim dividend. The Board is
proposing a final dividend of 4.1p (2020: 3.65p) which if
approved at the AGM will be recorded and paid on 20 May
2022. Total proposed dividend therefore rises to 4.85p
(2020: 4.4p), an increase of 10%. The dividend is covered 3
times by underlying earnings. TClarke recognises that many
of its shareholders invest for dividends.
Strategic Report
09
Summary of Financial Performance
2021
2020
£m
Revenue 327.1
231.9
Operating profit
– Underlying
1
6.0
– Reported 8.8
2.1
Profit before tax
– Underlying
1
5.1
– Reported 7.8
1.2
Profit after tax
– Underlying
1
4.3
– Reported 6.3
1.2
Profit for the year 6.3
1.2
Earnings per share - basic
– Underlying
2
10.29p
– Reported 14.99p
2.87p
Dividend per share
3
4.4p
1. Underlying operating profit, profit before tax and operating margin are
stated before amortisation of intangible assets and restructuring costs.
2. Underlying earnings per share is calculated by dividing underlying profit
after tax by the weighted average number of shares in issue.
3. Dividend per share represents the interim and final dividend proposed or
paid for the year in question.
Forward Order Book
2021
2020 %
Market sector
£m
£m change
Infrastructure
104.6
99.9 5%
Residential & Hotels
102.7
115.1 (11%)
Technologies
134.8
46.8 188%
Engineering Services
174.0
175.2 (1%)
Facilities Management
18.1
19.0 (5%)
Total
534.2
456.0 17%
Forward Order Book comprises jobs which are secured through contracts
or letters of intent.
Progressive Dividend Policy
2017 - 2021
20212020201920182017
4.85
4.44.4
4
3.5
Group Financial Review
TClarke
Annual Report and Financial Statements 2021
08
Our Strategy
A Strategy to Deliver Profitable Growth
Our medium term strategy focuses on delivering organic
growth generating £500m annual revenuesby leveraging our
attractive market positions to deliver a well balanced range of
engineering service to our customers along with a sustainable
profit and cashflow generation.
2021 Volumes to
Exceed £300m by:
• Focusing on our 5 core markets
• Expanding our data centre business
2021 Achievement
• Turnover £327m
• Data centre turnover £40m
Expand Growth
Organically by:
•
Data centre business
•
Large projects across UK
•
Healthcare offering
•
Energy efficient smart building solutions
2021 Achievement
•
Orderbook record £534m
•
Technology orders £135m up from
• Major project wins across UK
•
Place won on NHS Smart Building Framework
• Building two large solar farms
Sustain a 3% Operating
Margin by:
• Successful targeted tendering
• Operational efficiency and economies of scale
2021 Achievement
First half 1.7%
•
Second half 3.3%
Maintain our
Premium Position in
our Core Markets by:
•
Focusing on our 5 core markets
• Building long term relationships
• Remaining contractor of choice for
major
2021 Achievement
•
Orderbook replenished and increased
•
Technology business expanded
•
90% of turnover from
£500m
Annual
Revenue
London
Revenue from our London operations rose to £189.4m
(2020: £134.6m), generating an underlying operating profit
of £6.2m (2020: £4.9m). Underlying operating margin was
3.3% (2020: 3.6%). The growth in revenue has been primarily
driven by the success of our data centre offering where in
addition to our current five live projects the tendering
pipeline identifies many further opportunities. Our core
Engineering Services have also continued to deliver strongly,
with work on a number of high-profile shell and core
commercial and hotel developments, with many of which
offering future fit-out opportunities.
UK South
Revenue from UK South rose to £67.1m (2020: £55.1m), with
the region delivering an underlying operating profit of £2.6m
(2020: £2.7m) and giving rise to an underlying operating
margin of 3.9% (2020: 4.9%). The region has developed a
high-quality customer base providing a significant quantity of
repeat business and is particularly strong in infrastructure with
many projects being undertaken in defence, education and
healthcare.
UK North
Revenue rose to £70.6m (2020: £42.2m) with the region
delivering an underlying operating profit of £3.0m (2020:
£0.7m) and giving rise to an underlying operating margin of
4.2% (2020: 1.7%). This strong performance has been driven
by the completion of our first major engineering services
project in Liverpool, our continued success in winning and
delivering a number of educational projects through our
Leeds office and Scotland’s residential work. In addition our
Manchester office has recently started work on a significant
engineering services project for a major financial institution.
Forward Order Book
The closing Forward Order Book of £534m represents
a 17% increase compared to last year’s, with the largest
increase being in respect of Technologies (up 188%), driven
by the success of our data centre business.
Cash Flow and Funding
Cash balances totalled £20.3m at 31 December 2021
(2020: £25.2m). The £15m RCF was drawn down at both
31 December 2021 and 2020, resulting in net cash of £5.3m
at the 2021 balance sheet date (2020: £10.2m). The
movement in cash can be largely attributed to VAT following
the introduction of the Construction Industry reverse charge
VAT regime on 1 March 2021 and repayment of deferred
amounts. The Group has also self-funded the increase in
turnover, with working capital increasing by £6.5m over
the year.
The Group has a £15.0m revolving credit facility, which is
committed until 31st August 2024, and a £10.0m overdraft
facility which is repayable on demand. Interest on overdrawn
balances is charged at 2.0% above base rate, and interest
on balances drawn down under the revolving credit facility is
charged at a margin above SONIA, fixed for the duration of
each drawdown. The Group was compliant with the terms of
the facilities throughout the year ended 31st December 2021
and the Board’s detailed projections demonstrate that the
Group will continue to meet its obligations in the future.
The Board’s projections show that TClarke is expected to
maintain a healthy cash position throughout the next
three-year period, and we do not anticipate seeking any
additional facilities during this time.
The Group also has in place £50.1m of bonding facilities
(2020: £40.1m), of which £24.3m were unutilised at 31st
December 2021 (2020: £27.0m).
Net Assets and Capital Structure
The Group is funded by equity capital, retained reserves and
bank facilities, and there are no plans to change this structure
or to raise new capital. Shareholders’ equity is £26.5m
(2020: £15.7m).
Goodwill stood at £25.3m at the year-end (2020: £25.3m).
The Board has undertaken an impairment review in respect
of goodwill and has concluded that no impairment
is necessary.
Defined Benefit Pension Scheme Obligations
The most-recent formal actuarial valuation of the Group’s
defined benefit pension scheme at 31st December 2018
showed a deficit of £24.9m, representing a funding level
of 59%. Following the valuation the Group committed to a
deficit reduction plan to eliminate the deficit over a 12 year
period, and throughout 2021 it continued to make
additional contributions at the agreed rate of £1.5m per
annum. The Group also continues to provide security to the
pension scheme in the form of a charge over property assets
up to a combined market value of £3.1m. A new formal
funding valuation is being carried out as at 31 December
2021 and the results will be reported in next year’s Annual
Report & Financial Statements.
The methodology underlying the formal valuation differs from
that used for the annual IAS 19 valuation included in these
financial statements, particularly in respect of the calculation
of financial assumptions. When calculated in accordance with
IAS 19 the deficit stood at £23.9m at 31st December 2021,
representing a reduction of £6.3m over the year, recognised
primarily through the Statement of Comprehensive Income.
The reduction was predominantly driven by an increase in the
discount rate applied.
Financial Risk Management
The Group’s main financial assets are contract and other trade
receivables, and bank balances. These assets represent the
Group’s main exposure to credit risk, which is the risk
that a counterparty will fail to discharge its obligations,
resulting in financial loss to the Group. The Group may also
be exposed to financial and reputational risk through the
failure of a subcontractor or supplier.
The financial strength of counterparties is considered prior
to signing contracts and reviewed as contracts progress
where there are indications that a counterparty may be
experiencing financial difficulty. Procedures include the use
of credit agencies to check the creditworthiness of existing
and new clients and the use of approved suppliers’ lists and
Group-wide framework agreements with key suppliers.
We have performed a thorough analysis of our supply
chain during the year to ensure we comply with the
Government’s new IR35 off payroll working requirements,
a process which will continue in the future.
Accounting Policies
The Group’s consolidated financial statements are prepared
in accordance with the requirements of the Companies Act
2006 and in accordance with UK-adopted international
standards. There have been no new accounting policies
adopted in the year.
Trevor Mitchell
Group Finance Director
8th March 2022
TClarke
Annual Report and Financial Statements 2021
10
2021 Operating Margin
by Region
2021 Operating
Prot
by Region
London 6.2
Total 8.8
£m
2021 Revenue
by Region
London 189.4
Total 327.1
£m
Strategic Report
11
Cash Performance (£m)
Working capital
movements
Repayment of
deferred VAT
Operating
profit
Impact of reverse
charge VAT regime
1 Jan 2021
Net cash
Dividends Pension deficit
reduction
Purchase of
shares by ESOT
Other
31 Dec 2021
Net cash
0
4
2
8
6
10
14
12
18
20
16
10.2
(1.3)
(2.8)
(1.5)
(0.9)
1.2
5.3
(1.9)
(6.5)
8.8
Group Financial Review
continued
London
UK South UK North
0.0%
1.0%
2.0%
3.0%
3.5%
4.0%
4.5%
0.5%
1.5%
2.5%
3.3%
3.9%
4.2%
Strategic Report
TClarke
Annual Report and Financial Statements 2021
12
Our strategic advantages
Our People
• We directly employ professional engineering
Market Opportunities
• The UK Government has recently published a
• Net Zero - We offer a wide range of energy efficient
• Data Centres – significance number of data centres
Integrated Services and Technology
• We offer a broad range of engineering services.
Nationwide Coverage
• We cover the whole of the UK with 20 offices.
Reputation
• Our performance maintains our brand reputation for
The value we create for
our stakeholders
Shareholders
• Shareholder returns – we aim to generate long-term
• Dividend – we have a progressive dividend policy
Clients
• We aim to deliver projects safely on time and to
• ESG activities support our customers on their path to
Our People
• Industry leading career paths and project work to
Supply Chain Partners
• We work to build strong, collaborative relationships
• We support our suppliers to meet high standards of
Communities/Society
• We are focused on social sustainability by ensuring
Environmental
• Support our customers through implementing
• Building of solar farms and installation of
• Type 1 and type 2 emissions per £1m of turnover
13
What we do
Our strategic advantages give us market leadership.
Our service mix allows us to deliver value at each
stage of the project. Our delivery is underpinned by
our core values, known as
The TClarke Way
.
Business Model
Attractive market positions
Attractive positions in our markets where
we operate with scale, operational
capability at both national and regional
levels as well as project delivery including
processes and expertise
Performance excellence
The delivery of high quality projects
safely, on time and to budget across
the business
Sustainability
Committed to achieving net zero
carbon across our own operations and
supply chain offering energy efficient
solutions to our customers
Client relationships
Building long term relationships with
our blue chip customer base
Design and Engineering Capability
Experienced engineers supported by
internal prefabrication facility to deliver
modern methods of construction
Project Management
Experienced high quality project
management delivered through our
own workforce
TClarke
Annual Report and Financial Statements 2021
14
Strategic Report
15
Section 172 of the Companies Act requires each Director to
act in the way they consider, in good faith, would most likely
promote the success of the Company for the benefit of its
shareholders. In doing this, the Director must have regard,
amongst other matters, to:
• The likely consequences of any decision in the long term;
• The interests of the Company’s employees;
• The need to foster the Company’s business relationships
• The impact of the Company’s operations on the
• The reputation for high standards of business conduct;
• The need to act fairly between members of the Company.
The Board of Directors have complied with these
requirements.
As a Board we have always taken decisions for the long term,
and collectively and individually our aim is always to uphold the
highest standards of conduct. Similarly, we understand that our
business can only grow and prosper over the long term if we
understand and respect the views and needs of our customers,
colleagues and the communities in which we operate, as well as
our suppliers, the environment and the shareholders to whom
we are accountable. This is reflected in our business principles,
and the Sustainability section on pages 16 to 25 sets out in more
detail how we manage our relationships with them.
Summary of how the Board Engages with our Stakeholders
The following table describes how the Directors have had
regard to the matters set out in section 172(1) (a) to (f) and forms
the Directors’ statement required under section 414CZA of the
Companies Act 2006.
Iain McCusker
Chairman
8th March 2022
Stakeholder
Group
Why we engage How we engage What matters to
this Group
Section 172 Statement
•
Continued access to capital is
•
We work to ensure that our
•
The Company’s long-term success is
•
We engage with our workforce to
well-being
•
Our pensioners continue to feel
•
Our purpose is to design, install,
•
We aim to build long-term lasting
developments.
•
Our suppliers are fundamental to
ourselves
•
Suppliers must demonstrate that
•
We aspire to be responsible
•
We are committed to minimising
•
The community and environment
•
Long term value creation
•
Growth opportunity
•
Financial stability
•
Culture
•
Transparency
•
Dividend policy
•
Health and safety
•
Fair employment
•
Fair pay and benefits
•
Diversity and inclusion
•
Training, development and
•
Ethics and sustainability
•
Safety of pension
•
Financial stability
•
Engagement
•
Total reliability in project
delivery
•
Quality of product
•
Health and safety
•
Responsible use of
•
Environment
•
Ethics and sustainability
•
Fair trading and payment
terms
•
Anti-bribery
•
Ethics and slavery
•
Environment and
•
Charitable donations
•
Volunteering
•
Energy usage
•
Recycling
•
Waste management
•
Corporate website, social media
•
Results announcements and
•
Shareholder and analyst meetings
•
Private investor events
•
Designated Non-Executive Director
•
The TOMMY employee hub
•
TClarke Career Pathway and
•
TClarke Future Leaders Programme
•
Whistleblowing Policy
•
Business-wide health, wellbeing and
•
AGM
•
Pensioner newsletter
•
Corporate Website
•
TClarke has deep, long-term
developers
•
We offer a full, comprehensive
maintenance
•
TClarke employ a formal supply
•
Key supply chain partners are
practice
•
Regular performance reviews of
•
TClarke is proactive in its corporate
•
We encourage employee
Shareholders
and potential
shareholders
Our employees
Our pensioners
Clients
Suppliers
Community and
environment
Our Supply
Chain
Our key
stakeholders
Our
Clients
Our
Employees
Our
Shareholders
Our
Pensioners
Our
Communities
TClarke
Annual Report and Financial Statements 2021
16
Strategic Report
17
Environmental, Social and Governance Report
Governance
Sustainability the TClarke Way
Active Collaboration with World Class Partners; Positive
Action in our Areas of Direct Control
We recognise the impact climate change has on the
environment and society and accept the known environmental
implications of our engineering works and procedures. We are
committed to minimising the impact our business operations
have on the environment and continue to actively manage our
energy efficiency.
In key areas of environmental sustainability, the nature of our
work as specialist engineers means that our strongest impacts
can be generally achieved by collaborating with progressive
clients and principal contractors nationwide upon whose
programmes we work.
By doing so, our teams not only adhere to and help deliver
benchmark standards for sustainable performance, we also
support the achievement of groundbreaking sustainability
targets and the highest standards of environmental
performance, from Passivhaus, to Well Building and BREEAM
standards of quality.
In many areas of social sustainability, TClarke can and does take
the lead, creating social value and strong performance for the
benefit of all our stakeholders, supporting fully the ethos and
objectives of Section 172 of the Companies Act.
Non-financial Information Statement
This section (pages 16 to 25) provides information as required
by regulation in relation to:
•
Environmental matters
•
Our employees
•
Social matters
•
Human rights
•
Anti-bribery and corruption
Other related information
•
Our business model (pages 12 - 13)
•
Principal risks (pages 26 - 29)
Task Force on Climate-related Financial
Disclosures (TCFD)
This is our first reporting period subject to compliance
with TCFD. TCFD was created by the Financial Stability
Board to improve and increase reporting of client-related
financial information with the aim of providing the
financial markets with clear, comprehensive high-quality
information on the impacts of climate change. The
reporting requirements are focussed on four thematic
areas that represent core elements of how companies
operate as illustrated below:
Governance Structure
Responsible for:
•
Setting the
targets
Chaired by the Group
Managing Director this
group is responsible for:
• Identifying all
Responsible for
supporting the Board in
it’s responsibilities with
respect to climate
change, including:
• Considering climate
•
Overseeing
Responsible for:
• Delivering the relevant
•
Day-to-day
• Embedding the climate
• Working groups are led
Board
Climate Change Delivery Group
• Reviewing key
• Establishing action
•
Embedding
• Considering climate
• The group meets
Audit Committee
Working Groups
Direct and advise
Report and escalate
Group Management Board
Responsible for:
• Reviewing and
• Ensuring appropriate
Governance Strategy
Risk Management
Metrics and
Targets
Disclose the
organisation’s
governance around
climate-related risks
and opportunities.
Disclose the
actual and potential
impacts of
climate-related risks
and opportunities
on the organisation’s
business, strategy,
and financial
planning where
such information
is material.
Disclose how the
organisation identifies
assess and manages
climate-related risks.
Disclose the
metrics and targets
used to assess and
manage relevant
climate-related
risks and
opportunities where
such information
is material.
TClarke
Annual Report and Financial Statements 2021
Strategic Report
Climate Strategy
Risk Management
Transition Risk Analysis
To further understand the risk that climate change could
have on our business, we undertook a high-level scenario
analysis, where we considered scenarios out to 2030. We used
two scenarios:
Our Climate Change Scenario Analysis
Opportunities
Commercial opportunities from
the transition towards net zero
will continue to shape our
portfolio and strategy.
Timeframe:
Short, medium and long-term
Impacted businesses:
Group-wide
The first assumed that the global response to the threat
of climate change is enough to limit global average
temperature increases to no more than 1.5ºC above
pre-industrial levels (as set out in the Paris Agreement)
by 2100 (the 1.5ºC scenario). In this scenario, rapid
changes are made to progress decarbonisation goals:
coordinated policy, regulation and customer behaviour
favours bans on polluting technologies, and support for
low-carbon solutions.
The second scenario assumed that the 1.5ºC target is
missed by some margin, comparable to a 4ºC global
average temperature increase (the 4ºC scenario). In this
scenario, changes are less rapid and less comprehensive,
and emissions remain high, so that the physical
ramifications of climate change are more apparent
by 2030.
Risks
We have a strategy of
reaching net carbon zero by
2030. There is a risk that the
cost/availability of an electric
charging network delay
achievement of this target.
Timeframe:
Short, medium and long-term
Impacted businesses:
Group-wide
Impacts
Timeframe:
Short, medium and long-term
Impacted businesses:
Group-wide
The decarbonisation of heat presents significant opportunities for our technology
businesses as electric heating solutions are sought for homes, offices and buildings.
We are currently installing heat pumps across the UK and are building solar farms.
We believe our smart building offering affords significant opportunities for our business
as our customers seek to reduce their carbon footprints. We are on the NHS Smart
building framework.
Our prefabrication facility at Stansted enables us to have far less labour onsite,
minimising journeys and reducing our carbon footprint which is attractive to our customers.
It is our ambition to take a leading role as a Build UK business champion within the
Construction Leadership Council’s CO
2
nstruct Zero programme which is the industry’s
response to the climate challenge.
Whilst decarbonisation creates significant market opportunities across all time frames
we continue to focus on our five market sectors in order that TClarke doesn’t become
dependent on the rate of take up of technologies such as air source heat pumps.
Under this scenario significant market opportunities are
available to TClarke as building owners seek to
substantially reduce their carbon footprint. These
opportunities are forecast to significantly outweigh the
cost risks faced by the Group.
The main impacts of this scenario were increased
weather events of escalating severity and frequency,
which could increase disruption to our sites and to our
customers, market opportunities are likely to be less
and risks significantly higher than 1.5ºC scenario due to
extreme weather events.
One of the key actions in reducing our carbon footprint is the decarbonisation of our
fleet; currently this is not practical due to:
1 Availability of electric vehicles
2. Charging network across the UK
3. Ranges of vehicles before a charge
4. Costs associated with moving to an electric fleet
As such the plan is to move to an electric fleet between 2025 and 2030.
In addition decarbonisation of the economy may raise costs of other items across the
cost base. In a low margin industry any material cost increases will need to be able to be
passed on to customers. There is a risk that this may not be possible. The likely
impact would be to extend the time frame for TClarke becoming net carbon zero.
Overall we believe the market opportunities available to TClarke significantly outweigh
potential cost risks. It is the Board’s expectation that costs risks will be mitigated through
market price changes and or lengthening of the decarbonisation timeframe.
Risk/opportunity type
and description
Scenario
Our response
Impact
The process for identifying, assessing and managing
climate related risks are identified in Strategy above.
Our key climate risk is detailed in the Key Risk
Assessment on page 29
18
19
Overview of our climate-related risks and opportunities
The scale of ambition and speed of change required to meet
net zero emission targets, along with the changes in
temperature and weather patterns present both risks and
opportunities to our business. These risks and opportunities,
along with a summary of the work we are doing to address
them, are presented in the table below. Short-, medium- and
long-term timeframes are defined in our risk methodology as
one year or less, one to three years and three or more years
respectively, and this is reflected in the table below.
Our Strategy for Responding to
Climate Change
Climate Strategy
Our activities effect our employees, supply chain and the
communities in which we work. It is critical to the Group’s
success that our employees, suppliers and subcontractors
have the tools they need to deliver our clients programmes of
work on time and to the quality expected from TClarke.
We are proud of our talented employees, proud that we have
on of the largest apprenticeship schemes within our industry
(16% of workforce apprentices), and proud of the long-term,
mutually supportive relationships that we have developed
with many of our suppliers and subcontractors.
Our People
Positive culture, local opportunities and a pipeline of
world class engineers
TClarke recognises that as a specialist engineering company,
we can play our role by rooting ourselves in local
communities and providing high quality, long term career
paths and opportunities for people. Equally we can promote
and deliver the highest possible standards of health, safety,
wellbeing and respect for people - our own employees and
those with whom we work.
Our apprenticeships, advanced future leaders training and
our health, safety and wellbeing programmes are by accept-
ed metrics, absolute industry leaders and deliver far beyond
the benchmark norms.
This does not happen by chance or without substantial
cost or long term investment. TClarke’s longstanding
commitments and deep cultural focus across these areas is
central to who we are, the pride we take in our business and
the value that we deliver to our stakeholders.
Diversity and Inclusion
We cultivate an inclusive work environment where everyone
has access to the relevant knowledge, technology and
services they need to achieve their personal ambitions and
drive the business forward. We want to encourage greater
diversity within our sector and ensure that no discrimination
occurs, however unintentional it may be.
TClarke recognises the need to actively foster and create an
environment where everyone is respected and fully
empowered to be their best. As an organisation which relies
heavily on the qualities its people display daily when working
in collaboration with our partners, this idea has strong
practical value and application and is embedded within our
working culture.
During 2021 TClarke invited Chickenshed to conduct training
with a number of our personnel on unconscious bias.
HighlightsClimate Metrics and Targets
TClarke recognises and accepts the known environmental
implications of its engineering works and procedures and is
committed to minimising the impact our business operations
have on the environment.
In key areas of environmental sustainability, the nature of our
work as specialist engineers means that our strongest impacts
can be generally achieved by collaborating with progressive
clients and contractors nationwide upon whose programmes
we work. By doing so, our teams not only adhere to and help
deliver benchmark standards for sustainable performance; we
are also support the achievement of ground breaking
sustainability targets and the highest standards of environmental
performance, from Passivhaus, to Well Building and BREEAM
standards of quality.
We are committed to leading our industry in the efficient
consumption and preservation of critical resources. Through
creative design and implementation, programmatic inclusion
of renewable resources, and operational excellence, we have
and will continue to take strides in adopting new technology
and working practices for resource management. The TClarke
collaborative approach will be for all disciplines to operate as an
integrated part of the overall project team, in a partnering
environment, and carry this philosophy through the design
stages and the delivery phase. This will deliver a healthier
and more sustainable environment, as well as associated cost
efficiencies, to the benefit of our people, customers, and the
communities in which we operate.
Our Pathway to Net Zero
In December 2020 we committed to achieving net zero
emissions across our own business operations by 2030.
We refer to Scope 1 & Scope 2 carbon emissions as our
‘business operations carbon as these scopes relate to our own
use of energy from direct operations under our control. This is
the carbon emitted from fuel used on our sites and in company
vehicles, and electricity used on sites and in offices.
This year TClarke has taken action to reduce our emissions in
the quickest and most effective way possible using simple
solutions such as:
• Procurement policy – change in our procurement policy so
• Fleet – at Group level we have begun the process of
• Buildings – the ongoing auditing of our buildings’ energy use
We have commenced the ‘audit’ of our supply chain carbon
footprint. We have become members of BUILD UK and will
take a leading role in this Co2nstruct Zero, the industry wide
response to carbon reduction as we seek to reduce our Scope
3 emissions from our supply chain. Our assessment of Scope 3
emissions is ongoing.
Greenhouse Gas Emissions (CO2e) Energy consumption was
measured across the Group by recording data on the
combustion of fuel and the use of electricity at its offices and
facilities, and we have collated Scope 1 and Scope 2 emissions
data for the year ended 31st December 2021.
Our CO
2
e emissions have been calculated using UK
Government guidelines for conversion of fuels and electricity.
Greenhouse Gas Emissions 2021 2020 2019
Scope 1 emissions (tCO2e) 1,740 1,654 2,098
Scope 2 emissions (tCO2e) 152 164 211
Total Scope 1 & 2 emissions (tCO2e) 1,892 1,818 2,309
Revenue (£m) 327.1 231.9 334.6
Emissions / £m revenue (£1m) 5.8 7.8 6.9
TClarke
Annual Report and Financial Statements 2021
Strategic Report
Social SustainabilityEnvironmental Sustainability
*2019 starting point DECARBONISATION ACTIONS
2309
*
tonnes CO
2
e0
Scope 2
Emissions
Scope 1
Emissions
Scope 2 Emissions
Scope 1 Emissions
Reduce
embodied
carbon
Electrication
of eet
and plant
Reduce
energy
intensity
Increase
renewable
energy supply
Offset residual
emissions
to net zero
Definitions:
1. Scope 1 emissions: Combustion
2. Scope 2 emissions: Electricity
3. tCO2e: Tonnes carbon
Net Zero Carbon Roadmap to 2030
20
21
tonnes CO
2
e60%
Reduction in accidents
since 2018
40
Future Leaders enrolled
on our training
programme
60
DAYS
Average supplier
payment days
16
%
Of workforce
Apprentices
19
,
645
Training days
completed in 2021
9
YEARS
Average length of
employee service
TClarke Academy
TClarke operates a Career Pathway and Training Academy
designed to provide employees with a clear career pathway
with training and opportunities for personal and professional
growth to achieve their goals. We have successfully rolled
out an eLearning platform to ensure all staff are trained in
TClarke’s procedures and kept up to date with new systems
and technologies.
Our Pensioners
Our pensioners like to keep abreast of developments in
TClarke. We produce a yearly newsletter to keep our
pensioners informed of any matters of interest concerning
their pension in addition to news stories on our website.
Health, Safety and Wellbeing
The health, safety and wellbeing of all our employees and
suppliers is of paramount importance. TClarke has an
‘absolute’ accident reporting regime which ensures that each
accident, no matter how apparently small or insignificant, is
reported and included in our statistics. We are proud of the
culture that we have created and maintained.
Innovation
Innovation is key in refreshing our safety behaviour and
culture. We operate an ongoing cycle of innovation with new
campaigns and the extensive use of traditional and digital
platforms in new ways.
We have recently completed our changeover to
‘All-Electronic’ reporting for our Near Miss Reporting System.
Our unique ‘You See, You Say’ reporting system was one of
the first Apps of its kind.
This changeover has made the process quicker, easier, more
direct, more economically friendly and far more efficient
by being able to address anything that has the potential to
cause harm, in a suitably prompt time period.
We have also introduced a series of Electronic inspection
Apps to assist with the onsite requirements of ensuring plant/
equipment is suitable and fit for use.
TClarke
Annual Report and Financial Statements 2021
22
Strategic Report
23
Chickenshed is a pioneering and inclusive company that
bring together people of all ages and from all backgrounds
to produce outstanding theatre productions that entertain,
inspire, challenge and inform both audience and
participants alike.
Gender Splits
Gender Pay
Gender is just one aspect of diversity, we remain steadfast
in our commitment to create a diverse, inclusive culture, one
which supports and encourages everyone to give their best,
and bring their whole selves to work.
In the construction sector, there is a long-standing lack of
women in the industry. For those women who are employed
in the industry they are usually in non-delivery or non-client
facing roles and often in more junior positions. This means
that across construction a significant pay and bonus gap
exists between men and women. The small proportion of
women employed means that the measures above,
particularly the bonus measure, can be volatile from one
year to the next.
TClarke have engaged with Women in Construction and have
taken on another female apprentice. This follows our female
apprentice of the year, Emma Nichols, and our increased
focus for women in construction across the group in the last
decade with a number of roles being fulfilled by women such
as Procurement Director, Quality Manager, Commissioning
Manager, Quality Surveyor, Design Manager and Planner.
Human Rights
Whilst TClarke does not have a separate human rights policy,
a respect for human rights is implicit in all our employment
policies, corporate values and policies on data protection,
privacy, modern slavery, anti-bribery and corruption.
Training and Development
The annual TClarke Apprentice of the Year is a key part of
our culture and all finalists gain automatic entry to our Future
Leaders programme. The standard of entrant is extremely
high. Through the usual strict process we managed to get
the number down to 3 finalists; Dean Callan (UK North)
Emily Lyons (London) Kyle Hancock (UK North) with Dean
Callan becoming Apprentice of the Year.
Future Leaders
The Future Leaders Programme identifies strong
leadership candidates at various stages of their careers
within our business and provides them with continuous
additional professional training, networking, and personal
development.
We currently have 40 employees enrolled on the Future
Leaders Programme.
All Future leaders gain opportunities for growth and career
progression and many have moved into management
positions across the TClarke Group, some are currently
project managing some of the biggest projects TClarke
have in London.
Apprentice Intake 2021
We are renowned for our apprentice programme within the
industry and have one of the highest intakes in our sector.
We currently have 195 apprentices currently working their
way through the programme. As a group our normal intake
level is around 40 apprentices every September. TClarke’s
longstanding culture and approach to quality has driven our
continued commitment in this area.
Disability
We are committed to an open and inclusive culture, including
the fair treatment of disabled people. We give full and fair
consideration to job applications made by disabled people. Our
procedures include making reasonable adjustments to roles and
responsibilities and providing training and support to ensure
they have the same opportunities for career development and
promotion as other employees.
Social Sustainability
continued
Board 6 1 6 1
Senior management
(Group Management Team)
1
6 1 7 1
Group Management Team
direct reports 43 21 40 14
All employees 1,121 115 1,119 99
Number of UK employees
at 31 December, on which 1,236 1,218
data is based
excludes executive directors
1
Men Women
2021
Men Women
2020
Hourly pay
2021
2020
29%
30%
28%
23%
Bonus pay
2021
2020
79%
84%
60%
67%
Mean pay differential (average)
Median pay differential (mid-point)
Annual Group Accidents
2017 -2021
2017 2018 2019 2020 2021
Continual Accident
Reduction
Persistent focus on accidents
and incidents
Annual Accident Frequency Rate
*
2017 2018 2019 2020
2021
2.48
2.32
1.09
1.18
0.92
* Accident frequency rate is
(number of accidents divided by number of hours)
multiplied by 100,000
YOU SEE!
YOU SAY!
SWITCHED ON TO SAFETY
THANK
YOU!
Report a concern Report a concern Report a concern
Report a concern
Report a concern
2017 2018
102
113
73
47
46
TClarke
Annual Report and Financial Statements 2021
24
Strategic Report
25
Social Sustainability
continued
Continuous Improvement
We have enhanced our PPE policy to ensure our people are
greater protected whilst at work. We have introduced a more
robust Glove Policy which gives additional protection, whilst
maintaining comfort and dexterity. This will enable us to
prevent hand injuries and maintain a safe working
environment and are environmentally friendly.
TClarke continuously aims to keep Health & Safety at the
forefront of everybody’s mind and does so by continuing to
implement our full range of well-established Health &
Safety initiatives. These initiatives include ‘Have Your Say’
which focuses on drawing out Health & Safety topics and
issues for discussion, which encourages engagement and
consultation with the employees. The ‘You See You Say’
reporting card and mobile phone app identify potential
Health & Safety risks.
TClarke has a Mindful Worker initiative, supported by a
mindful worker campaign. We are proud to have introduced
Mental Health First Aid training sessions across the Group
to enable staff to become qualified Mental Health First
Aiders. Our Green Hearts Mindfulness classes for all staff &
supervisors have been well attended and appreciated.
The classes cover practical breathing and meditation
techniques which help to manage stress. The classes were
so successful that we have now created a series of videos.
These measures are a big step forward within the
construction industry and prove how serious TClarke is
about managing every aspect of our employees’ mental
health, health and wellbeing.
Our Supply Chain
We have forged longstanding relationships with our supply
chain partners. Where possible, we use local resources to
ensure we harness innovation, achieve consistent quality and
meet our responsible business goals. We work with our
supply chain partners to help them to enable their own
businesses to succeed.
Our strong relationships with our supply chain help us to
be an employer of choice and facilitate conversations on
subjects such as innovation and future growth. We monitor
our subcontractors’ performance against set criteria and
provide them with constructive feedback.
We are working with our supply chain to help them measure
and reduce carbon emissions and plastic use. A key
objective for 2022 is to reduce our supplier payment days
from our current average of 60 days.
Antibribery & Corruption
TClarke values its reputation for lawful and ethical behaviour
and has zero tolerance of any form of bribery or
inappropriate inducement to ensure that business can be
conducted in a free and fair market. Our anti-bribery and
corruption policy has been communicated to all staff and is
published on TOMMY, the new TClarke employee hub. Every
individual and organisation that acts on the Company’s behalf
or represents the Company is responsible for ensuring that
this principle is upheld and the policy is implemented so that
the Company conducts all business in an honest and
professional manner in line with the Bribery Act 2010.
Modern Slavery
TClarke is committed to compliance with Modern Slavery Act
2015 go to www.tclarke.co.uk/downloads for full policy.
Customers
Strong Engagement and Leadership
All our client relationships are underpinned by a systematic
programme of ongoing engagement. Only through this
ongoing collaboration can we continue to evolve as a
business, improve our ways of working and continue to
meet or exceed the expectations of our clients. TClarke’s
structure and organisation means that our executive
leadership team has direct, personal control and
accountability for this engagement.
Delivering Increasing Value to our Customers
Our long history of total reliability, safety and delivery of
quality projects enables us to remain long term partners
and the contractor of choice for many clients. We operate
a collaborative and open approach to work which maximises
value, efficiency and productivity. As we increase our
leadership in critical areas of technology, manufacturing and
our portfolio of engineering specialisms, we keep pace with
and in many cases are anticipating our clients requirements.
An Efficient Unified Procurement Operation
Work we have done in recent years has added a series of
strategic benefits to our long-standing and effective supply
chain partnerships. Across the UK, the last year has shown the
value of having such a supportive and loyal group of
suppliers in helping to keep our clients programmes on track,
around the UK.
A Nationwide Precision Logistics Operation Focused
on Efficiency
The scale of our operation is considerable. Every day
TClarke’s nationwide procurement team ensures the
correct delivery of more than 100 orders nationwide. This is
a precision logistics operation, dovetailing with our clients’
operational requirements. In the last years, as a dividend from
group wide structural improvements, we have streamlined
and unified our nationwide procurement team, including the
introduction of a new digital portal, dashboards, reporting
tools and processes.
We have a new simplified approvals process for supply chain
membership and a streamlined procurement process which
gives our buying teams a stronger support community, better
information flows, access to deals and opportunity to
concentrate on value creation. We have also been able
to create new logistics efficiencies as we share resources,
knowledge and relationships across our UK team. In addition
to process improvements we are also able to drive increased
value through the scale of our Group purchasing.
Community
TClarke understands its corporate responsibility to the local
and wider community in which we work.
TClarke is registered with the Considerate Constructors
Scheme and monitored against a Code of Considerate
Practice designed to raise industry standards and requires
us to carry out our construction activity with the greatest care
and consideration.
We engage in initiatives with our communities by liaising
with local schools, attending career open days, holding skills
workshops and offering work placements for young and
mature trainees.
In addition to the support we give to providing employment
to the local and wider community, TClarke and its people
value the contribution we can make through charitable
organisations and sponsored events that we support.
Examples of Community Involvement Include
TClarke have engaged with Camden Council to employ
young people who are not in employment, education or
training (NEETs) for our Camden Town Hall project.
TClarke participate in local job fairs to promote employment
in construction and five apprentices were employed from the
local area at Battersea Power Station.
TClarke sponsored Bowmer & Kirkland and the Department
for Education for their Coast to Coast Ride to raise money
for the Talent Foundry, a charity which helps young people
from disadvantaged backgrounds develop valuable new
employment skills and take that first step into the world
of work.
TClarke is one of the lead partners for the new Stanhope
Foundation to help London’s most vulnerable people.
The Stanhope Foundation is focused on increasing
employability among vulnerable and young people in
London, so they can find hope and pride through
meaningful employment.
TClarke has always made significant efforts to offer the best
pathways into meaningful and high-quality employment
within the construction and engineering sectors. Whenever
we look to extend the opportunities we offer, we aim to
ensure that they are meaningful and well supported.
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Working
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Derby Central
Processing Centre
Serving Projects
Across UK
Invoicing and
Reconciliations
Serving 20
Regional Offices
Payroll
£76M
Central
Finance
Procurement
£242M
Payables and
Receivables
Project
Registration
Principal Risks
TClarke
Annual Report and Financial Statements 2021
26
Strategic Report
27
Audit Committee
Group Management Board
Quality Assurance Function
Risk Reviews Strategy Planning
Delegated Authorities Divisional Reporting
The Group’s risk profile continues to be supported by a strong balance sheet and secured workload, and a continued
focus on contract selectivity.
Our Approach
Risk is inherent in our business and cannot be eliminated. Our risk governance model ensures that our principal risks and
the controls implemented throughout the Group are under regular review at all levels.
Risk Governance
Group Board
The Board is responsible for setting the Group’s risk appetite and for ongoing risk management, including assessing
the principal risks that threaten our strategy and performance. The principal risks faced by the Group and the mitigating
actions were formally received by the Audit Committee and Board in September 2021 and February 2022.
The audit committee assists the Board in monitoring risk management and internal control, and formally reviews the
Group and divisional risk registers on behalf of the Board.
The board ensures that inherent and emerging risks across the Group are identified and managed appropriately.
The Quality Assurance Team reviews the divisional risk registers to check that they have been reviewed, maintained, and
updated. The Group Finance Director draws from the divisional risk registers when compiling the Group risk register.
Twice a year each
business unit carries out
a detailed risk review,
recording significant
matters in its risk register.
Each risk is evaluated,
both before and after
mitigation, as to its
likelihood of occurrence
and severity of impact
on strategy. This is then
reviewed by the Group
Finance Director
conferring with the Group
Management Board.
Risk management is part
of our business planning
process. Each year
objectives and strategies
are set that align with the
risk appetite defined by
the Board.
The Group has produced
a schedule of delegated
authorities that assigns
approval of material
decisions to appropriate
levels of management.
Such decisions include
project selection,
tender pricing, and capital
requirements. Certain
matters are reserved for
Board approval.
The divisional risk
registers record the
activities needed to
manage each risk, with
mitigating activities
embedded in day-to-day
operations for which
every employee has
some responsibility.
Rigorous reporting
procedures are in place
to monitor significant risks
throughout the divisions
and ensure they are
communicated to the
Group’s board reporting
and delegated
authorities’ process.
Health & Safety (H&S)
H&S will always feature
significantly in the risk profile
of a construction business.
Accidents could result in legal
action, fines, costs and
insurance claims as well as
project delays and damage to
reputation. Poor H&S
performance could also affect
our ability to secure future
work and achieve targets.
Changes in the Economy
There could be fewer or less
profitable opportunities in our
chosen markets. Allocating
resources and capital to
declining markets or less
attractive opportunities would
reduce our profitablility and
cash generation.
Insolvency of Key Client,
Subcontractor or Supplier
An insolvency of a key client
could impact cash flow and
profitability. An insolvency of a
subcontractor or supplier could
disrupt projects, cause delay
and incur costs of finding a
replacement.
Inadequate Funding and
Cash Flow Management
A lack of liquidity could impact
our ability to continue to trade
or restrict our ability to achieve
market growth or invest in
regeneration schemes.
1. The Group Health & Safety Director monitors
2. Industry leading health and safety policies and
3. All employees receive regular training and
4. Our teams adapted well to new site operating
5. Continued focus on ‘You See You Say’
1. We balance our business by strategic
2. The Group monitors its order book to ensure an
1. We work for a number of large well funded clients.
2. We have a rigorous due dilligence regeime both
3. Working with preferred suppliers where possible,
4. Regular monitoring of work in progress
1. The Group has a Revolving Credit Facility of £15m
2. Daily monitoring of cash levels and regular
3. Regular stress-testing of long-term cash forecasts.
4. Funding of significant projects signed off by
Improvement
Greater use of Modern
methods of construction and
prefabrication have reduced
number of hours worked
on site.
Our Health & Safety
performance has improved in
the year, with a reduction in the
number of lost time incidents.
Our AFR has fallen to 0.92.
Improvement
We believe that in the medium
to longer term, the markets in
which we operate remain
favourable and structurally
secure. Our order book stands
at a record level with many
more opportunities currently
being bid.
No Change
The pandemic and the
introduction of the reverse
charge VAT regeime have
impacted customers and supply
chain balance sheets.
No Change
At 31st December 2021 The
Group had £20.3m of cash and
£10m of unused facilities. Our
balance sheet continues to
provide assurance for our
employees, clients, supply chain
and counterparties in an
increasingly uncertain market.
Risk and potential impact Update on Risk Status Mitigation and Action
TClarke
Annual Report and Financial Statements 2021
28
Strategic Report
29
Attracting and Retaining
Talented People
Attracting and retaining
appropriately qualified staff
to deliver our ambitious
growth plan.
Contract Selection
In a market where competition
is high a Region might accept
a contract with a main
contractor that is poor in
managing projects. The impact
to us is the risk of increasing
our costs and causing delays.
Research and Development
(Innovation)
A failure to produce or
embrace new products and
techniques could diminish our
delivery to clients and reduce
our competitive advantage.
It could also make us less
attractive to existing or
prospective employees.
Mispricing a Contract
If a contract is under priced this
could lead to contract losses and
an overall reduction in gross
margin. If it is over priced the
Group will not secure sufficient
tenders to secure the order book
and grow the business. Miss/
pricing contracts may also damage
the relationship with the client.
Cyber Security
Investment in IT is necessary
to meet the future needs of the
business in terms of expected
growth, security and innovation,
and enables its long-term
success. It is also essential in
order to avoid reputational and
operational impacts and loss
of data that could result in
significant fines and/or
prosecution.
Project Delivery
Failure to meet client
expectations could incur costs
that erode profit margins, lead
to the withholding of cash
payments and impact working
capital. It may also result in
reduction of repeat business
and client referrals.
Climate Change and
Sustainability
The impact of increased costs
arising from a zero carbon
economy. The loss of key
clients through not addressing
carbon emissions adequately.
Contract Variations and
Disputes
Changes to contracts and
contract disputes could lead
to costs being incurred that
are not recovered, loss of
profitability and delayed
receipt of cash.
Material Availability & Inflation
The majority of TClarke
contracts are tendered at a
fixed price lump sum. Material
inflation during the contract
period will increase costs and
impact profitability.
1. The Group remains committed to providing
2. Remuneration packages for all staff are linked
1. Clear selectivity, strategy and business plan to
2. Weekly calls with all our business leaders are held
Our employees enjoy working on high-profile,
innovative projects that provide them with the
opportunity to enhance their knowledge and
experience. Business and IT come together to
promote new innovations across the business.
1. A well-established bidding process with
2. Estimating Teams have been office based
3. All tenders have director/sign off.
A dedicated team focused on providing a stable
and resilient IT environment, and continued
investment in core infrastructure and applications.
The Group maintains robust cyber security policies
to guard against third party access and malicious
attacks. The Group’s core systems are outsourced to
a third party with robust processes and procedures.
1. Contracts of significant size or risk are regularly
2. Regular performance reviews of all key suppliers
3. Ongoing assessment and management of
4. Train and maintain industry-leading teams of
5. Profit and cash flow are monitored throughout
1. We have a Climate and Sustainability Committee
2. The Board considers climate related issues when
1. Review contract terms at tender stage and
2. Well established systems of measuring and
3. Use and development of electronic dashboards
Formal supplier framework agreements are
maintained to mitigate this risk, with prices locked
in through procurement at the beginning of a
contract wherever possible.
No Change
We have an industry leading
apprenticeship scheme with
on average 195 apprentices
accounting for 16% of our
workforce. Our Future Leaders
Programmes identifies strong
leadership and currently has
circa. 40 people.
No Change
The quality of our order book
in terms of projects and
repeat clients enables us to
remain highly selective when
bidding future work. Over
90% of contracts are with
repeat clients.
No Change
Continued development of
TClarke Smart Building
Solutions, implemention of
business dashboards and
development of apps for
Procurement, Time Sheets,
H&S and Expenses.
No Change
Almost all contracts are
profitable at a time when the
order book is at a record high.
No Change
In order to protect against
increasing levels of UK cyber
attack, we continue to invest
in established security controls
and external security partners
who actively advise on strategy.
Refreshed security awareness
training was rolled out to all our
employees over 2020 and 2021.
No Change
The pandemic caused initial
project delays but impacts were
promptly renegotiated with our
clients and supply chain. This
reinforced the strength of our
relationships, sector strategy
and approach to working with
preferred partners. In terms of
product availability, a large
proportion of products are
UK-sourced which helps
reduce risk.
Increase
The focus on the impacts of
climate change has increased
significantly. We have begun to
communicate our strategy for
addressing climate change and
the actions we are taking in order
to meet the expectations of our
stakeholders. Our Strategy is
to become a Build UK Business
Champion and take a lead role.
No Change
We continue to monitor the
agreement of variations on a,
monthly basis. It is the Groups
policy not to recognise
variations in full until formally
agreed (see note 4).
Increase
There is currently a significant
price inflation and fluctuation on
copper and steel and longer
lead times generally.
Risk and potential impactRisk and potential impact Update on Risk StatusUpdate on Risk Status Mitigation and ActionMitigation and Action
TClarke
Annual Report and Financial Statements 2021
30
Governance
31
Executive Directors
Mark Lawrence
Group Chief Executive Officer
Appointed to the Board on 2nd May 2003.
Mark has been with the Company for 36 years and started at
TClarke by completing an electrical apprenticeship in 1987.
As Group Chief Executive Officer since January 2010, Mark
has led strategic change across the Group.
Mike Crowder
Group Managing Director
Appointed to the Board on 1st January 2007.
Mike has over 36 years of significant experience in the
Construction industry and started at TClarke as an
Apprentice. Mike has overall responsibility for Operations
and is responsible for Group Health and Safety.
Trevor Mitchell
Group Finance Director and Company Secretary
Appointed to the Board on 1st February 2018.
Trevor is a Chartered Accountant with extensive experience
across many sectors. Prior to his appointment, Trevor had
been working with TClarke since October 2016, assisting with
simplifying the structure and improving the Group’s financial
controls and procedures.
Group Management Board
The Group Management Board comprises the Executive
Directors and:
Chris Harris Rob Faro Garry Julyan
1
UK North Director UK South Director London Director
Kevin Mullen
2
UK North Director UK South Director
2
1 Statutory director of TClarke Contracting Limited
2 Statutory director of TClarke Services Limited and TClarke Contracting Limited
Associate Members of the Group Management Board
Sally Higgins Josh Bourne
Group Procurement Group Health &
Director Safety Director
Non-Executive Directors
Iain McCusker
Chairman
Chair of the Nomination Committee
Appointed to the Board on 1st January 2009 and appointed
Chairman on 1st October 2015. Iain is a Chartered Accountant
and has significant international financial and management
experience, Iain is a former member of the Qualifications
Board of the Institute of Chartered Accountants of Scotland.
He is Senior Visiting Fellow, City, University of London, and
Chairman of NPA Insurance.
Peter Maskell
Senior Independent Director – (from 5th May 2021)
Chair of the Remuneration Committee
Non-Executive Director for Employee Engagement
Appointed to the Board on 1st January 2018. Peter worked at
Philips Electronics for 37 years after studying Electrical and
Electronic Engineering at Kingston University. For the last 20
years, he held a number of senior management positions in
both the UK and Europe.
Louise Dier
Independent Director
Chair of the Audit Committee – (from 5th May 2021)
Appointed to the Board on 1st January 2019.
Louise was previously Managing Director of David Chipperfield
Architects having joined them in 2013. Louise is also a Trustee
of the charity Sported.
Jonathan Hook
Independent Director – (appointed 1st July 2021)
Appointed to the Board on 1st July 2021. Jonathan has recently
retired as a partner at PwC where he was the global leader of the
Engineering & Construction practice.
The Directors have assessed the Group’s prospects and viability,
taking into account its current position and the principal risks
outlined on pages 26 to 29.
The nature of the Group’s business is long-term. The UK
construction market in which the Group operates is subject to
considerable peaks and troughs. The Directors consider a three
year period as appropriate for assessing the ongoing viability of
the Group as most of the projects undertaken by the Group are
completed within a three year time horizon from initial tender
and the Group uses a three year time frame for the preparation
of its strategic business plans and financial projection models.
The Group’s prospects are assessed primarily through its
strategic business planning process and the ongoing
monitoring of the principal risks and mitigating actions. The
process is led by the Chief Executive and involves senior
management throughout the Group.
All business units formally update their strategic plans on an
annual basis. This process, which takes place in the fourth
quarter each year, includes:
• an assessment of the business unit’s current position taking
• the business unit’s achievements over the previous twelve
• a detailed review of the risks faced by the business units and
• the agreement of financial and strategic targets covering the
• the preparation of detailed budgets and projections for the
The business unit strategic plans are formally reviewed and
challenged by the Executive Directors prior to presentation to
the full Board.
Based on the financial models submitted by the business units,
the Group’s financial projections are updated and tested using a
range of sensitivities to identify potential threats to the financial
viability of the Group over the three year projection period.
These sensitivities included reductions of 25% and 50% to
forecast profitability, as well as an upside scenario to consider
demands on working capital. The key assumptions underlying
the financial model include the renewal and continuing
availability on similar terms of the Group’s existing banking
facilities, which comprise a £10m overdraft facility repayable on
demand and a committed £15m revolving credit facility expiring
on 31 August 2024, and the ability to flex the cost base
sufficiently to address any significant change in workload. See
note 2 on page 72 for further discussion of the key assumptions
underpinning the going concern basis of preparation and the
financial viability of the Group.
The three year projections demonstrate that taking into account
reasonable sensitivities around revenue and profitability, the
Group will be able to operate within its existing facilities over the
three year projection period, and the Directors are confident that
the Group’s business model allows sufficient flexibility to meet any
significant change in demand for its services. The Group ended
2021 with a record forward order book of £534m, as we move
towards our £500m per annum revenue target. The Group is in
a strong position both operationally and financially and is well
placed to respond quickly to any changes in market conditions
whilst remaining profitable.
The Group takes a conservative approach to strategic risk. The
business case for all significant investments and entry into or exit
from specific markets is reviewed and signed off by the Board.
Risk registers are maintained and reviewed regularly throughout
the year to identify potential threats to the Group’s business, to
assess the financial, operational and strategic impact of these
threats, and to determine appropriate mitigating actions.
Based on their assessment of prospects and viability above,
the Directors confirm that they have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the three year period ending
31st December 2024.
Strategic Report Approval
The Board confirms that, to the best of its knowledge, the
Strategic report on pages 1 to 30 includes a fair review of the
development and performance of the business and the position
of the Company, and the undertakings included on the
consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
Approved by the Directors and signed on behalf of the Board
on 8th March 2022.
Mark Lawrence
Group Chief Executive Officer
8th March 2022
Committees
Audit Committee
Remuneration Committee
Chair
Board of Directors
Long-term Viability Statement
Governance
TClarke
Annual Report and Financial Statements 2021
32
33
Chairman’s Introduction
The Board is committed to high standards of corporate
governance and complies with the principles contained in
the UK Corporate Governance Code 2018 (‘the Code’), which
took effect for accounting periods starting on or after 1st
January 2019. The Code sets out principles to which the
Listing Rules require all listed companies to adhere,
supported by more detailed provisions. This governance
section describes the principal activities of the Board and its
committees and how the Company has applied the principles
contained within the Code. Our statement of compliance with
section 172 of the Companies Act 2006 is set out on pages
14 to 15.
The Board recognises that a high standard of corporate
governance is essential to support the growth of our business
and to protect and enhance shareholder value. The Directors,
whose names and details are set out on page 31, are
collectively responsible to shareholders for the long-term
success of the Company. The Board does this by supporting
entrepreneurial leadership from the Company’s executive
team whilst ensuring effective controls are established that
enable the proper assessment and management of risk. The
Board is ultimately responsible for the Company’s strategic
aims and long-term prosperity; it seeks to achieve this by
ensuring that the right financial resources and human talent
are in place to deliver the Company’s strategy and objectives.
Our culture is fundamental to the successful delivery of our
strategic objectives.
The day-to-day management and leadership of the Company
is delivered by the Group Management Board, which
comprises the Executive Directors and other key members
of the Group’s senior management team, including
representatives of the regional businesses, details of whom
are provided on page 31.
During 2021, we undertook a formal, internal evaluation
of the Board’s and its committees’ effectiveness. The results
of this exercise are summarised on page 40. I am pleased
to report that I am satisfied that the Board and each of the
Directors are operating effectively. Louise Dier,
non-executive director having served her initial three year
term has decided to retire from the Board on 30 April 2022.
I am happy to recommend that all Directors standing for
election should be elected or re-elected at the 2022 AGM.
As Chairman, I will continue to evolve our governance
framework, being mindful of best practice and the latest
developments surrounding corporate governance.
Iain McCusker
Chairman
8th March 2022
Corporate Governance Report
Statement of Compliance
Throughout the year ended 31st December 2021, the Board
considers that it has complied with the principles and
provisions of the UK Corporate Governance Code 2018
(‘the Code’), other than the tenure of the Chairman, which
is explained below. The Code is issued by the Financial
Reporting Council (FRC) and is publicly available on the FRC’s
website, www.frc.org.uk.
Structure of the Board
The Company is managed by the Board of Directors, which
currently consists of four Non-Executive Directors (including
the Chairman) and three Executive Directors. The
Non-Executive Directors who served during the year ended
31st December 2021 were deemed to be independent,
notwithstanding their shareholdings held during the year,
which are not considered significant by the Board. At the
time of his appointment as Chairman, Iain McCusker was
considered to be independent, but is not considered to be
independent by virtue of his appointment as Chairman.
All Directors are subject to annual re-election unless a
Director has been newly appointed during the year, when
they will seek election. At the forthcoming AGM on 11th May
2022, all Directors will be retiring and all except Louise Dier,
are offering themselves for election or re-election.
All Executive Directors have signed service agreements which
take into account best practice and contain a notice period of
12 months from either party. All Non-Executive Directors have
letters of appointment specifying their roles, responsibilities
and required time commitment to the Board.
The Board maintains procedures whereby potential conflicts
of interests are reviewed regularly. The Board has considered
the other significant commitments undertaken by the
Directors, details of which are provided in their biographies
on page 31, and considers that the Chairman and each of the
Directors are able to devote sufficient time to fulfil the duties
required of them under the terms of their service agreements
or letters of appointment.
Iain McCusker was appointed Chairman in October 2015,
although he has been a Non-Executive Director since 2009.
The Board notes that the Code states that the Chair should
not remain in the post beyond nine years from the date of
first appointment to the Board, but provides that this period
may be extended to facilitate effective succession planning
and the development of a diverse Board, particularly in those
cases where the Chair was an existing Non-Executive Director
on appointment. Therefore, in order to provide continuity
and stability given the relative short periods of office of the
other Non-Executive Directors, Iain McCusker will stand for
re-election at the 2022 AGM and his position as Chairman
will be kept under review.
The Chairman is responsible for the leadership and
management of the Board and its governance. By promoting
a culture of openness and debate, he facilitates the effective
contribution of all Directors and helps maintain constructive
relations between Executive and Non-Executive Directors.
The Chief Executive Officer is responsible for the executive
leadership and day-to-day management of the Company,
to ensure the delivery of the strategy agreed by the Board.
Through his leadership of the Group Management Board, he
demonstrates his commitment to health and safety,
operational and financial performance.
The Senior Independent Director acts as a sounding board
for the Chairman and serves as an intermediary for the other
Directors, where necessary. The Senior Independent
Director is also an additional point of contact for shareholders
if they have reason for concern and where contact through
the normal channel of the Chairman, Chief Executive or other
Executive Directors has failed to resolve or for which such
contact is inappropriate.
Independent of management, the Non-Executive
Directors bring diverse skills and experience vital to
constructive challenge and debate. The Non-Executive
Directors provide the membership of the Audit,
Remuneration and Nomination Committees.
Board Diversity
The Board recognises the benefits of Board diversity,
including, but not limited to, the appropriate mix of skills,
experience, gender, age, ethnicity, background and
personality. The Board endorses a balance of diversity and
experience to promote Board effectiveness, whilst taking into
account the appropriate financial, managerial and industry
skills which are relevant to the calibre of a Director
of TClarke.
The Board stipulates that new appointments to the Board will
be based on merit and suitability to the role, whilst also giving
due consideration to diversity. Non-Executive Directors should
have the ability to fulfil the requisite time commitment.
Statement of Compliance
Governance
TClarke
Annual Report and Financial Statements 2021
34
35
Board Meetings
The composition of the Board is designed to ensure effective
management, control and direction of the Group.
The Board is collectively responsible for the effective oversight
of the Company, its businesses and its culture. It also
determines the strategic direction and governance structure
of the Company to enable it to achieve long-term success and
deliver sustainable shareholder value, whilst taking account of
the interests of all stakeholders. The Board takes the lead in
safeguarding the reputation of the Company and ensuring that
the Company maintains a sound system of internal control.
The Board’s full responsibilities are set out in the schedule of
matters reserved for the Board.
Matters Reserved for the Board Include:
•
Consideration and approval of the Group’s strategy,
•
Consideration and approval of the Group’s annual and
•
Consideration and approval of interim and final dividends.
•
Consideration and approval of the Group’s trading
statements.
•
Ensuring the maintenance of a sound system of internal
•
Conducting a robust assessment of the principal risks
•
Changes to the structure, size and composition of
Committee.
•
Establishing committees of the Board and determining
The Board meets regularly to consider and decide on matters
specifically reserved for its attention. Board papers are
circulated sufficiently in advance of Board meetings to
enable time for review. The attendance of individual Directors
at formal monthly Board and sub-committee meetings is set
out in the table below.
At each Board meeting the Board reviews management
accounts in order to provide effective monitoring of financial
performance. At the same time, the Board considers other
significant strategic risk management, operational and
compliance issues to ensure that the Group’s assets are
safeguarded and financial information and accounting records
can be relied upon. The Board monitors monthly progress on
contracts formally. Furthermore, the Company’s risk appetite is
discussed and considered when making key decisions.
Board Committees
The Board has delegated certain responsibilities to the Audit
Committee, Remuneration Committee and Nomination
Committee, which report directly to the Board. The terms of
reference of each committee are available in the Investor
section of the Company’s website.
The Board also established an Administration Committee at
its Board meeting in January 2019 to which it delegated items
of a routine and administrative nature. The Committee meets
as and when required and is constituted by any two or more
Directors. It met 4 times during 2021 to deal with the exercise
of options under the TClarke Savings Related Share
Option Scheme.
Number of Meetings Attended by the Directors
Board
(Maximum 10)
Audit
(Maximum 4)
Nomination
(Maximum 2)
Remuneration
(Maximum 4)
Iain McCusker
10
– 2 4
Mike Robson (retired 5th May 2021)
4 2 1 2
Peter Maskell
10
4 2 4
Louise Dier
10
4 2 4
Jonathan Hook (appointed 1st July 2021)
4 2 1 2
Mark Lawrence
10
– – –
Trevor Mitchell
10
– – –
Mike Crowder
10
– – –
Group Management Board
The Group Management Board comprises the Executive
Directors and other key members of the Group’s senior
management team, including representatives of the regional
businesses. The role of the Group Management Board is to
co-ordinate and direct the efforts of the three regional
businesses and the individual offices below them to manage
risk and deliver value for the Group as a whole across our
target sectors in line with the Group’s strategy. The Group
Management Board considers Group initiatives on matters
such as health and safety, procurement, employee
engagement, and the development of new services and areas
of expertise. The Group Management Board also reviews the
operational effectiveness of the business units in matters such
as tender submission and success rates, cash generation and
maintenance, and health and safety performance. The Group
Management Board is responsible for the implementation of
the Group’s ESG strategy.
Performance Evaluation
The effectiveness of the contribution and level of
commitment of each Director to fulfil the role of a Director of
the Company is the subject of continuing evaluation, having
regard to the regularity with which the Board meets, the
limited size of the Board and the reporting structures which
are in place within the Company to monitor performance.
The Chairman primarily, but acting in conjunction with the
Chief Executive Officer, undertakes the task of annual
evaluation of performance and commitment of individual
Board members by conducting individual interviews. The
evaluation of the Board as a whole, and its committees, is
also undertaken on an annual basis. New Directors receive a
formal induction, overseen by the Chairman and Chief
Executive Officer in conjunction with the Company Secretary.
Training is available for all Directors as and when necessary.
The Senior Independent Director, in conjunction with the
other independent Non-Executive Directors, undertakes the
annual appraisal of the Chairman.
During the year, the Board conducted its annual internal
appraisal of its own performance, led by the Chairman in
conjunction with the Nomination Committee, covering the
composition, procedures and effectiveness of the Board and
its committees. The Board members are of the opinion that
the Board and its committees operate effectively.
Performance is regularly monitored to ensure ongoing
obligations are adequately met and the Board regularly
considers methods for continuous improvements.
Company Secretary
All Directors have access to the advice and services of the
Company Secretary, who is responsible for advising the
Board on all governance matters and ensures that the Board
receives appropriate and timely information, that Board
procedures are followed and that statutory and regulatory
requirements are met.
Relationship with Shareholders
The Company recognises the importance of dialogue with
both institutional and private shareholders in order to
understand their views on governance and performance
against strategy.
Presentations are made to brokers, analysts and institutional
investors at the time of the announcement of the year-end
and half-year results, and there are regular meetings and
presentations with analysts and investors throughout the year.
The aim of the meetings is to explain the strategy and
performance of the Group and to establish and maintain a
dialogue so that the investor community can communicate
its views to the executive management. All such meetings
are reported at Board meetings. In addition, the Chairman is
available to meet with major shareholders periodically to
discuss Board governance and strategy.
The Board has always invited communication from
shareholders and encouraged their participation at the
Annual General Meeting. All Board members present at the
Annual General Meeting are available to answer questions
from shareholders, including the Chairs of the Audit,
Remuneration and Nomination Committees, during the
meeting and remain available after the meeting to talk
informally with shareholders. Notice of the Annual General
Meeting is given in accordance with best practice and the
business of the meeting is conducted with separate
resolutions, each being voted on initially by a show of hands,
with the results of the proxy voting being provided at the
meeting. Further shareholder information is available in the
Investor section of the Company’s website.
Internal Control
The Board is responsible for the Group’s system of internal
control and for reviewing its effectiveness. Such a system is
designed to manage, rather than eliminate, the risk of failure
to achieve business objectives, and can only provide
reasonable and not absolute assurance against material
misstatement or loss.
Risk management and internal control procedures are
delegated to Executive Directors and Senior Management
in the Group, operating within a clearly defined divisional
structure. Each division assesses the level of authorisation
appropriate to its decision-making process after the
evaluation of potential benefits and risks. A three-year
strategic plan is prepared for each division and updated
annually, including the identification and consideration of
significant risks to the division’s strategic objectives. Progress
against the strategy and the management of the risks
identified is formally reviewed on a regular basis by the
Group Management Board.
The Audit Committee reviews the Company’s risk register
and monitors risk management procedures as a regular
agenda item and receives reports thereon from Group
management. The Audit Committee Chairman provides a
report on its findings to the Board. The emphasis is on
obtaining the relevant degree of assurance and not merely
reporting by exception.
At its meeting on 23rd February 2022, the Board carried out
the annual internal controls and risk management assessment
Statement of Compliance
continued
All Directors attended their maximum possible number of meetings.
Governance
TClarke
Annual Report and Financial Statements 2021
36
37
by considering documentation from the Audit Committee.
In accordance with the Code, the Board confirms that, for the
year ended 31st December 2021, it has carried out a robust
assessment of the principal risks facing the Group, including
those that would threaten its business model, future
performance, solvency or liquidity. The principal risks
identified and the controls and mitigating actions in place are
described on pages 26 to 29.
Further details concerning the Audit Committee’s review of
internal controls and risk management processes are included
in the Audit Committee report on pages 37 to 39.
Historically, the internal audit function has been covered
through regular site visits conducted by Quality Assurance
and Group finance personnel and the role was expanded
in 2018 to include detailed reviews that the Committee felt
appropriate. The Audit Committee reviewed the need for a
separate internal audit function during 2021 and agreed that
the current process worked well and should continue.
Share Capital Structures
The statements within the Directors’ report on share capital
structures are incorporated by reference into this statement
of compliance.
Fair, Balanced and Understandable Assessment
In relation to compliance with the Code, the Board has given
consideration as to whether or not the Annual Report and
Financial Statements, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Company’s position, performance,
business model and strategy and concluded that this is the
case. A statement to this effect is included in the Directors’
Responsibilities Statement on page 60. The preparation of
this document is co-ordinated by the Finance team and the
Company Secretary with Group-wide input and support from
other areas of the business. Comprehensive reviews have
been undertaken at regular intervals throughout the process
by Senior Management and other contributing personnel
within the Group.
The Directors’ responsibilities for preparing the financial
statements and supporting assumptions that the Company is
a going concern are set out on page 57.
Long-term Viability Statement (‘LTVS’)
In relation to compliance with the Code, the Board has
assessed the prospects of the Group, taking into account the
Group’s current position and principal risks. The LTVS and
supporting assumptions are set out on page 30.
Trevor Mitchell
Company Secretary
8th March 2022
Statement of Compliance
continued
Audit Committee ReportDear Shareholder
As Chairman of the Audit Committee, I am pleased to
present the report of the Audit Committee for the year
ended 31st December 2021.
The Audit Committee continues to support the Board by
providing detailed scrutiny of the integrity and relevance
of the Group’s financial reporting, monitoring the
appropriateness of the Group’s internal control and risk
management systems and overseeing the external
audit process.
The Audit Committee has continued to follow a programme
of meetings which are timed to coincide with key events in
the financial calendar. As a Committee, we are committed
to discharging our responsibilities effectively and
constructively challenge the information we receive. Over
the past year, the regular reports the Audit Committee has
received from management and the external auditors have
been timely and well presented, which has enabled the
Committee to discharge its responsibilities effectively.
Where necessary, we request additional detailed information
so that we may better assess certain issues, and the risks
and opportunities presented.
I would like to pay tribute to the late Mike Robson for his
significant contribution to the Committee. Mike was chair
from November 2015 until his retirement from the Board in
May 2021.
Further information concerning the activities of the
Audit Committee during the year are set out on the
following pages.
Louise Dier
Chair of the Audit Committee
8th March 2022
Matters Considered by the Audit Committee
The Audit Committee met on four occasions during the year
ended 31st December 2021. The principal matters discussed
at the meetings are set out below.
July 2021
Review of the half year results.
September 2021
Audit plan presented by the external auditors.
Governance and independence of the external auditors.
Consideration of the need for a separate internal
Review of policy on non-audit services.
Review of risk register and mitigating actions.
Consideration of the internal audit work undertaken by
•
Annual assessment of internal controls and risk Review of Committee’s effectiveness.
Review of risk register and mitigating actions.
February 2022
Draft Annual Report and Financial Statements for the
Finance Director’s report on going concern and
Finance Director’s report on goodwill impairment.
Interim report of external auditors detailing their
Review of risk register and mitigating actions.
March 2022
Draft Annual Report and Financial Statements for the
Audit representation letter.
Report of external auditors on their audit of the 2021
Consideration of the reappointment of external auditors.
Independence of external auditors.
Governance
TClarke
Annual Report and Financial Statements 2021
38
39
Significant Judgements, Key Assumptions and Estimates
The Audit Committee pays particular attention to matters it
considers to be important by virtue of their impact on the
Group’s results and remuneration of
Senior Management, or the level of complexity, judgement or
estimation involved in their application on the consolidated
financial statements. The main areas of focus during the year
are set out below:
Matters Considered and Actions
Matter Considered:
Contract Profit and
Revenue Recognition
Action:
The recognition of revenue and profit on
construction contracts involves significant judgement
due to the inherent difficulty in forecasting the final
costs to be incurred on contracts in progress and the
process whereby applications are made during the
course of the contract with variations, which can be
substantial, often being agreed as part of the final
account negotiation.
The Committee considered the consistency and
appropriateness of the Group’s policies and the
effect of IFRS 15 in respect of profit and revenue.
Their specific application to a number of large
contracts was considered, including key
judgements made by management and the
external audit thereof.
The Committee concurred with management’s
assessment of the contracts and the revenue
recognised.
Matter Considered:
Pension Scheme
Accounting
Action:
The Group’s defined benefit pension scheme
is valued annually by external advisers in accordance
with IFRSs. The valuation is subject to significant
fluctuations based on actuarial assumptions, including:
•
discount rates;
•
mortality assumptions;
•
inflation;
•
salary increases;
•
expected return on plan assets.
The Committee reviewed the basis of the
valuation, including the assumptions used,
and considered the sensitivity of the
pension scheme valuation to changes in
those key assumptions. Further details of
the valuation, including the key assumptions
used, are disclosed in note 22 to the
financial statements on pages 96 to 101.
Matter Considered:
Carrying Value of
Intangible Assets
and Investments
Action:
Intangible assets comprise a significant
element of the Group’s net assets. As required by
IFRSs, the Company conducts an impairment review
of these assets every year.
The Committee considered the papers presented by
the Group Finance Director supporting management’s
assertion that goodwill is not impaired. Other
intangible assets comprise customer relationships
on acquisition and are amortised. This assertion was
supported by detailed cash flow and profit projections
covering a three-year period, including sensitivity
analysis and an analysis of secured workload. It also
considered the independent auditors’ comments on
the key assumptions and detailed forecasts made.
The issue of impairment involves making significant
judgements about individual cash-generating units
and the risks they face.
The Committee agreed with management’s
recommendation that no impairment
charge should be made. Further details
concerning the make-up of intangible
assets, the assumptions used and the
sensitivity of the carrying value of intangible
assets can be found in note 11 to the
financial statements on pages 85 to 86.
Aligned to the review of the carrying value
of intangible assets, the Committee also
considered the carrying value of the
subsidiaries in the Parent Company’s
financial statements.
Matter Considered:
Going Concern
Action: The Group conducts a review to ensure it
has sufficient working capital to support its 3 year business
plan. The review considers impact on working capital
requirements of various sensitivities to ensure that plans
are sufficiently robust to cater for reasonable worst case
scenarios whilst still meeting all bank covenants.
The Committee considered the papers presented
by the Group Finance Director supporting management’s
assertion that the Group remains a going concern and has
sufficient working capital to support its business plans.
The Committee agreed with management’s
recommendation that the Group is a going
concern. On all scenarios modelled the
Group was able to meet all banking
covenants with significant headroom.
Further details can be found in the long
term viability statement on page 30.
Membership of the Audit Committee
The members of the Committee during the year were Mike Robson (Chair to 5 May 2021), Louise Dier (Chair from 5th May
2021), Peter Maskell and Jonathan Hook (from 1st July 2021). Biographies of the current members of the Audit Committee are
included on page 31.
Audit Committee Report
continued
Governance
The Committee members are all independent
Non-Executive Directors. The Board is satisfied that Louise
Dier has the necessary skills and experience to chair the
Audit Committee and the Committee as a whole has the
requisite recent and relevant financial experience to the
construction industry. The Committee routinely meets four
times a year, and additionally as required, to review or discuss
other significant matters.
The Group Finance Director and the Group Chief Executive
Officer attend the meetings; the external auditors also attend
parts of the meetings.
The terms of reference of the Committee are available on the
Company’s website under the Investor section – Governance.
Internal Controls
The Audit Committee receives regular updates on internal
controls and has concluded that our controls are adequate
and appropriate to our business. Following an independent
review of the controls over expenses a number of changes
and improvements have been made to the expenses policy
and processes.
Internal Audit
The internal audit function is covered through regular site
visits conducted by Quality Assurance and Group finance
personnel and the remit of the Quality Assurance department
was expanded in 2018 to include detailed reviews that the
Committee felt appropriate. The Audit Committee reviewed
the need for a separate internal audit function during the year
and agreed that the current practice worked well and was
appropriate to our business.
Risk Management
Assisted by Executive Directors, the Audit Committee has
focused on maintaining and improving the procedures to
identify, manage and mitigate the risks facing the business
and to drill down on selected risks on a rolling basis through
the year.
External Audit
The Audit Committee is responsible for overseeing relations
with the external auditors, including the approval of fees, and
makes recommendations to the Board on their appointment
and reappointment. Details of the auditors’ remuneration can
be found in note 6 to the financial statements on page 81.
The Committee accepts in principle that certain work of a
non-audit nature is most efficiently undertaken by the
external auditors. The policy on non-audit services provided
by PricewaterhouseCoopers LLP (‘PwC’) is that the Chairman
of the Audit Committee reviews and, if appropriate, approves
all non-audit services and fees, and any such approval is put
to the Audit Committee for review and ratification at the next
Committee meeting. Apart from a nominal fee for access to
online technical resources, no non-audit services were
provided during the year (2020: £nil).
The Company complies with the Competition and Markets
Authority’s requirements around independence. The
independence of the external auditors is essential to
the provision of an objective opinion on the true and fair
presentation in the financial statements. Auditor
independence and objectivity is safeguarded by limiting the
nature and value of non-audit services performed by the
external auditors and ensuring the rotation of the lead
engagement partner at least every five years. The current
lead engagement partner has held the position for one year.
The Audit Committee reviews the effectiveness of the audit
process through quality service reviews with the external
auditors post-audit. At the end of the review process, the
Audit Committee decides whether, given the results of the
review, to recommend to shareholders that the auditors
be reappointed.
Louise Dier
Chair of the Audit Committee
8th March 2022
The Roles and Responsibilities of the Audit
Committee Include:
•
Monitoring the integrity of the financial statements of the
•
Reviewing the Company’s internal controls and risk
•
Making recommendations to the Board, to be put to
•
Reviewing and approving the audit plan and ensuring it is
•
Reviewing the independence of the external auditors and
•
Reviewing the extent of non-audit services provided by the
•
Reviewing the Company’s whistleblowing and anti-bribery
procedures.
Governance
TClarke
Annual Report and Financial Statements 2021
40
41
Dear Shareholder
As Chairman of the Nomination Committee, I am pleased to
present the report of the Nomination Committee for the year
ended 31st December 2021.
During the year, the Nomination Committee comprised Iain
McCusker (Chair), Peter Maskell, Mike Robson (Until 5th May
2021) Louise Dier and Jonathan Hook (from 1st July 2021).
Biographies of the current members of the Nomination
Committee are included on page 31.
The Nomination Committee met twice during the year to
review the structure, size and composition of the Board
and its Committees, undertake a Board evaluation process
and to consider the formal succession plan for Directors and
senior management. The Nomination Committee also
recommended to the Board that Jonathan Hook be
appointed a Non-Executive Director.
The Committee gives due consideration to diversification in
the make-up of the Board but, due to the size of the Company,
the most important consideration is to achieve an appropriate
mix of skills, knowledge and experience, taking into account
the Company’s Board Diversity policy. Before any appointment
is made by the Board, the Nomination Committee evaluates
the balance of skills, experience, independence and
knowledge on the Board and, in the light of this evaluation,
prepares a description of the role and capabilities required for
a particular appointment.
The Committee’s succession planning not only takes into
consideration the Company’s long-term and medium-term
needs and natural evolution to the Board, but also short-term
needs such as unforeseen departures and contingency for
unexpected Board changes. The Committee also formulated
succession plans for the Group Management Board taking
into account the challenges and opportunities facing the
Company, and the skills and expertise needed on the Board
in the future.
The performance of individual Directors, the Board, its
committees and the Chairman is reviewed annually. In 2021, in
order to evaluate the performance of the Board, each member
of the Board was asked to complete a detailed questionnaire.
The responses to the questionnaire were summarised and were
reviewed and discussed by the Nomination Committee and
subsequently shared with and discussed by the Board.
Topics covered in the review included strategy, risk
management and the conduct and effectiveness of Board
meetings. Whilst acknowledging that there are always
opportunities for development and improvement, the Directors
have concluded that the Board had effectively discharged its
duties during the year.
As part of the evaluation process, as Chairman of the
Nomination Committee and acting in conjunction with the
Chief Executive Officer, I undertook the task of annual
evaluation of performance and commitment of individual
Board members by conducting individual interviews. The
review of my own performance and commitment was
undertaken by the Senior Independent Director.
Based upon the evaluation of the Board, its committees and
the continued effective performance of individual Directors,
the Committee recommended to the Board that those
directors wishing to be considered stand for re-election at the
Company’s AGM in 2022.
Iain McCusker
Chair of the Nomination Committee
8th March 2022
The Roles and Responsibilities of the
Nomination Committee Include:
•
Regularly reviewing the structure, size and composition
•
Evaluating the balance of skills, experience, independence
•
Responsibility for identifying and nominating, for the approval
•
Satisfying itself with regard to succession planning for
•
Making recommendations to the Board concerning
•
Reviewing annually the time required from Non-Executive
Directors.
Nomination Committee Report
Dear Shareholder
I am pleased to present the remuneration report for the year to
31st December 2021. This report aims to set out how the Group
pays our Directors, decisions made on their pay and how much
they have received in the last financial year.
The report is split into two sections:
•
A summary of the Directors’ Remuneration Policy, which
•
The Annual Report on Remuneration, which includes
Performance and Reward for 2021
2021 marked the start of our 3 year growth plan to achieve
£500m annual turnover. The first year of this plan has been
successfully delivered; 2021 revenue has been restored to
£327m, our order book is at record levels with £379m already
secured for 2022. There is a well founded confidence of
achieving our growth ambitions.
The Executive Directors’ targets were set by the
Remuneration Committee at the start of 2021. Financial
performance of TClarke combined with and the performance
of the Executive Directors in executing against the strategic
annual bonus objectives set for them resulted in a bonus of
91
% of salary being payable to each of the Executive Directors.
LTIP awards granted in 2019, which vest on three year
performance to 31 December 2021, will vest in full. On this
basis earnings per share growth over the three-year period to
31st December 2021 was 14%. This was above the stretch
vesting condition of EPS growth rate exceeding RPI by more
than 10% for the LTIP award granted in 2019 and, as a result,
the award will vest in full on 24th April 2022.
Further information on the actual targets set, and performance
against them, is provided on page 50.
Remuneration Policy
The Committee expects the 2020 remuneration policy to
remain effective until the 2023 AGM. Our remuneration policy
is designed to be sustainable and simple, and to encourage the
effective stewardship that is vital to delivering our strategy of
creating long-term value for all stakeholders. It promotes long
term sustainable performance through significant deferral of
remuneration through shares. Executive Directors are expected
to build and maintain substantial personal shareholdings in the
business. Our policy ensures that performance-related
components will form a significant proportion of the overall
remuneration package, with maximum rewards earned only
through the achievement of challenging performance targets
based on measures aligned with our long-term strategy.
Implementation of the Remuneration Policy for 2022
The key highlights of how we intend to apply it for
2022 are:
•
Fixed Pay – the percent
increase in Executive Directors base
•
Variable pay – annual bonus maximum will be 150% of
•
Performance measures – will continue to be focused on
•
Employee share schemes: Long-Term Incentive Plan, Save As
Alignment with Shareholders
We are mindful of our shareholders’ interests and are keen
to ensure a demonstrable link between reward and value
creation. We are proud of the support we have received in
the past from our shareholders, with over 97% approval of
the Directors’ remuneration report received last year at the
2021 AGM. We hope that we will continue to receive your
support at the forthcoming AGM in 2022.
Peter Maskell
Chair of Remuneration Committee
8th March 2022
The Role and Responsibilities of the
Remuneration Committee Include
•
Determining the service contracts and base salary levels for
•
Setting remuneration policy for all Executive Directors
•
Approving the design of, and determining targets for, any
schemes.
•
Determining the policy for, and scope of, pension
•
Reviewing the design of all share incentive plans for
•
Agreeing the policy for authorising claims for expenses from
2021
2020
Revenue £327.1m
£231.9m
Underlying operating profit £8.8m
£6.0m
Underlying EPS 14.99p
10.29p
Dividend per share 4.85p
4.4p
Remuneration Committee Report
Governance
TClarke
Annual Report and Financial Statements 2021
42
43
This part of the Directors’ remuneration report summarises the
Directors’ Remuneration Policy for the Company which was
approved by the shareholders at the 2020 AGM.The policy
came into effect on the 24th June 2020 and is next due to be
put to the shareholders for approval at the 2023 AGM.
Policy Overview
The primary objective of the remuneration policy is to promote
the long-term success of the Company. In working towards the
fulfilment of this objective, the Committee takes into account a
number of factors when formulating the remuneration policy for
the Executive Directors, including the following:
•
the need to provide a remuneration structure that is
•
the alignment of interests between executives and
•
internal levels of pay and employment conditions
•
the principles and recommendations set out in the UK
•
periodic external comparisons of market trends and
Our remuneration structure is intended to be simple and
transparent, and to contribute to the building of a sustainable
performance culture. Our policy ensures that
performance-related components will form a significant
proportion of the overall remuneration package, with maximum
total potential rewards earned only through the achievement of
challenging performance targets based on measures selected to
promote the long-term success of the Company.
The main elements of the remuneration package for
Executive Directors are a base salary, benefits and pension
provision, as well as an annual bonus plan and shares
awarded under a long-term incentive plan (‘LTIP’), both of
which are subject to stretching performance conditions.
The Committee has determined that this structure will
provide an appropriate balance between fixed and
performance-related pay elements. The Committee will
continue to review the remuneration policy to ensure it takes
due account of remuneration best practice and that it remains
aligned with shareholders’ interests.
How the Executive Directors’ Remuneration Policy Relates to
the Wider Workforce
The Committee does not directly consult with employees
regarding the remuneration of Directors. However, the pay and
conditions elsewhere in the Company are considered when
designing the policy for Executive Directors and continue to
be considered in relation to implementation of the policy. The
Committee regularly monitors pay trends across the workforce
and salary increases will ordinarily be (in percentage of salary
terms) in line with those of the wider workforce. Reflecting the
UK Corporate Governance Code and investor guidelines, new
external Executive Director appointees will also have company
pension contributions set in line with the level offered to the
majority of the salaried workforce (in percentage of salary terms).
The remuneration policy described here provides an overview
of the structure that operates for the most senior executives in
the Company. Employees below executive level have a lower
proportion of their total remuneration made up of
incentive-based remuneration, with pay driven by market
comparators and the impact of the role in question. Long-term
incentives are reserved for those judged as having the greatest
potential to influence the Group’s strategic direction, earnings
growth and share price performance.
How Shareholders’ Views are Taken into Account
The Committee seeks to engage with its major shareholders
when any significant changes to the remuneration policy are
proposed. The Committee also considers shareholder feedback
received in relation to the Directors’ remuneration report and
at the AGM each year, and this, plus any additional feedback
received from time to time, is considered as part of the
Committee’s annual review of remuneration policy. The
Committee also closely monitors developments in institutional
investors’ best practice expectations.
Summary Director Policy Table
The table below summarises the remuneration policy
for Directors.
Element of Remuneration: Salary
Element of Remuneration: Benefits
Purpose and Link to Strategy
•
To provide competitive fixed remuneration to attract and
Operation
•
Normally reviewed annually with changes typically effective
•
Paid in cash on a monthly basis
•
Comparison against companies with similar characteristics are
•
Internal reference points, the responsibilities of the individual
Purpose and Link to Strategy
•
To support recruitment and retention
•
To provide a market consistent benefits package
Operation
•
Benefits may include a combination of car or car
•
Executive Directors will be eligible for any other benefits
•
Travel allowances or time-limited relocation benefits
•
Any reasonable business-related expenses (including
•
Executive Directors are also eligible to participate in any
Maximum Opportunity
•
There is no prescribed maximum annual basic salary or
•
Any salary increase (in percentage of salary terms) will
•
Where an Executive Director’s salary is set below
Performance Targets
•
None, although the overall performance of the individual
Maximum Opportunity
•
There is no maximum limit but the Committee reviews the
•
Participation in the all-employee share plans is subject to
Performance Targets
•
Not applicable
Directors’ Remuneration Policy
Governance
TClarke
Annual Report and Financial Statements 2021
44
45
Element of Remuneration: Pension Element of Remuneration: Long-Term Incentive Plan
Element of Remuneration: Bonus
Element of Remuneration: Share Ownership Guidelines
Purpose and Link to Strategy
•
Provide competitive retirement benefits
Operation
•
Defined benefit or defined contribution scheme (or cash
alternative)
•
Where the promised levels of benefits cannot be
Purpose and Link to Strategy
•
Aligned to delivery of strategy and long-term
•
Align Executive Directors’ interests with those of
shareholders
•
To promote retention
Operation
•
LTIP awards take the form of conditional rights or nil,
•
Awards vest after three years’ subject to the achievement
•
The Committee reviews the quantum of awards annually
measures
•
The Committee may determine at grant that an amount
•
Awards under the LTIP are subject to withholding and
Purpose and Link to Strategy
•
Incentivise annual achievement of performance targets
•
Maximum bonus only payable for achieving demanding
targets
Operation
•
Normally payable in cash
•
Levels of award are determined by the Committee
•
All bonus payments are at the ultimate discretion of
•
Payments in relation to the annual bonus are subject to
Purpose and Link to Strategy
•
To increase alignment between Executives and
shareholders
Operation
•
Executive Directors are required to build and maintain
•
Wholly owned shares and vested LTIP shares in the
Maximum Opportunity
•
For Executive Directors appointed externally from 1
•
Current employees, including Executive Directors, who
Performance Targets
•
Not applicable
Maximum Opportunity
•
Annual awards of no more than 100% of salary (with this
Performance Targets
•
Performance is measured over three years
•
Awards currently vest based on performance against
•
Notwithstanding the performance outcome, the
•
A maximum of 25% vests at threshold, increasing to 100%
Maximum Opportunity
•
Maximum of 150% of salary per annum
•
Target performance would normally result in 60% of
Performance Targets
•
Group financial measures (e.g. profit-related measures)
•
If used, personal or strategic objectives will be applied
•
Measures and objectives will be determined over a
Maximum Opportunity
•
Not applicable
Performance Targets
•
Not applicable
Directors’ Remuneration Policy
continued
Governance
TClarke
Annual Report and Financial Statements 2021
46
47
Element of Remuneration: Post-employment Share Ownership Guidelines
Element of Remuneration: Non-Executive Director
Purpose and Link to Strategy
•
To provide further long-term alignment between Executives
•
To ensure a focus on successful succession planning
Operation
•
Executive Directors will normally be expected to maintain
•
The post-employment guideline will be equal to the lower of:
•
The guideline will apply only to shares acquired from LTIP
•
The specific application of the shareholding guideline will be
Purpose and Link to Strategy
•
To provide competitive fees to attract and retain high-calibre
•
To reflect the time commitment and responsibilities of
Operation
•
The Chairman’s fee is set by the Board on the
•
Non-Executives may be paid additional fees for chairing one
•
The fees are set taking into account the time commitment
•
In exceptional circumstances, if there is a temporary
•
Fees are normally paid monthly in cash and are normally
•
Directors can be reimbursed for any reasonable
Maximum Opportunity
•
Not applicable
Performance Targets
•
Not applicable
Maximum Opportunity
•
There is no prescribed maximum fee or fee increase
•
Any increase will be guided by changes in market rates,
Performance Targets
•
Not applicable
Notes:
1 Thechoiceoftheperformancemetricsapplicabletothe2021annualbonusschemereectstheCommittee’sbeliefthatanyincentivecompensationshouldbeappropriatelychallengingandtiedtoboththedeliveryof
targetsrelatingtoakeynancialmeasure,prot,andwhichsupporttheCompany’sstrategicobjectivesthroughindividualand/orstrategicperformancemeasuresintendedtoensurethatExecutiveDirectorsare
incentivisedtodeliveracrossarangeofobjectivesforwhichtheyareaccountable.TheCommitteehasretainedsomeexibilityonthespecicmeasureswhichwillbeusedoverthelifeofthepolicytoensurethatany
measures are fully aligned with the strategic imperatives prevailing at the time they are set. Targets are generally set with reference to the Group’s budget, with target performance typically requiring meaningful
improvement on the previous year’s outturn.
2 The performance condition applicable to the 2021 LTIP awards is earnings per share growth (EPS). EPS was selected by the Remuneration Committee on the basis that it is aligned with the delivery of long-term returns
toshareholdersanditistheGroup’skeynancialmetrics.TheCommitteehasretainedexibilityonthemeasureswhichwillbeusedforfutureawardcyclestoensurethatthemeasuresarefullyalignedwiththestrategy
prevailing at the time the awards are granted. LTIP targets are intended to be stretching but achievable taking into account the Group’s long-term strategic plan, as well as a range of relevant internal and external
reference points.
3 The Committee operates the annual bonus, LTIP and all employee share plans in accordance with the relevant plan rules and, where appropriate, the Listing Rules and HMRC legislation. The Committee, consistent with
market practice, retains discretion over a number of areas relating to the operation and administration of the plans. These include, for example, the timing of awards and setting performance criteria each year, dealing
with leavers, discretion to retrospectively amend performance targets in exceptional circumstances (providing the new targets are no less challenging than originally envisaged) and in respect of share awards, to adjust
the number of shares subject to an award in the event of a variation in the share capital of the Company.
4 For the avoidance of doubt, in approving this Directors’ Remuneration Policy, authority is given to the Company to honour any commitments entered into with current or former Directors (such as the exercise of past
share awards). Details of any payments to former Directors will be set out in the Annual Report on Remuneration as they arise. Notwithstanding the above, pension arrangements for new appointees after 1 January
2020 will be consistent with the wider workforce.
5 Consistent with HMRC legislation and market practice, the HMRC all-employee share plans do not have performance conditions.
6 TheannualbonusandLTIPincludewithholdingandrecoveryprovisionswhichmaybeappliedincertaincircumstances,includingfollowingamaterialmisstatementoftheCompany’snancialaccounts,grossmisconduct
on the part of the award-holder or an error in calculating the award outcome. The 2020 annual bonus and awards made under the LTIP from 2020 onwards will be subject to an expanded list of triggers. In respect of
the annual bonus, the provisions apply for up to two years following payment, whilst LTIP awards remain subject to the provisions throughout the vesting and holding period (where applicable). Participants in both
schemes are now required to acknowledge their understanding of the withholding and recovery provisions to help ensure that the provisions would be enforceable the circumstances arise.
Pay for Performance Scenarios
The charts below provide an illustration of the potential
future reward opportunities for the Executive Directors, and
the potential split between the different elements of
remuneration under four different performance scenarios:
‘Minimum’, ‘Target’, ‘Maximum’ and ‘Maximum including the
impact of a 50% share price appreciation on LTIP awards’.
Potential reward opportunities are based on TClarke’s
remuneration policy, applied to the base salaries effective 1
January 2022. The annual bonus and LTIP are based on the
maximum opportunities set out under the remuneration policy
for normal circumstances; being 150% of salary and 100% of
salary respectively. Note that the LTIP awards granted in a year
do not normally vest until the third anniversary of the date of
grant, and the projected value is based on the face value at
award rather than vesting (i.e. the scenarios exclude the impact
of any share price movement over the period).
The ‘minimum’ scenario reflects base salary, pension and
benefits (i.e. fixed remuneration) which are the main elements
of the Executive Director remuneration packages not linked
to performance.
The ‘target’ scenario reflects fixed remuneration as above,
plus a bonus payout of 60% of maximum and LTIP threshold
vesting at 25% of maximum award.
The ‘maximum’ scenario includes fixed remuneration and full
payout of all incentives (150% of salary under the annual
bonus and 100% of salary under the LTIP) but no movement
in share price over the three-year period. Under the
‘maximum’ scenario, if TClarke share price increased by 50%
over the three-year performance period ( in effect valuing this
element of pay at 150% of salary) the indicative total
remuneration value would be £1,788,910 for the Group Chief
Executive, £1,533,303 for the Group Managing Director and
£1,341,218 for the Group Finance Director.
Approach to Recruitment and Promotions
The remuneration package for a new Executive Director would
be set in accordance with the terms of the prevailing approved
remuneration policy at the time of appointment and take into
account the skills and experience of the individual, the market
rate for a candidate of that experience and the importance of
securing the relevant individual.
Salary would be provided at such a level as required to attract
the most appropriate candidate and may be set initially at a
below mid-market level on the basis that it may progress
towards the mid-market level over a period of two to three
years once expertise and performance has been proven and
sustained.
New appointees would receive company pension contributions
or an equivalent cash supplement aligned to that offered to the
wider salaried workforce at the time of appointment, and would
be eligible to receive benefits of the same type and at similar
levels as other Executive Directors. If the new appointee were
promoted from within the business and was already a member
of the defined benefit scheme, they would remain eligible for
benefits from it in the same way as other members of the
workforce who are members.
The maximum level of variable pay which may be awarded to
new Executive Directors will be in line with the policy set above.
In addition to this, the Committee may make buyout awards
in the form of additional cash and/or share-based elements to
replace remuneration forfeited by an executive as a result of
leaving his or her previous employer. It will, where possible,
ensure that these awards are consistent with awards forfeited in
terms of vesting periods, expected value and performance tests.
The Committee may apply different performance measures,
performance periods and/or vesting periods for initial awards
made following appointment under the annual bonus and/or
long-term incentive arrangements, subject to the rules of the
scheme, if it determines that the circumstances of the
recruitment merit such alteration. LTIP awards can be made
shortly following an appointment (assuming the Company is
not in a close period), whilst the maximum annual bonus in the
year of appointment would generally be pro-rated to reflect the
period of service during the year.
Minimum
Target
Maximum
100%
£440
£869
£1,277
51% 43%
6%
34% 49%
16%
£000s
0 300 600 900 1,200 1,500
Minimum
Target
Maximum
£468,910
100%
48%
30%
41%
42%
28% £1,568,910
11% £974,910
Mark Lawrence
xed pay
Annual
Bonus
long-term
incentives
2022
Total
Minimum
Target
Maximum
100%
£440
£869
£1,277
51% 43%
6%
34% 49%
16%
£000s
0 300 600 900 1,200 1,500
Minimum
Target
Maximum
£408,303
100%
49%
30%
40%
42%
28% £1,345,803
11% £839,553
Mike Crowder
xed pay
Annual
Bonus
long-term
incentives
2022
Total
Minimum
Target
Maximum
100%
£440
£869
£1,277
51% 43%
6%
34% 49%
16%
£000s
0 300 600 900 1,200 1,500
Minimum
Target
Maximum
£351,218
100%
48%
30%
41%
42%
28% £1,176,218
11% £730,718
Trevor Mitchell
xed pay
Annual
Bonus
long-term
incentives
2022
Total
Directors’ Remuneration Policy
continued
Governance
TClarke
Annual Report and Financial Statements 2021
48
49
For an internal Executive Director appointment, any variable pay
element awarded in respect of the prior role may be allowed to
pay out according to its original terms.
For external and internal appointments, the Committee may
agree that the Company will meet certain relocation and/or
incidental expenses as appropriate.
The fee structure for Non-Executive Director appointments will
be based on the Non-Executive Director fee policy as set out in
the policy table.
Service Contracts and Approach to Leavers
The Company’s policy is for Executive Directors to have service
contracts which may be terminated with no more than 12
months’ notice from either party. The Executive Directors’
service contracts are available for inspection by shareholders at
the Company’s registered office.
No Executive Director has the benefit of provisions in their
service contract for the payment of pre-determined
compensation in the event of termination of employment. It is
the Committee’s policy that the service contracts of Executive
Directors will provide for termination of employment by giving
notice or by making a payment of an amount equal to basic
salary in lieu of the notice period. It is the Committee’s policy
that no Executive Director should be entitled to a notice period
or payment on termination of employment in excess of the
levels set out in his or her service contract. Incidental expenses
may also be payable, if appropriate.
Annual bonus may be payable with respect to the period of the
financial year served, although it will be pro-rated for time and
paid at the normal payout date. Any share-based entitlements
granted to an Executive Director under the Company’s share
plans will be determined based on the relevant plan rules. In
certain circumstances, such as death, ill health, disability,
retirement or other circumstances at the discretion of the
Committee, ‘good leaver’ status may be applied. For good
leavers, awards will normally vest at the normal vesting date,
subject to the satisfaction of the relevant performance
conditions at that time and reduced pro-rata to reflect the
proportion of the vesting period actually served. Awards subject
to a holding period will normally be released following
completion of the holding period. Under the plan rules, the
Remuneration Committee has overarching discretion to
determine that awards vest at cessation of employment and/
or to disapply the time pro-rating requirement if it considers it
appropriate to do so.
In relation to a termination of employment, the Committee may
make payments in relation to any statutory entitlements or
payments to settle compromise claims as necessary. The
Committee also retains the discretion to reimburse reasonable
legal expenses incurred in relation to a termination of
employment and to meet any transitional costs if deemed
necessary. Payment may also be made in respect of accrued
benefits, including untaken holiday entitlement.
There is no provision for additional compensation on a change
of control. In the event of a change of control, the LTIP awards
will normally vest on (or shortly before) the change of
control and the Committee shall determine the extent to which
outstanding awards shall vest. Awards may alternatively be
exchanged for new equivalent awards in the acquirer where
appropriate. Outstanding awards under any/all employee share
plans will vest in accordance with the relevant scheme rules.
Bonuses may become payable, subject to performance and,
unless the Committee determines otherwise.
External Appointments
The Board allows Executive Directors to accept external
Non-Executive Director positions provided the appointment
is compatible with their duties as Executive Directors. The
Executive Directors may retain fees paid for these services. Any
appointment will be subject to approval by the Board.
Non-Executive Directors
The Chairman and Non-Executive Directors’ terms are set out
in letters of appointment. The letters of appointment of the
Non-Executive Directors are available for inspection at the
Company’s registered office during normal business hours.
Single Total Figure Remuneration (Audited)
The table below reports the total remuneration receivable in respect of qualifying services by each Director during the year:
Year ended 31st December 2021
Total salary
and fees
£
Taxable
benets
£
Annual
bonus
£
Long-term
incentives
£
Total
£
Executive:
Mark Lawrence
418,500 26,410 380,835 190,675 1,016,420
Mike Crowder
357,000 30,803 324,870 162,685 875,358
Trevor Mitchell
311,375 20,718 283,351 141,848 757,292
Non-Executive:
Iain McCusker
97,000
– – –
97,000
Mike Robson
23,417
– – –
23,417
Peter Maskell
56,200
– – –
56,200
Louise Dier
54,117
– – –
54,117
Jonathan Hook
25,600
– – –
25,600
Year ended 31st December 2020
Total salary
and fees
£
Taxable
benets
£
Annual
bonus
£
Long-term
incentives
£
Total
£
Executive:
Mark Lawrence
418,500 26,168 188,325 288,522 921,515
Mike Crowder
357,000 31,226 160,650 246,172 795,048
Trevor Mitchell
311,375 20,718 140,119 214,623 686,835
Non-Executive:
Iain McCusker – –
97,000
–97,000
Mike Robson – –
56,200
–56,200
Peter Maskell – –
56,200
–56,200
Louise Dier – –
51,200
–51,200
Directors’ Remuneration Policy
continued
Annual Report on Remuneration
TClarke
Annual Report and Financial Statements 2021
50
51
Governance
Theguresinthesingletotalgureremunerationtablearederivedfromthefollowing:
Total salary and fees The amount of salary and fees received in the year.
Taxablebenets Thetaxablevalueofbenetsreceivedintheyear.Theseareacarorcarallowanceandprivate
medical insurance.
Annual bonus
The2021annualbonuswassubjecttounderlyingprotbeforetaxtargets(two-thirdsofbonus)
alongside a scorecard of strategic objectives closely aligned with the KPIs of the business
(one-third of bonus).
Theactualperformanceof£8.8munderlyingoperatingprotresultedin52%ofmaximumfor
this element being payable.
Themeasuresselectedforstrategicobjectivesreectarangeofkeynancialandoperational
goals which support the Company’s strategic objectives. The respective targets have not been
disclosed as they are considered by the Board to be commercially sensitive. Performance
against strategic objectives resulted in 78% of maximum for this element being payable.
Overall this resulted in a bonus of 91% of salary (maximum 150%) for Mark Lawrence,
Mike Crowder and Trevor Mitchell being payable.
Long-term incentives The value of LTIP awards that vest in respect of a performance period that is completed by
theendoftherelevantnancialyear.For2021thisincludesthe2019Conditionalshares
awards which will vest in full on 24th April 2022. The value is based on the 3-month average
share price ending 31 December 2021 of 159.77p The performance conditions are detailed on
page 52. EPS growth over the three-year period to 31st December 2021 was 14%. The 2020
numbershavebeenupdatedtoreecttheactualexercisepriceon25thApril2021.
Pension-relatedbenets TheDirectorsreceivednopensionbenetsin2021(2020:nil).
Directors’ Interests and Minimum Shareholding Requirement (‘MSR’) (Audited)
Directors’ interests in the issued share capital of TClarke plc are set out below. There is a current MSR for the Executive Directors
whereby each Executive Director is required to build and maintain a holding of 100,000 shares in TClarke plc. For Non-Executive
Directors,theMSRrequirementis2,000sharesinTClarkeplcasdenedintheCompany’sArticlesofAssociation.
ThebenecialinterestsofDirectorsintheOrdinarysharecapitalofTClarkeplcat31stDecember2021and31stDecember2020were:
At
31st December 2021
10p Ordinary shares
At
31st December 2020
10p Ordinary shares
Outstanding
conditional
share awards
1
Outstanding
options held
under SAYE
MSR achieved at
31st December 2021
Mark Lawrence
331,285 217,834 870,097
–100%
Mike Crowder
298,681 201,177 742,252
–100%
Trevor Mitchell
227,624 142,000 647,313
–100%
Iain McCusker –
2,000 2,000
–100%
Peter Maskell –
41,500 41,500
–100%
Louise Dier –
2,000 2,000
–100%
Jonathan Hook – –
20,000
–100%
1 The outstanding conditional share awards are subject to performance conditions.
There have been no changes to Directors’ interests since 31st December 2021.
The Directors’ interests over shares as a result of their participation in the TClarke Equity Incentive Plan (‘EIP’) are as follows:
Award date
01/01/2021
Number Granted Exercised Lapsed
31/12/2021
Number
Earliest date
of exercise
Date of
expiry
Mark Lawrence
Conditional shares
25/04/2018 181,588
– 0
(181,588)
–25/04/2021 25/04/2028
Conditional shares
24/04/2019 119,344
– – –
119,344 24/04/2022 24/04/2029
Conditional shares
01/05/2020 439,601
– – –
439,601 01/05/2023 01/05/2030
Conditional shares
28/04/2021
–
311,152
– –
311,15228/04/2024 28/04/2031
Mike Crowder
Conditional shares
25/04/2018 154,934
– 0
(154,934)
–25/04/2021 25/04/2028
Conditional shares
24/04/2019 101,825
– – –
101,825 24/04/2022 24/04/2029
Conditional shares
01/05/2020 375,000
– – –
375,000 01/05/2023 01/05/2030
Conditional shares
28/04/2021
–
265,427
– –
265,42728/04/2024 28/04/2031
Trevor Mitchell
Conditional shares
25/04/2018 135,078
– 0
(135,078)
–25/04/2021 25/04/2028
Conditional shares
24/04/2019 88,783
– – –
88,783 24/04/2022 24/04/2029
Conditional shares
01/05/2020 327,025
–
327,025 01/05/2023 01/05/2030
Conditional shares
28/04/2021
– –
231,505
–231,505 28/04/2024 28/04/2031
Annual Report on Remuneration
continued
TClarke
Annual Report and Financial Statements 2021
52
53
Governance
The conditional share awards and options will vest subject to continued employment with the Group and satisfaction of the following
performance conditions over a three-year period ending 31st December preceding the earliest vesting date.
For the 2019 and 50% of the 2020 and 2021 awards, the following performance conditions apply:
Annual growth rate in underlying EPS above RPI
1
Proportion of award vesting
Less than 3% Nil
3% 25%
Between 3% and 10% Between 25% and 100% on a straight-line basis
Above 10% 100%
1 The base point is based on average underlying EPS for the three years ending with the year preceding date of grant.
The remaining 50% of the 2020 award performance conditions relate to the actions taken by the Executive Directors to enable TClarke
toincreaseretainedreservesfortheyearended31December2020(excludinganyimpactfromPensionDecitMovements).The
RemunerationCommitteeassessedthattheperformanceconditionhadbeenmetasthe2020protaftertaxwas£1.2m.Forthe
shares to vest the Company must not breach any banking covenants for the remainder of the three year period.
The remaining 50% of the 2021 award performance conditions are as follows
Annual growth rate in underlying EPS above RPI
1
Proportion of award vesting
Less than 20% Nil
Between 20% and 30% Between nil and 100% on a sliding scale
Above 30% 100%
The Directors’ interests in the TClarke Savings Related Share Option Scheme (‘SAYE Scheme’) are as follows:
Award date
01/01/2021
Number
Granted Lapsed
Exercised 31/12/2021
Number
Mark Lawrence –
24/10/2018
– 4,807
(4,807)
–Mike Crowder –
24/10/2018
– 4,807
(4,807)
–Trevor Mitchell –
24/10/2018
– 4,807
(4,807)
–External Appointments
Mark Lawrence and Mike Crowder do not hold any external appointments. Trevor Mitchell is an Executive Director of It’s Purely
Financial Limited.
Pensions
At 31 December 2021 none of the Directors were members of the Company pension scheme. (2020: None)
Performance Graph
The graph below shows the total shareholder return that would have been obtained over the past ten years by investing £100 in shares
of TClarke plc on 31st December 2011 and £100 in a notional investment in the FTSE All-Share Index and the FTSE All-Share
Construction & Materials Index on the same date. In all cases it has been assumed that all income has been reinvested. The FTSE
All-Share Index and the FTSE All-Share Construction & Materials Index are considered to be the most appropriate broad equity indices
to use as a comparison because the Company is a constituent of both.
Shareholder Return 2012–2021
Total Remuneration (Audited)
ThetotalremunerationguresfortheGroupChiefExecutiveOfcerduringeachofthelasttennancialyearsareshowninthetable
below.Thetotalremunerationgureincludestheannualbonusbasedonthatyear’sperformanceandLTIPawardsbasedonthree-year
performance periods ending in the relevant year. The annual bonus payout and LTIP vesting level as a percentage of the maximum
opportunity are also shown for each of these years.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Total remuneration (£000s)
266 308 300 436 567 875 1,056 1,137 922 1,016
Annual bonus (%)
0% 9% 0% 24% 32% 69% 100% 78% 30% 61%
LTIP vesting (%)
0% 0% 0% 0% 0% 100% 100% 100% 100% 100%
Ratio of Chief Executive’s Remuneration Relative to all UK Employees
ThetablebelowshowstheratiooftheGroupChiefExecutiveOfcer’ssingletotalgureofremunerationcomparedtoallUK
employees at the 25th percentile, median and 75th percentile. The method used for the calculation is Option C. Three employees
wereidentiedateachpercentilefromthelistofallfulltimeemployeesintheUK.Thereportwillbuildupovertimetoshowatenyear
period on each year accompanied by narrative to explain any movements.
Remuneration (£) Pay Ratio Remuneration (£) Pay Ratio
Group
ChiefExecutiveOfcer 921,515
1,016,420
25th Percentile 30,710 30:1
32,984 31:1
Median 41,662 22:1
46,465 22:1
75th Percentile 57,975 16:1
61,443 17:1
300
500
250
450
200
400
150
350
100
50
FTSE All-ShareTClarke plc FTSE AIM All-Share / Construction and Materials – SS FTSE All-Share / Construction and Materials – SEC
2021
2020
Annual Report on Remuneration
continued
January
2012
January
2013
January
2014
January
2015
January
2016
January
2017
January
2018
January
2019
January
2020
January
2021
TClarke
Annual Report and Financial Statements 2021
54
55
Governance
Percentage Change in Chief Executive’s Remuneration
ThetablebelowshowsthepercentagechangeintheGroupChiefExecutiveOfcer’ssalary,benetsandannualbonusbetweenthe
nancialyearended31stDecember2020and31stDecember2021,comparedwiththatofthetotalamountsforallUKemployeesof
the Group for each of these elements of pay
2021
£k
2020
£k
Change
Salary:
GroupChiefExecutiveOfcer
418.5
418.5 0%
UK employee average
48.7
44.6 9%
Benets:
GroupChiefExecutiveOfcer
26.4
26.2 1%
UK employee average
2.2
2.0 10%
Annual bonus:
GroupChiefExecutiveOfcer
380.8
188.3 102%
UK employee average
1.5
1.9 -22%
Average number of UK employees
1,204
1,294
Relative Importance of Spend on Pay (Audited)
The following table illustrates the year-on-year change in total remuneration for all employees in the Group relative to dividends and
total operating expenses. Total operating expenses comprise cost of sales and administrative expenses before amortisation of
intangible assets and other non-underlying costs.
2021
£m
2020
£m
Staff costs
76.3
72.0
Dividends
1.9
1.9
Total operating expenses
318.3
225.9
Service Contracts and Letters of Appointment
All Executive Directors have 12-month notice periods from the Company (and 12 months from the Executive Director) in accordance
with their service agreements.
Non-Executive Directors have letters of appointment which include initial terms of three years.
Consideration by the Directors of Matters Relating to Directors’ Remuneration
The Company’s approach to the Chairman’s and Executive Directors’ remuneration is determined by the Board on the advice of the
Remuneration Committee.
During the year, the Remuneration Committee comprised Peter Maskell (Chair), Iain McCusker, Mike Robson (until 5 May 2021)
Louise Dier and Jonathan Hook (from 1 July 2021). Biographical information on the Committee members and details of attendance at
the Remuneration Committee’s meetings during the year are set out on pages 31 and 34 respectively.
The Remuneration Committee has access to independent advice where appropriate. The Committee appointed Mercer Limited
(‘Mercer’) in August 2019 to provide independent advice on remuneration matters. Mercer is a member of the Remuneration
Consultants Group and operates voluntarily under the Group’s code which sets out the scope and conduct of the role of executive
remuneration consultants when advising UK listed companies. Mercer does not undertake any other work for the Company, and the
CommitteeissatisedthattheadviceprovidedbyMercerwasobjectiveandindependent.
TheCommitteealsoreceivesinputfromtheGroupChiefExecutiveOfcerandadvicefromtheCompanySecretary.Noindividualsare
present when their own remuneration is being discussed.
Statement of Voting at Annual General Meeting
The Company remains committed to ongoing shareholder dialogue and takes a keen interest in voting outcomes. The following table
sets out voting outcomes in respect of the resolutions relating to approving Directors’ remuneration matters at the Company’s AGM on
5th May 2021:
Resolution
Votes for/
discretionary
% of vote
Votes
against
% of vote
Votes
withheld
Approval of Directors’ remuneration report
10,444,274 97.34% 285,876 2.66% 25,506
Implementation of the Remuneration Policy for the year ending 31st December 2022
A summary of how the Directors’ Remuneration Policy will be applied during the year ending 31st December 2022 is set out below.
2022
Basic salary
Other* Total
2021
Basic salary
Other* Total
Mark Lawrence Minimum
£440,000
£28,910
£468,910£418,500 £26,128 £444,628
Target
£440,000 £534,910 £974,910
£418,500 £507,443 £925,943
Maximum
£440,000 £1,128,910 £1,568,910
£418,500 £1,072,418 £1,490,918
Mike Crowder Minimum
£375,000 £33,303 £408,303
£357,000 £31,226 £388,226
Target
£375,000 £464,533 £839,553
£357,000 £441,776 £798,776
Maximum
£375,000 £970,803 £1,345,803
£357,000 £923,726 £1,280,726
Trevor Mitchell Minimum
£330,000 £21,218 £351,218
£311,375 £20,718 £332,093
Target
£330,000 £400,718 £730,718
£311,375 £378,799 £690,174
Maximum
£330,000 £846,218 £1,176,218
£311,375 £799,155 £1,110,530
* Otherfor2022includesbenetsatMinimumlevel;attargetlevelincludesbenetsplusbonuspayoutof60%ofmaximumandLTIPthresholdvestingat25%ofmaximumaward
innormalcircumstances.MaximumlevelincludesbenetsplusfullpayoutofbonusandLTIPatMaximumlevel.
Basic Salary
Salaries of Executive Directors are shown in the table above:
Pension Arrangements
NoneofthecurrentExecutiveDirectorsreceiveanypensionbenetfromtheCompany.
Annual Bonus
The maximum bonus potential for the year ending 31st December 2022 is 150% of salary for all the Executive Directors.
AwardsaredeterminedbasedonacombinationofboththeGroup’snancialresults,beinggrowthinGroupprotbeforetax
(two-thirds of overall bonus) and strategic targets (one-third of overall bonus) being met.
MaximumbonuswillonlybepayablewhenboththenancialresultsoftheGrouphavesignicantlyexceededexpectationsandall
strategic targets have been met.
ThemeasureshavebeenselectedtoreectarangeofkeynancialandoperationalgoalswhichsupporttheCompany’sGrowthPlan
and ESG initiative. The respective targets have not been disclosed as they are considered by the Board to be commercially sensitive.
The Executive Directors’ performance will be assessed individually by the Committee against the measures and targets, relying on
audited information where appropriate, and having regard to the value which has been created for shareholders.
Annual Report on Remuneration
continued
TClarke
Annual Report and Financial Statements 2021
56
57
Governance
Long-term Incentives (Audited)
Consistent with past awards, LTIP awards that will be granted in 2021 will vest subject to continued employment with the Group and
satisfaction of the following performance conditions over a three-year period ending on 31st December 2023.
Annual growth rate in underlying EPS above RPI
1
Proportion of award vesting
Less than 3% Nil
3% 25%
Between 3% and 10% Between 25% and 100% on a straight-line basis
Above 10% 100%
1 Base point from which performance is measured is based on average underlying EPS for the three years ended 31st December 2020.
Non-Executive Directors
The Company’s approach to Non-Executive Directors’ remuneration is set by the Board with account taken of the time and
responsibility involved in each role. There were no fee increases in 2021. Fees are shown below:
On behalf of the Board
Peter Maskell
Chair of the Remuneration Committee
8th March 2022
Non-Executive
2022 Committee
2021 Committee
Directors Position base fee fee
base fee fee
Iain McCusker Chairman £97,000 £0
£102,000
£0
Peter Maskell Remuneration Committee Chair £51,200 £5,000
£53,750
£5,000
Louise Dier Audit Committee Chair (from 5 May 2021)
£53,750 £5,000 £51,200 £2,917
Jonathan Hook Independent Director
£53,750 £0
£26,200 £0
Mike Robson Audit Committee Chair (to 5 May 2021)
– –
£21,333 £2,083
The Directors’ report should be read in conjunction with the Strategic report on pages 1 to 30 and the Corporate Governance report
on pages 31 to 60, both of which form part of this Directors’ report. The Directors’ report comprises sections of the Annual Report
incorporated by reference as set out below which, taken together, contain the information to be included in the Annual Report, where
applicable, under Listing Rule 9.8.4.
Board membership Page 31
Dividends Page 9
Directors’ long-term incentives Pages 41 to 56
Corporate Governance report Pages 51 to 60
Engagement with employees Pages 21 to 26
Engagement with stakeholders
Future developments of the business of the Group
Pages 21 to 26
Pages 2 to 8
Employee equality, diversity and involvement Pages 21 to 25
Carbon emissions Page 20
StatementofDirectors’responsibilitiesinrespectofthenancialstatements
Page 60
Financial risk management Pages 102 to 104
Subsidiaries Page 108
Directors
Thedirectorswhoheldofceduringtheyearanduptothedateofsigningthesenancialstatementswereasfollows:
Name Appointment
Iain McCusker Chairman
Mike Robson Independent Director (retired 5 May 2021)
Peter Maskell Senior Independent Director
Louise Dier Independent Director
Jonathan Hook Independent Director (appointed 1 July 2021)
Mark Lawrence
GroupChiefExecutiveOfcer
Mike Crowder Group Managing Director
Trevor Mitchell Group Finance Director
BriefbiographiesofcurrentservingDirectors,indicatingtheirexperienceandqualications,canbefoundonpage31.
In line with the UK Corporate Governance Code, all the Directors shall be subject to annual election or re-election at the forthcoming
Annual General Meeting (‘AGM’) on 11th May 2022.
Powers of Directors
The powers of the Directors are determined by the Company’s Articles of Association, the Companies Act 2006 and the directions
given by the Company by resolutions passed in general meetings. The Directors are authorised by the Articles of Association to issue
and allot Ordinary shares, to disapply statutory pre-emption rights and to make market purchases of the Company’s shares. The
Directors currently have shareholder approval for the issue of Ordinary share capital up to a maximum amount of £1,434,941 and for
the buyback of Ordinary shares up to a maximum aggregate of 10% of the issued Ordinary share capital. The Directors will be seeking
to renew their authorities at the forthcoming AGM.
Going Concern
Indeterminingtheappropriatebasisofpreparationofthenancialstatements,thedirectorsarerequiredtoconsiderwhethertheGroup
and Company can continue in operational existence for the foreseeable future.
As at 31 December 2021 the Group held cash of £20.3m (2020: £25.2m) and had drawn down short-term borrowings of £15m under a
revolving credit facility. This resulted in net cash of £5.3m (2020: £10.2m). The Group also has access to a £10.0m overdraft facility. No
balances were drawn down under the overdraft facility at either 31st December 2021 or 2020.
The Group uses the above banking facilities as and when required to meet working capital requirements. The revolving credit facility
expires on 31st August 2024. The overdraft facility is subject to annual review with any amounts borrowed repayable on demand. The
Directorshavereceivedconrmationfromthebankthattheyknowofnoreasonwhytheoverdraftfacilitywillnotberenewedwhenitfalls
due for review.
The Directors have reviewed the Group’s forecasts and projections for the next three year period. The model assumes delivery of the
2022-24 Group Business Plan, and that the banking facilities will remain in place throughout the projection period. The projections show
thattheGroupwillremainprotable,withasignicantamountofheadroomagainstcovenantsandborrowinglimits.
Annual Report on Remuneration
continued
Directors‘ Report
TClarke
Annual Report and Financial Statements 2021
58
59
Governance
Qualifying Third Party Indemnities
The Articles of Association of the Company entitle the Directors,
to the extent permitted by the Companies Act 2006 and other
applicablelegislation,tobeindemniedoutoftheassetsofthe
Company in the event that they suffer any expenses in
connection with certain proceedings relating to the execution
of their duties as Directors of the Company.
In addition, the Company has in place insurance in favour of its
Directorsandofcersinrespectofcertainlossesorliabilitiesto
whichtheymaybeexposedduetotheirofceuptoalimitof
£10m. The insurance was in force throughout the year.
Research and Development
The Group undertakes research and development activity in
creating innovative design and construction solutions integral to
the delivery of its projects. The direct expenditure incurred is not
separatelyidentiableastheinvestmentisusuallycontained
within the relevant project.
Political Contributions
No contributions were made to any political parties during the
current or preceding year.
Events After the Balance Sheet Date
On 11th February 2022 the Group entered into a lease for our
forthcoming move to 30 St Mary Axe. This will be accounted for
in the 2022 Financial Statements whereby a right of use asset
and corresponding lease liability for c.£3m will be included in the
Statement of Financial Position.
Independent Auditors
A resolution is proposed at the AGM for the reappointment of
PricewaterhouseCoopers LLP as independent auditors of the
Company at a rate of remuneration to be determined by the
Audit Committee.
Annual General Meeting (‘AGM’)
The AGM of the Company will be held at the 200 Aldersgate,
St Pauls London EC1A 4HD at 10am on Wednesday
11th May 2022.
The Notice convening the AGM, together with details of the
special business to be considered and explanatory notes for
each resolution, is contained in a separate circular sent to
shareholders. It is also available to be viewed on the
Company’s website.
Approved by the Directors and signed by order of the Board.
Trevor Mitchell
Company Secretary
8th March 2022
TClarke plc is registered in England No. 00119351.
Management have also produced sensitivity analysis to assess the Group’s resilience to more adverse outcomes which could arise from
oneoftheprincipalriskstothebusiness(discussedonpages26to29),includingascenariowherebyrevenueandprotabilityremainat
currentlevelsandaseverebutplausiblescenariowherebyprotabilitydropsby50%.Managementhavealsoproducedanupside
scenario which factors in an additional £100m revenue per annun to consider the impact on working capital requirements. In all scenarios,
includingthereasonableworstcase,theGroupisabletocomplywithitsnancialcovenants,operatewithinitscurrentfacilities,andmeet
its liabilities as they fall due.
Accordingly,thedirectorsconsidertheretobenouncertaintiesthatmaycastsignicantdoubtontheGroup’sabilitytocontinueto
operate as a going concern. They have formed a judgement that there is a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of signing of
thesenancialstatements.Forthisreason,theycontinuetoadoptthegoingconcernbasisinthepreparationofthesenancialstatements.
Share Capital
The Company’s share capital consists of Ordinary shares with a nominal value of 10p each. The issued share capital as at 31 December
2021 was £4,388,286 consisting of 43,882,861 Ordinary shares of 10p each. The Company’s issued Ordinary shares are fully paid and
rank equally in all respects. There are no restrictions on the size of a holding nor on the transfer of Ordinary shares in the Company or
on the exercise of voting rights attached to them, save that:
•
certain restrictions may from time to time be imposed by laws and regulations (for example, insider trading laws and market
requirements relating to close periods); and
•
pursuant to the Listing Rules of the Financial Conduct Authority, whereby certain employees of the Company require the approval
of the Company to deal in the Company’s shares.
Furtherdetailsonsharecapitalareshowninnote18tothenancialstatements.
Substantial Shareholdings
As at 31 December 2021 the following information has been disclosed to the Company under the FCA’s Disclosure Guidance and
TransparencyRules(’DTR5’),inrespectofnotiableinterestsinthevotingrightsintheCompany’sissuedsharecapital:
Name of holder
Total voting
rights
1
% of voting
voting rights
2
Regent Gas Holdings Limited
7,406,624 16.88%
Interactive Investor
4,738,506 10.80%
Hargreaves Lansdown, stockbrokers
3,670,918 8.37%
Heritage Capital Management
2,510,000 5.72%
Barclays Smart Investor
2,301,054 5.24%
1
Total voting rights attaching to the ordinary shares at the Company at the time of disclosure to the Company.
2
Percentage of total voting rights at the date of disclosure to the Company.
Asat8thMarch2022,theCompanyhadnotbeennotiedofanychangestomajorshareholdings.
Signicant Agreements – Change of Control
TheDirectorsarenotawareofanysignicantagreementsthattakeeffect,alterorterminateuponachangeofcontroloftheCompany
following a takeover bid.
The Company has an Equity Incentive Plan (‘EIP’) in place for Directors and senior management, and an employee share save scheme
in place which is available to all employees. The rules of the EIP provide that awards made under the EIP may vest on a change of
control of the Company, at the discretion of the Remuneration Committee. The rules of the Savings Related Share Option Scheme
provide that in the event of a change of control, outstanding options may be exchanged or replaced with similar options on the same
terms.Furtherdetailsonemployeeshareschemesaredisclosedinnote18tothenancialstatements.
There are no other known agreements between the Company and its Directors or employees providing for compensation for loss of
ofceoremploymentthatoccursbecauseofatakeoverbid.
Signicant Interests
Save for interests in service agreements, none of which extend beyond 12 calendar months, the Directors have no material interest in
anycontractofsignicancethatwouldhaverequireddisclosureunderthecontinuingobligationsoftheFinancialConductAuthority
ListingRules,norhavetheyanybenecialinterestintheissuedsharecapitalofthesubsidiarycompanies.
•
•
Directors‘ Report
continued
TClarke
Annual Report and Financial Statements 2021
60
61
Governance
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the Group financial statements in accordance
with UK-adopted international accounting standards and the
Company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 “Reduced
Disclosure Framework”, and applicable law).
Under company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of
the profit or loss of the Group for that period. In preparing the
financial statements, the Directors are required to:
•
select suitable accounting policies and then apply them
consistently;
•
state whether applicable UK-adopted international
statements;
•
make judgements and accounting estimates that are
•
prepare the financial statements on the going concern basis
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain the
Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report
comply with the Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
Directors’ confirmations
The Directors consider that the annual report and accounts,
taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess
the Group’s and company’s position and performance, business
model and strategy.
Each of the Directors, whose names and functions are listed in
Directors’ report confirm that, to the best of their knowledge:
•
the Group financial statements, which have been prepared in
•
the Company financial statements, which have been prepared
•
the Annual Report and Financial Statements includes a fair
In the case of each Director in office at the date the Directors’
report is approved:
•
so far as the Director is aware, there is no relevant audit
•
they have taken all the steps that they ought to have taken as
On behalf of the Board
Trevor Mitchell
Group Finance Director
Iain McCusker
Chairman
8th March 2022
TClarke plc
Registered number: 00119351
Opinion
In our opinion:
•
TClarke Plc’s Group financial statements and Company
•
the Group financial statements have been properly prepared
standards;
•
the Company financial statements have been properly
•
the financial statements have been prepared in accordance
We have audited the financial statements, included within the
Annual Report and Financial Statements, which comprise: the
Consolidated and Company Statements of Financial Position as at
31 December 2021; the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Cash Flows, and the Consolidated
and Company Statements of Changes in Equity for the year then
ended; and the notes to the financial statements, which include a
description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit
Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We remained independent of the Group in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with
these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
Other than those disclosed in Note 7 (Operating Profit), we have
provided no non-audit services to the Company in the period
under audit.
Our audit approach
Context
As part of our audit we performed enquiries of management
about their assessment of the climate change risks facing the
business, their potential impact and the Company’s
preparedness to respond to these. We performed a risk
assessment and did not identify any additional climate change
specific risks for the audit.
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the 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) identified by the auditors,
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,
and any comments we make on the results of our procedures
thereon, 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.
This is not a complete list of all risks identified by our audit.
Impact of Covid-19 and Goodwill and intangibles impairment
assessment, which were key audit matters last year, are no
longer included because of the impact of Covid-19 being
reduced in the current year and Goodwill and intangibles
impairment being reduced from a significant risk in the prior
year to a normal risk in the current year. Otherwise, the key
audit matters below are consistent with last year.
Overview
Audit Scope
•
Our audit covered the audit of all the significant components
Key Audit Matters
•
Revenue recognition and long-term contract accounting in
Materiality
•
Overall group materiality: £1,635,000 (2020: £1,483,000)
•
Overall company materiality: £634,000 (2020: £625,000)
•
Performance materiality: £1,226,250 (2020: £1,112,250)
Statement of Directors‘ Responsibilities in Respect of the
Financial Statements
Independent Auditors‘ Report to the Members of TClarke PLC
Report on the Audit of the Financial Statements
TClarke
Annual Report and Financial Statements 2021
62
63
Governance
Independent Auditors‘ Report to the Members of TClarke PLC
continued
Report on the Audit of the Financial Statements
Key audit matter Key audit matterHow our audit addressed the key audit matter How our audit addressed the key audit matter
Revenue recognition and long-term contract accounting
in respect of construction contracts (Group)
Refer to Note 3 (Significant accounting policies), Note 4
(Significant judgements and sources of estimation
uncertainty), Note 5 (Segment information) and Note 15
(Construction Contracts). Total revenue equalled £327.1m for the
year ended 31 December 2021 (2020: £231.9m), with contract
assets and contract liabilities of £51.7m and £2.9m
respectively. We focused on the revenue and profit recognised
on long term contracts because they result in material balances,
involve judgements and can be complex. IFRS 15 requires
revenue to be recognised over the course of the contract by
selecting an appropriate method for measuring the entity’s
progress towards complete satisfaction of that performance
obligation. If a project is, or is forecast to be, loss making, it
requires the full loss to be recognised immediately.
Risk of fraud in revenue recognition and complexities in revenue
and profit recognition, on long term contracts, are deemed
significant risks. This is due to the complexity involved with long
term contract accounting and the risk of the company front
loading the revenue of the contract and not recognising revenue
on a cost to complete basis over the contract duration.
Percentage completion of contracts is calculated based on the
amount of costs incurred to date compared with the total
expected costs to be incurred on the project, except where this
would not be representative of the stage of completion. Forecast
end of life costs are inherently subjective and could be
manipulated by management to impact the revenue and profit
recognised. Testing percentage completion enables us to
determine the appropriateness of revenue recognition
.
We obtained an understanding of management’s own
processes and controls for reviewing long-term contracts through
the following:
•
We performed a walkthrough of the revenue and receivables
•
We attended a Cost Review Meeting and performed a site
We obtained an understanding of management’s ability to
forecast by performing look-back procedures through a
comparison of prior years’ expected total costs and margins to
actual final total costs and margins or current year end total
estimated costs and margins, investigating large fluctuations
through discussions with management and obtaining supporting
documentation to validate these explanations.
We selected a sample of contracts to test, based on both
quantitative and qualitative criteria including:
•
high levels of revenue recognised in the year;
•
low margin or loss-making contracts;
•
significant balance sheet exposure; and
•
other risky projects as identified by discussions with
For our sample of contracts, we gained an understanding of
the background of the projects, key judgements involved and
obtained supporting documentation to corroborate these.
We focused on the significant judgements adopted by
management in relation to the revenue and margin recognition,
and, in particular, judgements with respect to the percentage
completion, as follows:
•
We held discussions with management to understand and
•
We agreed forecast revenue to signed contracts, signed
•
We agreed the most recent certification pre year end (or
•
We agree the latest client certification and bank if cash has
•
We reviewed support for significant claims and other
•
We compared revenue recognised with amounts certified by
•
We re-performed the key calculations behind the margin
•
We evaluated forecast costs to complete through analytical
In addition to testing a sample of cost incurred to date on each
project above, we tested cost of sales centrally by selecting a
haphazard sample and performing the following:
•
We agreed to supporting documentation; and
•
We ensured the cost had been coded to the correct
•
We performed a substantive analytic over payroll costs and
In addition, for the remaining contract population we performed
the following:
•
We reviewed the forecast margins and for those which had
•
We target tested contracts with in year revenue above
We performed testing over balance sheet exposure as follows:
•
We recalculated the contract asset/deferred revenue and
•
We obtained post year end cash receipts for Trade Receivable
•
We recalculated retentions and assessed recoverability of
Based on all the evidence obtained in the above procedures,
we are satisfied that revenue and profit recognised by
management is supportable. We also considered the adequacy
of the disclosures in the financial statements in relation to
contracts and the disclosures in respect of significant judgements
and estimates.
How we Tailored the Audit Scope
We tailored the scope of our audit to ensure that we
performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the
structure of the Group and the Company, the accounting
processes and controls, and the industry in which they operate.
Our audit included all of the significant components in TClarke
PLC, namely, TClarke Contracting Limited, (the main external
trading entity), Weylex Properties Limited (which holds the
Group’s properties) and TClarke Services Limited (where the
defined benefit pension is held). The audit work relating to
each of these components was performed by the Group audit
team. These components account for 100% of the Group’s
revenue and profit before tax.
Materiality
The scope of our audit was influenced by our application
of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
TClarke
Annual Report and Financial Statements 2021
64
65
Governance
misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform
procedures to conclude whether there is a material
misstatement of the financial statements or a material
misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact. We have nothing to report based on these
responsibilities.
With respect to the Strategic Report and Directors’ Report,
we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic Report and
Directors’ Report for the year ended 31 December 2021 is
consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and
Company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic Report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Annual Report on Remuneration
to be audited has been properly prepared in accordance with
the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements
in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the
Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional
responsibilities with respect to the corporate governance
statement as other information are described in the Reporting
on other information section of this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement, included within the Statement of
Compliance is materially consistent with the financial statements
and our knowledge obtained during the audit, and we have
nothing material to add or draw attention to in relation to:
•
The directors’ confirmation that they have carried out a robust
•
The disclosures in the Annual Report that describe those
•
The directors’ statement in the financial statements about
statements;
•
The directors’ explanation as to their assessment of the
•
The directors’ statement as to whether they have a reasonable
assumptions.
Our review of the directors’ statement regarding the
longer-term viability of the Group was substantially less in scope
than an audit and only consisted of making inquiries and
considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant
provisions of the UK Corporate Governance Code; and con
-
sidering whether the statement is consistent with the financial
statements and our knowledge and understanding of the Group
and Company and their environment obtained in the course of
the audit.
In addition, based on the work undertaken as part of our audit,
we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the
financial statements and our knowledge obtained during
the audit:
•
The directors’ statement that they consider the Annual
•
The section of the Annual Report that describes the review of
•
The section of the Annual Report describing the work of the
We have nothing to report in respect of our responsibility to
report when the directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a
departure from a relevant provision of the Code specified under
the Listing Rules for review by the auditors.
Financial statements - Group Financial statements - Company
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
£1,635,000 (2020: £1,483,000).
0.5% of revenue (2020: 0.5% of average revenue for the last
five years)
We used revenue as a basis for materiality as the Group’s
profit margins have historically been low, consistent with the
industry as a whole, and therefore revenue is used by the
Group as a key performance indicator.
Overall materiality
How we
determined it
Rationale for
benchmark applied
£634,000 (2020: £625,000).
1% of total assets (2020: 0.9% of
total assets)
We used total assets as a basis for
materiality as the Company does not
trade and we believe that total assets
is therefore the most appropriate
benchmark.
Independent Auditors‘ Report to the Members of TClarke PLC
continued
Report on the Audit of the Financial Statements
For each component in the scope of our group audit, we
allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across
components was between £88,500 and £1,635,000.
We use performance materiality to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% (2020: 75%) of
overall materiality, amounting to £1,226,250 (2020: £1,112,250) for
the Group financial statements and £515,000 (2020: £469,000) for
the Company financial statements.
In determining the performance materiality, we considered a
number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and
concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to
them misstatements identified during our audit above £81,750
(Group audit) (2020: £74,150) and £31,700 (Company audit)
(2020: £26,000) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s
and the Company’s ability to continue to adopt the going
concern basis of accounting included:
• assessing the inputs and underlying assumptions of the
•
assessing the downside and upside scenarios which have been
• reviewing management’s analysis of both liquidity and
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 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.
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.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the Group’s
and the Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the
other information, which includes reporting based on the Task
Force on Climate-related Financial Disclosures (TCFD) rec-
ommendations. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance 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
TClarke
Annual Report and Financial Statements 2021
66
67
Governance
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’
Responsibilities in Respect of the Financial Statements, the directors
are responsible for the preparation of the financial statements in
accordance with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also responsible
for such internal control as they 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 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 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 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.
Based on our understanding of the Group and industry, we
identified that the principal risks of non-compliance with laws
and regulations related to the Listing Rules, Pensions legislation,
UK tax legislation, and the Health & Safety Executive legislation,
and we considered the extent to which non-compliance might
have a material effect on the financial statements. We also
considered those laws and regulations that have a direct impact
on the financial statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that
the principal risks were related to posting inappropriate journals
to increase revenue or reduce expenditure, management bias
in accounting estimates, and inappropriate allocation of costs
between contracts. Audit procedures performed by the
engagement team included:
•
Discussions with management in respect of known or
•
Review of board minutes;
•
Evaluation of the operating effectiveness of management’s
estimation;
•
Challenging assumptions and judgments made by
•
Identifying and testing journal entries, in particular testing a
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited
number of items for testing, rather than testing complete
populations. We will often seek to target particular items for
testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the Company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no
other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent
in writing.
Independent Auditors‘ Report to the Members of TClarke PLC
continued
Report on the Audit of the Financial Statements
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
•
we have not obtained all the information and explanations we
•
adequate accounting records have not been kept by the
•
certain disclosures of directors’ remuneration specified by law
•
the Company financial statements and the part of the Annual
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we
were appointed by the directors on 13 May 2011 to audit the
financial statements for the year ended 31 December 2011
and subsequent financial periods. There was a re-tender in 2020
for the 31 December 2021 year end audit where we were
reappointed, therefore, the period of total uninterrupted
engagement is 11 years, covering the years ended 31
December 2011 to 31 December 2021.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these
financial statements will form part of the ESEF-prepared annual
financial report filed on the National Storage Mechanism of
the Financial Conduct Authority in accordance with the ESEF
Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report
provides no assurance over whether the annual financial report
will be prepared using the single electronic format specified in
the ESEF RTS.
Andy Ward (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
8 March 2022
Note
2021
2020
Underlying
items
£m
Non-
underlying
items
£m
Total
£m
Underlying
items
£m
Non-
underlying
items
£m
Total
£m
Revenue 327.1 – 327.1 231.9 – 231.9
5
Cost of sales – –
(286.6 )
(286.6 )
(199.0 )
(199.0 )
Gross prot 40.5 – 40.5 32.9 – 32.9
Administrative expenses
Amortisation of intangible assets 7 – – – –
(0.2 ) (0.2 )
Restructuring costs 7 – – – –
(3.7 ) (3.7 )
Other administrative expenses – –
(31.7 )
(31.7 )
(26.9 )
(26.9 )
Total administrative expenses –
(31.7 )
(31.7 )
(26.9 ) (3.9 ) (30.8 )
Operating prot
7 8.8 – 8.8 6.0 (3.9 ) 2.1
Finance costs 6 – –
(1.0 )
(1.0 )
(0.9 )
(0.9 )
Prot before taxation 7.8 – 7.8 5.1 (3.9 ) 1.2
Taxation 9 – –
(1.5 )
(1.5 )
(0.8 ) 0.8
Prot for the nancial year 6.3 – 6.3 4.3 (3.1 ) 1.2
Earnings per share
Attributable to owners of TClarke plc
Basic – 14.99 p 10.29 p (7.42 )p 2.87 p
10 14.99 p
Diluted – 13.91 p 9.66 p (6.97 )p 2.69 p
10 13.91 p
Financial Statements
TClarke
Annual Report and Financial Statements 2021
68
69
2021
£m
2020
£m
Prot for the year 6.3 1.2
Other comprehensive income/(expense)
Items that will not be reclassied to the income statement
Actuarial gain/(loss) on dened benet pension scheme 5.6
(6.5 )
Revaluation of minority shareholding equity investment –
(2.0 )
Deferred tax relating to items that will not be reclassied 0.4 1.7
Total other comprehensive income/(expense) for the year (net of tax) 6.0
(6.8 )
Total comprehensive income/(expense) for the year 12.3
(5.6 )
The notes on pages 72 to 104 form part of these nancial statements.
Consolidated Income Statement
For the year ended 31st December 2021
Consolidated Statement of Comprehensive Income
For the year ended 31st December 2021
Consolidated Statement of Financial Position
As at 31st December 2021
Note(s)
2021
£m
2020
£m
Non-current assets
Intangible assets
11 25.3 25.3
Property, plant and equipment
12 7.5 8.0
Deferred tax assets
13 6.4 6.2
Trade and other receivables
16 4.9 3.6
Total non-current assets 44.1 43.1
Current assets
Inventories
14 0.4 0.4
Amounts due from customers under construction contracts
15 51.7 41.7
Trade and other receivables
16 52.5 34.5
Current tax receivables 0.2 0.7
Cash and cash equivalents
19 20.3 25.2
Total current assets 125.1 102.5
Total assets 169.2 145.6
Current liabilities
Bank loans
20 15.0 )
(15.0 )
(Amounts due to customers under construction contracts
15 1.1 )
(2.9 )
(Trade and other payables
17 77.5 )
(96.3 )
(Obligations under leases
23,25 1.3 )
(1.6 )
(Total current liabilities
(115.8 )
(94.9 )
Net current assets 9.3 7.6
Non-current liabilities
Obligations under leases
23,25 2.2 )
(1.3 )
(Trade and other payables
17 2.6 )
(1.7 )
(Retirement benet obligations
22 30.2 )
(23.9 )
(Total non-current liabilities
(26.9 )
(35.0 )
Total liabilities
(142.7 )
(129.9 )
Net assets 26.5 15.7
Equity attributable to owners of the parent
Share capital
18 4.4 4.3
Share premium
18 4.2 3.8
Revaluation reserve 0.7 0.8
Retained earnings 17.2 6.8
Total equity 26.5 15.7
The notes on pages 72 to 104 form part of these nancial statements.
The nancial statements on pages 72 to 104 were approved by the Board of Directors on 8th March 2022 and were signed on its
behalf by:
Iain McCusker Mark Lawrence
Director Director
Financial Statements
TClarke
Annual Report and Financial Statements 2021
70
71
Note
2021
£m
2020
£m
Net cash (used in)/generated from operating activities
19 3.7
(0.6 )
Investing activities
Investment in minority shareholding –
(2.0 )
Purchase of property, plant and equipment
(0.4 )
(0.2 )
Net cash used in investing activities
(0.4 )
(2.2 )
Financing activities
New shares issued 0.5 –
Facility fee
Proceeds from bank borrowing
20
(0.1 )
(0.1 )
Equity dividends paid
18 1.9 )
(1.9 )
(Acquisition of shares by ESOT
18 0.1 )
(0.9 )
(Repayment of lease obligations
(1.5 )
(1.6 )
Net cash (used in)/generated from nancing activities
(3.9 ) 11.3
Net (decrease)/increase in cash and cash equivalents
(4.9 ) 12.8
Cash and cash equivalents at the beginning of the year
19 25.2 12.4
Cash and cash equivalents at the end of the year
19 20.3 25.2
The notes on pages 72 to 104 form part of these nancial statements.
Consolidated Statement of Cash Flows
For the year ended 31st December 2021
Share
capital
£m
Share
premium
£m
Revaluation
reserve
£m
Retained
earnings
£m
Total
Equity
£m
At 1st January 2020 4.3 3.8 0.9 13.9 22.9
Comprehensive income/(expense)
Prot for the year – – – 1.2 1.2
Other comprehensive expense
Actuarial loss on retirement benet
obligation – – –
(6.5 ) (6.5 )
Deferred income tax on actuarial loss
on retirement benet obligation – – – 1.7 1.7
Minority shareholding equity investment – – –
(2.0 ) (2.0 )
Total other comprehensive expense – – –
(6.8 ) (6.8 )
Total comprehensive expense – – –
(5.6 ) (5.6 )
Transactions with owners
Transfer on depreciation of freehold properties – – –
(0.1 ) 0.1
Share-based payment charge – – – 0.4 0.4
Shares acquired by ESOT – – –
(0.1 ) (0.1 )
Dividends paid – – –
(1.9 ) (1.9 )
Total transactions with owners – –
(0.1 ) (1.5 ) (1.6 )
At 1st January 2021 4.3 3.8 0.8 6.8 15.7
Comprehensive income
Prot for the year – – – 6.3 6.3
Other comprehensive income
Actuarial gain on retirement benet obligation – – – 5.6 5.6
Deferred income tax on actuarial gain on
Retirement benet obligation – – – 0.4 0.4
Total other comprehensive income – – – 6.0 6.0
Total comprehensive income – – – 12.3 12.3
Transactions with owners
Transfer on depreciation of freehold properties – – –
(0.1 ) 0.1
Share-based payment charge – – – 0.8 0.8
Shares acquired by ESOT – – –
(0.9 ) (0.9 )
Allotted in respect of share option schemes 0.1 0.4 – – 0.5
Dividends paid – – –
(1.9 ) (1.9 )
Total transactions with owners 0.1 0.4 (0.1 ) (1.9 ) (1.5 )
At 31st December 2021 4.4 4.2 0.7 17.2 26.5
The notes on pages 72 to 104 form part of these nancial statements.
Consolidated Statement of Changes in Equity
For the year ended 31st December 2021
Note
22
13
3(x)
12
18
18
22
13
12
18
18
18
Financial Statements
TClarke
Annual Report and Financial Statements 2021
72
73
1
General Information
The address of its registered ofce and principal place of business is disclosed on page 109. The nature of the Group’s operations and
its principal activities are described in note 5 and in the Strategic report on pages 1 to 30. The Company is limited by shares.
2 Basis of Preparation
Statement of Compliance
The Group’s consolidated nancial statements are prepared in accordance with the requirements of the Companies Act 2006 and in
accordance with UK-adopted international standards; and have been prepared on a going concern basis under the historic cost convention as
modied by the revaluation of land and buildings. They comprise the consolidated nancial statements of TClarke plc and all its subsidiaries
made up to 31st December 2021 and have been presented in £m. There have been no new accounting policies adopted in the year.
The preparation of nancial statements in conformity with UK-adopted international standards requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signicant to
the consolidated nancial statements, are disclosed in note 4.
Going Concern
In determining the appropriate basis of preparation of the nancial statements, the directors are required to consider whether the
Group and Company can continue in operational existence for the foreseeable future.
As at 31 December 2021 the Group held cash of £20.3m (2020: £25.2m) and had drawn down short-term borrowings of £15m under a
revolving credit facility. This resulted in net cash of £5.3m (2020: £10.2m). The Group also has access to a £10.0m overdraft facility. No
balances were drawn down under the overdraft facility at either 31st December 2021 or 2020.
The Group uses the above banking facilities as and when required to meet working capital requirements. The revolving credit facility expires
on 31st August 2024. The overdraft facility is subject to annual review with any amounts borrowed repayable on demand. The Directors have
received conrmation from the bank that they know of no reason why the overdraft facility will not be renewed when it falls due for review.
The Directors have reviewed the Group’s forecasts and projections for the next three year period. The model assumes delivery of the
2022-24 Group Business Plan, and that the banking facilities will remain in place throughout the projection period. The projections
show that the Group will remain protable, with a signicant amount of headroom against covenants and borrowing limits.
Management have also produced sensitivity analysis to assess the Group’s resilience to more adverse outcomes which could arise from
one of the principal risks to the business (discussed on pages 26 to 29), including a scenario whereby revenue and protability remain
at current levels and a severe but plausible scenario whereby protability drops by 50%. Management have also produced an upside
scenario which factors in an additional £100m revenue per annum to consider the impact on working capital requirements. In all
scenarios, including the reasonable worst case, the Group is able to comply with its nancial covenants, operate within its current
facilities, and meet its liabilities as they fall due.
Accordingly, the directors consider there to be no uncertainties that may cast signicant doubt on the Group’s ability to continue to
operate as a going concern. They have formed a judgement that there is a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of signing of
these nancial statements. For this reason, they continue to adopt the going concern basis in the preparation of these nancial statements.
Application of New and Revised Standards
The principal accounting policies applied in the preparation of these consolidated nancial statements are set out in note 3 below.
There have been no new standards, amendments to standards or interpretations adopted from 1 January 2021 that had a material
effect. Future standards, amendments to standards, and interpretations not yet effective are noted below. None of these are expected
to have a material impact on the Group.
• Amendments to IAS 1: Presentation of Financial Statements: Classication of Liabilities as Current or Non-current and Amendments
to IAS 1: Classication of Liabilities as Current or Non-current – Deferral of Effective Date – effective 1 January 2023
• Amendments to IFRS 3: Business Combinations – Reference to the Conceptual Framework – effective 1 January 2022
• Amendments to IAS 16: Property, Plant and Equipment – effective 1 January 2022
• Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets – effective 1 January 2022
• Annual Improvemnts to IFRS Standards 2018-2020 Cycle – 1 January 2022
Notes to the Financial Statements
For the year ended 31st December 2021
3 Signicant Accounting Policies
(i) Basis of Consolidation
The consolidated nancial statements incorporate the nancial statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31st December each year. Control is achieved when the Company has power over the investee, is
exposed, or has rights, to variable returns from its involvement with the investee, and has the ability to use its power to affect its returns.
Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from
the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the
nancial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All
intra-Group transactions, balances, income and expenses are eliminated on consolidation.
(ii) Employee Share Ownership Trust (‘ESOT’)
As the Company is deemed to have control of its ESOT, it is included in the consolidated nancial statements. The ESOT’s assets (other
than investments in the Company’s shares), liabilities, income and expenses are included on a line-by-line basis in the consolidated
nancial statements. The ESOT’s investment in the Company’s shares is deducted from equity in the consolidated statement of nancial
position as if they were treasury shares. The Trustee of the ESOT has waived its right to dividends on the shares held in the ESOT.
(iii) Segmental Reporting
Operating divisions are reported in a manner consistent with internal reporting provided to the Board who, representing the ‘Chief
Operating Decision-Maker’ as per IFRS 8, are responsible for allocating resources to, and assessing the performance of, operating
divisions.
(iv) Revenue Recognition
Revenue is recognised in accordance with the ve-step model outlined in IFRS 15:
1.
Identify the contract with the customer.
2.
Identify the performance obligations in the contract.
3.
Determine the transaction price.
4.
Allocate the transaction price to the performance obligations in the contract.
5.
Recognise revenue when or as the entity satises its performance obligations.
Revenue derives largely from two sources: most signicantly, from long-term contracts whereby the Group designs, installs and
integrates mechanical and electrical systems for customers (‘construction contracts’, see (v)); less signicantly, from ongoing
maintenance works on previously installed systems. In both instances, steps one to ve of the revenue recognition process are
determined with reference to the formal contract which exists with the customer. In these contracts, the transaction price, performance
obligations, etc. are readily identiable and distinct.
Revenue from maintenance work is measured as the amount the entity expects to be entitled to in exchange for transferring goods or
services to the customer – this amount is net of discounts and VAT. It is recognised at the point in time the customer obtains control
over the asset associated with the works.
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the
customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction price
for the time value of money.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
74
75
3
Signicant Accounting Policies
continued
(v) Construction Contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised over time by reference to
the stage of completion of the contract activity at the reporting date, measured and based on the proportion of contract costs (prime
costs and overheads) incurred for the work performed to date relative to the estimated total contract costs, except where this would
not be representative of the stage of completion (instances of which are rare).
The earliest point at which prot is taken is that at which the outcome of the contract, based on an assessment by ofcials of the Group,
can be reliably foreseen, taking into account the circumstances of each contract. Variations are included to the extent it is highly
probable that their inclusion will not result in a signicant revenue reversal in the future. Full provision is made for any foreseeable losses
to completion. Whilst the bulk of consideration associated with construction contracts is xed, variable consideration elements can exist
(eg event claims). The Group only recognises revenue for these amounts if they are highly probable not to reverse.
‘Contract assets’ (as discussed in IFRS 15.107) are recognised when the Group performs by transferring goods or services to a customer
before the customer pays consideration or before payment is due. This asset is assessed for impairment in accordance with IFRS 9.
These ‘contract assets’ have been termed ‘Amounts due from customers under construction contracts’ in these nancial statements.
‘Contract liabilities’ (as discussed in IFRS 15.106) are recognised if a customer pays consideration before the entity transfers a good or
service. These have been captioned in these nancial statements as ‘Amounts due to customers under construction contracts’ respectively.
Bid costs are expensed as incurred, unless recoverable from customers.
(vi) Acquisitions and Goodwill
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the aggregate of the fair values at the acquisition date of assets
transferred, liabilities incurred and equity instruments issued, to the former owners by the Group in exchange for control of the
acquiree. Acquisition-related expenses are recognised directly in the income statement.
Purchased goodwill is measured as the excess of the sum of the fair value of the consideration transferred over the net of the acquisition
date fair values of the identiable assets and liabilities acquired, and is capitalised and classied as an intangible asset in the consolidated
statement of nancial position.
The acquiree’s identiable assets, liabilities and contingent liabilities are recognised at their fair values at the acquisition date, except for
non-current assets (or disposal groups) that are classied as held for sale in accordance with IFRS 5 ‘Non-current assets held for sale and
discontinued operations.’
When the consideration transferred by the Group in a business combination includes a contingent consideration arrangement, the
contingent consideration is measured at its acquisition date fair value and included as part of the consideration transferred in a
business combination.
(vii) Impairment of Goodwill and other Non-nancial Assets
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
Impairment tests on goodwill are undertaken annually at the nancial year end. Other non-nancial assets are subject to impairment
tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying
value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written
down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset’s
cash-generating unit (i.e. the lowest group of assets in which the asset belongs for which there are separately identiable cash flows).
For the purposes of impairment testing, goodwill is allocated on initial recognition to each of the Group’s operating segments that are
expected to benet from the synergies of the combination giving rise to the goodwill.
Impairment charges are included in non-underlying costs in the consolidated income statement, except to the extent they reverse gains
previously recognised in the consolidated statement of comprehensive income. An impairment loss recognised for goodwill is not reversed.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
3
Signicant Accounting Policies
continued
(viii) Intangible Assets
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at cost, being
their fair value at the acquisition date. Subsequent to initial recognition, intangible assets are reported at cost less accumulated
amortisation and impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful lives of the relevant
assets, determined on an individual basis and ranging from one to ten years.
(ix) Property, Plant and Equipment
Land and buildings comprise mainly ofces occupied by the operating units of the Group. Land and buildings are shown at fair value,
based on valuations carried out by external independent valuers, less subsequent depreciation. Valuations are performed with sufcient
regularity to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Any accumulated
depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to
the revalued amount of the asset. On disposal of the asset the balance of the revaluation reserve pertaining to the asset is transferred
from the revaluation reserve to retained earnings.
All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benets associated with the item will it flow to the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during
the nancial period in which they are incurred.
Increases in the carrying amount arising on revaluation of land and buildings are credited to other comprehensive income and shown as
revaluation reserves in shareholders’ equity. Decreases that offset previous increases of the same asset are charged in other comprehensive
income and debited against revaluation reserves directly in equity; all other decreases are charged to the income statement.
Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement
and depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings. On disposal of the
asset, the balance of the revaluation reserve pertaining to the asset is transferred from the revaluation reserve to retained earnings.
Depreciation is calculated on a straight-line basis so as to write off the cost less residual values of the relevant assets over their useful
lives, using the following rates:
Freehold properties: 2%
Leasehold improvements: 10% or life of lease if shorter
Plant, machinery and motor vehicles: 10%–33%
Right-of-use assets held under leases are depreciated over their expected useful lives on the same basis as owned assets or, where
shorter, the term of the relevant lease.
(x) Investments
During the preceding year the Group made a minority shareholding equity investment. In accordance with an irrevocable election
made upon initial recognition (as per IFRS 9 5.7.5), the subsequent remeasurement of the fair value of the investment has been charged
to other comprehensive income.
(xi) Inventories
Inventories of raw materials and consumables are initially recognised at cost, and subsequently at the lower of cost and net realisable
value. Cost is determined on a rst-in rst-out basis and comprises all costs of purchase, costs of conversion and other costs incurred in
bringing the asset to its present location and condition.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
76
77
3
Signicant Accounting Policies
continued
(xii) Leasing and Hire Purchase Commitments
As a Lessee
The Group assesses whether a contract is or contains a lease at the start of a contract. The Group recognises a right-of-use asset and a
corresponding lease liability for all lease agreements in which it is the lessee (with the exception of short-term and low value leases as
dened in IFRS 16 which are recognised as an operating expense on a straight-line basis over the term). The lease liability is initially
measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit
in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate. The right-of-use asset recognised initially is the amount of the lease liability, adjusted for any lease payments
and lease incentives made before the commencement date, in accordance with IFRS 16.24.
As a Lessor
Income is recognised on a straight-line basis over the term of the relevant lease.
Short-term and low value leases
Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the
lease term.
(xiii) Financial Instruments
The Group’s nancial instruments comprise trade and other receivables (excluding prepayments), contract trade and other payables
(excluding deferred income and taxation), and cash and cash equivalents net of overdrafts. The Group classies its nancial assets as
loans and receivables and its nancial liabilities as liabilities at amortised cost. The Group does not trade in any nancial derivatives.
Financial assets and liabilities are offset and the net amount reported in the statement of nancial position when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the
liability simultaneously.
Trade and Other Receivables
Trade and other receivables are non-interest bearing and are measured on initial recognition at fair value and subsequently at
amortised cost. On initial recognition, a loss allowance is created which reflects the lifetime expected credit loss on that asset. This loss
allowance is subsequently reassessed at each reporting period date.
Trade and other receivables are presented net of the loss allowance.
Bank Deposits
Bank deposits comprise cash placed on deposit with nancial institutions with an initial maturity of six months or more, and are
measured at amortised cost. Finance income is recognised using the effective interest method and is added to the carrying value of the
asset as it arises.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand, bank overdrafts, demand deposits and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignicant risk of changes in value. Bank
overdrafts are included within current liabilities in the statement of nancial position. Finance income and expense are recognised using
the effective interest method and are added to the carrying value of the asset or liability as they arise.
Bank Loans
Interest-bearing bank loans are recorded at the fair value of the proceeds received, net of direct issue costs. Finance charges are
accounted for on an accruals basis in the income statement using the effective interest method, and are added to the carrying value of
the instrument to the extent that they are not settled in the period in which they arise.
Trade and Other Payables
Trade and other payables are initially measured at fair value and subsequently at amortised cost. Trade and other payables are
non-interest bearing.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
3
Signicant Accounting Policies
continued
(xiv) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Tax is recognised in the income statement except to the extent that it relates to items recognised in other comprehensive income.
The tax currently payable is based on taxable prot for the period. Taxable prot differs from net prot as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
nancial statements and the corresponding tax bases used in the computation of taxable prot and is accounted for using the liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable prots will be available against which deductible temporary differences can be utilised.
The amount of any deferred tax asset or liability recognised is determined using tax rates that have been enacted or substantively
enacted by the reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered.
Deferred tax assets and liabilities are offset as the Group has a legally enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied on either the same company, or on different companies, where there is an
intention to settle current tax assets and liabilities on a net basis.
(xv) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over
the period of the borrowings using the effective interest method.
(xvi) Borrowing Costs / Interest Income
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the loan is drawn down. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it relates.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.
(xvii) Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, these are
recognised when they are paid. In the case of nal dividends, these are recognised when approved by the shareholders at the AGM.
(xviii) Retirement Benet Costs
Payments to dened contribution retirement benet schemes are charged as an expense as they fall due.
The retirement benet obligation represents the fair value of the dened benet obligation at each reporting date as reduced by the
fair value of scheme assets. For dened benet retirement benet schemes, the cost of providing benets is determined using the
Projected Unit Credit Method, with actuarial valuations being carried out at each reporting date. Actuarial gains and losses are
recognised in full in the period in which they occur. They are recognised outside the income statement and presented as a component
of other comprehensive income.
The current service cost of dened benet retirement benet schemes is recognised in ‘employee benet expense’ in the income
statement, except where included in the cost of an asset, and reflects the increase in the dened benet obligation resulting from service
in the current year, benet changes, curtailments and settlements. Past service cost is recognised immediately in the income statement.
(xix) Long-term Employee Benets
Long-term employee benets are accrued when the Group has a legal or constructive obligation to make payments under long-term
employee benet arrangements and the amount of the obligation can be reliably measured. The liability is discounted to present value
where it is due after more than one year.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
78
79
3
Signicant Accounting Policies
continued
(xx) Share-based Payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity
instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set
out in note 18.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the
period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the
end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the
revision of the original estimates, if any, is recognised in prot or loss such that the cumulative expense reflects the revised estimate
with a corresponding adjustment to equity.
(xxi) Non-underlying Items
Non-underlying items are items of nancial performance which the Group believes should be separately identied on the face of the
income statement to assist in understanding the underlying nancial performance achieved by the Group, such as the costs associated
with a major programme of restructuring. This also includes items that are irregular in nature, and also the amortisation of acquired
intangibles, which principally relates to acquired customer relationships. The Group incurs costs, which are recognised as an expense in
the income statement, in maintaining these customer relationships. The Group considers that the exclusion of the amortisation charge
on acquired intangible from underlying performance avoids the potential double counting of such costs.
4 Signicant Judgements and Sources of Estimation Uncertainty
In the application of the Group’s accounting policies, which are described above, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities at the reporting date and the amounts of revenue and
expenses incurred during the period that may not be readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
The estimates and assumptions that have the most signicant impact are set out below.
Revenue and Margin
The recognition of revenue and prot on construction contracts is a key source of estimation uncertainty due to the difculty of
forecasting the nal costs to be incurred on a contract in progress and the process whereby applications are made during the course of
the contract with variations, which can be signicant, often being agreed as part of the nal account negotiation.
The Group’s policies for the recognition of revenue and prot on construction contracts are set out in note 3(v). Commercial reviews of
all live contracts are undertaken on a regular basis, with all signicant contracts being reviewed on a monthly basis. The Directors also
take into account the recoverability of contract balances and trade receivables, and allowances are made for those balances which are
considered to be impaired. The Group only recognises revenue once there is a formal contractual entitlement and the recognition
criteria of IFRS 15 have been met.
As at 31 December 2021 the Group had approximately £25m (2020: £15m) of formally instructed, unagreed variations, of which £15m
(2020: £9m) satisfy the highly probable test under IFRS 15 and as such have been taken to revenue.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
4 Signicant Judgements and Sources of Estimation Uncertainty
continued
Retirement Benet Obligations
The costs, assets and liabilities of the dened benet scheme operated by the Group are determined using methods relying on
actuarial estimates and assumptions, which are largely dependent on factors outside the control of the Group. Details of the key
assumptions are set out in note 22, and include the discount rate, expected return on assets, rate of inflation and mortality rates. The
Group takes advice from independent actuaries relating to the appropriateness of the assumptions. Changes in the assumptions used
may have a signicant effect on the income statement, statement of comprehensive income and the statement of nancial position.
A sensitivity analysis is included in note 22.
5 Segment Information
(i) Reportable Segments
The Group provides mechanical and electrical contracting and related services to the construction industry and end users.
For management and internal reporting purposes, the Group is organised geographically into three regional divisions: London, UK
South and UK North, reporting to the Board who represent the ‘chief operating decision-maker’ as per IFRS 8. The measurement basis
used to assess the performance of the divisions is underlying operating prot, stated before amortisation of intangible assets and other
non-underlying items.
All transactions between segments are undertaken on normal commercial terms. All the Group’s operations are carried out within the
United Kingdom, and there is no signicant difference between revenue based on the location of assets and revenue based on the
location of customers. The accounting policies for the reportable segments are the same as the Group’s accounting policies disclosed
in note 3. Segmental information is based on internal management reporting.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
80
81
5
Segment Information
continued
(ii) Segment Information and Revenue Analysis – Current Year
London
£m
UK South
£m
UK North
£m
Group costs
and
Unallocated
£m
Total
£m
Revenue from contracts with customers
189.4 67.1 70.6
–
327.1
Operating prot
6.2 2.6 3.0 (3.0) 8.8
Finance costs
– – –
(1.0) (1.0)
Prot before tax
6.2 2.6 3.0 (4.0) 7.8
Taxation expense
– – –
(1.5) (1.5)
Prot for the year
6.2 2.6 3.0 (5.5) 6.3
London
£m
UK South
£m
UK North
£m
Total
£m
Business sector
Facilities Management
2.7 13.6 9.7 26.0
Infrastructure
15.1 34.4 29.3 78.8
Engineering Services
91.7 14.3 10.9 116.9
Residential & Hotels
31.5 4.8 19.6 55.9
Technologies
48.4
–
1.1 49.5
Total revenue
189.4 67.1 70.6 327.1
(iii) Segment Information and Revenue Analysis – Prior Year
London
£m
UK South
£m
UK North
£m
Group costs
and
Unallocated
£m
Total
£m
Revenue from contracts with customers
134.6 55.1 42.2
–
231.9
Underlying operating prot
4.9 2.7 0.7 (2.3) 6.0
Restructuring costs – – –
(3.7) (3.7)
Amortisation of intangibles – –
(0.2)
–(0.2)
Operating prot
4.9 2.7 0.5 (6.0) 2.1
Finance costs – – –
(0.9) (0.9)
Prot before tax
4.9 2.7 0.5 (6.9) 1.2
Taxation expense – – – – –
Prot for the year
4.9 2.7 0.5 (6.9) 1.2
London
£m
UK South
£m
UK North
£m
Total
£m
Business sector
Facilities Management and Frameworks
2.4 9.7 5.7 17.8
Infrastructure
20.6 22.1 16.2 58.9
Engineering Services
59.4 15.7 6.5 81.6
Residential & Hotels
21.7 7.6 12.8 42.1
Technologies
30.5
–1.0 31.5
Total revenue
134.6 55.1 42.2 231.9
Notes to the Financial Statements
continued
For the year ended 31st December 2021
5
Segment Information
continued
Revenue is wholly attributable to the principal activity of the Group and arises solely within the United Kingdom.
Revenue recognised in the year that was included in the contract liability balance at the beginning of the year was £1.1m
(2020: £0.1m).
At the end of the year, the aggregate amount of transaction price allocated to performance obligations that are unsatised (or partially
unsatised) was £453.8m (2020: £271.8m). These will be recognised as revenue in accordance with the satisfaction of the performance
obligations.
2021 revenue includes £34.3m and £34.2m which arose from sales to single customers. No other single customer
contributed 10% or more of the Group’s revenue for either 2021 or 2020.
In the current year, the incremental costs of obtaining a contract with a customer which has been recognised as an asset is £nil
(2020: £nil).
In the current year, the costs to full a contract with a customer which has been recognised as an asset is £nil (2020: £nil).
Of the £327.1m revenue recognised in 2021 (2020: £231.9m), £299.2m was recognised over time (2020: £218.4m) and £27.9m was
recognised at a point in time (2020: £13.5m).
6
Finance Costs
2021
£m
2020
£m
Finance costs
Interest on lease liabilities
0.1
0.1
Interest on bank overdrafts and loans
0.5
0.3
Interest cost in respect of dened benet pension schemes
0.4
0.5
Total
1.0
0.9
7
Operating Prot
Operating Prot is Stated After Charging
2021
£m
2020
£m
Amortisation of intangible assets
–
0.2
Depreciation of property, plant and equipment
2.0
2.2
Project-related raw materials and consumables recognised as an expense
81.0
56.0
Fees payable to the Company’s auditors for the audit of:
0.3
0.2
0.1
0.1
Employee benet expense (see note 8)
76.3
72.0
Apart from a nominal fee for access to online technical resources, no non-audit services were provided by the Company’s auditors
during the year (2020: none).
Non-underlying items in the prior year included £0.2m amortisation of intangible assets relating to acquired customer
relationships, and the £3.7m cost of a restructuring programme, principally comprising redundancy costs.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
82
83
8
Employee Benet Expense
(i) Employee Benet Expense
2021
£m
2020
£m
Staff costs during the year were as follows:
Wages and salaries
65.7
63.0
Share awards and options granted to Directors and Employees (see note 18)
0.8
0.4
Social security costs
6.5
6.4
Other Pension costs
3.3
2.2
Total employee benet expense
76.3
72.0
Included within staff costs is £0.4m of furlough grant income from the Government’s Job Retention Scheme (2020: £6.9m).
£3.1m of the prior year employee benet expense was included within non-underlying items (2021: £nil).
Details of Director remuneration are included in the Annual Report on Remuneration on pages 49 to 56.
(ii) Monthly Average Number of Employees
Group
2021
Number
2020
Number
Staff (including Directors)
450
425
Operatives
754
869
Total
1,204
1,294
Notes to the Financial Statements
continued
For the year ended 31st December 2021
9
Taxation
2021
£m
2020
£m
Current tax expense
UK corporation tax payable on prot for the year
1.5
–
Adjustment in relation to prior years
(0.2)
(0.3)
Deferred tax expense
Arising on:
Origination and reversal of timing differences
0.2
0.3
Total income tax expense
1.5
–
Reconciliation of tax charge
Prot before tax for the year
7.8
1.2
Tax at standard UK tax rate of 19% (2020: 19%)
1.5
0.2
Tax effect of:
Adjustment in relation to prior years
(0.2)
(0.3)
Permanently disallowed items
0.2
0.1
Total income tax expense
1.5
–
2021
£m
2020
£m
Deferred tax credited to other comprehensive income
(0.4)
(1.7)
10
Earnings Per Share
(i) Basic Earnings Per Share
Basic earnings per share is calculated by dividing the prot attributable to owners of the Company by the weighted average number of
Ordinary shares in issue during the year.
2021
£m
2020
£m
Earnings:
Prot attributable to owners of the Company
6.3
1.2
Weighted average number of Ordinary shares in issue (000s)
42,284
42,295
Basic earnings per share
14.99p
2.87p
(ii) Diluted Earnings Per Share
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary shares outstanding to assume
conversion of all dilutive potential Ordinary shares. The Company has two categories of dilutive potential Ordinary shares: share
options granted under the Save As You Earn Schemes and conditional share awards and options granted under the Long-term
Incentive Plan. Further details of these schemes are given in note 18.
For the share options, a calculation is made to determine the number of shares that could have been acquired at fair value (determined
as the average annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to
outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been
issued assuming the exercise of the share options.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
84
85
10
Earnings Per Share
continued
2021
£m
2020
£m
Earnings:
Prot attributable to owners of the Company
6.3
1.2
Weighted average number of Ordinary shares in issue (000s)
42,284
42,295
Adjustments:
Savings Related Share Option Schemes
471
295
Equity Incentive Plan:
Conditional share awards
2,790
2,453
Weighted average number of Ordinary shares for diluted earnings per share (000s)
45,545
45,043
Diluted earnings per share
13.91p
2.69p
(iii) Underlying Earnings Per Share
Underlying earnings per share represents prot for the year adjusted for amortisation of intangible assets and other non-underlying
items and the tax effect of these items, divided by the weighted average number of shares in issue. Underlying earnings is the basis on
which the performance of the operating divisions of the business is measured. There have been no underlying items in 2021 and
therefore underlying and reported numbers are the same for 2021.
2021
£m
2020
£m
Prot attributable to owners of the Company
6.3
1.2
Adjustments:
Amortisation of intangible assets
–
0.1
Restructuring costs
–
3.0
Underlying earnings
6.3
4.3
Weighted average number of Ordinary shares in issue (000s)
42,284
42,295
Adjustments:
Savings Related Share Option Schemes
471
295
Equity Incentive Plan:
Conditional Share Awards
2,790
2,453
Weighted average number of Ordinary shares for diluted earnings per share (000s)
45,545
45,043
Diluted underlying earnings per share
13.91p
9.66p
Basic underlying earnings per share
14.99p
10.29p
Notes to the Financial Statements
continued
For the year ended 31st December 2021
11
Intangible assets
Goodwill
£m
Other
intangible
assets
£m
Total
£m
Cost
At 1st January 2020, 31st December 2020 and 31st December 2021
27.5 2.9 30.4
Accumulated impairment and amortisation
At 1st January 2020
(2.2) (2.7) (4.9)
Charge for the year –
(0.2) (0.2)
At 31st December 2020
(2.2) (2.9) (5.1)
Charge for the year – – –
At 31st December 2021
(2.2) (2.9) (5.1)
Net book value
At 1st January 2020
25.3 0.2 25.5
At 31st December 2020
25.3
–25.3
At 31st December 2021
25.3
–
25.3
Goodwill relates to the purchase of subsidiary undertakings. Goodwill is not amortised but is tested for impairment in accordance with
IAS 36 ‘Impairment of assets’ at least annually or more frequently if events or changes in circumstances indicate a potential impairment.
Other intangible assets comprise customer relationships arising on acquisitions. Amortisation of other intangible assets is included in
administrative expenses in the income statement.
Goodwill is allocated to operating segments as follows:
Operating segment
£m
London
11.3
UK South
6.1
UK North
7.9
Total
25.3
Value in use
The carrying value of goodwill has been compared to its recoverable amount based on the value in use of the operating segment to
which the goodwill has been allocated, being the smallest identiable group of assets that generates cash inflows that are largely
independent of the cash inflows from other groups of assets.
Value in use has been calculated using budgets and forecasts approved by the Board covering the period 2022 to 2024, which take
into account secured orders, business plans and management actions. The results of the period subsequent to 2024 have been
projected using 2024 forecasts with 2% growth assumed. The extrapolated cash flow projections have been discounted using a pre-tax
discount rate derived from the Group’s cost of capital.
2021
and 2020
Financial Statements
TClarke
Annual Report and Financial Statements 2021
86
87
11
Intangible Assets
continued
Assumptions
The key assumptions, to which the assessment of the recoverable amounts of operating segments is sensitive, are the projected
revenue and operating margin to 2024 and beyond, and the discount rate applied. The range of these assumptions applied to the
operating segments is as follows:
2021
2020
Pre-tax discount rate
10.3%
9.0%
Average annual revenue growth (2021–2024) (2020: 2020–2023)
London
15.1%
19.2%
UK South
18.0%
8.6%
UK North
15.9%
20.3%
Operating margins (2022–2024) (2020: 2021–2023)
London
3.7% - 4.0%
3.9% - 4.0%
UK South
3.7% - 4.0%
3.7% - 4.0%
UK North
3.7% - 4.0%
3.5% - 4.0%
Operating margins exclude any allocation of Group costs.
Sensitivities
For each operating segment, management has considered the level of headroom resulting from the impairment tests, and performed
further sensitivity analysis by changing the base case assumptions applicable to each operating segment. The sensitivities tested
related to changes in protability and discount rate, including consideration of how many times the value in use of a particular
operating segment exceeded its carrying value. This analysis has indicated that no reasonably possible changes in any individual key
assumption would cause the carrying amount of the operating segment to exceed its recoverable amount.
At 31st December 2021, based on these valuations, no increase in the impairment provision was required against the carrying value
of goodwill (2020: £nil).
An assessment of the subsidiary investments using consistent methodology amended for pre-tax cash flows indicates that there is no
requirement for any additional impairment provision.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
12
Property, Plant and Equipment
Group
Properties
£m
Leasehold
improvements
£m
Plant,
machinery
and vehicles
£m
Total
£m
Cost or valuation
At 1st January 2020
5.4 2.7 6.3 14.4
Additions
0.3 0.2 0.7 1.2
At 31st December 2020
5.7 2.9 7.0 15.6
Additions –
0.1 1.4 1.5
Disposals – –
(0.1) (0.1)
Transfer from depreciation on revaluation –
(0.2)
–(0.2)
Revaluation –
0.1
–0.1
At 31st December 2021
5.6 3.0 8.3 16.9
Accumulated depreciation and impairment
At 1st January 2020
(0.6) (1.7) (3.1) (5.4)
Charge for the year
(0.5) (0.5) (1.2) (2.2)
At 31st December 2020
(1.1) (2.2) (4.3) (7.6)
Charge for the year
(0.4) (0.2) (1.4) (2.0)
Transfer to cost on revaluation –
0.2
–0.2
At 31st December 2021
(1.3) (2.4) (5.7) (9.4)
Net book value
At 1st January 2020
4.8 1.0 3.2 9.0
At 31st December 2020
4.6 0.7 2.7 8.0
At 31st December 2021
4.3 0.6 2.6 7.5
The net book values shown above at 31st December 2021 reflect the following right-of-use assets: Properties £1.4m (2020: £1.6m) and
Plant, machinery and vehicles £2.1m (2020: £1.7m). Additions in the year for right-of-use assets were £nil for Properties (2020: £0.3m)
and £1.4m for Plant, machinery and vehicles (2020: £0.6m). The depreciation charge for right-of-use assets was £0.4m for Properties
(2020: £0.5m) and £0.9m for Plant, machinery and vehicles (2020: £1.2m).
The Group’s freehold land and buildings were last valued at 31 December 2021 based on an external valuation provided by an
independent valuer. The external valuation was conducted on the basis of market value as dened by the RICS Valuation Standards,
and was determined by reference to recent market transactions on arm’s length terms. The net book value of the freehold properties
on a historical cost basis would have been £3.6m (2020: 3.7m).
The Group has granted a charge in favour of the TClarke Group Retirement and Death Benets Scheme over a number of properties
occupied by the Group up to a maximum value of £3.1m, to secure the future pension obligations of the scheme. The book and fair
value of the properties at 31st December 2021 was £3.1m (2020: £3.0m).
Financial Statements
TClarke
Annual Report and Financial Statements 2021
88
89
13
Deferred Taxation
Group
Revaluations
£m
Retirement
benet
obligation
£m
Other
£m
Total
£m
(Liability)/asset at 1st January 2020
(0.1) 4.7 0.2 4.8
Charged to income –
(0.3)
–(0.3)
Credited to other comprehensive income
–
1.7
–
1.7
(Liability)/asset at 31st December 2020
(0.1) 6.1 0.2 6.2
Charged to income
–
(0.2)
–(0.2)
Credited to other comprehensive income
–
0.4
–0.4
(Liability)/asset at 31st December 2021
(0.1) 6.3 0.2 6.4
The amount of deferred tax recoverable within one year is insignicant. The deferred tax asset arises in respect of the decit on
the retirement benet obligation. A decit reduction plan is in place to reduce this decit over a number of years (see note 22).
The deferred tax asset will be recovered over time as the decit is reduced. There were £0.4m unrecognised deferred tax assets at
31 December 2021 (2020: £0.4m).
The net deferred tax asset reported on the Statement of Financial Position can be analysed as follows:
2021
£m
2020
£m
Deferred tax liabilities
(0.1)
(0.1)
Deferred tax assets
6.5
6.3
Total
6.4
6.2
The main rate of UK corporation for the period is currently 19%. The Finance Act 2021 was substantively enacted in May 2021 and has
increased the corporation tax rate to from 19% to 25% with effect from 1 April 2023. The deferred taxation balances have been
measured using the rates expected to apply in the reporting periods when the timing differences reverse.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
14 Inventories
2021
£m
2020
£m
Raw materials and consumables, net of provision (2020: £nil)
0.4
0.4
15
Construction Contracts
2021
£m
2020
£m
Contract work in progress comprises:
Contract costs incurred plus recognised prots less recognised losses to date
309.5
285.2
Less: progress payments
(260.7)
(244.6)
Total
48.8
40.6
Contracts in progress at the reporting date
Gross amounts due from customers
51.7
41.7
Gross amounts due to customers
(2.9)
(1.1)
Total
48.8
40.6
At 31st December 2021, retentions held by customers of the Group for contract work amounted to £19.5m (2020: £19.1m).
These amounts are included in trade receivables (see note 16).
Advances received from customers for contract work amounted to £2.9m (2020: £1.1m).
Contract balance movements from the prior year closing position were due to events in the normal course of business.
Contract amounts are shown net of impairment of £nil (2020: £nil).
Financial Statements
TClarke
Annual Report and Financial Statements 2021
90
91
16
Trade and Other Receivables
Group
2021
£m
2020
£m
Trade receivables – gross
35.3
15.3
Trade receivables – allowances for credit losses
(0.2)
(0.4)
Net trade receivables
35.1
14.9
Other receivables (including retentions)
21.4
20.8
Prepayments
0.9
2.4
Total
57.4
38.1
Movements in allowances for credit losses
At 1st January
(0.4)
(0.8)
Written off in year
0.2
0.4
At 31st December
(0.2)
(0.4)
Net trade receivables are due as follows
Due within 3 months
32.1
11.1
Due in 3 to 6 months
–
0.1
Due in 6 to 12 months
–
–Due after more than one year
–
–Overdue
3.0
3.7
Total
35.1
14.9
The ageing of trade receivables past due but not impaired is as follows
30 days or less
2.4
2.7
31–60 days
0.6
1.0
60–90 days
–
–Greater than 90 days
–
–
Total
3.0
3.7
The expected credit losses on trade receivables are estimated based on past default experience of the debtor and an analysis of the
debtor’s current nancial position adjusted for factors that are specic to the debtors such as the ageing of the debt.
Group
2021
£m
2020
£m
Trade and other receivables are analysed as follows on the
statement of nancial position:
Current assets
52.5
34.5
Non-current assets
4.9
3.6
Total
57.4
38.1
Notes to the Financial Statements
continued
For the year ended 31st December 2021
17
Trade and Other Payables
Group
2021
£m
2020
£m
Current
Trade payables (including retentions)
47.9
44.1
Other taxation and social security
3.9
8.1
Accruals
43.8
24.2
Other payables
0.7
1.1
Total
96.3
77.5
Non-current
Trade payables (including retentions)
1.7
2.6
Total
1.7
2.6
Trade payables payment terms are as follows:
30 days or less
23.4
27.2
31 to 60 days
22.7
18.7
Greater than 60 days
3.5
0.8
Total
49.6
46.7
18
Capital and Reserves
(i) Components of Owners’ Equity
The nature and purpose of the components of owners’ equity are as follows:
Component of owners’ equity
Description and purpose
Share capital Amount subscribed for share capital at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value, net of allowable
expenses.
Revaluation reserve Cumulative gains recognised on revaluation of land and buildings above
depreciated cost.
Retained earnings Cumulative net gains and losses recognised in the income statement and the
statement of comprehensive income.
Retained earnings include shares in TClarke plc purchased in the market and held by the TClarke Employee Share Ownership Trust
(’the Trust’) to satisfy options under the Company’s Share incentive schemes. The number of shares held by the trust at 31 December
2021 was 1,068,637 (2020: 695,795) with a cost of £1.2m (2020: £0.7m). All of the shares held by the Trust were unallocated at the
year-end and dividends on these shares have been waived. Based on the Company’s share price at 31 December 2021 of £1.60
(2020: £0.98), the market value of the shares was £1.7m (2020: £0.7m).
The cost of shares held in the Trust has moved as follows:
2021
£m
2020
£m
Opening cost of shares
0.7
0.8
Cost of shares purchased by Trust
0.8
–Cost of shares disposed of by Trust
(0.3)
(0.1)
Closing cost of shares
1.2
0.7
Financial Statements
TClarke
Annual Report and Financial Statements 2021
92
93
18
Capital and Reserves
continued
(ii) Share Capital and Premium
Allotted, called up and fully paid (nominal value 10p per share)
Number of shares
Share
capital
£m
Share
premium
£m
At 31st December 2021
43,882,861
4.4 4.2
At 31st December 2020
43,052,558
4.3 3.8
All shares rank equally in respect of shareholder rights.
(iii) Save As You Earn Scheme
The following options granted to employees and Directors of the Group under approved Save As You Earn (‘SAYE’) share option
schemes were outstanding at the end of the year:
Number
of options
Grant date
Exercise dateExercise
price
Fair value at
date of grant
TClarke plc Savings Related Share Option
Scheme (‘2018 SAYE Scheme’)
248,036 24/10/2018 01/12/2021
to
31/05/2022
74.88 0.3p
TClarke plc 2021 Sharesave Scheme
(‘2021 SAYE Scheme)
1,337,785 06/10/2021 01/12/2024
to
31/05/2025
124.2 30.1p
In accordance with both sets of scheme rules, all employees of the Group with at least six months’ continuous service were eligible to
participate in the schemes, the only vesting condition being that the individual remains an employee of the Group over the savings
period. The impact of recognising the fair value of employee share option plan grants as an expense under IFRS 2 is £nil for the year
ended 31st December 2021 (2020: £nil). The schemes are open to all eligible employees including the Executive Directors. Under the
rules of the schemes all participating employees have entered into an approved Save As You Earn contract (‘SAYE contract’) under
which the employee agrees to make monthly contributions, of between £10 to £500 for a period of three years, at the end of which the
employee may use part or all of the proceeds to acquire the shares under option. Options will be exercisable within a period of six
months commencing on the date of maturity of the participant’s SAYE contract.
The number of options outstanding during the year were as follows:
2021
Number
2021
Weighted
average
exercise
price (p)
2020
Number
2020
Weighted
average
exercise
price (p)
At 1st January
1,146,971
74.88
1,321,219 74.88
Granted
1,341,031
124.20
– –
Exercised
(800,314)
74.88
(21,736) 74.88
Lapsed
(101,867)
76.45
(152,512) 74.88
At 31st December
1,585,821
116.49
1,146,971 74.88
The weighted average remaining contractual life of the options at 31 December 2021 was 1,076 days (2020: 480 days)
Notes to the Financial Statements
continued
For the year ended 31st December 2021
18
Capital and Reserves
continued
(iv) Long-term Incentive Plan
All employees, including Executive Directors, are eligible to participate in the TClarke Long-term Incentive Plan (‘the Plan’) at the
discretion of the Remuneration Committee. Awards may be made in the form of approved options, unapproved options, conditional
awards of shares and matching awards of shares. Awards may be made in the six-week periods after adoption of the Plan and after the
announcement of the Group’s interim or nal results. No award may be made more than ten years after the date on which the Plan was
last approved by shareholders (5th May 2021). Options and awards of shares are subject to performance conditions as determined by
the Remuneration Committee.
The total number of shares issued pursuant to the Plan, when aggregated with the total number of shares issued pursuant to any other
employee share scheme in the ten years immediately preceding the date upon which an award is made, shall not exceed 10% of the
Company’s issued share capital at the date of the grant. Our practice is to only issue shares for the Save As You Earn Scheme; shares for
the Long-term Incentive Plan are satisied through market purchases.
At 31st December 2021, 2,789,712 conditional share awards were outstanding (2020: 2,575,228 outstanding).
Conditional
shares
Conditional
shares
Conditional
shares
Conditional
shares
Date of grant
24/04/2019 24/04/2019 01/05/2020 28/04/2021
Number of awards
309,952 530,000 1,141,676 808,084
Share price at date of grant
130.00p 130.00p 93.50p 135.50p
Exercise price – – – –
Option life
3 years 3 years 3 years 3 years
The conditional share awards and options will vest subject to continued employment with the Group and satisfaction of the following
performance conditions over a three-year period ending 31st December preceding the earliest vesting date.
For the 2019 and 50% of the 2020 and 2021 awards, the following performance conditions apply:
Annual growth rate in underlying EPS above RPI¹ Proportion of award vesting
Less than 3%
Nil
3% 25%
Between 3% and 10% Between 25% and 100% on a straight-line basis
Above 10% 100%
1 The base point is based on average underlying EPS for the three years ending with the year preceding the date of grant.
The remaining 50% of the 2020 award performance conditions relate to the actions taken by the Executive Directors to enable TClarke
to increase retained reserves for the year ended 31 December 2020 (excluding any impact from Pension Decit Movements). The
Remuneration Committee assessed that the performance condition had been met as the 2020 prot after tax was £1.2m. For the
shares to vest the Company must not breach any banking covenants for the remainder of the three year period.
The remaining 50% of the 2021 award performance conditions are as follows
Annual growth rate in underlying EPS above RPI¹ Proportion of award vesting
Less than 20%
Nil
Between 20% and 30% Between nil and 100% on a straight-line basis
Above 30% 100%
1
The base point from which performance is measured is based on average underlying EPS for the three years ended 31st December 2020.
(v) Share-based Payment Expense
The charge to the income statement takes into account the number of shares and options that are expected to vest. The impact of
recognising the fair value of Long-term Incentive Plan grants as an expense under IFRS 2 is a £0.8m charge for the year ended
31 December 2021 (2020: £0.4m charge).
Financial Statements
TClarke
Annual Report and Financial Statements 2021
94
95
18
Capital and Reserves
continued
(vi) Dividends Paid
2021
£m
2020
£m
Final dividend of 3.65p (2020: 3.65p) per Ordinary share paid during the year relating
to the previous year’s results
1.6
1.6
Interim dividend of 0.75p (2020: 0.75p) per Ordinary share paid during the year
0.3
0.3
Total
1.9
1.9
The Directors are proposing a nal dividend of 4.1p (2020: 3.65p) per Ordinary share totalling £1.8m (2020: £1.6m).
This dividend has not been accrued at the reporting date.
19
Notes to the Statement of Cash Flows
(i) Reconciliation of Operating Prot to Net Cash (Outow)/Inow from Operating Activities
Group
2021
£m
2020
£m
Operating prot
8.8
2.1
Depreciation charges
2.0
2.1
Equity-settled share-based payment expense
0.8
0.4
Amortisation of intangible assets
–
0.2
Pension decit reduction contribution
(1.5)
(1.5)
Dened benet pension scheme charge/(credit)
0.4
(1.7)
Operating cash flows before movement in working capital
10.5
1.6
Movement in inventories
–
(0.2)
(Increase)/decrease in contract balances
(8.2)
3.9
(Increase)/decrease in operating trade and other receivables
(18.8)
3.8
Increase/(decrease) in operating trade and other payables
16.4
(4.5)
Cash (used in)/generated from operations
(0.1)
4.6
Corporation tax paid
–
(0.6)
Interest paid
(0.5)
(0.3)
Net cash (used in)/generated from operating activities
(0.6)
3.7
(ii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments that are readily convertible into cash,
less bank overdrafts, and are analysed as follows.
Group
2021
£m
2020
£m
Cash and cash equivalents
20.3
25.2
Notes to the Financial Statements
continued
For the year ended 31st December 2021
20
Bank Overdrafts and Bank Loans
During the year the Group had in place a £10.0m overdraft facility and a £15.0m revolving credit facility (‘RCF’), both with National
Westminster Bank plc, with the level of usage available dependent on covenant compliance. The RCF charges commitment fees at
market rates and drawings bear interest at a margin above SONIA. Interest is charged on the overdraft at 2.00% above base rate. The
RCF includes nancial covenants in respect of interest cover and net leverage ratios which are tested quarterly. The RCF is available
until 31 August 2024 and the overdraft facility is subject to annual review. The Group was compliant with its obligations under the RCF
and the overdraft facility throughout the year.
All operating companies within the Group are included within the overdraft facility, and National Westminster Bank plc has a floating
charge over the assets of the Group.
At both 31st December 2021 and 31st December 2020 the Group had unused overdraft facilities of £10.0m and had drawn down
£15.0m of the RCF. Net cash at 31st December 2021 was £5.3m (2020: £10.2m).
21
Related Party Transactions
(i) Key management personnel
The key management personnel of the Group comprise members of the TClarke plc Board of Directors and the Group Management
Board. The key management personnel compensation is as follows:
2021
£m
2020
£m
Short-term benets
3.3
3.3
Share-based payments
0.6
0.5
Post-employment employee benets
0.1
0.1
Total
4.0
3.9
(ii) Transactions with subsidiary companies
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
96
97
22
Pension Commitments
Dened Contribution Schemes
The Group operates dened contribution pension schemes for all qualifying employees of all its operating companies. The assets of
these schemes are held separately from those of the Group in funds under the control of the trustees.
The total cost charged to income of £2.5m (2020: £1.9m) represents contributions payable to these schemes by the Group at rates
specied in the rules of the separate plans.
Dened Benet Scheme
The Group operates a funded dened benet scheme for qualifying employees. The scheme is registered with HMRC and is
administered by the trustees.
With effect from 1st March 2010, the benet structure was altered from a nal salary scheme with an accrual rate of 1/60th to a Career
Average Revalued Earnings scheme with an accrual rate of 1/80th. No other post-retirement benets are provided. The assets of the
scheme are held separately from those of the participating companies.
The most recent triennial actuarial valuation of the scheme, carried out at 31st December 2018 by R Williams, Fellow of the Institute of
Actuaries, showed a decit of £24.9m, which represented a funding level of 59%. The valuation was impacted by the signicant fall in
bond yields over the period leading up to the date of the valuation and a change in mortality assumptions, caused by macro-economic
factors beyond the Group’s control. Following agreement of the valuation, the decit reductions contributions of £1.5m per annum will
continue. The Group continues to provide security in the form of a charge over the Group’s property portfolio up to a combined value
of £3.1m.
From 1st April 2020, the service contribution increased from 21.4% to 22.4% of pensionable payroll (including employee contributions,
which, increased from 10% to 12% of pensionable payroll).
As part of a Group reorganisation, a subsidiary company, TClarke Services Limited, became the principal employer of the scheme with
effect from 23rd December 2016, and the pension scheme liability and related deferred tax asset were transferred to TClarke Services
Limited at that date. The Company and its subsidiary, TClarke Contracting Limited, have provided a guarantee to the trustees of the
scheme in respect of TClarke Services Limited’s obligations to the pension scheme.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
22
Pension Commitments
continued
The key assumptions used to value the pension scheme liability in the nancial statements are set out below:
2021
%
2020
%
Rate of increase in salaries
3.39
2.60
Rate of increase of pensions in payment
3.15
3.00
Discount rate
1.89
1.40
Inflation assumption (RPI)
3.25
2.90
The mortality assumptions used in the IAS 19 valuation were:
2021
Years
2020
Years
Life expectancy at age 65 for current pensioners
21.5
21.8
– Women
23.4
24.1
Life expectancy at age 65 for future pensioners (current age 45)
22.5
22.8
– Women
24.6
25.2
The amounts recognised in the consolidated statement of nancial position are as follows:
2021
£m
2020
£m
Present value of funded obligations
73.4
76.3
Fair value of plan assets
(49.5)
(46.1)
Decit of funded plans
23.9
30.2
Financial Statements
TClarke
Annual Report and Financial Statements 2021
98
99
22
Pension Commitments
continued
The movement in the dened benet obligation is as follows:
Present value
of obligation
£m
Fair value of
plan assets
£m
Total
£m
At 1st January 2020
70.7 (44.3) 26.4
Current service cost
0.9
–0.9
Settlements
0.4
–0.4
Interest expense/(income)
1.4 (0.9) 0.5
Total
2.7 (0.9) 1.8
Remeasurements
Return on plan assets, excluding amounts included in interest expense –
(4.7) (4.7)
Change in demographic assumptions
0.3
–0.3
Loss from change in nancial assumptions
9.3
–
9.3
Experience loss
1.6
–1.6
Total
11.2 (4.7) 6.5
Contributions
Employers –
(4.5) (4.5)
Employees
0.5 (0.5)
–Payment from plans
Benet payments
(8.8) 8.8
–
At 31st December 2020
76.3 (46.1) 30.2
Current service cost
0.7
–
0.7
Interest expense/(income)
1.1 (0.7) 0.4
Total
1.8 (0.7) 1.1
Remeasurements
Return on plan assets, excluding amounts included in interest expense
–
(1.8) (1.8)
Change in demographic assumptions
(1.2)
–
(1.2)
Gain from change in nancial assumptions
(4.8)
–
(4.8)
Experience loss
2.2
–
2.2
Total
(3.8) (1.8) (5.6)
Contributions
Employers
–
(1.8) (1.8)
Employees
0.5 (0.5)
–
Payment from plans
Benet payments
(1.4) 1.4
–
At 31st December 2021
73.4 (49.5) 23.9
Current service cost and settlements are included in administrative expenses.
Interest expense is included in nance costs.
Remeasurement gains and losses have been included in other comprehensive income/expense.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
22
Pension Commitments
continued
Plan assets are held in professionally managed multi-asset funds, cash and bank accounts managed by the trustees, and an insurance
annuity contract. Plan assets are comprised as follows:
2021
2020
£m
Quoted
£m
Unquoted
£m
Total
%
£m
Quoted
£m
Unquoted
£m
Total
%
Equities
31.2
–
31.2
63%
11.1
–11.1
24%
Fixed interest corporate
bonds
1.2
–
1.2
4.1
–4.1
Government bonds
13.2
–
13.2
21.3
–
21.3
Total bonds
14.4
–
14.4
29%
25.4
–25.4
55%
Property
0.8
–
0.8
2%
0.6
–0.6
1%
Cash
–
1.3 1.3
2%
3.0 0.3 3.3
7%
Insurance annuity
contracts
–
–1.8 1.8
4%
1.8 1.8
4%
Other
– – – –
–3.9 3.9
9%
Total
46.4 3.1 49.5
100%
40.1 6.0 46.1
100%
Of the above assets £48.7m are denominated in Sterling and £0.8m in overseas currencies.
Through the dened benet pension scheme the Group is exposed to a number of risks, the most signicant of which are set out below.
Asset Volatility
The objective of the investment strategy is to have sufcient assets to pay benets to members as they fall due. The scheme assets are
invested in a diversied portfolio of growth assets (such as multi-asset funds and equities) and matching assets (such as bonds held in
multi-asset funds and cash). Multi-asset funds include property investments. In addition, the scheme holds a number of annuity policies
which are used to back a number of pensions in payment, reducing the volatility of the results.
The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If plan assets underperform this
yield, this will create a decit. A proportion of scheme assets are held in equities, which are expected to outperform bond yields in the
long term while providing volatility and risk in the short term.
The Group believes that due to the long-term nature of scheme liabilities and the strength of the Group, it is appropriate to continue
to hold a proportion of the assets in equities.
Change in Corporate Bond Yields
A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the
scheme’s bond holdings.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
100
101
22
Pension Commitments
continued
Ination Risk
Some of the pension obligations are linked to inflation, and higher inflation will lead to higher liabilities. Caps are in place for
inflationary increases which protect the scheme against the impact of extreme inflation. The majority of the plan’s assets are largely
unaffected by inflation, meaning that any increase in inflation will also increase the decit.
Life Expectancy
Pension obligations are payable for the life of the member, and where elected by the member, the member’s spouse.
Increases in life expectancy will result in increases in scheme liabilities.
Age Prole
The weighted average duration of the unsecured liabilities is approximately 22 years.
The sensitivity of the dened benet obligation to changes in the weighted principal assumptions is:
Impact on dened benet obligation
Change in assumption Increase in assumption Decrease in assumption
Discount rate
0.5% Decrease by 10% Increase by 12%
Inflation assumption
0.5% Increase by 6% Decrease by 6%
Rate of increase in salaries
0.5% Increase by 1% Decrease by 1%
Rate of increase in pension payments
0.5% Increase by 5% Decrease by 5%
Life expectancy
1 year
Increase by 4% Decrease by 4%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the dened benet
obligation to signicant actuarial assumptions, the same method (present value of the dened benet obligation calculated with the
projected unit credit method at the end of the year) has been applied as when calculating the pension liability recognised within the
statement of nancial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.
23
Obligations Under Leases
In addition to the recognition of right-of-use-assets in note 12 the impact of the Group’s lease arrangements on the nancial statements
is shown below.
31st December 2021
Properties
£m
Leasehold
improvements
£m
Plant,
machinery
and vehicles
£m
Total
£m
Lease liability
1.3
–1.6
2.9
Total value of lease payments
0.4
–1.1
1.5
Total payments for short-term and low value leases –
0.4
–0.4
Interest expense –
0.1
–0.1
31st December 2020
Properties
£m
Leasehold
improvements
£m
Plant,
machinery
and vehicles
£m
Total
£m
Lease liability
1.7
–1.8
3.5
Total value of lease payments
0.4
–1.2
1.6
Total payments for short-term and low value leases –
0.4
–0.4
Interest expense –
0.1
–0.1
Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight line basis over the
lease term.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
24
Contingent Liabilities
Group banking facilities of £25.0m and surety bond facilities of £50.1m are supported by cross guarantees given by the Company and
participating companies in the Group. There are contingent liabilities in respect of surety bond facilities, guarantees and collateral
warranties under contracting and other arrangements entered into in the normal course of business.
Group’s Dened Benet Pension
As part of a Group reorganisation, a subsidiary company, TClarke Services Limited, became the principal employer of the scheme with
effect from 23rd December 2016, and the pension scheme liability and related deferred tax asset were transferred to TClarke Services
Limited at that date. The Company and its subsidiary, TClarke Contracting Limited, have provided a guarantee to the trustees of the
scheme in respect of TClarke Services Limited’s obligations to the pension scheme.
25
Financial Instruments
(i) Capital Risk Management
The Group manages its capital to ensure that each entity within the Group will be able to: continue as a going concern; to maintain a
strong nancial position to support business development, tender qualication and procurement activities; and to maximise the overall
return to shareholders over time. Dividends form an important part of the overall return to shareholders. The Group is mindful of the
need to ensure that the dividend is covered by earnings over the business cycle and paid out of cash reserves in order to secure the
long-term interests of shareholders. The Board considers that it has sufcient capital to undertake its activities for the foreseeable
future. The Group’s overall capital strategy remains unchanged from 2016.
The capital structure of the Group consists of net funds, including cash and cash equivalents, bank loans and overdrafts and lease
obligations, and equity attributable to equity holders of the Parent Company, comprising issued capital, reserves and retained earnings.
The Group does not use derivative nancial instruments.
The capital structure of the Group at 31st December 2021 and 2020 was as follows:
2021
£m
2020
£m
Cash and cash equivalents
20.3
25.2
Less borrowings
(15.0)
(15.0)
Net cash
5.3
10.2
Obligations under leases
2.9
3.5
Total equity
26.5
15.7
(ii) Financial Assets and Liabilities
Details of the signicant accounting policies and methods adopted, including the criteria for recognition, the bases of measurement
and the bases on which income and expenses are recognised in respect of each class of nancial asset, nancial liability and equity
instrument are disclosed in note 3. The fair value of the Group’s and the Company’s nancial assets and nancial liabilities is not
materially different to the carrying value. All nancial assets and liabilities are level 3 by denition (ie inputs are not based on observable
market data).
Financial Statements
TClarke
Annual Report and Financial Statements 2021
102
103
25
Financial Instruments
continued
Financial Assets
The Group’s nancial assets comprise trade and other receivables held at amortised cost, and cash and cash equivalents as follows:
31st December 2021
Cash and cash
equivalents
£m
Trade and other
receivables
1
£m
Total
£m
Carrying value
20.3 56.5 76.8
Contractual cash ows
Less than one year
20.3 51.6 71.9
One to two years
–
4.1 4.1
Two to three years
–
0.7 0.7
More than three years
–
0.1 0.1
Total
20.3 56.5 76.8
31st December 2020
Carrying value
25.2 35.7 60.9
Contractual cash ows
Less than one year
25.2 32.1 57.3
One to two years –
2.8 2.8
Two to three years –
0.6 0.6
More than three years
–
0.2 0.2
Total
25.2 35.7 60.9
1 Trade and other receivables excludes prepayments.
The nancial assets and nancial liabilities notes have been represented to remove amounts due from/to customers under
construction contracts. See notes 16 and 17 for values.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
25
Financial Instruments
continued
Financial Liabilities – Analysis of Maturity Dates
At 31st December 2021, the carrying value of the Group’s nancial liabilities and maturity prole of the associated contractual cash
flows are shown below. The contractual cash flows are undiscounted and therefore differ from the carrying values which include the
impact of discounting cash flows.
31st December 2021
Trade and
other
payables
1
£m
Obligations
under leases
£m
Total
£m
Carrying value
94.1 2.9 97.0
Contractual cash ows
Less than one year
92.4 0.9 93.3
One to two years
1.5 0.7 2.2
Two to three years
0.2 0.5 0.7
More than three years
–
0.8 0.8
Total
94.1 2.9 97.0
31st December 2020
Carrying value
72.0 3.7 75.7
Contractual cash ows
Less than one year
69.4 1.3 70.7
One to two years
2.4 0.9 3.3
Two to three years
0.1 0.6 0.7
More than three years
0.1 0.9 1.0
Total
72.0 3.7 75.7
1 Trade and other payables exclude other taxation and social security.
(iii) Financial Risk Management
Financial risk management is integral to the way in which the Group is managed. The overall aim of the Group’s nancial risk
management policies is to minimise any potential adverse effects on nancial performance and net assets.
The Group does not enter into any derivative transactions and has minimal exposure to exchange rate movement as its trade is based
in the United Kingdom.
The nancial risks to which the Group is exposed comprise credit risk, market risk and liquidity risk.
The Group seeks to manage these risks as follows:
Credit Risk
Credit risk is the risk that a counterparty will fail to discharge its obligations and create a nancial loss. Credit risk exists, amongst other
factors, to the extent that at the reporting date there were signicant balances outstanding. The Group’s policy is to mitigate this risk by
assessing the creditworthiness of prospective clients prior to accepting a contract, requesting progress payments on contract work in
progress and investing surplus cash only with large, highly regarded UK nancial institutions.
The carrying value of construction contracts, trade and other receivables and cash on deposit represents the Group’s maximum
exposure to credit risk. There were no signicant concentrations of credit risk at 31st December 2021.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
104
105
25
Financial Instruments
continued
Liquidity Risk
Liquidity risk is the risk that the Group will not generate sufcient cash and liquid funds to be able to settle its nancial liabilities as and
when they fall due. The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by monitoring cash flows
and by matching the maturity proles of nancial assets and liabilities within the bounds of its contractual obligations.
The Group’s facilities were last renegotiated in May 2020 and comprise a £15.0m RCF and a £10.0m overdraft facility. The RCF is a
committed facility available until 31st August 2024 and is subject to quarterly nancial covenant tests. Management has prepared
three-year cash flow projections that demonstrate that the Group will be able to meet these nancial covenants. There have been no other
signicant changes to the nature of nancial risks or the Group’s objectives and policies for managing these risks.
Based on an interest rate of 2.25%, provided that the Group is utilising its banking facilities, the effect of a delay/acceleration in the
maturity of the Group’s trade receivables at the balance sheet date would be to decrease/increase prot by approximately £0.1m
(2020: £0.1m) for each month of delay/acceleration, and the effect of a delay/acceleration in the maturity of the Group’s trade payables
at the reporting date would be to increase/decrease prot by approximately £0.1m (2020: £0.1m) for each month of delay/acceleration.
If the facilities are unused, there is no impact on prot.
Cash Flow Interest Rate Risk
The Group is exposed to changes in interest rates on its bank deposits and borrowings. Surplus cash is placed on short-term deposit at
xed rates of interest. Bank overdrafts are at floating rates, at a xed margin of 2.00% above base rates. The interest rate on amounts
drawn down under the RCF are set at a margin above SONIA at the time of drawdown for periods of up to twelve months. The Group’s
lease obligations are at xed rates of interest determined at the inception of the lease.
The effect of each 1% increase in interest rates on the Group’s borrowings at the reporting date would be to reduce prots by
approximately £0.1m (2020: £0.1m) per annum. Details of the Group’s and the Company’s bank facilities are disclosed in note 20.
26
Events after the Balance Sheet date
On 11th February 2022 the Group entered into a lease for our forthcoming move to 30 St Mary Axe. This will be accounted for in the
2022 Financial Statements whereby a right of use asset and corresponding lease liability for c.£3m will be included in the Statement of
Financial Position.
Notes to the Financial Statements
continued
For the year ended 31st December 2021
Note
2021
£m
2020
£m
Non-current assets
Investments 1
44.1
43.6
Total non-current assets
44.1
43.6
Current assets
Amounts owed by subsidiary undertakings
6.4
4.6
Trade and other receivables
0.2
0.2
Current tax receivables
1.2
0.6
Cash and cash equivalents
17.5
19.0
Total current assets
25.3
24.4
Total assets
69.4
68.0
Current liabilities
Bank loans
(15.0)
(15.0)
Amounts owed to subsidiary undertakings
(6.5)
–Other tax and social security
(1.7)
(6.1)
Trade and other payables
(0.1)
–Total current liabilities
(23.3)
(21.1)
Net current assets
2.0
3.3
Non-current liabilities
Amounts owed to subsidiary undertakings
(28.3)
(29.9)
Total non-current liabilities
(28.3)
(29.9)
Total liabilities
(51.6)
(51.0)
Net assets
17.8
17.0
Equity
Called up share capital
4.4
4.3
Share premium
4.3
3.8
Retained earnings
9.1
8.9
Total equity
17.8
17.0
The prot after tax for the year was £2.2m (2020: £1.9m).
The notes on pages 107 to 108 form part of these nancial statements.
The nancial statements of the Company were approved by the Board and authorised for issue on 8th March 2022 and signed on its
behalf by:
Iain McCusker Mark Lawrence
Director Director
Company Statement of Financial Position
As at 31st December 2021
TClarke PLC
Registered number 00119351
Financial Statements
TClarke
Annual Report and Financial Statements 2021
106
107
Attributable to owners of the parent
Called up
share
capital
£m
Share
premium
£m
Retained
earnings
£m
Total
Equity
£m
At 1st January 2020
4.3 3.8 9.0 17.1
Comprehensive income
Prot for the year
– –
1.9 1.9
Total comprehensive income – –
1.9 1.9
Transactions with owners
Shares acquired by ESOT – –
(0.1) (0.1)
Dividends paid – –
(1.9) (1.9)
Total transactions with owners – –
(2.0) (2.0)
At 31st December 2020
4.3 3.8 8.9 17.0
Comprehensive income
Prot for the year
– –
2.2 2.2
Total comprehensive income
– –
2.2 2.2
Transactions with owners
New Shares
0.1 0.5
–
0.6
Shares acquired by ESOT
– –
(0.8) (0.8)
Share-based payment charge
– –
0.7 0.7
Dividends paid
– –
(1.9) (1.9)
Total transactions with owners
0.1 0.5 (2.0) (1.4)
At 31st December 2021
4.4 4.3 9.1 17.8
The notes on pages 107 to 108 form part of these nancial statements.
Company Statement of Changes in Equity
For the year ended 31st December 2021
Notes to the Financial Statements
For the year ended 31st December 2021
Basics of Accounting
The separate nancial statements of the Company are presented as required by the Companies Act 2006 (‘the Act’). The Company
meets the denition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council.
Accordingly, the Company has prepared its nancial statements in accordance with FRS 101 (Financial Reporting Standard 101)
‘Reduced Disclosure Framework’ as issued by the Financial Reporting Council. This is the rst year that the Company accounts have
been prepared under FRS 101 (previously IFRS).
The Company’s accounting policies are consistent with those described in the consolidated accounts of TClarke plc, except that, as
permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to
share-based payments, nancial instruments, capital management, presentation of a cash flow statement and related party
transactions. Where required, equivalent disclosures are given in the consolidated accounts. In addition, disclosures in relation to share
capital (note 18 (ii)) and dividends (note 18 (vi)) have not been repeated here as there are no differences to those provided in the
consolidated accounts. There are no critical judgements the directors have made within the Company nancial statements.
These nancial statements have been prepared on the going concern basis as set out in the Directors’ Report on page 57, and under
the historical cost convention. The nancial statements are presented in pounds sterling, which is the Company’s functional currency,
and unless otherwise stated have been rounded to the nearest £0.1m. The Company has taken advantage of section 408 of the Act
and consequently the statement of comprehensive income (including the prot and loss account) of the Parent Company is not
presented as part of these accounts.
Investments in subsidiaries are recorded at cost, being the fair value of consideration paid, and subsequently at cost less provisions for
impairment. Cost includes the fair value of equity-settled share-based payment arrangements relating to options to acquire shares in
TClarke plc granted to subsidiary employees under Savings Related Share Option schemes.
An annual impairment review of the carrying value of the Company’s subsidiaries is undertaken at 31st December each year in
conjunction with the goodwill impairment review (see note 11 of consolidated nancial statements), using the same underlying cash
flow projections and other key assumptions. The impairment provision comprises the entire cost of subsidiaries where operations have
ceased, or a reduction to recoverable amount where there has been a signicant reduction in underlying trading and signicant losses
have been incurred, such that the Group is unable to recover the cost of the investment through its net asset value or future trading.
Financial Statements
TClarke
Annual Report and Financial Statements 2021
108
109
1 Investments
All subsidiaries are wholly and directly owned by TClarke plc unless otherwise stated, and all are incorporated within the United Kingdom.
Principal operating company
Type of shares
TClarke Contracting Limited
Ordinary
Group services company
TClarke Services Limited
Ordinary
Property holding company
Weylex Properties Limited
Ordinary
Non-trading and dormant companies
Eton Associates Limited
Ordinary
TClarke Europe Limited
Ordinary
Anglia Electrical Services Limited
Ordinary
D G Robson Mechanical Services Limited
Ordinary
G.D.I. Electrical Co. Limited
Ordinary
J.J. Cross Limited
Ordinary
J.J. Cross Services Limited
*
Ordinary
Mitchell and Hewitt Limited
Ordinary
T. Clarke East Limited
Ordinary
TClarke Leeds Limited
Ordinary
TClarke Newcastle Limited
Ordinary
T.Clarke (Northern) Limited (dissolved 22 February 2022)
Ordinary
T Clarke North West Limited
Ordinary
T. Clarke (Scotland) Limited
Ordinary
TClarke South East Limited
Ordinary
TClarke South West Limited
Ordinary
Waldon Security Limited
**
Ordinary
* Shares held by J.J. Cross Limited. ** Shares held by TClarke South West Limited.
All subsidiary companies have their registered ofce at 45 Moorelds, London EC2Y 9AE apart from T. Clarke (Scotland) Limited whose
registered ofce is at 6 Middleeld Road, Middleeld Industrial Estate, Falkirk, Stirlingshire FK2 9AG and T.Clarke (Northern) Limited
whose registered ofce is at Stanhope House, 116-118 Walworth Road, London SE17 1JL.
Investments comprise:
Subsidiary undertakings
2021
£m
2020
£m
Cost
At 1st January
53.2
53.0
Capital Contributions
0.5
0.2
At 31st December
53.7
53.2
Impairment
At 1st January
(9.6)
(9.6)
At 31st December
(9.6)
(9.6)
Net book value
At 31st January
43.6
43.4
At 31st December
44.1
43.6
Capital contributions of £0.3m were made during the year ended 31 December 2021 in relation to share based payments on behalf of
subsidiaries (2020: £0.2m).
Notes to the Financial Statements
For the year ended 31st December 2021
Company Details
Registered ofce:
45 Moorelds
Telephone: 020 7997 7400
Email: [email protected]
Company registration number: 00119351
The TClarke PLC Website
Shareholders are encouraged to visit our website www.tclarke.co.uk for further information about the Company. The dedicated investor
section on the website contains information specically for shareholders, including regulatory announcements and copies of the latest
and past nancial statements.
Registrar
The Company’s shareholder register is maintained by our Registrar, Link Group. If you have any queries relating to your TClarke plc
shareholding, you should contact Link Group directly by one of the methods below:
Email: shareholder[email protected]
Telephone: 0371 664 0300
By post: 10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Shareholder portal: www.signalshares.com
If you are yet to register, you will need your investor code.
Analysis of Shareholdings
The tables below show an analysis of Ordinary shareholdings as at 31st December 2021.
Shares Percentage Holdings Percentage
Individuals
6,457,839
14.72%
73073.81%
Banks or nominees
34,738,689
79.16%
23423.66%
Other corporations
2,686,333
6.12%
252.53%
Totals
43,882,861
100%
989100%
Number of shares held:
1 to 5,000
1,172,085
2.67%
60461.07%
5,001 to 10,000
980,038
2.23%
13213.35%
10,001 to 50,000
3,754,718
8.56%
17017.19%
50,001 to 500,000
10,299,740
23.47%
666.67%
500,001 to 1,000,000
3,716,122
68.47%
0.61%
1,000,001 +
23,960,158
54.60%
111.11%
Totals
43,882,861
100%
989100%
Shareholder Information
Designed by: Jon Budd Design Limited
TClarke
Annual Report and Financial Statements 2021
110
Independent Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Corporate Broker
Cenkos Securities plc
6-8 Tokenhouse Yard
London EC2R 7AS
Tel: 020 7397 8900
Investor Relations
RMS Partners Limited
160 Fleet Street
London EC4A 2DQ
Tel: 020 3735 6551
Financial Calendar
Annual General Meeting
11th May 2022
Final Dividend for 2021
Ex-dividend 21st April 2022
Record date 22nd April 2022
Payment due 20th May 2022
Half Year Results Announcement
14th July 2022
Interim Dividend for 2022
Ex-dividend 1st September 2022
Record date 2nd September 2022
Payment due 30th September 2022
Trading Update Release
24th November 2022
These dates are indicative only and may be subject to change.
Dividend Reinvestment Plan
A dividend reinvestment plan (‘DRIP’) is available to shareholders. Those shareholders who have not elected to participate in the DRIP
and who would like to do so, should contact our Registrar, Link Group on 0371 664 0381. The last day for election for the nal dividend
for 2021 is 29th April 2022.
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45 Moorelds, London EC2Y 9AE | 020 7997 7400 | www.tclarke.co.uk