The directors present the strategic report for the year ended 31 January 2025.

Unfortunately, founder and chairman Arthur David sadly passed away in late December 2024. Arthur started the business from scratch in 1962 and grew it over the next 62 years into the fantastic company that it is today. Arthur was immensely proud of the business and treated his employees like family. He leaves a long lasting legacy with the business renowned for its customer service, excellence and his quality in the food service industry in and around the Bristol area and will be sorely missed.

Promoting the success of the company

The company was started by Arthur David in 1962 and celebrated its 62nd anniversary in the year. The company has continued to be controlled and run by the David family over that period and is proud of the way in which it has grown, developed and provided employment, training and financial reward in the local area for both its owners and employees.

The directors believe that the long-term success of the business is linked to the promotion of five “Core Values”. It actively engages with employees to live these values of Customer Service, Quality, Excellence, Teamwork and Respect. This also drives relationships with customers, suppliers, the local community and the wider economy and world in which we operate.

The directors are always seeking to add value, improve efficiencies, control costs and grow profits and market share and aim to make decisions for the long-term future and success of the business. The company has also improved the way in which it communicates with employees to keep them up to date with the performance of the business.

The financial year ended 31 January 2025 saw the company continue to face a number of challenges following on from uncertainty and volatility in the UK economy over the last four or five years.

Volatile fuel and energy prices, cost inflation, labour shortages and supply chain issues all had a negative impact on the business. Uncertainty around the change of UK government in July 2024 and the subsequent financial budget in November 2024 saw many of our customers and consumers reduce their demand for our services and products. Poor weather around Easter and over the summer months also had a negative impact on demand and trade suffered as a result. Whilst sales volumes were up year on year, these were significantly lower than expected.

The company continued to spend time looking at operational and management structures and made some changes to key areas within the business where it felt necessary in order to focus on value adding activities. This is vitally important to keep serving our customers with the products they needed without compromising service levels against a backdrop of rising costs and uncertain demand.

As part of this review, the company decided to close its Preparation Room in August 2024. Despite significant investment of around £600,000 in February 2020, the company was not able to generate the cost savings and efficiencies associated with the investment. In addition to this, the compliance landscape and shortage of labour with the necessary skills in this area, the company could not generate enough profitability from that area of the business so took the decision to close it. This was not an easy decision to make given that the company was one of the first businesses to launch this type of service many years ago, but as this part of the business was making a loss, it was considered necessary for the overall sustainability of the business.

This year’s turnover increased by 2.0% to £57.6m (2023/24 - £56.5m) but cost inflation and competition forces in the market resulted in a small reduction in gross profit in the year. Overhead costs also increased year on year by around £0.4m but this included around £0.4m of costs associated with the closure of the Preparation Room. This meant that earnings before tax were lower than the previous year at £0.3m (2023/24 - £1.2m).

The company retained Investors in People accreditation in the year and was awarded a BRC AA grade certification during the year following on from an its announced audit in January 2025.

The ongoing Ukraine / Russia and Israel / Gaza conflicts, competition, market forces, cost inflation, high interest rates and Brexit are seen as the main areas of risk and uncertainty for the company. These all had an impact on the company’s ability to recruit the labour it needed and to control product prices, stock levels and overhead costs.

To address some of these risks, the company has continued to develop its’ strategy of dealing with fresh produce growers directly and this is having a positive impact on supplier relationships and availability of stock.

Joining the “Country Range” purchasing group in January 2024 did not have the desired impact so it took the decision to come back out of this arrangement in January 2025.

Great customer service is at the forefront of everything we do and this commitment remains one of the key reasons that the company continued to grow its customer base even during the economic uncertainty during the year.

Average headcount reduced in the year by around 4% following the closure of the Preparation Room. The company continues to see a shortage of labour in the UK employment market as a lack of foreign workers due to the longer term impact of Brexit and the COVID-19 pandemic. Changes have been introduced to shift patterns in many of the operational teams which has increased flexibility and availability of staff from the wider labour market including taking on staff on temp to perm contracts.

A review of wages rates was undertaken across the entire workforce and these were increased where appropriate to attract and retain the right level of headcount needed to satisfy demand.

The company continue to offer competitive employee benefits schemes in the year including a cash healthcare scheme, death in service insurance, additional holiday entitlement, on site catering facilities and additional discounts on food along with offering flexible shift patterns in some of our operational areas.

The business was significantly impacted by the COVID-19 pandemic over the last five years but is now emerging financially stronger and fitter than it was before. It has continued to adapt and find new ways of serving new and existing customers whilst ensuring costs and cash are kept under control.

The business has also continued to work with 4 key objectives for the next 3 years with clearly defined key results. The directors are fully committed to these to maintain the long-term future of the business.

Sustainability and social responsibility

The company is aware of its wider social responsibility to minimise waste, reduce energy usage and promote recycling and has recently set some challenging longer-term objectives around this. The directors will constantly monitor and adapt the business' processes to hit these targets. It will ensure that the business considers the impact of its actions on the wider environment and continues to source products locally where possible.

The business recently launched the “Arty Community Foundation” where it continues to support local charities such as “One Community Trust”, “The Mazi Project”, “Billy Chip”, “The Matthew Tree Project”, “St Peter’s Hospice” and “Community of Purpose”. The company also supports and donates food, employees’ time and funds to various other local charities and good causes as it continues to increase its community engagement.

The firm has also spent time looking at longer term succession planning and started a year long “Leadership Team” training programme in January 2024 for middle managers to give them the skills and confidence to support the Board of Directors in running the business in the future.

Going Concern Statement

There were many external factors that adversely impacted the company during the 2024/25 financial year. The ongoing war in Ukraine, the Israel/Gaza conflict, disturbances in long established shipping routes and the longer-term disruption to trade following Brexit and the COVID-19 pandemic continued to cause issues with supply chains, product availability and the recruitment of staff.

Volatility in diesel prices and wholesale electricity and gas markets calmed slightly during the year, as did overall cost inflation but there were still significant impacts on the company’s operating costs. The economic uncertainty following a change in government and the planned increase in Employers National Insurance in April 2025 has also impacted on consumers’ willingness to visit hospitality venues which had an impact on sales volumes in the second half of 2024. Despite all these challenges, the business grew it’s sales volumes in the year.

We have also continued to experience several customers going into liquidation and defaulting on their debts. Despite this, optimism remains strong going into 2025.

The company continued with its banking and working capital funding relationship with HSBC in the year with the savings and improvements in availability of cash continuing to have a positive impact on the performance of the business. The only remaining external debt as at 31 January 2025 is the rolling invoice finance facility with HSBC which was renewed in January 2025.

The 35,000 square foot warehousing facility just outside Bristol at Hallatrow recently secured on an initial 5-year lease is now close to being refurbished with the site operational from early May 2025. This will replace the existing warehousing facilities at Bristol Wholesale Fruit Centre following the likely sale and redevelopment of that site soon. Significant investment of around £2m will provide the business with a fantastic new location for ambient, chilled and cold stores along with significant office space.

The 2025/26 financial year has started slowly with sales, profitability and cash availability slightly behind expectations. The directors have a reasonable expectation that the company has sufficient resources to continue in operational existence for the foreseeable future. They also fully believe that the company can continue to adopt the going concern basis of accounting in preparing the financial statements and are confident that the level of liquidity is adequate to meet its current liabilities.

The company's key financial performance indicators during the year were as follows:

Unit          2025     2024                            

Turnover                £        57,591,158    56,486,205    

Turnover Growth            %         1.96         5.59

Gross Profit            £        19,193,491    19,546,598

Gross Profit Margin        %     33.33          34.60        

Profit Before Tax             £         311,423        1,212,947

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 January 2025.

The principal activity of the company continued to be that of wholesaling and distribution of high quality, fresh and ready prepared fruit and vegetables together with a range of fine foods for the food service sector.

The results for the year are set out on page 12.

Ordinary dividends were paid amounting to £143,000. The directors do not recommend payment of a final dividend.

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

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

The management objectives are to retain sufficient liquid funds to enable it to meet its day to day requirements, minimise the company's exposure to fluctuating interest rates, and match the repayment schedule of any external borrowings or overdrafts with the future cash flows expected to arise from the company's trading activities.

The company is exposed to a moderate level of credit risk, liquidity risk and cash flow risk. The company manages these risks by financing its operations through the continued support of its bankers and financers, supplemented by long term bank borrowings where necessary to fund expansion or capital expenditure programmes.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information of matters of concern to employees is given through newsletters and staff meetings which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

The auditor, Old Mill Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

This report summarises the UK energy use, associated greenhouse gas emissions and energy efficiency actions for Arthur David (Food With Service) Limited, under the Streamlined Energy & Carbon Reporting (SECR) policy, implemented by The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.

Arthur David (Food With Service) Limited are mandated to report energy consumption, related emissions, intensity metrics and information regarding energy efficiency actions and improvements undertaken within the most recent reporting period.

The company engaged with a 3rd party consultancy business to record and calculate its scope 3 carbon emissions for the 2024/25 financial year. These figures are shown in the tables below without any comparison to the prior year as this information was not available.

Organisational Structure and Qualification

This report and accompanying data has been produced for Arthur David (Food With Service) Limited and relates to activities in the operational control of the company from 1 February 2023 to 31 January 2024 and 1 February 2024 to 31 January 2025, consistent with our financial reporting periods.

Annual Reporting Figures

The total consumption (kWh) for energy supplies that relate to activities within the control of Arthur David (Food With Service) Limited are as follows:

The total emissions in tonnes of carbon dioxide equivalent (tCO2e) for energy supplies reportable by the company are as follows:

Intensity Ratio

Intensity metrics of tCO2e per £m of sales and per 1,000 “packages” delivered has been employed as the two most efficient measures of relative performance.

Energy Efficiency Improvements

Energy Efficiency measures adopted by Arthur David (Food With Service) Limited during the reporting period are as follows:

• Replacement and upgrading of delivery vehicles to new more efficient vans whenever possible.

• Implementation of delivery round planning to optimise routes to reduce mileage and fuel consumption where possible.

• Analysis of telematics information to monitor vehicle idling time, driving styles and fuel efficiency.

• Replacement of standard lighting to LED energy efficient lighting including motion sensor activated lighting.

• Carrying out meetings with customers, suppliers and employees via online meeting platforms such as Zoom and Teams to reduce travel where possible.

• Regular servicing and maintenance of refrigeration and air conditioning units to ensure efficient operation.

• Installation of more energy efficient compressors and pumps which support the refrigeration machinery.

• Installation of an Energy Management System across the Head Office site at Hillside Farm to monitor, track and reduce energy consumption.

• Installation of energy efficient fridge motors, air conditioning and plant at the new site at Hallatrow.

Methodology

Scope 1, 2 and 3 consumption and CO2 emissions data has been calculated in line with the requirements of the GHG Reporting Protocol Corporate Standard and ISO 14064. The carbon emission factors used to convert each activity that gives rise to GHG emissions are consistent with the latest UK Government conversion factors for company reporting.

Estimations undertaken to cover both instances of missing billing periods and/or data not being available for the entirety of the reporting period, have been calculated using a pro-rata methodology, based on the closest available piece of verifiable data.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

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

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future development and performance.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of Arthur David (Food With Service) Limited (the 'company') for the year ended 31 January 2025 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 January 2025 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the entity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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 company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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 misstatement misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that 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.

We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, BRC regulations and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Arthur David (Food With Service) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hillside Farm, Sutton Wick, Bishop Sutton, BRISTOL, Somerset, BS39 5XR.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in Sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The balance sheet as at 31 January 2025 is showing net current assets £123,481 (2024 £888,449).true

There were many external factors that adversely impacted the company during the 2024/25 financial year. The ongoing war in Ukraine, the Israel/Gaza conflict, disturbances in long established shipping routes and the longer-term disruption to trade following Brexit and the COVID-19 pandemic continued to cause issues with supply chains, product availability and the recruitment of staff.

Volatility in diesel prices and wholesale electricity and gas markets calmed slightly during the year, as did overall cost inflation but there were still significant impacts on the company’s operating costs. The economic uncertainty following a change in government and the planned increase in Employers National Insurance in April 2025 has also impacted on consumers’ willingness to visit hospitality venues which had an impact on sales volumes in the second half of 2024. Despite all these challenges, the business grew it’s sales volumes in the year.

We have also continued to experience several customers going into liquidation and defaulting on their debts. Despite this, optimism remains strong going into 2025.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

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

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

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

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

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

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

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

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

The directors have reviewed all significant debts on a case by case basis and have made a provision for doubtful debts based on their knowledge of both specific customer and the current economic conditions within the industry. Despite an increase in bad debts in the period, the directors are satisfied that the control procedures and cash collections strategies are good enough to mean that the bad debt provision in 2025 of £300,000 can be reduced from the 2024 provision of £390,048.

The directors have reviewed the fixed assets, item by item, and have considered their carry value and an impairment was processed based upon their assessment of the value of the assets in the context of the company's business plan.

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

The directors use their knowledge of the business and the industry to estimate the useful life and residual value of property, plant and equipment in order to arrive at applicable depreciation rates. In accordance with section 17 of FRS 102, the directors review and update these estimates if there are indicators that current estimates should change.

It must be noted that there is inherent uncertainty within these estimates as factors such as unexpected wear and tear, technological advancement and changes in market prices may result in future changes to the appropriate rate of depreciation. The carrying value of property, plant and equipment at the year end is set out in the notes to these financial statements.

An analysis of the company's turnover is as follows:

As part of an ongoing operational and management review, the company decided to close its Preparation Room in August 2024. Exceptional costs include the impairment losses of the Preparation Room assets, holiday and redundancy costs of the staff affected. Included in the costs are wages and social security costs of £189,693.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2024 - 4).

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

The company closed the Prep Room manufacturing facility during the year. The impairment relates to assets previously used in that area of the business which are now obsolete.

More information on impairment movements in the year is given in note 13.

Other creditors of £364,177 (2024 - £1,234,363) are secured against a fixed and floating charge over the assets of the company.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Each share class carries unrestricted rights to vote, to receive dividends and to receive repayment of capital invested on the winding up of the company.

The below commitments include operating leases on rental property and vehicles used for the delivery of goods. The agreements contain fixed charges payable by the company.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The balances shown are interest free and repayable on demand.

The company is controlled by the David family.

Details of transactions with Directors' during the year are as follows:

Dividends totalling £143,000 (2024: £481,753) were paid in the year in respect of shares held by the company's directors.

During the year the company did not pay rent for use of the premises owned by Mr A David and Mr P David.

Advances or credits have been granted by the company to its directors as follows:

The balance of the loan account is payable upon the demand. Interest is charged in accordance with the official beneficial loan rates.