The director presents the strategic report for the period ended 31 December 2024.

The KBF Enterprises Group delivered another year of strong progress in 2024, with sales continuing to show significant growth. Much of this performance was driven by Warrior, which has become the Group’s cornerstone brand and the main contributor to growth and value creation. Warrior’s success reflects the strength of our strategy, our focus on innovation, and the depth of our customer relationships.

Market Environment

The trading environment in 2024 remained challenging, shaped by persistent cost inflation, evolving consumer behaviour, and intense competition across the health and nutrition categories. Against this backdrop, Warrior continued to expand rapidly, demonstrating both the appeal of its products and the resilience of the business model. Our ability to deliver consistent growth in a competitive environment reflects disciplined execution and an adaptable approach.

Performance Review

During the financial year, to better align with seasonal sales cycles and planning windows of its key customers, the company took the decision to move its year end from June to December. As such, the numbers reported within these financial statements are for the 18-month period July 2023 to December 2024.

Revenues grew to £54.2m for the 18-months to December 2024, up from £26.3m for the 12-month period to June 2023, marking another period of double-digit % growth and building on the Group’s strong track record of expansion. Warrior was the key driver of this performance, supported by both existing product lines and successful new launches across bars, powders, and ready-to-drink formats.

Growth was also supported by an expanded distribution footprint. In the UK, Warrior secured new listings with major retailers, including Tesco and Morrisons, and grew its presence within existing accounts. Internationally, the brand entered new European markets, laying the foundations for future global expansion.

Operational investment continued throughout the year, strengthening supply chain capacity, implementing new systems, and enhancing production capabilities. These improvements have supported growth, while ensuring efficiency and scalability for the future.

2024 Key Achievements

Strong sales growth – Group revenue increased by 37% year-on-year(annualised), driven primarily by Warrior.

Warrior expansion – New product launches in bars, powders, and RTDs strengthened category leadership and drove incremental sales.

Retail partnerships – Secured additional Warrior listings with leading UK retailers and expanded distribution in international markets.

Operational investment – Expanded supply chain capacity and implemented new systems to support efficiency and scalability.

Team growth – Increased headcount across key functions and invested in leadership and professional development.

Sustainability progress – Improved packaging formats, reduced environmental impact in logistics, and advanced responsible sourcing initiatives.

Financial Performance

Over the last 5-years, revenue growth has been consistently strong, driven by Amazon UK, penetration into leading high street retailers and multiples, and internationalisation.

The key financial and other performance indicators for the Group during the year were as follows:

During the 18-month period to December 2024, the KBF Enterprises Group continued to build on the strong performance in prior years, achieving Turnover of £54.2m, Gross Profit of £14.9m, and an Adjusted EBITDA of £3.2m.

Gross Profit Margin % in the period improved by +4.1pppts, to 27.5%. At 5.9%, Adjusted EBITDA Margin % for the period was broadly in line with the prior 12 months to June 2023.

Profit / (loss) before tax for the period to December 2024 was a loss of £0.5m. During the period, PBT was materially impacted by an incidence of employee fraud, relating to the theft of stock. The direct costs of the fraud amounted to £1.8m and have been recorded as an Exceptional Item. Further detail on the fraud event and subsequent control actions taken by the business is provided below.

Historically, the Group has prudently treated sales of all Protein Powders as standard rated for VAT purposes. However, following a first-tier tribunal decision in the Global By Nature Limited case (REF: TC/2023/07672) – within which the Tribunal ruled that protein powder products sold by Sunwarrior at a Standard VAT rating were eligible for 0% UK VAT, entitling them to a retrospective VAT repayment – KBF engaged Grant Thornton to carry out a review of its protein powder products.

Subsequently, in H1 2025, KBF Enterprises has submitted a VAT Error Correction Notice (‘ECN’) to HMRC, to request a repayment of overdeclared output VAT for the total amount of £4.5m in the period from 1 April 2021 to 31 December 2024, representing a significant potential upside for the business.

As the outcome of this ECN process is, as yet, unknown, no adjustment was made for this within the accounts as at 31 December 2024.

Fraud Event

The nature of the fraud was theft of stock, whereby an employee artificially inflated sales forecasts and placed fraudulent orders on international customer accounts, causing the business to over-produce, ultimately requiring a write-off of fraudulent sales.

The direct costs of the fraud amounted to £1.8m and have been recorded as an Exceptional Item. Upon discovery of the fraud, the business conducted a full internal controls review, and has since implemented stronger controls on credit worthiness checks and changes to customer account and delivery details.

Those responsible have since been arrested and charged, and remain the subject of an ongoing police investigation. The case is expected to go to trial in 2026/2027, with custodial sentences anticipated.

In addition, changes have subsequently been made to senior management positions within the business, to significantly strengthen leadership and expertise.

Innovation & New Product Development

Warrior is an innovation-led business, with full in-house manufacturing and R&D capability across core product types, including powders, bars and capsules. NPD cycles are typically less than six weeks from concept to shelf, enabling the business to deliver category firsts, such as the Creatine Bar and Creatine Plus portfolio.

Sustainability and Responsibility

We recognise that long-term growth must be achieved responsibly. Sustainability efforts in 2024 included packaging improvements, greater supply chain transparency, and progress in reducing environmental impact through more efficient logistics.

Warrior has played an important role in this, with innovation focused on healthier formulations and responsible sourcing. Embedding sustainability into both operations and product development will remain central to the Group’s strategy.

People and Culture

Our people remain central to the success of the business. The rapid growth of Warrior has only been possible through the hard work, expertise, and commitment of our teams.

We continue to invest in developing talent, building leadership capability, and fostering a culture that combines ambition with responsibility. Creating a supportive, high-performance environment will remain a priority as we attract and retain the skills needed for the next stage of growth.

The principal risks and uncertainties facing the Group are as follows.

Operational Risk

Operational risks include raw material shortages, and volatility in the price of raw materials. To surmount these risks the company maintains a wide pool of high quality suppliers, and maintains excellent relationships with them.

The Group formulates and manufactures the vast majority of its own products giving it the ability to adapt products to the market of the time. The Group forecasts demand and contracts for future demand, ensuring that the forecast level and price of material is available when needed.

Market and Strategic Risk

The sports nutrition market is fast evolving and in rapid growth, and this rapid growth encourages new entrants which increases risk of competition. The Group is exceptionally well placed to handle this risk in three ways:

• The Group’s brands, including Warrior®, are incredibly attractive and have a demonstrated, strong and resilient connection with consumers.

• The Group is a vertically integrated business owning the means of production, giving it incredible agility and control over products and costs.

• The Group’s management team have exceptional experience and long tenure, demonstrating high commitment within a successful, resilient and highly skilled team.

Credit Risk

The Group provides credit to some customers which creates a credit risk. In order to manage this, the directors set a limit for each credit customer based on a combination of payment history, third party references, and external credit rating agencies. These limits are reviewed regularly for any changes in payment performance and credit score.

In addition, a significant portion of the Group’s revenue comes from direct to consumer sales where no credit risk exists, with payments made prior to dispatch.

Regulatory Compliance Risk

The Group is subject to regulatory compliance risk, being failure to comply with laws and regulations set by food manufacturing bodies. Non-compliance could lead to product recall, fines or suspension from selling products.

To mitigate this risk the Group invests in technology and automation, as well as a strong internal quality control and regulatory compliance team. The Group conducts regular third party testing of its products, as well as engaging third party certification bodies to ensure outstanding product quality and compliance.

On behalf of the board

The director presents his annual report and financial statements for the period ended 31 December 2024.

The principal activity of the Group continued to be that of the manufacture and supply of health and wellbeing goods.

The period was marked by continued strong performance, with Warrior driving significant revenue growth and strengthening the Group’s position in its core markets. The Director acknowledges the dedication of all employees whose contribution has been central to the progress of the business.

The Director remains focused on ensuring that growth is delivered responsibly and sustainably. Investment in people, systems, and governance continues to support the scaling of the business, while financial discipline underpins long-term stability.

The Group’s risk management framework remains under review and development. Key risks include ongoing cost inflation, competitive pressures, and shifts in consumer demand. The Director is confident that the Group’s strategy, supported by its strong financial position and market presence, provides a robust foundation to manage these risks effectively.

The Director is committed to maintaining high standards of governance and transparency, recognising that the long-term success of the business depends on the trust of all stakeholders — including employees, customers, suppliers, lenders, and shareholders.

The results for the period are set out on page 11

No ordinary dividends were paid (2023: £105,000). The director does not recommend payment of a further dividend.

The director who held office during the period and up to the date of signature of the financial statements was as follows:

The outlook for the business remains positive. With Warrior driving performance, supported by a strong innovation pipeline and expanding distribution both in the UK and internationally, the KBF Enterprises Group is well positioned to continue its trajectory of strong growth.

Investment will remain focused on innovation, international expansion, and building the talent and infrastructure required to support growth, whilst continuing to manage risks carefully and operate with financial discipline. Whilst we remain mindful of external challenges, including economic headwinds and competitor activity, our proven ability to adapt and deliver gives us confidence in the long-term prospects of the business.

The auditor, Barlow Andrews LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 Group's auditor is unaware. Additionally, the director has taken all the necessary steps that he ought to have taken as director in order to make himself aware of all relevant audit information and to establish that the Group’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

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

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom and have also chosen to prepare the parent company financial statements in accordance with Financial Reporting Standard (FRS) 101 'Reduced Disclosure Framework'. Under company law the director must not approve the financial statements unless he is 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 the group financial statements, International Accounting Standard 1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

• make an assessment of the company's ability to continue as a going concern.

In preparing the parent company financial statements, the director is required to:

• select suitable accounting policies and then apply them consistently;

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

• state whether FRS 101 Reduced Disclosure Framework has 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 director is 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. He is 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.

We have audited the financial statements of KBF Enterprises (Holdings) Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the period ended 31 December 2024 which comprise the consolidated statement of comprehensive income, the consolidated and company statement of financial position, the consolidated and company statement of changes in equity, the consolidated statement of cash flows and the consolidated and company notes to the financial statements, including significant accounting policies.

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion:

• the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2024 and of the group's profit for the period then ended;

• the group financial statements have been properly prepared in accordance with UK adopted international accounting standards and the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• the financial statements 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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

Our responsibilities and the responsibilities of the director 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 director is 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 director's report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

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

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

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

• certain disclosures of director's 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 director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the parent company or to cease operations, or has 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.

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

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, health and safety legislation and regulations relevant to the development and manufacture of consumable products;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions; and

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• enquiring of management as to actual and potential litigation and claims; and

• reviewing correspondence with relevant regulators.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Other matters which we are required to address

The financial statements of KBF Enterprises (Holdings) Limited for the year ended 30 June 2022 were not required to be audited. As such, the comparative figures in the financial statements for the year ended 30 June 2023 are unaudited.

Use of our report

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

As permitted by trues408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £6,000 (2023 - £100,000 profit).

KBF Enterprises (Holdings) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1 Guinness Road Trading Estate, Guinness Road, Trafford Park, Manchester. The company's principal activities and nature of its operations are disclosed in the director's report.

The group consists of KBF Enterprises (Holdings) Limited and all of its subsidiaries.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with the requirements of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value, except for the revaluation of . The principal accounting policies adopted are set out below.

The transition to IFRS has not resulted in any material transitional adjustments, therefore the reported financial position and financial performance for the previous period have not been affected.

Reporting period

The current accounting period covers the 18-month period from 1 July 2023 to 31 December 2024. The group has extended its financial year in order to bring in line with the calendar year for reporting purposes, to better align with seasonal sales cycles and planning windows of its key customers.

Comparative figures presented relate to the 12-month period ended 30 June 2023, and as such are not directly comparable.

As part of a review of business activities, management have made certain reclassifications between cost categories to more accurately reflect the operational structure. For consistency, these reclassifications have also been applied to the prior year. Details are included within note 26 to the accounts.

In addition, the group identified a material error in the financial statements for the year ended 30 June 2023. The error related to the overstatement of inventories as a result of incorrect processing of month-end stock journals within the accounting system. Following an investigation and confirmation by the software provider, it was determined that inventories were overstated by £893,758. Further details are included within note 26 to the accounts.

The financial statements and related notes have been updated to reflect these reclassifications, ensuring comparability and alignment with the current period’s presentation.

The consolidated group financial statements consist of the financial statements of the parent company KBF Enterprises (Holdings) Limited together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 31 December 2024.

All intra-group transactions and balances between group companies are eliminated on consolidation.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

The director has at the time of approving the financial statements, a reasonable expectation that the truegroup has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The group recognises revenue when it transfers control of a product or service to a customer.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Development costs and trademarks        20% - 33% straight line

Property, plant and equipment 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 recognised in the income statement.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting end date, the group 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 group 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 is estimated to be less than its carrying amount, the carrying amount of the asset 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.

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.

Inventories 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 inventories to their present location and condition. Stock is recognised on a FIFO basis.

Inventories 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.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Cash and cash equivalents include cash in hand and bank balances.

Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value plus directly attributable transaction costs for all financial assets or financial liabilities not classified at fair value through profit or loss.

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the company has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition. Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.

Classification of financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value.

Debt instruments that meet the following conditions are subsequently measured at amortised cost:

• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The business model

An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The group determines the business models at a level that reflects how the group of financial assets are managed together to achieve a particular business objective.

The group's business model does not depend on management’s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument-by-instrument basis.

Debt instruments measured at amortised cost

The following financial assets are classified within this category - other receivables and cash at bank. Appropriate allowances for expected credit losses (‘ECLs’) are recognised in profit or loss.

Interest income is recognised using the effective interest method and is included in the line item ‘Investment income’.

Financial liabilities and equity

• Trade and other payables are classified with current liabilities and are stated at their nominal value.

• Borrowings are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, with interest recognised on an effective yield basis.

• Ordinary shares issued by the company are classified as equity instruments.

ECLs

The group applies the simplified approach and recognises lifetime ECL on the basis that debt instruments measured at amortised cost do not contain a 'significant financing component'. On applying the lifetime ECL the group considers whether there has been a significant increase in credit risk since initial recognition.

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable 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 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. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet 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 profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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 group 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 inventories or non-current assets.

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

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

At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the group's estimate of the amount expected to be payable under a residual value guarantee; or the group's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Included within exceptional items are costs associated with an instance of fraud which occurred during the financial period, due to illegal misappropriation of stock.

The total cost recognised in relation to this incident amounted to £1,751,322, comprising direct financial losses, professional fees and internal costs associated with the investigation and strengthening of internal controls. These costs have been presented separately in the income statement as exceptional items due to their material significance, non-recurring nature and importance in providing a true and fair reflection of the company’s underlying operating performance.

The company has reviewed and enhanced its internal control environment in response to this incident.

No further costs are expected and any recovery of expenditure incurred will be recognised in future periods if and when they become virtually certain.

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

Their aggregate remuneration comprised:

The charge for the period can be reconciled to the loss per the income statement as follows:

Details of the company's subsidiaries at 31 December 2024 are as follows:

The company has reviewed trade receivables and does not consider there to be any expected credit losses that need to be accounted for.

The director considers that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

Bank loans totalling £1,149,693 (2023: £475,834) are secured by a debenture incorporating both fixed and floating charges over all assets and undertakings of the group.

The remaining loan for £236,817 (2023: £655,273) is secured by debentures from the director and the group incorporating both fixed and floating charges over the group's assets and undertakings. Guarantees from the director and the group are also in place for £75,000 and £750,000 plus interest, costs and expenses, respectively.

Within other payables are debt factoring facilities of £1,419,607 secured by a legal mortgage over all land and fixed and floating charges over all the assets and undertakings of the group.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

Finance lease payments represent rentals payable by the company for certain items of plant and machinery and motor vehicles. Where applicable, leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The lease liabilities are measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate, as the interest rate implicit in the lease was not readily determinable. The incremental borrowing rates applied range from 3% to 5%, based on the rates that management have assessed as being secured if funds were borrowed for assets of a similar nature with similar terms, security and conditions.

The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.

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

During the period, an immediate family member of the director carried out consultancy work for the company, totalling £90,790 (2023: £5,600).

During the period, another immediate family member of the director received remuneration of £62,887 (2023: £34,856).

The ultimate controlling party of the group is Mr K B Fisher.

At the prior period end, amounts due from the directors in respect of advances amounted to £205,598. This balance has been fully repaid in the current period, with no balance outstanding from the directors at the end of December 2024.

Dividends totalling £105,000 were paid in the prior period in respect of shares held by the company's director. No dividends were paid in the current period.

During the period, the group identified a material error in respect of the financial statements for the year ended 30 June 2023. The error related to the overstatement of inventories as a result of incorrect processing of month-end stock journals within the accounting system since July 2020, when it was first implemented. Following a detailed investigation and confirmation by the software provider, it was determined that inventories at the prior year end were overstated by £893,758.

The error has been corrected by restating the comparative inventories balance for the year ended 30 June 2023 and preceding years, as required, and adjusting the opening reserves at 1 July 2023.

In addition, in the prior year, expenditure relating to sales fees totalling £2,064,835 were included within both finished goods purchases and advertising costs. On further reflection, these costs should have been held within a separate nominal. The impact of this is an increase in cost of sales of £1,143,275 and a corresponding reduction in administrative expenses, being the amounts held within advertising costs.

Similarly, £1,292,707 relating to freight costs in the prior year was held within finished goods purchases. On reflection, it was deemed more appropriate to hold these costs within a separate nominal; however, this has had no impact on the total cost of sales within the comparative period.

KBF Enterprises (Holdings) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1 Guinness Road Trading Estate, Guinness Road, Trafford Park, Manchester. The company's principal activities and nature of its operations are disclosed in the director's report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

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 company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.

The director has at the time of approving the financial statements, a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

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

Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

Details of the company's principal operating subsidiaries are included in note 12.