The directors present the strategic report for the year ended 31 December 2024.

In 2024, the UK construction industry faced significant challenges, particularly within private housing across new build and RMI (repairs, maintenance and improvement). The overall construction output fell by 2.9% for the year, with private housing new build and RMI taking the largest hits. This contraction was driven by a weak economic environment, elevated borrowing costs, and reduced demand for new housing projects. We saw a notable reduction in demand for building materials, which led to increased competition among competitors, squeezing margins and limiting sales volumes.

During the year, the directors approved and delivered the acquisition of Futuremost Limited, a PVC and aluminium window fabricator. It represents the largest acquisition in the history of Elliotts. It is clearly linked to our commitment to help our customers build, with an overlap in customer base between Futuremost, our merchant business and our roofing contracting business. The immediate integration has gone well, with opportunities for sales growth generated in all three trading businesses as a result.

Despite the difficult trading environment, the directors present a solid set of accounts. The Group’s turnover increased by 1% in 2024, to £93m while operating profit decreased by 32% to £2.1m, largely as a result of the macro environment described above. The Group’s Net Assets increased by £837k.

Outlook

Looking ahead to 2025, the market was expected to begin a gradual recovery, though the number of challenges we face is growing.

In these extraordinary times of global economic uncertainty, any recovery is far from guaranteed and will depend on a range of factors, including sustained reductions in mortgage rates and consistent support from government policies aimed at increasing housing supply.

The private housing sector is expected to see some improvement, though forecasts vary. A modest recovery may be underpinned by factors such as improved consumer confidence, gradual real wage growth, and a potential uplift in home moves. That said, ongoing economic pressures — including inflation and persistent high interest rates — remain a threat to both consumer spending and borrowing, and could temper demand. Additionally, shifts in planning policy and building regulations could continue to affect project timelines and increase development costs.

Supply chain resilience will continue to be a critical factor in 2025. With global supply chains still exposed to geopolitical volatility, builder’s merchants must remain alert to the risks. Evaluating supplier relationships and refining stock management practices will be important steps in preparing for any increase in demand, should it materialise. This may require closer coordination with key suppliers and further efficiencies in logistics.

The National Insurance and Minimum Wage increases due in April 2025 will have a noticeable impact on our cost base, and we are preparing accordingly. We will aim to protect margins while staying competitive and will continue to challenge our internal costs to ensure expenditure is focused only where essential.

2024 presented significant headwinds, and while forecasts for 2025 indicate the possibility of recovery, it is likely to be uneven and fragile. The acquisition of Futuremost and positions of our merchant and roofing businesses respectively leaves us in good shape to capitalise on opportunities as and when the market recovers. Maintaining flexibility and a proactive approach to economic and regulatory changes will be essential to navigating the recovery and continuing to provide exceptional service to customers.

Economic Conditions

The outlook highlights ongoing structural challenges that create uncertainty in both the short and the medium terms.

Customer Prosperity

The cash flow of customers and their ability to finance working capital pose risks to prompt debt payment. The Group addresses this by closely engaging with customers to anticipate and understand their cash flow situations, minimising credit exposure. Customer credit levels are consistently monitored throughout the organization, allowing for early detection of potential issues and prompt corrective action.

Competitive Pressure

Failing to compete effectively on pricing, product range, quality, and service could negatively impact the Group's financial performance. Additionally, a portion of the Group's business relies on winning contracts through competitive bidding, especially in times of reduced demand. The Group manages competitive pressures by responding swiftly to market changes, controlling costs, and fostering strong customer relationships among staff members.

Weather Risks

Poor weather conditions could decrease demand for products and disrupt operations, leading to lower sales and profits.

Financial Risks

The Group's primary source of financing is retained earnings, supplemented by long-term bank loans for major projects and finance leasing for minor ones. Short-term working capital is supported by an invoice discounting facility. Monthly reviews of potential investments and performance against benchmarks are conducted by the management team.

This S172 statement explains how the directors:

• have engaged with employees, suppliers, customers, and others; and

• have had regard to employee interests, the need to foster the company's business relationships with suppliers, customers and others, and effect of these, including on the principal decisions taken by the Group during the financial year.

When making decisions, each director ensures that they act in the way they consider, in good faith, would most likely promote the Group’s success for the benefit of its members as a whole, and in doing so they have regard (among other matters) to:

The likely consequences of any decision in the long term

As a business founded in 1842, and still prospering, our longevity demonstrates a commitment to the long term through successive generations. It is embedded within our culture that we work hard for our customers, look after our people, and make decisions for the long term.

The interests of the Group’s employees

The directors recognise that our staff are fundamental to the success of our business; having great people depends on our ability to attract, retain and motivate them. From pay and benefits to our health, safety and workplace environment, the directors factor the implications of decisions on employees and the wider workforce. To ensure we understand how we can improve, we conduct an annual team survey and follow up with listening groups across our business.

The need to foster the Group’s business relationships with suppliers, customers and others

In order to succeed, we need strong, mutually beneficial, relationships with suppliers and customers. These relationships are based on trust and openness, principles that have served us well over the years. Where we can, we try to build those relationships at a local level and go far beyond a transactional relationship. The directors receive regular updates from the management team on how the business is performing and how these stakeholders have been engaged. Further details of our employees’ involvement and our engagement with suppliers, customers and others is in the Directors Report.

The impact of the Group’s operations on the community and the environment

The Group aims to supply environmentally sustainable products thereby enabling its customers to comply with current building regulations. We source our timber products from suppliers who meet appropriate environmental standards and have both FSC and PESC affiliation. The directors regularly review opportunities to reduce the environmental impact.

We support the community through our local charity of the year, and through our sponsorship and support of local sports clubs and events.

The desirability of the Group maintaining a reputation for high standards of business conduct

We aim to operate with fairness in all of our dealings and expect our staff to “do the right thing” in any given situation, rather than acting according to a detailed rule book. Where we have areas to improve, we will create an action plan; for example, reviewing and upgrading the straps that we use to secure products onto our lorries so that they were even better.

The need to act fairly as between members of the Group

The shareholders of Elliotts represent a connection to the company’s founder, Thomas Elliott, and it’s important that they are treated fairly. After weighing up all relevant factors, the directors consider which course of action best enables delivery of long-term value for the Group. In doing so, directors ensure that decisions made consider the interests of all members.

Throughout 2025, the board will continue to review and challenge how engagement with stakeholders can be improved. Careful control and review are also applied to all levels of cost and investment, and steps taken to maximise cash flow and minimise overall borrowings.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The profit for the year, after taxation, amounted to £1,133k (2023 - £1,976k).

The directors propose the payment of a final dividend of 26.00p (2023 - 29.00p) per share, which if approved by shareholders, will be paid on 28th May 2025. The total dividend for the year will amount to 35.00p per share (2023 - 39.00p).

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

The Strategic Report includes an explanation of our exposure to price risk, credit risk, liquidity risk and cash flow risk. In addition to the mitigation of financial risks explained in the Strategic Report, the directors regularly review the financial outlook of the Group in order to anticipate potential challenges and respond accordingly.

The Group will continue to invest strategically in areas which will develop sales, reduce costs, or improve profit, for the mutual benefit of both staff and the Group.

The Group and Company ensures that all full and part time employees, and job applicants, are treated fairly in accordance with Group policies and values. Selection for employment, promotion, training or any other benefit is assessed objectively against the requirements for each job role, taking account of any reasonable adjustments that may be required for those with disabilities.

Engagement with suppliers, customers and others

The Board recognises that it is essential for the long-term success of the business to build and maintain strong relationships across its customers, suppliers and wider stakeholder community. In order to effectively achieve this, there is a customer account management team who cultivate strong customer relationships. Supplier relationship management is maintained through our product experts and supported through our membership of an industry buying group.

The Board considers the interests of all shareholders and stakeholders at its regular board meetings and ensures that all stakeholders interests are considered when it is appropriate to do so. Qualifying third party indemnity provisions Qualifying third party indemnity provision for the benefit of one or more directors of the Company was in force during the financial year.

The group strives to ensure all employees and job applicants are treated fairly and without discrimination. It aims to utilise and develop, to the full, the abilities and talents of all members of staff. Development, training, and further education are actively encouraged, and priority is given to internal promotion.

All employees are eligible to join the group's pension scheme, and all employees participate in the Group's profit-sharing bonus scheme, which ordinarily pays out twice each year. The Elliott Brothers Employment Trust holds an 11% shareholding in the Company; the income from which is earmarked for the benefit of current and former employees and their dependents.

Details of the number of staff employed and related costs are set out in note 6 to the financial statements.

Post balance sheet events

There have been no significant events impacting the group since the year end.

The auditor, Fiander Tovell Ltd, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

The Group aims to supply environmentally sustainable products thereby enabling its customers to comply with current building regulations. We source our timber products from suppliers who meet appropriate environmental standards and have both FSC and PESC affiliation. The directors regularly review opportunities to reduce the environmental impact, now covered in more detail under the SECR section.

Energy and carbon report

Our energy and carbon calculations have been conducted in accordance with the UK Government’s Reporting Guidelines for Company Report. Data has been reviewed and verified by a third-party (Adler and Allan). GHG calculations have been performed using the Greenhouse Gas Protocol Corporate Reporting Standards (GHG Protocol) and ISO14064-1:2018 Greenhouse Gases – Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals. All emissions calculations use up to date GHG Conversion Factors for Company Report (BEIS) and are reported as carbon dioxide equivalent (CO2e), accounting for all major greenhouse gases.

The table below sets out total energy consumption and resulting GHG emissions by scope arising from business operations:

Elliott Brothers is committed to playing its part in reducing environmental impact and tackling climate change. Based on the previous financial year, our total energy consumption and overall emissions have increased by 2% and 3%, respectively, due to higher demand for deliveries, and the acquisition of Futuremost. Whilst total emissions per employee have decreased by 3% in the last 12 months, our carbon intensity per £m turnover has increased by 1%.

The Group has successfully installed LED lighting across another site, and further LED trials have been undertaken at our Christchurch Site, with a view to a larger scale rollout in 2025. As well as this, we are currently investigating the potential for solar PV systems at our sites and are also reviewing the use of electric forklift trucks at all sites once the current diesel forklift fleet contract expires in 2027.

We continue to progressively decarbonise our vehicle fleet with 80% of company cars now hybrid or fully electric; with more to be transitioned to low or zero emissions vehicles as lease contracts expire. We are continuing to ensure that our HGVs are upgraded with the most efficient Euro 6 models, wherever possible. Furthermore, our diesel forklifts continue to be swapped in favour of zero emissions electric alternatives. We will conduct regular energy audits and other studies to identify more opportunities to increase energy efficiency and reduce our environmental impact in the future. We will conduct regular energy audits and other studies to identify more opportunities to increase energy efficiency and reduce our environmental impact in the future.

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 group and company, and of the profit or loss of the group 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;

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

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

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 auditor of the company 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 auditor of the company is aware of that information.

We have audited the financial statements of Elliott Brothers (Builders Merchants) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 group's and the parent company's affairs as at 31 December 2024 and of the group's 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 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 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 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 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 group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent 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.

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• 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 group through discussions with 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 group, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation.

We assessed the susceptibility of the group’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.

• 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.

• tested a sample of BACS payments to identify payments being made to unexpected bank accounts.

• performed transactional testing on payroll costs in respect of those employees with responsibility or authority in connection with the payroll function.

• assessed whether judgements and assumptions made in determining the accounting estimates.

• investigated the rationale behind significant or unusual transactions.

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.

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.

Use of our 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 notes on pages 20 to 43 form part of these financial statements.

The notes on pages 20 to 43 form part of these financial statements.

The notes on pages 20 to 43 form part of these financial statements.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £4,752k (2023 - £2,702k). Excluding dividends and intercompany transactions, the company's profit for the year was £488k (2023 - £343k).

The notes on pages 20 to 43 form part of these financial statements.

The notes on pages 20 to 43 form part of these financial statements.

The notes on pages 20 to 43 form part of these financial statements.

Elliott Brothers (Builders Merchants) Limited (“the company”) is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is Millbank Wharf, Millbank Street, Southampton, Hampshire, SO14 5AG.

The group consists of Elliott Brothers (Builders Merchants) Limited and all of its subsidiaries.

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 £000.

The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Elliott Brothers (Builders Merchants) Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

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

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:

• the group has transferred the significant risks and rewards of ownership to the buyer;

• the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of turnover can be measured reliably;

• it is probable that the group will receive the consideration due under the transaction; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Contracts in progress

Contracts in progress are assessed on a contract by contract basis and are reflected in the profit and loss account by recording turnover and related costs as contract activity progresses. Where the outcome of each contract can be assessed with reasonable certainty before its conclusion, the attributable profit is recognised in the statement of income and retained earnings as the difference between the reported turnover and related costs for that contract. Where revenue on individual contracts exceeds the amounts invoiced, a debtor is recognised disclosed as 'amounts recoverable on contracts'.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

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

Computer software development assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is amortised on a straight line basis, over a period of 3 years, to the profit and loss.

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:

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:

Freehold land is not depreciated.

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 profit and loss account.

The group acquires properties for the purposes of carrying out its trading activities and not as investment properties. Occasionally, the timing of an acquisition may be opportunistic and a property may be let on a temporary basis until utilised for trading purposes.

Investment property is carried at fair value determined annually. No depreciation is provided. Changes in fair value are recognised in the consolidated profit and loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. 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 period end date, the group reviews the carrying amounts of its tangible and intangible 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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

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 group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group after deducting all of its liabilities.

Basic financial liabilities, including creditors, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group 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 group.

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 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 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 if, and only if, there is 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.

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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 leased 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.

Invoice financing

Amounts due in respect of invoice financing are separately disclosed as short term borrowing under current liabilities. The group can use these facilities to draw down a percentage of the value of certain sales invoices. The management and collection of trade debtors remains with the group, therefore the debtors are recognised in full in the balance sheet.

Elliott Brothers Employment Trust

The Elliott Brothers Employment Trust is a separately administered discretionary trust and the assets of the Elliott Brothers Employment Trust mainly comprise shares in the company.

The cost of shares is deducted from shareholders' funds.

The assets, liabilities, income and costs of the Elliotts Brothers Employment Trust are included in both the company's and the consolidated financial statements.

In the application of the group’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 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 useful lives are estimated having regard to such factors as asset maintenance, rate of technical and commercial obsolescence and asset usage. The useful lives of key assets are reviewed annually.

Where an indicator of impairment is identified on an asset, an impairment test is conducted by comparing the carrying value of the assets within the cash-generating unit containing the asset, to the recoverable amount of those assets. The cash generating unit represents the smallest group of assets that are expected to generate separately identifiable cash flows. No such impairment has been identified.

The directors have made key assumptions regarding the stage of completion on site, future costs to complete, and collectability of billings of construction contracts.

The directors have made key assumptions in the determination of the fair value of investment property in respect of the state of the property market in the location where the property is situated, and in respect of the range of reasonable fair value estimates of the asset. Advice is sought from external property experts but value can only ultimately be reliably tested in the market itself.

Rebates received from suppliers mainly consist of volume related rebates on the purchase of stock for resale. Contractual volume related rebates are accrued where it is probable the rebates will be received, and the amounts can be estimated reliably. Rebates relating to stock purchased but still held at the balance sheet date are deducted from the carrying value so that the cost of stock is recorded net of applicable rebates.

Given how rebates are remitted to the company it is not always easy to estimate the rebates due at any one point in time. A more detailed assessment is performed for amounts due from top suppliers at each year end. However, the estimate made for rebates from other suppliers is more judgmental, based on post year end receipts and historical trends over the last 3 years.

GMP equalisation provision

The group has estimated the increase in liabilities due to GMP equalisation relating to its historic pension scheme, the Elliott Brothers Limited Retirement Benefits Scheme ('Scheme'). The liability has been estimated by the company's actuary at £442k (2023 - £442k).

The ultimate cost of GMP equalisation will not be known until the Trustees complete a process to determine the impact on each relevant member's benefits. Further information is shown in note 23.

The whole of the turnover is attributable to the principal activity of the group and arises solely within the United Kingdom.

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

Their aggregate remuneration comprised:

Key management is the directors of the group and subsidiaries. The total compensation paid to key management personnel for services to the group was £1,367k (2023 - £1,337k). Liabilities payable to key management personnel at the year-end, built up over a number of years, amounted to £510k (2023 - £707k). Included in this liability is a balance attributable to a long-term incentive scheme, which is linked to changes in the net assets value of the Group. The long-term incentive scheme accrued for each participant is payable only if all qualifying conditions relating to the plan have been met.

During the year retirement benefits were accruing for 2 directors (2023 - 2) in respect of defined contribution pension schemes.

From 1 April 2023, the rate of corporation tax increased from 19% to 25%. The effective rate of corporation tax for the year ended 31 December 2024 was 25.00% (2023: 23.52%).

The effective rate of deferred tax for the year ended 31 December 2024 was 25.00% (2023: 25.00%).

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 final dividend above of 29p (2023 - 27p) per share is in respect of the year ended 31 December 2023. The interim dividend of 9p (2023 - 10p) per share is in respect of the year ended 31 December 2024.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

The directors reviewed the market value of the investment properties and concluded the year end valuation is appropriate. The historic cost of investment property is £2,062k (2023 - £2,062k).

The other investments addition in the year relates to the shareholding of Hercules Enterprises Limited, of which Elliott Brothers (Builders Merchants) Ltd owns 10% of the ordinary shares.

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

The difference between purchase price or production cost of stocks and their replacement cost is not material.

The bank loans are secured by debentures in favour of HSBC Bank Plc, which incorporate fixed charges over certain assets of the group. Also a fixed and floating charge which is supported by a guarantee across the group.

The short term borrowing relates to an invoice discounting facility and is secured by an equitable assignment of the book debts.

Obligations under finance leases and hire purchase contracts are secured over the assets concerned.

Between 30 December 1991 and 31 March 2010 the group operated a trust-based money purchase pension scheme - the Elliott Brothers Limited Retirement Benefits Scheme ('Scheme').

The Scheme was contracted out of the earnings-related part of the state pensions scheme because it was thought that an insurance-based scheme would prove to be a better alternative for its members. The Scheme was required to provide formal assurance that the arrangement would provide benefits no worse than the equivalent element of the state pension scheme. The trustees therefore contracted with Scottish Life (now part of Royal London) to provide the Scheme with a guarantee against the cost of Guaranteed Minimum Pension ("GMP") provision. In the light of these arrangements, the scheme was classified as a money purchase scheme.

The Scheme came to an end on 31 March 2010 when the company introduced a Group Personal Pension Plan. The trustees put in hand arrangements to begin the winding-up of the old scheme on 26 May 2010. Shortly afterwards, the trustees were advised that although the Royal London guarantee secured the liability of the cost of the GMP benefits payable under conditions prevailing in 1991, it did not cover the costs arising from the subsequent harmonisation of male and female retirement dates. This was a complex and uncharted issue and the winding up of the scheme was suspended until there was greater clarity on the matter. A High Court ruling on 26 October 2018 eventually provided some clarity and set out a number of different methods of calculating liabilities for schemes generally.

Following the Court's decision, the Trustees commissioned the Scheme's advisers to undertake the GMP equalisation process, using one of the approved methods, in order to progress the winding up. The first estimate of the cost of meeting the un-guaranteed element of the Scheme's liability was provided by the Scheme's actuary in April 2022 in the sum of £442,000. The group accounts now recognise this potential liability.

Further work is being commissioned to better understand this matter as there remains uncertainty as to how equalisation affects a money purchase scheme.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The group operates a defined contribution pension scheme. All monies paid by both the employer and employees are paid into pension funds for the benefit of employees. The unpaid contributions at the balance sheet date were £110k (2023 - £103k).

The company has one class of ordinary shares which carry no right to fixed income.

The share premium account includes the premium on issue of equity shares, net of any issue costs.

The capital redemption reserve contains the nominal value of own shares that have been acquired by the company and cancelled.

Profit and loss account

The profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.

Called up share capital

Share capital represents the nominal value of the shares issued.

Shares held by EBET

This balance is further explained in note 28 below.

The Elliott Brothers Employment Trust holds 97,572 ordinary £1 shares in Elliott Brothers (Builders Merchants) Limited representing 11.14% of the issued share capital. The shares are held for the long term benefit of the employees generally. The trustees of the trust are able to consider requests for them to make grants for the benefit of beneficiaries. In the past, they have enabled some members of staff to receive urgent medical treatment earlier than would otherwise be available. They can also consider grants to assist staff and their families in other ways. The directors estimate the shares are worth no less than cost.

On 30 September 2024 the group acquired 100% of the issued capital of Futuremost Group Limited and its subsidiaries.

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

There is no ultimate controlling party of Elliott Brothers (Builders Merchants) Limited.

The company has taken advantage of the exemptions conferred by Section 33.1A of FRS 102 not to disclose transactions with its wholly-owned subsidiaries.