REGISTERED NUMBER: 00254946 (England and Wales)

LBS BUILDERS MERCHANTS LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2024

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

8

Income Statement

12

Other Comprehensive Income

13

Balance Sheet

14

Statement of Changes in Equity

15

Notes to the Financial Statements

16

DIRECTORS:

J M Davies

R G Davies

B O Davies

P W Evans

D G Thomas

SECRETARY:

P W Evans

REGISTERED OFFICE:

LBS Business Centre

Parc Amanwy

Ammanford

Carmarthenshire

SA18 3FE

REGISTERED NUMBER:

00254946 (England and Wales)

SENIOR STATUTORY AUDITOR:

Henry Lloyd Davies

AUDITORS:

Bevan Buckland LLP

Chartered Accountants

And Statutory Auditors

Ground Floor Cardigan House

Castle Court

Swansea Enterprise Park

Swansea

SA7 9LA

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

BUSINESS REVIEW

The Income Statement shows a profit for the financial year of £488,000 (2023: £1,424,000).

In the opinion of Directors, despite improving its sales performance, pressure on margins continued. The sales volume growth, which was ahead of industry figures, still did not match the increase in overheads due to individual, exceptional events plus economic and industry factors. The Directors anticipate that the market will continue to be challenging for all in the sector, but the business has a strong outlook for growth and improved financial performance for the coming year.

2024 was a busy year for projects. The Company acquired two new businesses; DG Heath (Timber Products) Limited based in Pontarddulais, Swansea and Denman & Sons (Builders Merchants) Limited in Pengam, increasing the number of trading sites to 30. The Financial Statements reflect goodwill included from the purchase of both sites.

Alongside these new branches, the company relocated its Total Plumbing Swansea Branch and Showroom to an improved, larger site in Llansamlet, Swansea. The Company also relocated its LBS Maesteg branch to a larger site across town, doubling the size of the branch. LBS Holdings (UK) Limited (Parent Company) purchased its LBS Neath site, which it had occupied since 2010, complete with additional land, before fully redeveloping and upgrading the branch offer. All three sites are trading positively in line with Directors' expectations.

The Company has made a large provision of bad debt for 2024. Customers experienced tough market conditions, including insolvencies in some cases. Whilst this is provisional, the Company continues to work with both Administrators and customers in difficulty to ensure that any debt is repaid.

The Directors continue to take a positive view with regards to future trading and growth. For 2025, the Company is outperforming industry benchmarks year-to-date, with stronger results projected for the remainder of the year. Continued investment in both employees and across the infrastructure of the Company will deliver continued long-term success.

GOING CONCERN

The forecasts prepared by the directors indicate that the company will be able to continue to trade profitably for the remainder of the year ended 31 December 2025 and the following year. Those forecasts also show that the company anticipates that it will be able to operate the business with the current financial facilities it has available, the company continues to pursue sustainable growth opportunities as well as, investing in areas which will develop sales, reduce costs or improve profit. On this basis the directors have concluded that it is appropriate that the financial statements be prepared on the going concern basis.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the company's strategy are subject to a number of risks. The key business risks and uncertainties affecting the company are considered to relate to competition from other builders' merchants and the level of activity in the construction and home improvements sectors.

Financial key performance indicators ·

The directors consider that the key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross profit, operating profit and profit before taxation as set out in the Income Statement.

Streamlined Energy and Carbon Reporting (SECR) Statement

In line with the Streamlined Energy and Carbon Reporting (SECR) requirements, the company is exempt from reporting company specific information and consolidated reporting is included in the LBS Holdings (UK) Limited financial statements.

SECTION 172(1) STATEMENT

A director of a company must act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

-

the likely consequences of any decisions in the long-term.

-

the interests of the company's employees.

-

the need to foster the company's business relationships with suppliers, customers and others.

-

the impact of the company's operations on the community and environment.

-

the desirability of the company maintaining a reputation for high standards of business conduct; and

-

the need to act fairly as between members of the company.

OUR PURPOSE

The primary purpose of the company is to provide high quality building material products and best in class customer experience through innovation and partnership. We constantly strive to help set industry standards, engender trust and build our reputation for excellence.

THE BOARD'S APPROACH

The company is family owned and managed. The overall Board strategy is based on a long-term view of commercial, sustainable growth, supported by the right people that deliver. The policy of ongoing investment in quality acquisitions will continue to pay dividends in future years.

STAKEHOLDER ENGAGEMENT

The Board acknowledges that the long-term success of the Company is dependent on the way it works with several important stakeholders. Key stakeholders are considered in their decision making and in doing so ensure the directors' duty is discharged under section 172 of the Companies Act 2006.

EMPLOYEES

The success of the Company is dependent on the workforce, and this is reflected in the company's key objectives. The Company engages with the workforce through a number of means. Regular HR surgeries are held with all branches, this allows independent communication on an individual basis to discuss business updates, welfare issues and any questions employees may have. The company also has an appointed Senior Leadership Team which is made up of key individuals providing representatives for each area. The Senior Leadership Team assists the Board in the engagement, management and development of its employees across the business.

CUSTOMERS

The Company seeks to develop long term relationships with its customers to support their growth plans. The Company has developed a reputation for the highest quality products and strong stock availability. Continuous strides are being made to maintain its position in the market.

The Company is subject to regular audits from its customer base. All audits have been passed successfully. The Company also holds accreditations from FSC, PEFC and ISO amongst others.

SUPPLIERS

The Company uses a number of strategic suppliers both directly and through its membership of a national buying group. This ensures the consistency and quality of products across the Company as a whole, irrespective of where they are produced. The relationships with these suppliers are longstanding and maintained through regular discussion and a combination of formal and informal reporting processes. The majority of suppliers used have a longstanding relationship with the Company which enables the Company to plan for the medium term and ensure a robust supply chain is in place to support future plans. The Company also ensures its supply chain complies with the Companies policies with regard to Modem Slavery and ethical sourcing of raw materials.

ENVIRONMENT

At LBS Builders Merchants Limited, sustainability is a key focus for the business. This is key to the company's accreditation under ISO 14001 & ISO 50001, in that the company has set its own suite of targets to ensure betterment in its processes, asset management and the products it procures in order to aim for continuous improvement

KEY DECISIONS MADE IN THE YEAR

The majority of the key decisions made in the year are covered in these accounts under the Business review, namely, the acquisition of two new businesses: DG Heath (Timber Products) Limited based in Pontarddulais, Swansea and Denman & Sons (Builders Merchants) Limited in Pengam.

Alongside these new branches, the company relocated its Total Plumbing Swansea Branch and Showroom to an improved, larger site in Llansamlet, Swansea. The Company also relocated its LBS Maesteg branch to a larger site across town, doubling the size of the branch.The parent company purchased its LBS Neath site, which it had occupied since 2010, complete with additional land, before fully redeveloping and upgrading the branch offer. All three sites are trading positively in line with Directors' expectations.

The Company also invested further into its IT security and eCommerce platforms to ensure an effective and robust operating system tied with innovation.

ON BEHALF OF THE BOARD:

B O Davies - Director

30 September 2025

The directors present their report with the financial statements of the company for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of builders' merchants.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

J M Davies

R G Davies

B O Davies

P W Evans

D G Thomas

CHARITABLE DONATIONS

The company paid £2,709 (2023: £2,427) to UK based charities in the year, the donations were for numerous local charities with the maximum donation to an individual charity being £439 (2023: £810).

FINANCIAL RISK MANAGEMENT

The company's operations expose it to a variety of financial risks that include the effects of changes in credit risk, liquidity risk and interest rate risk. The company has in place a risk management program that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs.

Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department.

PRICE RISK

The company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in scale or nature. The company has no exposure to equity securities price risk as it holds no listed or either equity investments.

CREDIT RISK

The company has implemented policies that require appropriate credit checks on potential customers before sales are made. Where debt finance is utilised, this is subject to pre-approval by the board of directors and such approval is limited to financial institutions with an AA rating or better. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed annually by the board.

LIQUIDITY RISK

The company actively maintains short-term debt finance that is designed to ensure the company has sufficient available funds for operations and planned expansions.

FUTURE DEVELOPMENTS

The directors are of the view that growth in turnover and profitability will be maintained in the future given reasonable market conditions.

EMPLOYEES

The Company is committed to attracting, developing and retaining the best employees. We do this by offering competitive remuneration packages, definitive career path and a working environment that gives everyone the opportunity to achieve their aspirations through commitment, loyalty and trust.

We believe in building on strengths and improving on weaknesses through a number of training and development programmes on an internal and external basis.

In order to achieve a common awareness of all employees of the financial and economic factors that affect the company's performance, we operate an open two-way communication policy that embraces employee ideas and input through a number of different channels.

REWARD AND RECOGNITION

To ensure employees share in our success, the company offers competitive pay and benefit packages that are directly linked to performance. This is controlled through the achievement of commercially based targets.

EQUAL OPPORTUNITIES POLICY

Applications for employment by disabled persons are always fully considered, bearing in mind the respective aptitudes and abilities of the applicant concerned. In the event of members of staff becoming disabled; every effort is made to ensure that their employment with the Company continues, and the appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of a disabled person should, as far as possible, be identical to that of a person who does not suffer from a disability.

The Company is committed to ensuring that all of our employees and job applicants are treated fairly, have equality opportunity and are not discriminated against. The Company does not discriminate on the grounds of sex, sexual orientation, marital status, age, ethnic origin, colour, nationality, disability, religion or religious belief.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable 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 company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Bevan Buckland LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

B O Davies - Director

30 September 2025

Opinion

We have audited the financial statements of LBS Builders Merchants Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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:

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, and then, design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

We discussed our audit independence complying with the Revised Ethical Standard 2024 with the engagement team members whilst planning the audit and continually monitored our independence throughout the process.

Identifying and assessing potential risks related to irregularities.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

-

enquiring of management, including obtaining and reviewing support documentation, concerning the company's policies and procedures relating to:

-

identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of non-compliance;

-

detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;

-

discussing among the engagement team how and where fraud might occur in the Financial Statements and any potential indicators of fraud.

-

obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect on the operations of the company, The key laws and regulations we considered in this context included the UK Companies Act and relevant tax legislation.

Audit response to risks identified

In addition to the above, our procedures to respond to risks identified included the following:

-

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations;

-

enquiring of management concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

-

reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC;

-

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments;

-

assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and

-

evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Henry Lloyd Davies (Senior Statutory Auditor)

for and on behalf of Bevan Buckland LLP

Chartered Accountants

And Statutory Auditors

Ground Floor Cardigan House

Castle Court

Swansea Enterprise Park

Swansea

SA7 9LA

30 September 2025

TURNOVER

4

88,930,996

87,066,943

Cost of sales

59,632,274

58,077,428

GROSS PROFIT

29,298,722

28,989,515

Administrative expenses

29,092,776

27,374,487

205,946

1,615,028

Other operating income

5

518,375

174,081

OPERATING PROFIT

7

724,321

1,789,109

Interest receivable and similar income

110,711

226,293

835,032

2,015,402

Interest payable and similar expenses

8

1,800

-

PROFIT BEFORE TAXATION

833,232

2,015,402

Tax on profit

9

345,489

591,692

PROFIT FOR THE FINANCIAL YEAR

487,743

1,423,710

PROFIT FOR THE YEAR

487,743

1,423,710

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

487,743

1,423,710

FIXED ASSETS

Intangible assets

10

697,313

-

Tangible assets

11

4,867,908

4,264,662

Investments

12

34,692

34,692

5,599,913

4,299,354

CURRENT ASSETS

Stocks

13

12,917,632

11,335,435

Debtors

14

19,102,461

14,921,375

Cash at bank and in hand

3,038,162

10,880,874

35,058,255

37,137,684

CREDITORS

Amounts falling due within one year

15

8,378,205

9,889,388

NET CURRENT ASSETS

26,680,050

27,248,296

TOTAL ASSETS LESS CURRENT LIABILITIES

32,279,963

31,547,650

CREDITORS

Amounts falling due after more than one year

16

(88,438

)

-

PROVISIONS FOR LIABILITIES

19

(763,451

)

(607,319

)

NET ASSETS

31,428,074

30,940,331

CAPITAL AND RESERVES

Called up share capital

20

2,267

2,267

Capital redemption reserve

21

1,133

1,133

Retained earnings

21

31,424,674

30,936,931

SHAREHOLDERS' FUNDS

31,428,074

30,940,331

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

B O Davies - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

2,267

29,513,221

1,133

29,516,621

Changes in equity

Total comprehensive income

-

1,423,710

-

1,423,710

Balance at 31 December 2023

2,267

30,936,931

1,133

30,940,331

Changes in equity

Total comprehensive income

-

487,743

-

487,743

Balance at 31 December 2024

2,267

31,424,674

1,133

31,428,074

1.	STATUTORY INFORMATION

LBS Builders Merchants Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The address of its registered office is LBS Business Centre, Parc Amanwy, Ammanford, Carmarthenshire; Wales, SA18 3FE.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

The forecasts prepared by the directors indicate that the company will be able to continue to trade profitably for the remainder of the year ended 31 December 2025 and the following year. Those forecasts also show that the company anticipates that it will be able to operate the business with the current financial facilities it has available, the company continues to pursue sustainable growth opportunities as well as, investing in areas which will develop sales, reduce costs or improve profit. On this basis the directors have concluded that it is appropriate that the financial statements be prepared on the going concern basis.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirement of paragraph 33.7.

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company 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.

Sale of goods

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

-

the company has transferred the significant risks and rewards of ownership to the buyer; ·

-

the company 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 company 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.

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirers interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Income Statement over its useful economic life.

Intangible assets

Intangible 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.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% on cost

Plant and Machinery

-

15% on cost

Fixtures and fittings

-

15% on cost

Motor vehicles

-

10 - 33.3% on cost

Tangible assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

The assets' residual values useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Income Statement.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Functional and presentation currency

The company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement except when deferred in other comprehensive income as qualifying cash flow hedges

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalent are presented in the Income Statement within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Income Statement within 'other operating income'.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Financial instruments

The company has applied section 11 and 12 of FRS 102 in respect of recognition and measurement of financial instruments. The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties arid investments in non-puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Income Statement.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that-are readily convertible to known amounts of cash with insignificant risk of change in value.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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 reviewed if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.

i) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives of the assets. The useful economic lives are re-assessed and amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and physical condition of the assets

ii) Inventory provisioning

The principal activity of the company is that of a builders merchants. When calculating the inventory provision, management considers the nature and condition of the inventory, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. See note 13 for the net carrying amount of the inventory and associated provision.

iii) Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 14 for the net carrying amount of the debtors and the associated impairment provision.

4.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

All turnover arose within the United Kingdom

5.	OTHER OPERATING INCOME

2024

2023

£

£

Rents received

71,157

53,561

Other income

127,218

120,520

Government grants

320,000

-

518,375

174,081

Government grants previously deferred have been released to the income statement during the year

6.	EMPLOYEES AND DIRECTORS

2024

2023

£

£

Wages and salaries

13,041,170

12,759,826

Social security costs

1,164,617

1,133,429

Other pension costs

370,193

480,156

14,575,980

14,373,411

The average number of employees during the year was as follows:

2024

2023

Employees

469

466

The company's directors are employed by LBS Holdings (UK) Limited, their employment costs are included within recharges made to the company.

7.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2024

2023

£

£

Hire of plant and machinery

965,197

963,571

Other operating leases

2,028,970

1,567,183

Depreciation - owned assets

755,714

533,157

Depreciation - assets on hire purchase contracts

8,081

-

Profit on disposal of fixed assets

(40,763

)

(15,290

)

Goodwill amortisation

315,677

10,000

Auditors' remuneration

37,900

36,750

Taxation compliance services

6,200

5,000

Government grants

(320,000

)

-

Government grants previously deferred have been released to the income statement during the year.

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

2024

2023

£

£

Hire purchase

1,800

-

9.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2024

2023

£

£

Current tax:

UK corporation tax

193,446

459,701

Adjustment in respect of

previous periods

(4,089

)

99,712

Total current tax

189,357

559,413

Deferred tax

156,132

32,279

Tax on profit

345,489

591,692

UK corporation tax has been charged at 25% (2023 - 23.52%).