The directors are pleased to present their report and financial statements for the year ended 31st December 2024.

The company’s principal activity remained the production and sale of flowering and tropical houseplants. Sales are made to major UK multiple retailers, garden centres, and through our direct-to-consumer (D2C) brand.

Turnover for the year increased slightly to £11,555,339 (2023: £11,255,667). The company recorded a profit before taxation of £74,295 (2023: loss of £279,995).

Performance in 2024 was underpinned by a significant improvement in gross margin, reflecting operational efficiencies and improved production planning. This was achieved despite a £220,000 bad debt expense incurred during the year. The ability to maintain profitability under these circumstances demonstrates the resilience of the business.

The directors remain cautiously optimistic about the outlook for 2025 and beyond. Supermarkets will continue to provide significant scale for growth, although pricing pressure and margin erosion remain an ongoing feature of this channel. The direct-to-consumer business has shown modest year-on-year growth, although higher customer acquisition costs continue to limit profitability, and the directors recognise that strategic investment will be required to expand this channel further. Demand from garden centres strengthened in 2024, particularly for sustainable and peat-free plants, and this market is expected to offer further opportunities in the years ahead.

Industry-wide challenges such as labour shortages, energy costs, and the peat-free transition are easing but remain areas of focus. Foreign exchange movements had limited impact in 2024 but continue to present a risk due to the reliance on imported materials. Overall, improvements achieved in the second half of 2024 provide a more stable foundation for the business, and the directors believe the company is well positioned to respond to opportunities as market conditions develop.

The directors have considered the principal risks and uncertainties facing the business. These remain consistent with prior years, but continue to be actively monitored and managed. Demand for plants is influenced by wider consumer trends and levels of discretionary spending, and a downturn in consumer confidence could adversely affect sales. The company is reliant on timely and cost-effective transport routes, and disruptions, shipping delays, or higher freight costs represent a continuing risk to operations and margins.

The company is exposed to exchange rate movements on the purchase of imported materials, and fluctuations may increase costs and reduce profitability. As a plant-growing business, climate and environmental factors such as weather patterns, plant disease, and changes to regulation, including the transition to peat-free production, represent further risks to both production and quality. In addition, the availability of seasonal labour is critical to operations, and recruitment challenges or changes to immigration policy could affect the company’s ability to meet production demands.

The directors review these risks regularly and take steps, where possible, to mitigate their potential impact through careful forecasting, close supplier and customer relationships, and ongoing monitoring of market conditions.

The company continued to broaden its foliage and flowering product range during the year, with an emphasis on quality, sustainability, and the transition to peat-free production. These initiatives supported stronger trading relationships and enhanced the reputation of the business with both retail and direct customers. Operational processes were streamlined and efficiencies achieved in the second half of 2024, which contributed positively to margins and provided a stronger platform going into 2025.

The directors monitor both financial and operational performance using a number of key performance indicators. Turnover increased to £11.56m (2023: £11.26m), reflecting modest overall growth. Gross margin improved significantly to 12.7% (2023: 7.7%), demonstrating enhanced production efficiency and tighter pricing discipline. Operating profit for the year was £184k (2023: £169k loss), showing a return to positive underlying profitability. EBITDA increased to £420k, equivalent to 3.6% of turnover (2023: £63k), providing a measure of the company’s improved underlying cash-generating ability.

In addition to these financial measures, the directors also monitor non-financial indicators such as crop yields, waste levels, and progress in the transition to peat-free production, which remain important to the efficient and sustainable running of the business.

On behalf of the board

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

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

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

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

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

• select suitable accounting policies and then apply them consistently;

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

• 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.

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

During the period the company purchased 672 Ordinary C shares for £13,533. These shares were then cancelled on 28/08/2024.

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

We have audited the financial statements of Hill Brothers (Chichester) Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

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

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

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

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. 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

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

Our approach was as follows:

• We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;

• We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;

• We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;

• We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;

• We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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

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

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

The notes on pages 15 to 28 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The notes on pages 15 to 28 form part of these financial statements.

The notes on pages 15 to 28 form part of these financial statements.

Hill Brothers (Chichester) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Lagness Road, Runcton, Chichester, West Sussex, United Kingdom, PO20 1NL.

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

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

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

As set out in the Directors’ Responsibilities Statement on page 4, the directors are required to prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will continue in business.

In satisfaction of this responsibility, the directors have reviewed in detail the company’s cash flow projections and its ability to meet liabilities as they fall due. These forecasts are based on customer order programmes together with certain assumptions about additional expected sales, supported by historical trading patterns. The projections indicate that at certain points within the next 12 months, due to the timing of receipts and payments, the company may experience temporary deficits in cash that would exceed the overdraft limit.

The company has a £1 million overdraft facility in place, which supports its working capital requirements, and is due for renewal in October 2025. The directors believe the facility will be renewed and have no reason to consider that it will be withdrawn.

The Company has historically relied and still relies on an early repayment facility from a key customer to support working capital requirements during periods of cash flow constraint. This early repayment arrangement is informal and based on historical practice rather than a formal contractual agreement. This arrangement is used when there are temporary deficits in cash that exceed the overdraft limit. The directors have no reason to consider that the facility will be withdrawn.

The directors are confident that, through careful cash flow management and, where necessary, the early repayment of customer monies facilities, the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.

Should the assumptions referred to above prove to be invalid, the going concern basis may also be invalid, and accordingly, adjustments may have to be made to reduce the value of assets to their realisable value, to provide for any further liabilities which might arise, and to reclassify all fixed assets and long term liabilities as current assets and liabilities respectively.

At the time of approving the financial statements, the directors remain confident that the company will have sufficient resources to meet its ongoing obligations and to enable it to continue to operate for the foreseeable future.

Turnover comprises the invoice value of sales of goods carried out in the year, excluding value added tax, and is only recognised on the day the plants are delivered to customers.

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

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

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

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

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

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

At each reporting period end date, the company reviews the carrying amounts of its tangible 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 company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

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

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

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

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

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

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

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

Basic financial liabilities, including creditors and bank loans 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.

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.

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

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

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

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

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.

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.

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

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

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

In the opinion of the directors there are no significant judgements or areas of estimation uncertainty.

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

The company calculates its stock wastage provision using a pre-determined formula based on historical wastage rates observed in prior periods. This formula is applied to current stock levels to estimate the proportion of inventory expected to be lost or become unsaleable. In 2024, the value of the provision at the year-end was £96,216 (2023: £129,595).

The valuation of growing stock is based on the allocation of costs directly attributable to production, including direct labour and production overheads such as heating and electricity. These costs are assigned to each plant based on the normal production capacity expected under typical operating conditions. An absorption rate is calculated and applied proportionately according to the number of weeks each plant has been growing at the year-end.

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

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

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

The company has carried forward tax losses totalling £475,961 (2023: £681,463) available for future use which do not expire.

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

The carrying amount of growing stock includes absorbed costs totalling £455,361.

Bank loans and overdrafts are secured by a fixed charge over the freehold property and a fixed and floating charge over all the other assets held by the company.

Hire purchase liabilities are secured on the assets to which they relate.

Bank loans and overdrafts are secured by a fixed charge over the freehold property and a fixed and floating charge over all the other assets held by the company. The bank loan outstanding at the period end is repayable in monthly instalments of £6,070. Hire purchase liabilities are secured on the assets to which they relate.

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

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

During the period the company purchased 672 Ordinary C shares for £13,533. These shares were then cancelled on 28/08/2024.

Certain directors maintain loan accounts with the company. At the start of the financial period, the directors owed the company £4,626. During the period, additional withdrawals of £7,137 were made and repayments of £3,276 received. As a result, the closing balance owed to the company by the directors at the year end was £8,487.

The company was under the control of the directors, Mr K Hill, Mr P Hill and Mr G Hill throughout the current and previous year.