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

2024 proved to be a challenging year for the UK economy, particularly for the construction sector. Persistently high interest rates, maintained throughout the year in efforts to curb inflation, continued to suppress mortgage approvals and dampen developer confidence. As a result, the UK construction industry experienced a marginal contraction, with new housing output declining more sharply than other sub-sectors. In parallel, as sector activity slowed, competition within the merchanting marketplace intensified.

Against this backdrop, the Group delivered a stable trading performance, supported by a strong operational foundation and ongoing strategic investment. Total turnover experienced a slight decline to £131.18 million, primarily driven by softer demand in the new-build sector. This resulted in a reduction in Developer Sales, mirroring broader market challenges across the construction industry.

Despite these headwinds, the Group recorded a notable increase in Renewables Sales, reflecting the success of our strategic focus on low-carbon product categories. This growth not only helped offset the decline in developer-related turnover but also positions the business favourably in relation to long-term national decarbonisation and energy-efficiency objectives.

In the face of broader economic uncertainty, the core merchanting business experienced only a marginal decline, demonstrating underlying operational resilience and continued strength in non-developer trade and retail activity, albeit at slightly reduced volumes.

Operating profit declined by 16.8%, driven in part by modest gross margin compression rsulting from intensified competition and a shift in the sales mix towards lower-margin renewable products. This was further compounded by a 5.6% increase in overheads, attributable to rising employment costs, general inflationary pressures, higher bad debt provisions, and the operational expenses associated with opening three new branches. Notwithstanding these pressures, the business remained profitable and cash-generative, maintaining a strong balance sheet and a healthy liquidity position, providing ample headroom to support future investment and operational continuity and navigate economic uncertainty.

The Directors acknowledge the challenges encountered during 2024, shaped by macroeconomic headwinds and a subdued construction environment, and consider the Group’s performance to be satisfactory in the context of these external conditions. While the year saw a modest decline in overall revenue and a more marked impact on profitability, the successful execution of our branch expansion strategy and the strong performance in the Renewables segment have laid a solid foundation for future resilience and strategic positioning.

Looking ahead to 2025, the industry continues to face considerable uncertainty. The combined effects of sustained high interest rates, continued weakness in the new-build sector, and the introduction of additional cost burdens—such as the increase in Employers’ National Insurance contributions—are expected to exert further pressure on margins and sentiment across the construction supply chain. As such, trading conditions are likely to remain demanding in the short term.

Nonetheless, the Group anticipates continued controlled growth, even amid a challenging external environment. Our long-term strategy—centred on measured branch expansion and organic growth within the existing network—will remain fundamental to our future development. In the near term, management will focus on navigating persistent market challenges by enhancing operational efficiency, maintaining disciplined cost control, and accelerating growth within the Renewables segment. The Directors remain confident in the Group’s ability to adapt, compete, and succeed in a dynamic and evolving marketplace.

The Directors consider a range of different performance indicators in assessing its operations. The key financial performance indicators during the period were as follows:

                                2024        2023

                                £         £

Turnover                             131,183,616    132,377,519

Turnover Growth                            -0.90%        8.17%

Gross Profit %                            27.65%        28.13%

Profit before Taxation                        9,964,715    12,082,987

Net Profit %                            5.62%        6.97%    

Stock Turnover Days                        76        73

The Group regularly monitors sales and gross margin on a product/product category/manufacturer/branch basis.

The likely consequences of any decision in the long term

Branch Expansion

In line with our growth strategy of identifying and capitalising on opportunities to expand our branch network, three new branches were opened in 2024—located in Wrexham, Northallerton, and Swinton.

Investments in our Existing Branch Network

The Group continues to invest in the renovation and modernisation of its existing branches to enhance the overall customer experience and support staff in delivering even higher standards of service. As part of this ongoing commitment, the freehold premises of one of our existing branches was successfully acquired in 2024, securing long-term operational stability and enabling further site improvements.

Additional Warehousing Space

In 2024, the Group completed the acquisition of additional warehouse space, significantly increasing our capacity to hold higher stock levels. This investment strengthens our ability to support branch operations and ensures improved service availability for our customers.

Low Carbon Centre

Following the successful launch of our Low Carbon Centre in Burnley in 2023, we opened a second Daikin Sustainable Home Centre in 2024 at our Swinton branch in Manchester. The new facility supports both installer training and homeowner education in renewable heating technologies, reinforcing our ongoing commitment to low-carbon innovation. Through strategic investment in infrastructure that supports clean energy adoption, the Group continues to strengthen relationships with suppliers, customers, and trade professionals, while positioning itself at the forefront of the sector’s low-carbon evolution.

The interests of the Group's employees

Our employees are at the core of our business and are the driving force behind our success. Of fundamental importance to the Board are the views of our employees who work for us, as well as their health & safety. We strive to create an environment where employees feel engaged and empowered to deliver outstanding customer service, are proud to be part of James Hargreaves, and can enjoy a healthy and fulfilling working life. We provide a working environment where our employees are able to realise their potential. The Board works closely with all employees to ensure their requirements are met.

Acknowledging the pivotal contribution of our employees in ensuring the delivery of outstanding customer services, the Group maintains a steadfast commitment to conducting routine assessments of pay and rewards. In alignment with past practices, the Group undertook a comprehensive pay review in 2024, which was conducted internally.

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

Customers are at the heart of our business. We aim to deliver truly outstanding customer service. The Group strives to maintain a close relationship with its customers so that it can understand their real and perceived needs. Improving efficiencies for our customers is a top priority for the business.

The Group's focus remains on the service. Recent Improvements, such as the Click and Collect facility, the Customer Ordering Portal and the launch of e-commerce websites, allow the Group to serve customers better.

The Group's relationships with suppliers are vital to ensuring it can supply the right product at a competitive price in a timely manner to meet its customers' demands. The Group is committed to ensuring it works responsibly with suppliers. We have worked closely with all our key suppliers to achieve high levels of stock at our branches and in communicating with them about any significant shortages. The Group maintains strong payment discipline and ensures timely payments to all suppliers, regardless of size, in line with agreed terms.

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

In addition to generating new job opportunities within the local area of our branch operations, the Group has actively been recruiting young apprentices whenever feasible, nurturing them towards a truly valuable career trajectory.

The Group remains firmly committed to minimising its environmental impact and advancing sustainability across its operations. Several key initiatives have been implemented or are underway as part of our ongoing journey towards achieving net-zero carbon emissions:

• Work commenced in late 2024 on the installation of a major solar energy system at our head office in Burnley, with completion expected in early 2025. Once fully operational, the system will generate clean, renewable energy to power the entire site, including buildings, operational equipment, and parts of our vehicle fleet. This significant investment will substantially reduce our reliance on the national grid and marks a major milestone in our net-zero aspirations.

• The adoption of EDI, digitised document storage, and paperless invoicing has led to a measurable reduction in printed materials, supporting both operational efficiency and environmental goals.

• The Group continues to invest in zero-emission electric vehicles, demonstrating our commitment to reducing environmental impact through cleaner vehicle choices.

• LED lighting is being systematically installed throughout our premises where required.

• We consistently evaluate and implement opportunities to reduce our carbon footprint across all areas of the business, as part of a continuous improvement approach.

• Active role in the recycling of waste packaging from customers.

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

We prioritise integrity and accountability in all our interactions, from our relationships with customers and suppliers to our dealings with employees and stakeholders. Our policies and procedures are designed to ensure compliance with legal and regulatory requirements, as well as to promote a culture of fairness and respect. By consistently upholding these principles, we aim to build and sustain trust, foster long-term partnerships, and contribute positively to the communities in which we operate.

The need to act fairly as between members of the company

At the ultimate parent Group level, all minority shareholders are actively employed by the trading Group, fostering a stronger and more profound relationship between the Group and its shareholders. Performance metrics and financial information are readily available to all members of the Group. The Board routinely considers the interests of the Group's members in the decision-making process, ensuring alignment with the Group's practices, values, and goals.

On behalf of the board

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

The principal activity of the company is a holding company. The principal activity of the group continued to be that of wholesale plumbers' merchants.

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

Ordinary dividends were paid amounting to £5,000,267. The directors do not recommend payment of a further dividend.

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

G J Rothwell resigned as a director on 28 February 2023 and was re-appointed as a director on 1 February 2024.

The group and company finances its operations through a mixture of retained profits, and where necessary to fund expansion or capital expenditure programmes through bank borrowing.

The management's objectives are to:

• retain sufficient liquid funds to enable it to meet its day to day obligations as they fall due whilst maximising

returns on surplus funds;

• minimise the group's and company's exposure to fluctuating interest rates when seeking new borrowings; and

• match the repayment schedule of any external borrowings or overdrafts with the expected future cash flows expected to arise from the company's trading activities.

As the group and company funds are invested in sterling bank deposit accounts there is no exchange rate risk exposure. The group and company funds are held primarily in short term variable deposit accounts. The directors believe that this gives them the flexibility to release cash resources at short notice and also allows them to take advantage of changing conditions in the finance markets as they arise.

Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.

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

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

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

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

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2023 UK Government’s Conversion Factors for Company Reporting

To compare the emissions efficiency of the business year on year as the business changes, metrics have been used to analyse emissions and to measure progress. These intensity metrics consider the growth of the business and act as a measure of business performance and emissions. The group have utilised the revenue during the financial year to determine the tonnage of CO2 (equivalent) per £1,000,000 generated as the intensity ratio.

The group continues to invest in greener working practices in our ongoing review of our vehicle fleet, including cars, delivery vans and delivery wagons.

LED lighting continues to be installed across the group where it is required to improve energy efficiency.

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 James Hargreaves Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, 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.

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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection; 

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias. 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

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 £5,000,267 (2023 - £3,000,186 profit).

James Hargreaves Holdings Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Todmorden Road, Burnley, Lancashire, United Kingdom, BB11 3JT.

The group consists of James Hargreaves Holdings 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 £.

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

The company has taken advantage of the Reduced Financial Reporting Regime, as permitted by FRS102 regarding the disclosure requirements of Sections 3, 4, 7, 11, 12 and 33 of the standard. This information is included in the consolidated financial statements herein from a group perspective.

The consolidated group financial statements consist of the financial statements of the parent company James Hargreaves Holdings 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.

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

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

Goodwill represents the difference 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 5 years.

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

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 recognised in the profit and loss account.

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 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.

Provisions are made against slow moving, obsolete and surplus stock.

Cash and cash equivalents include cash in hand, deposits held at call and broker deposited funds for the purpose of Contracts for Difference (CFD) trading.

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 measured at transaction price including transaction costs.

CFDs are derivative financial instruments which are initially recognised at fair value on the date the contract is entered into. At each reporting date open trades are remeasured at fair value. Changes in fair value are recognised in the profit and loss. Broker deposited funds are held as cash equivalents in the balance sheet.

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 and loans from fellow group companies are recognised at transaction price.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 at transaction price.

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.

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.

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.

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

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

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 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 following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.

There is a degree of estimation uncertainty in relation to the calculation of the group's stock provision. When calculating the stock provision, management considers the age, nature and condition of the stock as well as applying assumptions around saleability of stock in the future.

The group makes an estimate of the recoverable value of trade and other debtors. When assessing the impairment of trade and other debtors, management considers factors including the ageing profile of trade debtors and past experience. For balances which management deem to be irrecoverable, a provision is made in the financial statements against these balances.

Determination of whether leases entered into by the group as lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment. At the year end, management review the financial performance of its subsidiaries to ensure that no impairment is required.

The average monthly number of persons employed by the group and 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 5 (2023 - 8).

In addition to the above, taxation services in respect of the company's directors were paid by the company, amounting to £15,200.

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:

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

Group stocks are stated after provisions for impairment of £2,721,000 (2023 - £2,337,000).

Other loans are unsecured, bear interest at 5.25% per annum and are repayable on demand.

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

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

At 31 December 2024, the amount outstanding relating to defined contribution plans was £11,921 (2023 - £21,464)

Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Capital redemption reserve - This reserve records the nominal price of shares purchased wholly or partly out of distributable reserves.

Other reserves - This reserve records the impact of a historic increase in equity arising from merger accounting.

Profit and loss account - This reserve records retained earnings and accumulated losses, less equity dividends paid.

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

At the balance sheet date the following amounts were contracted for but not provided in the financial statements:

The company has taken advantage of the disclosure exemption set out in FRS 102 Section 33.1A from disclosing details of transactions with wholly owned group companies.

The ultimate controlling party is considered to be Mr G J Rothwell by virtue of his majority shareholding in the company.