The directors present the strategic report for the year ended 31 March 2025.

The performance of the group remains closely aligned with the activity of the construction, DIY and repairs and maintenance sectors. During 2024-25 there were volume declines and also some price deflation observed in these markets, after several years of significant price inflation. Naturally this has impacted directly on the supply chain, where builders’ merchants play a key role.

Following a strong post-Covid recovery from 2020 to 2022, the past three years have seen sales volume & value declines in the builders’ merchant sector. Macroeconomic challenges impacting the UK market have included geopolitical tensions, increased borrowing costs, housing market slowdown, UK government uncertainty, rapidly rising costs through input inflation across the board coupled with the Autumn 2024 Budget tax changes. Consumers & businesses who have been experiencing the effects of the ‘cost of living crisis’, coupled with uncertainty, have had a more cautious outlook and delayed project outlay. The builders’ merchant sector has therefore become more competitive in recent years with businesses having to absorb more overheads in order to retain customers. The greater competition has led to increased insolvencies, redundancies and branch closures throughout the industry. The Sherborne Holdings group, whilst not closing any branches, has had to make a number of strategic decisions in order to continually manage costs and maximise efficiency, whilst still maintaining the high levels of quality and service that our customers expect from us.

In recent months we have seen relaxation of interest rates, with further loosening of monetary policy expected. When coupled with other factors including the recent government infrastructure strategy, planning reforms, and introduction of the Public Procurement Act, we expect to see a modest increase in construction and repair and renewal activity in the coming years.

During 2024-25 we celebrated the 150th birthday of Sydenhams, the largest trading business in the group. We reflect that this milestone has not been reached without dedication to meeting the evolving expectations of our customers and other stakeholders.

It remains as important as ever that we continue to invest for the future; increasing our service offering, reducing frictions, acting sustainably and doing business with integrity. During the year we were pleased to go live with our new Sydenhams e-commerce trading platform and website, continued the development of new and existing branches and increasing our commitment to the environment with our Sustainability Working Group and the inception of the ISO 14001 accreditation, amongst other initiatives.

At Sydenhams Timber Engineering we are proud to be working in partnership on a flagship sustainable housing project for the Duchy of Cornwall in Nansledan. This development will showcase the best in high-performing natural materials with durability, low embodied carbon, and low operational carbon output. With increasing pressure in the construction industry to find innovative solutions to reduce carbon, use sustainable materials, and maximise efficiencies, developments such as this one could mark a significant turning point.

Around the Group we also continue our usual renewal and replacement cycles of plant and equipment to ensure that operations continue to run efficiently and reliably.

Sherborne Holdings uses a range of performance indicators at branch level to manage the performance of the business. We consider that the key performance indicators relevant to the

overall financial performance and strength of the group are sales, gross margin, operating profit and net assets. We comment on these below.

Sales for the year to 31 March 2025 were £81,695,968 (2024 - £84,088,437), a decrease of 2.9%. Gross margin decreased to 40.5% (2024 – 40.9%). Operating profit decreased to £4,090,938 (2024 - £5,531,584), down 26.0% compared to the previous year. Profit before tax decreased to £4,099,005 (2024 - £5,549,882), down 26.1% compared to the previous year.

The group ended the year with net assets of £76,917,948 (2024 - £76,382,833) including cash of £7,925,840 (2024 - £5,088,807), the key elements of this strong net asset position being tangible assets, stocks and debtors.

A significant proportion of the assets of Sherborne Holdings Limited are the trading and investment properties. The property portfolio has performed in line with the local markets, which have remained robust in recent years. Approximately 80% of the portfolio is leased to the main trading subsidiary in the Group, Sydenhams Limited. The remaining 20% of the portfolio is leased to external commercial and residential tenants, with the majority of properties being presently occupied.

Acquisitions

In September 2024 we acquired the trade and assets of Shipston Building Supplies in Shipston-on-Stour, Warwickshire. This was a single branch purchase, with the land and buildings subsequently undergoing a period of refurbishment. The existing team have remained on to help run the Sydenhams Shipston branch, providing familiarity and continuity to the regular customers.

During June 2024 completion took place on the purchase of a new site in Warminster, providing a larger premises for our Warminster Hire depot to extend their range and facilities. The purchase has also added an additional unit to the investment property portfolio, for lease to external tenants.

In recent years: Guernsey Building Supplies acquired a larger premises which opened for trading in August 2023, with the previous site being leased to tenants. The new branch has proved popular with customers on the island and offers an experience and range of goods beyond what was possible at the previous location. Our Wickham Timber Centre and Timber Engineering site was expanded through the purchase of an adjacent plot of land. The new factory unit was completed in November 2023, allowing the expansion of our Timber Frame business to offer more eco-friendly and net-zero residential and commercial property. Sydenhams have many years of experience in the Timber Frame market and see this expansion as an important step towards a greener future of construction, and is an area where we conduct significant R&D to continually enhance this offering.

Matters of strategic importance and principal risks and uncertainties

In addition to the risks relating to financial instruments, detailed in the Directors' Report, the directors consider the following to be the key matters of strategic importance and principal risks and uncertainties faced by the business:

• Market conditions: The group supplies building materials and timber frame structures primarily to the 'private sector new-build' and 'repairs and maintenance' sectors. New-build activity has traditionally been more volatile, and is influenced by interest rates, government policy and consumer confidence. Repairs and maintenance expenditure is affected by similar factors, although to a lesser extent.

• Competitive pressures: The group faces competition from both national companies and local independently owned competitors. The group monitors the activities of competitors in its area of operation and responds accordingly.

• Availability of product: The group is reliant on its suppliers to ensure that product is available. There is a risk that demand for some products may exceed supply and it may take time for suppliers to increase production to meet demand. The group seeks to mitigate this risk by monitoring supply arrangements and obtaining supplies from multiple sources.

• Recruitment and retention of key staff: The group recognises the importance of its employees and uses a combination of financial and non-financial incentives in order to attract and retain key staff.

• Risk management and internal control: The group's internal controls are centred on comprehensive monthly reporting of financial performance, prevention of fraud, sales, health and safety and debtors. Stock is counted at least twice each year. Budgets are prepared annually and variances are monitored. Board approval is required for all capital expenditure.

• Changes to Business Property Relief: The Autumn 2024 budget announced changes from full relief of IHT on transfer of qualifying businesses, to effectively a 20% tax rate on transfer of businesses like ours to the next generation. This poses a significant risk to the future continuity of the business in its current form, and will likely restrict the future investment potential in the UK economy.

Overview of how the directors fulfil their duties:

Our Shareholders

The joint shareholders are both employees and Board Directors. This allows the other directors to regularly engage with the shareholders in day-to-day business, as well as at the Board meetings.

Our Employees

At the heart of the group is a family business that has been trading for over 150 years, with many long-serving employees. The dedication of the staff reflects the values of the group and the way in which the employees are engaged in the business activities and treated with fairness and respect. The group has a well-developed branch structure with each branch having its own manager & assistant manager who make many of the key decisions as to how that branch is run, alongside the Board. This allows a level of employee engagement at each branch and fosters a friendly competitive nature between the branches. Where circumstances allow, Board members perform regular branch visits and meetings are held at different sites throughout the year, which allows directors to engage directly with the employees at each site.

Our Customers

Providing a friendly and value-added service to customers is extremely important to the business. We pride ourselves on the relationships that we build with our customers, often over the very long-term. Management and directors, along with sales staff and sales representatives, have regular dialogue with customers, responding to feedback and fulfilling their needs. Given the clear and open lines of communication within the business enables decisions to be made quickly to improve the situation for all stakeholders, including customers. A number of financial and non-financial KPIs are monitored in relation to the customer accounts. These are reported to management and the Board when appropriate and used to improve the customer relationships.

Our Suppliers

Maintaining a good relationship with suppliers is crucial to the success of the business and this is managed both through direct contact with the supply chain and through the use of buying groups. Along with regular communication with the key management personnel in which relationships are developed the group also prides itself on the prompt payment to suppliers. Even during the uncertainty of the pandemic, payments continued to be made to all stakeholders within the usual business terms. Any issues relating to supplier accounts will normally be sorted promptly either with or without Board involvement.

Community and Environment

The Board recognises the importance of running a group that not only generates value for the customers, employees and shareholders, but also plays its part to contribute to wider society. Whether this is in making charitable donations of either building materials, time or money to various causes, sponsoring numerous local sports teams and individual athletes, aiming to be environmentally aware and responsible in our activities, or engaging with local communities that live in the vicinity of our branches. During 2023 we established a Sustainability Working Group comprising four individuals from across the business with a range of experience and skills, who meet regularly. We have reached out to a number of trusted partners and advisors to gather information and plan a way forward to enhance our sustainability and ESG strategy. We are currently working on additional accreditation in ISO14001 and the Global Reporting Initiative that will reinforce this commitment. We were pleased to achieve a robust initial ESG rating of BBB under the GRI standards.

Culture

Honesty, integrity and ethical standards are at the heart of how the group operates. A prudent approach is taken to doing business and the purpose is not to create short term profits but to grow the business sustainably both organically and by acquiring appropriate businesses as they come up for sale in our geographical areas of operation. This strategy has proven successful in creating long term confidence and value in the business for our stakeholders as well as increasing the service offering that we are able to provide to both existing and new customers.

Health & Safety

The safety and well-being of our employees, customers, suppliers and wider stakeholders is of utmost priority to the group. Health & safety risk assessments are regularly carried out by our external consultant and health & safety managers to understand and minimise the risks surrounding our activities. Health & safety training for all staff and logging of incidents and near-misses is carried out using the SafetyCloud managed system and there is regular reporting to the Board of any matters requiring attention. A number of employees across the group also hold health and safety qualifications, including IOSH. The Board reinforces the importance of health & safety awareness and compliance throughout the group and encourages a pro-active approach to its management.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2025.

The principal activity of the group continued to be that of sale and distribution of timber and building materials, timber engineering and the hire and sale of tools. The principal activities of the company during the year were provision of services to group companies and the letting of properties.

The results for the year are set out on page 17.

During the year interim equity dividends were paid totalling £806,785. The directors proposed a final equity dividend of £1,479,106 which was also paid in the year ending 31 March 2025.

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

The group maintains professional indemnity insurance covering directors, officers and senior managerial staff.

The group's principal financial instruments comprise of sterling bank balances, bank borrowings, preference shares, trade debtors and trade creditors arising from its trading activities.

The financial risk management objectives and policies of the group aim to minimise the risk of disruption to the business and to maintain the flexibility to react to new business opportunities. Counterparty risk relating to bank balances is managed by banking with financial institutions with strong credit ratings. Most sales are made on credit terms, and hence the group is at risk of customers defaulting on payment. This risk is managed by strict credit management procedures, and the Board review performance on a regular basis.

Liability and cash flow risk is managed by regular review of funding needs and maintaining borrowing facilities to enable the group to take advantage of acquisition and development opportunities as they arise.

The group has no material exposure to interest rate risk, price risk and foreign exchange risk.

Group management keep employees informed of developments in the business and other matters relevant to them as employees and the performance of the group, through regular branch visits, holding board meetings at branches and the use of a staff magazine. The group encourages feedback from employees on operational and management issues relating to the running of the business.

Pensions

The defined benefit section of the Sydenhams Pension Scheme closed to future accrual at 31 March 2006, at which date the scheme had a deficit of £2,279,185. An actuarial update performed at 31 March 2025 demonstrated a surplus of £3,513,162 (2024 - £3,649,764).

In line with the Streamlined Energy and Carbon Reporting legislation, the company is required to report its energy consumption and greenhouse gas emissions arising in the UK. All scope 1 & 2 sources of energy and emissions have been disclosed as well as mandatory scope 3 sources of energy and emissions.

We are committed to responsible carbon management and will practice energy efficiency throughout our organisation, wherever it’s cost effective. We recognise that climate change is one of the most serious environmental challenges currently threatening the global community and we understand we have a role to play in reducing greenhouse gas emissions.

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 2020 UK Government’s Conversion Factors for Company Reporting.

All conversion factors and fuel properties used in this disclosure have been taken from the 2024 “UK Government Greenhouse Gas Conversion Factors for Company Reporting” published by the Department for Energy Security & Net Zero (DESNZ) and the Department for Environment, Food & Rural Affairs (DEFRA). All greenhouse gas emissions have been expressed in terms of their carbon dioxide equivalence.

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m turnover, the recommended ratio for the sector.

In comparison with our previous financial period, our overall energy consumption has increased by 1% or 131.03 MWh, and our total (market based) greenhouse gas emissions have increased by 1% or 28.8 tCO2e.

We have, however, implemented the policies below for the purpose of increasing the business energy efficiency in the last financial year.

•    Our Bristol and Newport branches were fitted with solar panels

•    Guernsey branch switched from diesel to electric forklifts.

•    The newly acquired Shipston branch was converted to LED lighting

•    We have fitted light sensors in some of the stairwells / corridors

•    We are looking at several other projects along these lines

Utilities

Energy consumption expressed in kilowatt-hours has been taken from suppliers' invoices. Location based kgCO2e/kWh conversion factors for the average UK grid supply have been used to calculate greenhouse gas emissions from electricity and natural gas consumption.

Transport

Staff drive personal or company vehicles and are reimbursed through mileage claims. The litres of fuel used is recorded and the kWh/litre and kgCO2e/litre conversion factors from the category "Diesel (average biofuel blend) and Petrol (average biofuel blend)" have been used to calculate greenhouse gas emissions and underlying energy use.

Other Fuels & Emissions

LPG and Kerosene have been used and the kgCO2e/litre and kgCO2e/kWh conversion factors have been used to calculate greenhouse gas emissions and underlying energy use.

Maintenance records did not contain any instances of refrigerant leaks during the reference period. No other fugitive emissions have been identified.

TC Group were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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.

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.

We have audited the financial statements of Sherborne Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2025 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.

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. These include but are not limited to: the review of procedures surrounding income streams, cash and banking utilisation, authorisation across the purchase and bank system and segregation of duties across key areas of the business.

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/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.

Use of our report

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

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 £3,143,373 (2024 - £4,282,450 profit).

Sherborne Holdings Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 45-47 Ashley Road, Boscombe, Bournemouth, Dorset, BH1 4LG.

The group consists of Sherborne Holdings Ltd and all of its subsidiaries. The company's and group's principal activities are disclosed in the Directors' Report.

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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

For the purposes of its individual financial statements, the company is a qualifying entity under the FRS 102 Reduced Disclosure Framework and has taken advantage of the exemption from the following disclosure requirement.

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

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

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

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

The consolidated group financial statements consist of the financial statements of the parent company Sherborne 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 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

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

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

At the time of approving the financial statements, the directors are satisfied 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 and services 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 is recognised on dispatch of the goods or completion of services. Work in progress is invoiced on dispatch in line with the contract and cumulative project profit margins. Hire income is recognised on a straight line basis over the period of the hire contract.

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

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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:

Freehold land and assets in the course of construction are not depreciated.

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

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Property rented to a group entity is accounted for as tangible fixed assets.

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

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

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

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Cost is based on the cost of purchase on a first in first out basis.

Where work has been undertaken on contracts but has not been fully invoiced, the amount is included in

work in progress. Work in progress is valued at materials cost. No profit margin is recognised within work in

progress.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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

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

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

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

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

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

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

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

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.

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are described below.

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

The fixed asset depreciation charge is derived from the estimated useful economic life and residual value of the asset. These are reviewed annually alongside any impairment indicators.

The intangible assets are reviewed for their useful lives and carrying values on an annual basis to ensure these are consistent with expectations of future economic benefits. These reviews include intangible assets arising on business combinations.

The group operates a defined benefit pension scheme. The principle assumptions underlying the carrying value of the defined pension liability are based on advice from an independent actuary and are disclosed in the notes to the financial statements.

Investment property values are calculated on a rental yields basis with a percentage of between 5% to 15% utilised depending on the underlying risk of the tenant. These values are supported by independent valuations performed on a periodic basis.

The average monthly number of persons (including directors) 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 1 (2024 - 1).

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 4 (2024 - 4).

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:

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

The 2025 valuations were made by the directors, on an open market value for existing use basis.

If the investment properties had been accounted for under the historic cost accounting rules, the properties would be valued at £6,721,214 (2024: £6,791,179).

Investments in subsidiaries reflect the company's interest in the entire issued ordinary share capital of Sydenhams Limited and Isobar Properties Limited, Sydenhams Limited holds the entire issued ordinary share capital of Sydenhams Timber Engineering Limited, Sydenhams Hire Centres Limited, A Grade Timber Limited, Guernsey Building Supplies Limited, M's Building Supplies Limited, Avon Plywood Limited and Tipadel Limited.

The principal activities of Sydenhams Limited are the sale and distribution of timber and building materials. Those of Sydenhams Timber Engineering Limited are the design and manufacture of engineered timber products, those of Sydenhams Hire Centres Limited are tool hire, tool sales and repairs, those of Guernsey Building Supplies Limited are the sale and distribution of timber and building materials.

A Grade Timber Limited, Tipadel Limited, Avon Plywood Limited, M's Building Supplies Limited and Isobar Properties are dormant companies.

All subsidiaries are incorporated in the United Kingdom and registered in England and Wales other than Guernsey Building Supplies Limited which is incorporated in Guernsey. The registered office of the UK subsidiaries is 45-47 Ashley Road, Boscombe, Bournemouth, Dorset, BH1 4LG.

The registered office of the Guernsey subsidiary is Route de la Garenne, Pitronnerie Road, St Peter Port, Guernsey, GY1 2RA.

Sydenhams Limited, Sydenhams Timber Engineering Limited and Sydenhams Hire Centres Limited are audited. Guernsey Building Supplies Limited has an indefinite audit waiver. The dormant entities listed above have taken advantage of the audit exemption available to dormant companies under section 480 of the Companies Act 2006.

The overdraft is secured by way of a charge over the freehold properties at Shaftesbury Road, Gillingham; Winnall Industrial Estate, Winchester; Manor Way, Frome; Churchfields Industrial Estate, Salisbury; Ashley Road, Boscombe; and Centurion Way, Warminster.

The 5% cumulative preference shares of £1 each confer no voting rights and have no rights to dividends other than a fixed cumulative dividend of 5%. On winding up, they rank ahead of ordinary shares and will be repaid at par. They carry no right to participate in the profits or the capital of the company and are therefore classified as non-equity shares.

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.

The group operates a defined benefit pension scheme.

The defined contribution section closed with effect from 31 March 2012 and was replaced with a group personal pension scheme. Contributions to the group personal pensions scheme during the year are disclosed in note 6.

The defined benefit section closed to future accrual at 31 March 2006. The latest actuarial update at 31 March 2025 showed a decrease in the surplus from £3,649,764 to £3,513,162. The scheme's assets are held in independent, trustee-administered funds.

Assumed life expectations on retirement at age 65:

Mortality - prior to retirement assumes AMN00/AFN00 (2024 - AMN00/AFN00). Mortality post-retirement for deferred pensioners, insured pensions and scheme pensioners assumes 100% S3PMA/105% S3PFA, CMI 2023 model with long-term improvement 1.5% pa (M) and 1.0% pa (F) (2024 - S3PMA/S3PFA, CMI 2022 model with long-term improvement 1.5% pa (M) and 1.0% pa (F)).        

The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:

Amounts taken to other comprehensive income

The defined benefit obligations arise from plans funded as follows:

Movements in the fair value of plan assets

Fair value of plan assets at the reporting period end

The revaluation reserve reflects cumulative gains and losses in the fair value of investment properties.

The profit and loss account reflects cumulative profits and losses net of distributions to members.

On 30 August 2024 the group acquired the trade and assets of Shipston Building Supplies Limited.

The company is jointly and severally liable for the VAT liability of the group of which it is a member. At the year end the group liability was £357,377 (2024: £583,879).

Amounts contracted for but not provided in the financial statements:

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:

The operating leases represent leases to third parties.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

The remuneration of the group's key management personnel, who are the statutory directors of each of the companies of the group, is as follows:

During the year, consistent with their interests in the issued share capital of the company, close members of the families directors' received, in aggregate, preference dividends of £60,235 (2024: £60,235).

All dividends paid as disclosed in note 11 were to the directors and their close family members.

During the year, the directors maintained directors loan accounts with the group. Balances owed at 31 March 2025 totalled £1,893,602 (2024 - £2,893,463). The balances accrued interest at an average rate of 6.9% (2024 - 5.7%) and interest of £162,009 (2024 - £164,851) was charged in respect of this.

Transactions with other related parties

The company has taken advantage of the exemption available under Section 33 of FRS 102 from disclosing transactions with wholly-owned group companies.

During the year, the company received a loan of £5,200,000 from the Sherborne Retirement & Death Benefit Scheme. The balance outstanding at the reporting date is £5,200,000. Interest was charged at 5%, with repayment of the loan due within 3 months of issue.

The ultimate controlling parties are the majority shareholders C J Sherborne and J R Sherborne.