Company registration number 08056877 (England and Wales)
SOFA CLUB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
SOFA CLUB LIMITED
COMPANY INFORMATION
Directors
Mr T S O'Neill
Mr L W Kaczmarek
Company number
08056877
Registered office
6 Centrus Mead Lane
Hertford
Hertfordshire
SG13 7GX
Auditor
Alwyns LLP
Crown House
151 High Road
Loughton
Essex
IG10 4LG
SOFA CLUB LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
SOFA CLUB LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2025
- 1 -

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

Fair review of the business

The company’s principal activity during the year continued to be the retail selling of furniture. Turnover increased to £33.5m, generating a gross profit of £11.0m (2024 (six months) : £3.8m) and an operating profit of £3.2m (2024 : £1.2m). Profit before tax was £3.0m (2024: £0.7m), resulting in a profit after tax of £2.6m (2024: £0.7m).
The company ended the year with net assets of £1.0m (2024: net liabilities of £1.1m) and cash of £0.8m (2024: £0.1m).

Principal risks and uncertainties

The company is exposed to risks arising from changes in the business environment, including consumer confidence, inflationary pressures, foreign exchange movements and supply chain challenges. The UK furniture market is also competitive. The directors regularly review these risks and continue to monitor and strengthen controls to mitigate them.

Business environment

The retail sector remains highly competitive, with trading conditions influenced by wider economic trends. Demand for value and flexibility in payment options continues to shape customer behaviour. The directors remain confident that the company’s proposition and focus on customer service will support resilience and future growth.

Strategy

The company’s strategy is to scale profitably through a dual-channel model, combining the expansion of showrooms with sustained growth in online sales. Investment in operational infrastructure, including systems, logistics and finance processes, will continue to underpin this growth strategy.

Key performance indicators

The Board uses a range of KPIs to monitor performance, including:
- Revenue growth
- Gross margin (32.9%)
- Operating margin (9.4%)
- Net margin (7.7%)
- Cash generated from operations (£1.45m)
- Average order value and showroom performance
- Headcount (average of 45 employees, up from 39 in 2024)

On behalf of the board

Mr T S O'Neill
Director
14 October 2025
SOFA CLUB LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2025
- 2 -

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

Principal activities

The principal activity of the company continued to be that of furniture retailing.

Results and dividends

The results for the year are set out on page 7.

Interim dividends were paid amounting to £325,000. The directors do not recommend payment of a final dividend.

Directors

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

Mr T S O'Neill
Mr L W Kaczmarek

Mr L C Rose (deceased) was also a director throughout the year and until his death on 19 June 2025.

Financial instruments

The company operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the company’s activities.

The company’s principal financial instruments include cash held at banks, the purpose of which is to manage currency and interest rate risks arising from the company’s activities. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.

Foreign currency risk

The company’s principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.

Credit risk

Surplus cash is held in bank that must fulfil credit rating criteria approved by the Board. All customers enter into formal agreements with the company which stipulate terms. The directors regularly review trade debtors and pursue outstanding debts on a regular basis. Where appropriate, provisions are made for doubtful debts.

Auditor

Alwyns LLP were appointed as auditor to the company 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.

Statement of directors' responsibilities

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

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

SOFA CLUB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 3 -

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; and

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

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

Statement of disclosure to auditor

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

Medium-sized companies exemption

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

On behalf of the board
Mr T S O'Neill
Director
14 October 2025
SOFA CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOFA CLUB LIMITED
- 4 -

Qualified opinion on financial statements

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

In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

- give a true and fair view of the state of the company's affairs as at 31 March 2025 and of its profit for the year then ended;

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

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

Basis for qualified opinion

The financial statements for the period ending 31 March 2024 were unaudited and thus we did not observe the counting of physical inventories at the end of th at period. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31 March 202 4, which are included in the balance sheet at £2,288,513 by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary.

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

Emphasis of matter

We draw attention to to the matter that this is the first period that the financial statements have been subject to an audit, the comparative period was unaudited. Our opinion is not modified in this respect.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

SOFA CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOFA CLUB LIMITED (CONTINUED)
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effect of the mater described in the basis for qualified opinion section of our report in our opinion, based on the work undertaken in the course of our audit:

- the information given in the strategic report and the directors' r eport 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.

Matters on which we are required to report by exception

Except for the mater described in the basis for qualified opinion section of our report i n the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport.

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

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

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

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

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

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

Audit procedures undertaken in responses to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charge d with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claim; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As stated above, there is an unavoidable risk that material misstatements my not be detected, even though the audit have been planned and performed in accordance with ISAs (UK).

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.

SOFA CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOFA CLUB LIMITED (CONTINUED)
- 6 -

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.

David Stanley (Senior Statutory Auditor)
For and on behalf of Alwyns LLP, Statutory Auditor
Chartered Accountants
Crown House
151 High Road
Loughton
Essex
IG10 4LG
14 October 2025
SOFA CLUB LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
- 7 -
Year
Period
ended
ended
31 March
31 March
2025
2024
as restated
(unaudited)
£
£
Turnover
3
33,501,777
11,187,593
Cost of sales
(22,483,816)
(7,389,797)
Gross profit
11,017,961
3,797,796
Administrative expenses
(7,814,797)
(2,642,275)
Other operating expenses
(52,957)
-
0
Operating profit
4
3,150,207
1,155,521
Interest receivable and similar income
7
1,311
1,752
Interest payable and similar expenses
8
(109,804)
(421,181)
Profit before taxation
3,041,714
736,092
Tax on profit
9
(456,865)
-
0
Profit for the financial year
2,584,849
736,092

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SOFA CLUB LIMITED
BALANCE SHEET
AS AT 31 MARCH 2025
31 March 2025
- 8 -
2025
2024
as restated
(unaudited)
Notes
£
£
£
£
Fixed assets
Intangible assets
11
311,562
179,118
Tangible assets
12
201,821
252,616
513,383
431,734
Current assets
Stocks
14
2,462,874
2,288,513
Debtors
15
2,508,568
1,228,702
Cash at bank and in hand
836,059
114,697
5,807,501
3,631,912
Creditors: amounts falling due within one year
16
(5,310,985)
(5,308,616)
Net current assets/(liabilities)
496,516
(1,676,704)
Total assets less current liabilities
1,009,899
(1,244,970)
Provisions for liabilities
Deferred tax liability
18
50,455
55,435
(50,455)
(55,435)
Net assets/(liabilities)
959,444
(1,300,405)
Capital and reserves
Called up share capital
20
300
300
Profit and loss reserves
959,144
(1,300,705)
Total equity
959,444
(1,300,405)

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

The financial statements were approved by the board of directors and authorised for issue on 14 October 2025 and are signed on its behalf by:
Mr T S O'Neill
Director
Company registration number 08056877 (England and Wales)
SOFA CLUB LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 March 2024 (unaudited):
Balance at 1 October 2023 (unaudited)
300
(2,036,797)
(2,036,497)
Period ended 31 March 2024 (Unaudited):
Profit and total comprehensive income
-
736,092
736,092
Balance at 31 March 2024 (unaudited)
300
(1,300,705)
(1,300,405)
Year ended 31 March 2025:
Profit and total comprehensive income
-
2,584,849
2,584,849
Dividends
10
-
(325,000)
(325,000)
Balance at 31 March 2025
300
959,144
959,444
SOFA CLUB LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2025
- 10 -
2025
2024
as restated
(unaudited)
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,609,986
806,204
Interest paid
(109,804)
(421,181)
Income taxes paid
(92,085)
(72,116)
Net cash inflow from operating activities
1,408,097
312,907
Investing activities
Purchase of intangible assets
(225,524)
(113,888)
Purchase of tangible fixed assets
(114,123)
(35,328)
Interest received
1,311
1,752
Net cash used in investing activities
(338,336)
(147,464)
Financing activities
Repayment of bank loans
-
0
(61,377)
Net acquisition of derivatives
(22,832)
(16,491)
Dividends paid
(325,000)
-
0
Net cash used in financing activities
(347,832)
(77,868)
Net increase in cash and cash equivalents
721,929
87,575
Cash and cash equivalents at beginning of year
114,130
26,555
Cash and cash equivalents at end of year
836,059
114,130
Relating to:
Cash at bank and in hand
836,059
114,697
Bank overdrafts included in creditors payable within one year
-
0
(567)
SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
- 11 -
1
Accounting policies
Company information

Sofa Club Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6 Centrus Mead Lane, Hertford, Hertfordshire, SG13 7GX.

1.1
Reporting period

The prior period figures reflect a period of 6 months and therefore the comparative amounts presented in the financial statements are not entirely comparable.

1.2
Basis of preparation

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 a mounts in these financial statements are rounded to the nearest whole pound.

The financial statements have been prepared under the historical cost convention as modified by the revaluation of derivative financial instruments. The principal accounting policies adopted are set out below.

1.3
Going concern

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

1.4
Turnover

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 and the costs of providing interest free credit on behalf of customers.

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 delivery 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.

1.5
Intangible fixed assets other than goodwill

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 of assets less their residual values over their useful lives on the following bases:

Software
33% on straight line basis
1.6
Tangible fixed assets

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

SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 12 -

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

Fixtures and fittings
20% on reducing balance
Computers
25% on reducing balance
Motor vehicles
25% on reducing balance

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

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.8
Stocks

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

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

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

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

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

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

Basic financial assets

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

Other financial assets, including derivative financial assets, 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.

SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets

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

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from connected companies, 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 paymen ts 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. A m ounts 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.

Other financial liabilities

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value th r ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

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

1.12
Taxation

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

Current tax

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

SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
1
Accounting policies
(Continued)
- 14 -
Deferred tax

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.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

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.

1.14
Retirement benefits

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

1.15
Leases
As lessee

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 lease s asset are consumed.

1.16
Government grants

Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable.

1.17
Foreign exchange

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.

2
Judgements and key sources of estimation uncertainty

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

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

SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
Key sources of estimation uncertainty

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

Stock provision

The company makes estimates for the provision of slow moving or obsolete stock as set out in the accounting policy. These estimates are based on past experience and regular reviews to ensure they remain appropriate.

3
Turnover

The total turnover of the company for the year has been derived from its principal activity of the retail selling of furniture which is wholly undertaken in the United Kingdom.

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

2025
2024
as restated
(unaudited)
£
£
Turnover analysed by class of business
Sofa Sales
32,556,984
10,851,330
Care plans
944,793
336,263
33,501,777
11,187,593
4
Operating profit
2025
2024
(unaudited)
Operating profit for the year is stated after charging:
£
£
Exchange losses
32,729
18,787
Government grants repaid
52,957
-
Fees payable to the company's auditor for the audit of the company's financial statements
14,350
-
0
Depreciation of owned tangible fixed assets
72,799
34,200
Loss on disposal of tangible fixed assets
92,119
-
Amortisation of intangible assets
93,080
31,714
Operating lease charges
576,090
175,490
SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 16 -
5
Employees

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

2025
2024
(unaudited)
Number
Number
Directors
3
3
Sales
10
7
Administration
32
29
Total
45
39

Their aggregate remuneration comprised:

2025
2024
(unaudited)
£
£
Wages and salaries
2,367,204
675,705
Social security costs
230,344
74,585
Pension costs
32,064
12,111
2,629,612
762,401
6
Directors' remuneration
2025
2024
(unaudited)
£
£
Remuneration for qualifying services
39,725
16,500
7
Interest receivable and similar income
2025
2024
(unaudited)
£
£
Interest income
Interest on bank deposits
1,311
1,752
SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 17 -
8
Interest payable and similar expenses
2025
2024
as restated
(unaudited)
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
17,241
8
Other interest on financial liabilities
92,563
421,112
109,804
421,120
Other finance costs:
Interest on finance leases and hire purchase contracts
-
61
109,804
421,181
9
Taxation
2025
2024
(unaudited)
£
£
Current tax
UK corporation tax on profits for the current period
443,425
-
0
Adjustments in respect of prior periods
18,420
-
0
Total current tax
461,845
-
0
Deferred tax
Origination and reversal of timing differences
(4,980)
-
0
Total tax charge
456,865
-
0
SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
9
Taxation
(Continued)
- 18 -

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:

2025
2024
as restated
(unaudited)
£
£
Profit before taxation
3,041,714
736,092
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
760,429
184,023
Tax effect of utilisation of tax losses
(328,090)
(166,119)
Adjustments in respect of prior years
18,420
-
0
Timing difference of capital allowances against depreciation and deferred taxation
7,959
7,647
Tax adjustments on disposal of tangible fixed assets
23,029
-
0
Other tax adjustments
(24,882)
(25,551)
Taxation charge for the year
456,865
-
10
Dividends
2025
2024
(unaudited)
£
£
Interim paid
325,000
-
0
SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 19 -
11
Intangible fixed assets
Software
£
Cost
At 1 April 2024 (unaudited)
232,681
Additions - internally developed
225,524
At 31 March 2025
458,205
Amortisation and impairment
At 1 April 2024 (unaudited)
53,563
Amortisation charged for the year
93,080
At 31 March 2025
146,643
Carrying amount
At 31 March 2025
311,562
At 1 March 2024 (unaudited)
179,118

The software costs incurred relate to the development of bespoke online sales software.

12
Tangible fixed assets
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2024 (unaudited)
490,495
106,610
71,560
668,665
Additions
75,343
38,780
-
0
114,123
Disposals
(207,484)
(88,418)
(71,560)
(367,462)
At 31 March 2025
358,354
56,972
-
0
415,326
Depreciation and impairment
At 1 April 2024 (unaudited)
297,267
64,831
53,951
416,049
Depreciation charged in the year
56,552
14,046
2,201
72,799
Eliminated in respect of disposals
(152,405)
(66,786)
(56,152)
(275,343)
At 31 March 2025
201,414
12,091
-
0
213,505
Carrying amount
At 31 March 2025
156,940
44,881
-
0
201,821
At 31 March 2024 (unaudited)
193,228
41,779
17,609
252,616
SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 20 -
13
Financial instruments
2025
2024
(unaudited)
£
£
Carrying amount of financial assets include:
Instruments measured at fair value through profit or loss
45,573
22,741
14
Stocks
2025
2024
(unaudited)
£
£
Finished goods and goods for resale
2,462,874
2,288,513
15
Debtors
2025
2024
as restated
(unaudited)
Amounts falling due within one year:
£
£
Trade debtors
789,550
381,890
Corporation tax recoverable
180,382
-
0
Derivative financial instruments
45,573
22,741
Other debtors
1,207,951
566,797
Prepayments and accrued income
285,112
257,274
2,508,568
1,228,702
16
Creditors: amounts falling due within one year
2025
2024
as restated
(unaudited)
Notes
£
£
Bank loans and overdrafts
17
-
0
567
Trade creditors
2,953,465
2,184,783
Corporation tax
603,264
53,122
Other taxation and social security
497,296
613,026
Payments received on account
724,197
592,594
Other creditors
70,492
1,745,889
Accruals
462,271
118,635
5,310,985
5,308,616

Included within other creditors are amounts due to company connected by common directors totalling £Nil (2024 - £1,524,950) which are secured by a fixed and floating charges on the assets of the company.

SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 21 -
17
Loans and overdrafts
2025
2024
(unaudited)
£
£
Bank overdrafts
-
0
567
Payable within one year
-
0
567
18
Deferred taxation

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

Liabilities
Liabilities
2025
2024
(unaudited)
Balances:
£
£
Accelerated capital allowances
50,455
55,435
2025
Movements in the year:
£
Liability at 1 April 2024
55,435
Credit to profit or loss
(4,980)
Liability at 31 March 2025
50,455
19
Retirement benefit schemes
2025
2024
(unaudited)
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
30,307
12,905

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

SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 22 -
20
Share capital
2025
2024
2025
2024
(unaudited)
(unaudited)
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
Ordinary "A" shares of £1 each
100
100
100
100
Ordinary "B" shares of £1 each
100
100
100
100
300
300
300
300
21
Operating lease commitments
As lessee

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

2025
2024
£
£
Within 1 year
186,433
216,871
Years 2-5
41,495
254,130
227,928
471,001
22
Related party transactions

During the year, the company paid dividends of £227,500 (2024: £nil) to the directors.

During the year, the company purchased goods totalling £5,625,320 (2024: £1,393,884) from other companies controlled by the directors and purchased goods totalling £4,431,268 (2024: £1,653,669) from companies controlled by family members of the directors.

The company paid interest of £92,563 (2024: £321,997) from companies controlled by former directors.

At the year end, the company owed other companies controlled by the directors £380,908 (2024: £399,644), companies controlled by family members of the directors £596,452 (2024: £509,797).

23
Directors' transactions

At the balance sheet date directors owed the company £534,467 (2024 - £348,013) which was on no formal terms and repayable on demand. The balance of £534,467 is the maximum overdrawn position within the year,

SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 23 -
24
Cash generated from operations
2025
2024
as restated
(unaudited)
£
£
Profit for the year after tax
2,584,849
736,092
Adjustments for:
Taxation charged
456,865
-
0
Finance costs
109,804
421,181
Investment income
(1,311)
(1,752)
Loss on disposal of tangible fixed assets
92,119
-
Amortisation and impairment of intangible assets
93,080
31,714
Depreciation and impairment of tangible fixed assets
72,799
34,200
Movements in working capital:
Increase in stocks
(174,361)
(711,593)
(Increase)/decrease in debtors
(1,076,652)
404,028
(Decrease)/increase in creditors
(678,809)
178,761
Increase/(decrease) in payment received on account
131,603
(286,427)
Cash generated from operations
1,609,986
806,204
25
Analysis of changes in net funds
1 April 2024
Cash flows
31 March 2025
(unaudited)
£
£
£
Cash at bank and in hand
114,697
721,362
836,059
Bank overdrafts
(567)
567
-
0
114,130
721,929
836,059
SOFA CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
- 24 -
26
Prior period adjustment
Reconciliation of changes in equity
1 October
31 March
2023
2024
Notes
£
£
Adjustments to prior year
Trade debtor and deferred income
1
-
(730,900)
Purchases
2
-
(106,368)
Total adjustments
-
(837,268)
Equity as previously reported
(2,036,497)
(463,137)
Equity as adjusted
(2,036,497)
(1,300,405)
Analysis of the effect upon equity
Profit and loss reserves
-
(837,268)
Reconciliation of changes in profit for the previous financial period
2024
Notes
£
Adjustments to prior year
Trade debtor and deferred income
1
(730,900)
Purchases
2
(106,368)
Total adjustments
(837,268)
Profit as previously reported
1,573,360
Profit as adjusted
736,092
Notes to reconciliation
1. Trade debtors and deferred income

During the year ended 31 March 2025, it was discovered that there had been an error in the calculation of trade debtors and payments on account at 31 March 2024 which resulted in an overstatement of profits.

2. Purchases

During the year ended 31 March 2025, it was discovered that there had been an error with the omission of accrued costs at 31 March 2024 which resulted in an overstatement of profits.

3. Profit and loss reallocations

The profit and loss statement comparatives have been reallocated ensuring consistency in line with current reporting.

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