REGISTERED NUMBER: 00800907 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2025

FOR

E H SMITH (BUILDERS MERCHANTS) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

7

Report of the Independent Auditors

10

Income Statement

13

Other Comprehensive Income

14

Balance Sheet

15

Statement of Changes in Equity

16

Notes to the Financial Statements

17

DIRECTORS:

D P Ensell

M J H Hodgskin-Brown

A J Parker

J P Cave

SECRETARY:

I P Grainger

REGISTERED OFFICE:

Westhaven House

Arleston Way

Solihull

West Midlands

B90 4LH

REGISTERED NUMBER:

00800907 (England and Wales)

AUDITORS:

Prime

Chartered Accountants

Statutory Auditor

161 Newhall Street

Birmingham

B3 1SW

The directors present their strategic report for the year ended 30 June 2025.

INTRODUCTION

Turnover in the current year has increased on the prior year, resulting in an improved profit at the year end. Gross margins are fairly consistent overall and overhead costs are tightly controlled where possible. Lower inflation than in previous years has slowed down the pace of cost rises, and tight control of costs and margins has helped contribute to the the overall increase in profit generated. Construction activity picked up slightly in the year following the sector slowing down in the prior year, with lowering inflation and interest rates contributing to the pick up in activity. The good weather in the spring and summer, typically the better trading months, has further improved construction activity and thus turnover leading up to the year end, especially when compared to the prior year where the weather was poor in the same period. Trade remains above pre-pandemic levels and is among the Company's top results over the last few years, and is expected to remain around or above the current levels. Demand from both construction and home DIY contribute to the total turnover.

As one of the largest independent distributors of heavy side building materials, especially brick, the Company has benefitted from the policy of sustaining a diverse and comprehensive product range, enabling it to take advantage of the demand swings in the market. The higher levels of "in demand" product ranges meant the business could draw on its stock reserves and service the customer base, without suffering sporadic short term supply chain issues. As the UK remains chronically short of new homes, the medium to long term outlook for the construction sector remains positive, although economic uncertainty, cost inflation and the collapse of several construction firms in prior years, including several large firms, may affect this, however the Directors believe the Company is best placed to capitalise on servicing the continuing demand in the construction sector.

The Company remains a family owned independent business at over 100 years old, and looks forward to the future as a sustainable and independent business run on ethical and moral principles, serving the local communities and building on the success enjoyed thus far.

REVIEW OF BUSINESS

The results for the year and the financial position of the company are shown in the annexed financial statements.

Turnover increased in the year, growing 12.71% from 2024 to £165.9m which, while down on the record two years in 2022 and 2023, is still the third highest turnover in the last six years and is still above pre-pandemic levels, although inflation in the construction sector will also have paid a part in this. Operating costs increased by 11.87%, which is slightly below the revenue increase, which will have contributed to the improved profits. The company decreased the staff numbers in the year by 4.14%, which was largely countered by increased staffing costs from payrises and increased National Insurance contributions following Government changes in the budget. The gross margins have fallen slightly on the previous year but remain around the average pre-pandemic levels.

Following the success of the E H Smith Brick Showroom in Clerkenwell over the past 3 years, the company have now made a further investment by opening a Showroom and Design Centre in Digbeth, Birmingham. This facility, along with our knowledgeable staff based there, will service depot and specification enquiries and will display a large range of masonry and environmental building products. This development epitomises the long term, service led approach that E H Smith offer the construction market.

KEY PERFORMANCE INDICATORS

The Directors continuously review the strategic and financial progress of the company using, among others, the following KPIs:

Turnover

Turnover is considered in value, sector, branch and category.

Operating Margins

Operating margins are regularly reviewed. All costs both direct and indirect are reviewed to ensure that any price movements are reflected in sales.

Cash Flow

The Company experiences large movements in its cash resources on a monthly basis and where possible it takes advantage of early settlement discounts before customers settle their accounts. This is exaggerated when the company also takes advantage of bulk purchase to obtain competitive prices for its products.

Forecasts

The Company prepares comprehensive annual budgets which are reviewed monthly to reflect any changing market conditions and are compared to actual and last year's results on a monthly basis.

Personnel, Health and Safety

Employee numbers and staff remuneration and benefits are regularly reviewed.

Health and safety matters are regularly reviewed both at Board meetings and at branch health and safety meetings.

FUTURE DEVELOPMENTS

While inflation and interest rates have dropped from the highs of the last few years, inflation is still higher than the Bank of England's target of 2%, which is undoubtedly having a negative impact on the UK economy. This, together with continuing Brexit complications may affect investment decisions by house builders and lenders alike, however the core drivers of demand in the housing sector (i.e. lack of supply) will hopefully help to offset the general expected level of the whole economy, together with any support schemes. The Board considers that the Company, by its location, reputation and service ethos will be best placed to take advantage of any growth opportunities in the region's housebuilding activity by continuing to develop its product range, branch network and keen pricing strategies. The long held conservative attitude to profit retention and cash reserves by the Board has resulted in the Company having a strong asset base that can withstand general trading difficulties and therefore ensure business continuity.

Pursuing the objectives outlined above will continue to set the Company apart from the national competitors and ensure that a vibrant and exciting future remains for a truly independent family company.

PRINCIPAL RISKS AND UNCERTAINTIES

The company does have financial risks and has policies and procedures in place to minimise and manage their risk as part of the normal business operation. The company's results are sensitive to the general UK economic climate and are affected by factors including housing market conditions, property values, the availability of bank credit, consumer demand, interest rates, government capital expenditure, taxation rates and inflation. In addition weather can also play a very important role in our results.

The Company holds regular meetings and undertakes branch visits on a regular basis to discuss issues affecting the company's operations. Regular financial reports are produced including budgets and monthly accounts. These reports are reviewed locally and monitored by the directors on a monthly basis.

Bad debts are a continuing risk, especially in the current economic climate. Major importance is given to the management of credit risks and regular meetings are held to review amounts outstanding, and the credit risks are backed by a credit insurance policy to cover the worst exposures. These procedures have meant losses remain modest and are in line with current expectations.

The company monitors its day to day cash requirements and has a policy of investing surplus cash balances either in term deposits or overnight in short-term bank deposits.

CORPORATE SOCIAL RESPONSIBILITY

The company is committed to developing a safe and healthy working environment for all employees consistent with the requirements of the Health and Safety at Work Act, and has established health and safety committees to ensure policies and procedures are updated and followed at all times. During 2025 the company was awarded an Order of Distinction for achieving a Gold Award for the eighteenth consecutive year from the RoSPA Occupational Health and Safety Awards.

The Company has Forest Stewardship Council (FSC) certification to ensure that all timber products sold are purchased only from sustainable sources. As at 30 June 2025 FSC certification is held at all of our branches that stock timber.

The company has waste management procedures in place in order to increase the amounts of recycled waste and has maintained its accreditation with ISO 14001, as a result of its environment management systems.

Depending on their skills and abilities, disabled people enjoy the same career prospects as other employees, and if employees become disabled every effort would be made to ensure their continued employment, with appropriate training where necessary.

Policies for recruiting employees are designed to ensure equal opportunities irrespective of colour, ethnic or national origin, nationality, sex or marital status.

The company has a policy of communicating with employees via face to face consultations and regular notice board updates.

SECTION 172(1) STATEMENT

The revised UK Corporate Governance code ('2018 Code') was published in July 2018 and applies to accounting periods beginning on or after 1 January 2019. The Companies (Miscellaneous Reporting) Regulations 2018 ('2018 MRR') require Directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (a) to (f) of the Companies Act 2006 ('s172') when performing their duty to promote the success of the Company under s172.

The s172 statement focuses on matters of strategic importance to the Company, and the level of information disclosed is consistent with the size and the complexity of the business.

When making decisions, each Director ensures that they act in the way they consider, in good faith, would most likely promote the Company's success for the benefit of its members as a whole, and in doing so have regard (among other matters) to:

(a) 'The likely consequences of any decision in the long term'

The Directors have regard to the long term implications of the decisions they make, and have a policy of sustaining a diverse and comprehensive product range to enable it to take advantage of swings in the market. When making decisions on capital commitments the Directors have due regard for the financial implications to the Company including affordability and returns on the investment and will ensure the overall benefits of such commitments outweigh the costs. The Directors will also ensure any adverse impact on their employees by any decisions made are minimal to the best of their ability.

(b) 'The interests of the Company's employees'

The Directors recognise the importance of staff to the success of the business. The Company sends regular newsletters to employees and also put information on notice boards across the Company to keep employees informed. Employee feedback is encouraged and welcomed by the Directors, especially when undertaking major decisions, and regular visits by senior management to various branches enables further input at branch level into the operation and management of the Company.

(c) 'The need to foster the Company's business relationships with suppliers, customers and others'

The Directors understand that the success of the business also relies on strong mutually beneficial relationships with suppliers, customers and other partners. The Company ensures its relationships with its suppliers, customers and other partners are amicable, and any potential disputes are resolved in a timely and fair manner. The Company is a member of a buying group with other companies, who pool their resources together to achieve a fair deal from suppliers, in addition the Company has several longstanding suppliers who they have a strong relationship with and whom the Company is in regular contact with at senior levels to ensure the relationship remains strong and mutually beneficial. The Company closely monitors its bad debt risk and will speak to the customer in the first instance to agree a mutual way forward, only taking further action if such an agreement can't be found. This has enabled the Company to continue to maintain its reputation as a good, fair company for others to do business with.

(d) 'The impact of the Company's operations on the community and the environment'

The Company considers the impact its operations make on the community and the environment. As mentioned in the Corporate Social Responsibility section of the Strategic Report, the Company ensures all branches source timber from sustainable sources and the Company has waste management procedures in place to increase recycling and protect the environment. The Company has due regard for neighbouring businesses and residences when making changes at branches or in the opening of new branches, including the effect of goods traffic on the area. This includes consultations as part of any planning application process to ensure community concerns are addressed.

(e) 'The desirability of the Company maintaining a reputation for high standards of business conduct'

The Company considers that its policies of staff incentivisation, reward and engagement, fair pricing, and an aversion to unnecessary risks ensure the Company remains on a sustainable footing while growing the Company, maintaining its reputation. The Company has policies in place to ensure equal opportunities for employees, to ensure a safe and healthy working environment and to ensure the business is run ethically. This includes established disciplinary and grievance codes and procedures, whistleblowing and anti-bribery policies and anti-slavery policies. These are communicated to all employees and are included in detail in the Company's employee handbook, which is reviewed and updated regularly.

(f) 'The need to act fairly as between members of the Company'

The Directors consider which course of action best enable delivery of its strategy and aims, after weighing up all relevant factors and taking into consideration the impact on stakeholders. In doing so, the Directors act fairly as between the Company's members, ensuring all members have the chance to express their views before a decision is made that impacts them.

DEFINED BENEFIT PENSION SCHEME

The Group operated a defined benefit pension scheme, which required contributions to be made to a separately held administered fund. The scheme was closed to new members in 1997 from which time membership of a defined contribution scheme was made available. Following the changes introduced by the Financial Reporting Standard 102, adopted by the Company in 2016, the funding and deficit of the scheme has to be shown in the main sponsoring employer, rather than just in the group consolidated accounts.

The defined benefit scheme benefits from insured Guaranteed Annuity Rates (GARs), however the FRS 102 valuation methodology required for assessing pension scheme valuations does not recognise the GAR's in assessing the pension scheme deficit, hence in the Board's opinion the pension scheme valuation method incorporated into the accounts may be inappropriate to the facts at hand.

The Board are pleased to note that having continued to make substantial deficit reduction contributions to the Scheme over the last few years, together with the cumulative effect of the GARs coming into play as members take retirement, the Scheme is now in surplus, resulting in a pension asset on the company's balance sheet at the year end of £2.44m.

Contributions were made into the scheme up to December 2023. The decision was taken in 2023 to cease contributions to the scheme and therefore no further contributions have been made to the scheme from January 2024 onwards.

The Company is working towards a full buy out of the scheme.

ON BEHALF OF THE BOARD:

A J Parker - Director

27 November 2025

The directors present their report with the financial statements of the company for the year ended 30 June 2025.

DIVIDENDS

No final divided was proposed by the directors for the year ended 30 June 2024 and therefore no dividends were paid in this year.

Final dividends of £544,004 have been proposed by the Directors for the year ended 30 June 2025, to be paid in January 2026.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

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

D P Ensell

M J H Hodgskin-Brown

A J Parker

The following directors were appointed during the period and have held office from the date stated to the date of this report:

J P Cave - appointed 25 February 2025

STREAMLINED ENERGY AND CARBON REPORTING

Changes made by the 2018 Regulations require large unquoted companies to report on UK energy use, and the associated greenhouse gas (GHG) emissions, that relate to the consumption of fuel for the purposes of transport and the purchase of gas and electricity by the company for its own use.

The directors report this data below in order to fulfill these requirements.

Global GHG Emissions and Energy Use Data

(for the period 1 July to 30 June)

2024-25

2023-24

Energy consumption used to calculate emissions (kWh):

Gas

733,755 kWh

519,690 kWh

Electricity

1,108,944 kWh

1,066,496 kWh

Transport

7,658,051 kWh

7,092,779 kWh

Total

9,500,750 kWh

8,678,965 kWh

Emissions from activities for which the company is responsible including combustion of fuel [Scope 1] (tonnes of CO2 equivalent (tCO2e)):

Transport

2,022 tCO2e

1,877 tCO2e

Emissions from purchase of electricity and heat for own use [Scope 2] (tonnes of CO2 equivalent (tCO2e)):

Gas

149 tCO2e

105 tCO2e

Electricity

196 tCO2e

221 tCO2e

Total

345 tCO2e

326 tCO2e

Total Scope 1 & Scope 2 emissions

2,367 tCO2e

2,203 tCO2e

Intensity Ratio - tCO2e per £100,000 revenue

1.427

1.497

Methodology Used

Electricity usage in kWh per site for the period was obtained from invoices received. This was converted into tonnes of CO2 equivalent using 'UK Government GHG Conversion Factors for Company Reporting' (2024 publication).

Gas usage in kWh per site for the period was obtained from invoices received. This was converted into tonnes of CO2 equivalent using 'UK Government GHG Conversion Factors for Company Reporting' (2024 publication).

Transport usage in kWh is calculated by obtaining the fuel usage in litres for the period. This is converted into kWh using data interpretation taken from the Department for Transport Statistical Document (Dec 2019) - Transport Energy and Environmental Statistics: Notes and Definitions. To convert the fuel usage into CO2 emissions the following conversions were used:

- For diesel fuel: 1 litre of diesel weighs 838g. Diesel consists of 86.2% carbon, or 722g of carbon per litre of diesel. In order to combust this carbon to CO2, 1921g of oxygen is needed. The sum is then 722 + 1921 = 2643g of CO2/litre of diesel, which is applied to the total usage of 763,799 litres to arrive at the CO2 emissions (Source: Ecoscore.be).

- For unleaded petrol: 1 litre of petrol distillate will result in the production of 2610g of CO2 in use in an internal combustion engine, which is applied to the total usage of 1,264 litres to arrive at the CO2 emissions (Source: Exeter University - TW Davies).

Energy Efficiency Action

The Directors are committed to improving the energy efficiency of the Company. As part of this, the Company reviews its motor vehicle fleet on a regular basis, phasing out older vehicles and ensuring new vehicles are fuel efficient to reduce fuel usage. The Company has already phased out diesel company cars and has a desire to phase out petrol company cars and replace with electric vehicles over the coming years. The majority of company cars are now hybrids or fully electric. The Company is committed to improving the energy efficiency of all their premises, and some already have solar panels installed to provide electricity. The Company leases forklifts for use at its premises, and as several of these leases were reaching the end of the lease period, the Company made the decision to switch to electric forklifts. The necessary charging infrastructure was installed and from 1 July 2025 the leases for new electric forklifts began. Half of the Company's forklift fleet is now fully electric.

DISCLOSURE IN THE STRATEGIC REPORT

Other matters required to be disclosed in the directors' report are set out in the strategic report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

ON BEHALF OF THE BOARD:

A J Parker - Director

27 November 2025

Opinion

We have audited the financial statements of E H Smith (Builders Merchants) Limited (the 'company') for the year ended 30 June 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 June 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 opinion

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

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page nine, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

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

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry sector;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence;

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC and other relevant parties.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Use of our report

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

Morgan Davies FCA (Senior Statutory Auditor)

for and on behalf of Prime

Chartered Accountants

Statutory Auditor

161 Newhall Street

Birmingham

B3 1SW

27 November 2025

TURNOVER

3

165,906,985

147,198,241

Changes in stocks of finished goods and work in progress

(427,513

)

(479,508

)

165,479,472

146,718,733

Other operating income

290,967

330,929

165,770,439

147,049,662

Raw materials and consumables

129,045,190

111,717,461

36,725,249

35,332,201

Staff costs

4

20,873,827

20,713,730

Depreciation

855,121

771,591

Gain/loss on revaluation of investment property

(235,977

)

(172,917

)

Other operating expenses

12,922,166

13,061,194

34,415,137

34,373,598

OPERATING PROFIT

5

2,310,112

958,603

Interest receivable and similar income

6

679,537

757,934

Other finance income

18

174,000

166,000

853,537

923,934

PROFIT BEFORE TAXATION

3,163,649

1,882,537

Tax on profit

7

768,406

498,485

PROFIT FOR THE FINANCIAL YEAR

2,395,243

1,384,052

PROFIT FOR THE YEAR

2,395,243

1,384,052

OTHER COMPREHENSIVE INCOME

Actuarial gains on defined benefit plans

(335,000

)

(146,000

)

Movement in withholding tax on surplus

40,250

(45,250

)

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(294,750

)

(191,250

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,100,493

1,192,802

FIXED ASSETS

Tangible assets

9

12,779,335

12,710,043

Investment property

10

1,691,716

1,455,738

14,471,051

14,165,781

CURRENT ASSETS

Stocks

11

15,753,167

16,180,680

Debtors

12

30,214,016

25,675,763

Cash at bank

17,867,424

15,847,093

63,834,607

57,703,536

CREDITORS

Amounts falling due within one year

13

30,209,530

25,942,810

NET CURRENT ASSETS

33,625,077

31,760,726

TOTAL ASSETS LESS CURRENT LIABILITIES

48,096,128

45,926,507

PROVISIONS FOR LIABILITIES

15

(816,284

)

(867,906

)

PENSION ASSET

18

2,440,500

2,561,250

NET ASSETS

49,720,344

47,619,851

CAPITAL AND RESERVES

Called up share capital

16

5,000,000

5,000,000

Other reserves

17

445,020

373,046

Retained earnings

17

44,275,324

42,246,805

SHAREHOLDERS' FUNDS

49,720,344

47,619,851

The financial statements were approved by the Board of Directors and authorised for issue on 27 November 2025 and were signed on its behalf by:

A J Parker - Director

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 July 2023

5,000,000

42,079,928

247,121

47,327,049

Changes in equity

Dividends

-

(900,000

)

-

(900,000

)

Total comprehensive income

-

1,066,877

125,925

1,192,802

Balance at 30 June 2024

5,000,000

42,246,805

373,046

47,619,851

Changes in equity

Total comprehensive income

-

2,028,519

71,974

2,100,493

Balance at 30 June 2025

5,000,000

44,275,324

445,020

49,720,344

1.	STATUTORY INFORMATION

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

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Going concern

The company continues to be profitable and well resourced. The directors have a reasonable expectation that the company will continue in operational existence for at least 12 months from the date of approval of the financial statements. Therefore the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 33.7.

Significant judgements and estimates

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reporting of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Actual results may differ from estimates calculated using these judgements and assumptions. Key sources of estimated uncertainty and critical accounting judgements are as follows:

Rebates receivable

Rebate arrangements with suppliers are a common feature of trading in the merchanting industry and the Company has agreements with individual suppliers related to purchases of goods for resale.

Rebates are accounted for as a deduction from the cost of goods for resale and are recognised in the financial statements based on the amount that has been earned in respect of each individual supplier up to the balance sheet date. Rebates receivable are determined using established methodologies and are only recognised in the profit and loss where there is an agreement in place with an individual supplier, any related performance conditions have been met and the goods have been sold to a third-party customer. Rebates receivable from individual suppliers are typically calculated by applying an agreed percentage to the purchase price shown on the supplier invoice for products purchased for resale. A small proportion of rebates receivable are based on volumes purchased, and certain supplier agreements provide for a stepped increase in rebates if purchases reach predetermined targets within a specified time period.

Rebate agreements cover the calendar year for the majority of suppliers, which differs from the financial year of the Company, requiring estimation of the rebates receivable at the year end. Where estimation is used in the calculation of rebates receivable it is done on a consistent and prudent basis, based upon the rebate agreements, management's knowledge and experience of the suppliers and historic collection trends.

Rebates are classified in the balance sheet as follows:

Stock

The carrying value of stock at the balance sheet date is reduced to reflect rebates receivable relating to stock that has not been sold at the balance sheet date.

Debtors

The amount of rebates due but not received at the balance sheet date is classified as prepayments and accrued income.

Valuation of Stock

Stock comprises goods purchased for resale. Provisions are made against slow moving, obsolete and damaged stock for which the net realisable value is estimated to be less than cost. Determining the net realisable value of the wide range of products held in many locations requires estimation to be applied to determine the likely saleability of products and the potential prices that can be achieved. In arriving at any provisions for net realisable value, the Directors take into account the age, condition, quality of the products in stock and recent sales trends. The actual realisable value of stock may differ from the estimated value on which the provision is based. The company held provisions in respect of stock balances at 30 June 2025 amounting to £723k (2024: £750k).

Leases

Where the company has an option to extend or terminate a lease, management uses its judgement to determine whether such an option would be reasonably certain to be exercised. Management considers all facts and circumstances, including past practice and costs that would be incurred if an option were to be exercised, to help them determine the lease term. Such judgements could impact lease terms and associated lease liabilities.

Employee benefits

The Company operated a defined benefit retirement scheme, as set out in note 18, which was closed to future accruals from December 2023. The Company's total obligation in respect of defined benefit plans is calculated by independent, qualified actuaries and updated at least annually. The size of the obligation is sensitive to actuarial assumptions. The key assumptions are the discount rate, the rate of inflation, life expectancy, pension benefits and rate of salary increases.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue is recognised when the goods are despatched, which is the same day on which the goods are delivered and hence is the point at which the risks and rewards of ownership pass to the buyer.

Tangible fixed assets

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

Freehold property

- 2%-10% on cost of buildings

Long leasehold property

- 2%-10% on cost of property

Short leasehold property

- Over the life of the lease on cost of property

Plant and machinery, etc

- 10%-25% on cost of the asset

Investment property

Investment properties are stated at the balance sheet date at open market value. They are valued by the Directors on a rental yield basis.

In accordance with Financial Reporting Standard FRS 102 no depreciation is provided in respect of investment properties. This is a departure from the requirements of the Companies Act 2006 which requires all properties to be depreciated. Such properties are not held for consumption but for investment and the directors consider that to depreciate them would not give a true and fair view. Depreciation is only one amongst many factors reflected in the annual valuation of properties and accordingly the amount of depreciation which might otherwise have been charged cannot be separately identified or quantified. Properties occupied by other group companies have also been treated as investment properties, reflecting the arms length relationship between the companies. The directors consider that this policy gives a true and fair view.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is defined in relation to the different categories of stock as being that expenditure which has been incurred in the normal course of business in bringing the product to its present location and condition on a first-in, first-out basis. Such cost includes the initial purchase price, including duties, transport and handling costs, less trade discounts, rebates and subsidies, calculated on a first-in first-out basis. Net realisable value is the estimated proceeds of sale of the stock items, less all costs to be incurred in marketing, selling and distributing said items.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

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

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

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

Foreign currencies

The financial statements are presented in UK Sterling (£), which is the currency of the primary economic environment in which the Company operates (its functional currency).

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits

The Company operates a defined benefit pension scheme, which requires contributions to be made to a separately administered fund. The scheme was closed to new members in 1997 from which time membership of a defined contribution plan is available. From December 2023 the scheme closed to future accruals.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method, which attributes entitlements to benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of defined benefit obligations) and is based on actuarial advice. When a settlement or curtailment occur the change in the present value of the scheme liabilities and the fair value of the plan assets reflects the gain or loss which is recognised in the income statement during the period in which it occurs.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, at the start of the period taking into account any changes in the net defined 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.

Re-measurements, comprising 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) are recognised immediately in other comprehensive income in the period in which they occur. Re-measurements are not reclassified to profit and loss in subsequent periods.

The defined net benefit pension asset or liability in the balance sheet comprises the total for the 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.

Contributions to defined contribution schemes are recognised in the profit and loss account in the period in which they become payable.

E H Smith (Builders Merchants) Limited is the main and sponsoring employer of the defined benefit scheme. There is no contractual agreement or stated policy for charging the defined benefit cost of the plan as a whole to individual group entities and therefore the Company has recognised the entire net defined benefit cost and relevant net defined benefit liability of the scheme in its individual financial statements.

Debtors

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

Creditors

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

Provisions for liabilities

Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that the group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

The group recognises a provision for annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the next 12 months. The provision is measured at the salary cost payable for the period of absence.

Operating lease commitments

Rentals paid under operating leases are charged to Profit and Loss account as they are incurred.

3.

TURNOVER

The whole of the turnover is attributable to the sale of building materials and is wholly undertaken in the United Kingdom.

4.	EMPLOYEES AND DIRECTORS

2025

2024

£

£

Wages and salaries

17,891,634

17,969,189

Social security costs

2,052,252

1,836,697

Other pension costs

929,941

907,844

20,873,827

20,713,730

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

2025

2024

Sales & Management

271

271

Depot & Production

146

164

417

435

The Company operates a stakeholder defined contribution pension scheme for the benefit of employees.

2025

2024

£

£

Directors' remuneration

-

-