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

Principal activities

The principal activity of the Group continues to be the provision of the highest standards of care and nursery education tailored to a child’s individual interests and needs.

Our Nurseries are a little bit different. We have things like animals, light projectors and an art studio with a professional artist. But we think a bit differently too. We believe children love beautiful interesting things, just like adults. So we put lots of them in our nurseries.

We also believe in listening to children. We know if we help children work out what they are interested in, value their questions and ideas and help them express themselves, they will be more motivated learners.

Over the years we have been inspired by the Reggio Emilia Approach to education, which originates from Northern Italy and is revered all over the world. Our approach can best be described as enquiry-based learning. This means we look upon our work as research into how to best enable a child’s inherent enquiring mind. We see ourselves as enabling educators, researching children as they research the world around them.

Review of operations

Since its opening in 2010, Little Barn Owls has become the largest and first choice childcare provider for families in Horsham, West Sussex, presently caring for over 550 families across five settings and employing approximately 165 people.

Our most recent acquisition (in February 2025) was the setting at Midhurst, offering 50 places. Expenditure has been incurred in bringing these premises up to the standard of the rest of the Little Barn Owls portfolio.

Occupancy at the Brookfield site, acquired in January 2024, has increased from below 60% at the start of this year to in excess of 80% by the year end, and has proved to be a popular and profitable addition to the Little Barn Owls portfolio.

A further nursery, Bohunt, offering 52 places, was acquired in December 2025 and brings the total spaces offered by the group to 418. This was a brand new site, not operating as a nursery at the time of acquisition. Trading is due to start in January 2026. The directors are confident that this setting will continue the growth trend of previous acquisitions.

Financial information

Turnover for the year was £6,389,525 with an operating profit of £905,105. This compares favourably with the results for the year ended 31 March 2024, which showed turnover of £4,329,121 and an operating profit of £176,767.

Going concern

The director has a strong expectation that the Group has adequate resources to continue its operational existence for the foreseeable future, and thus continues to adopt the going concern basis of accounting in preparing the annual financial statements.

The following is a summary of material business risks that could adversely affect our financial performance and growth potential, and how we propose to mitigate such risks:

Competition risks

The Group operates in a highly competitive market. Given the finite period of a child’s attendance at our nurseries there is a continual need to maintain standards to attract new children and to keep a register of those who wish their children to attend should places become available. That waiting list currently exceeds 1,000.

Environmental risks

Children spend as much time outside as they do inside, whether it be caring for our animals in the farm school, planting and harvesting in the edible garden, creating large scale constructions from scrap in the outdoor atelier or building dens around the trees in the garden. The need for these outdoor spaces to remain both risk-free for the children and the environment remains paramount.

Operational risks

The Group could not operate without a trained and dedicated workforce, and we offer training to those who wish to progress in their chosen career. We employ both full-time and part-time employees, the latter fitting in their shifts around their other responsibilities.

We are subject to regular Ofsted inspections and conduct periodic mock audits to ensure that our operations continually meet the highest standards.

Financial risks

The Group forecasts business performance and sets forecasts based on occupancy, working capital management and forecast capital expenditure. Capital expenditure is managed centrally to ensure that expenditure remains within budget. The Group’s finance function manages day to day cashflow to ensure that there is adequate working capital to manage operations.

Interest rate risk

The Group has financed the acquisition of nursery sites by means of bank loans with Santander UK. The interest rates on these loans are either fixed or based on a margin above base rate.

Macroeconomic risk

In the current economic climate, with movements in interest rates, inflation, wage inflation and the impending increase in employer’s national insurance contributions there is continual pressure on margins and a need to continuously monitor competitors’ rates to ensure that pricing remains in line with the market and is sufficiently adequate to attract and retain staff.

The main key performance indicators were as follows:

Occupancy

Full-time equivalent spaces:

The growth has been partly organic and partly due to:

• the continuing maturity of the Orchard and Brookfield sites.

• acquisition of the Midhurst site from mid-February 2025. The site was acquired with lower existing occupancy levels.

Fees and funding income

The acquisition of the site at Midhurst, which was acquired part-way through the year with low occupancy has contributed to the reduction in fees per FTE.

Staff costs

The increase in full-time staff has led to a decrease in the requirement for part-time staff, leading to a fall in overall staff numbers whilst increasing the average number of hours worked by each member of staff.

Head Office staff costs also increased as the Group sought to build a strong management team to prepare for future growth.

Gross profit

The increase in GP% can be largely accounted for by the growth in fee and registration income during the year.

Administrative expenses

The principal areas where administrative costs increased were:

(in '000s)

Loan interest

The directors act in good faith to continually balance the success of the Group and the rewards to its shareholders against many other factors, including ensuring that:

• Business is conducted morally and ethically

• Short-term gains do not have an adverse consequence on the Group's long-term strategy, success and benefits

• Employee welfare, training and interests are taken care of

• Resident and supplier relationships are strong, mutually beneficial and comply with the Group's policies (such as anti-bribery and corruption, anti-slavery and human trafficking and corporate social responsibility)

• Any community and environmental impacts as a result of the Group's operations are considered

On behalf of the board

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

The principal activity of the company and group continued to be that of pre-primary education.

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

Ordinary dividends were paid amounting to £201,800. The directors do not recommend payment of a further dividend.

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

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

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

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

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

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

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

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

In our opinion the financial statements:

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

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

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

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

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

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

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

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

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

We have considered the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur. We consider that the calculation of judgmental balances constitutes the main risk of fraud and error and we consider property valuation to be the primary area of judgement.

As auditors we are required to consider which laws and regulations are of significance in the context of the entity. We consider regulation in regards to quality of nursery provision as overseen by Ofsted to be of greatest significance to the entity.

We considered valuation reports produced as at the time the business combinations occurred as well as independently available property indices in considering the validity of judgements on valuation.

We considered the attendance levels at the nurseries and the levels and sought to obtain evidence for revenue by proving the balance in total using evidence outside of the accounting system.

We considered the manual adjustments made by management in the accounting period and after it and reviewed all material transactions and an additional random sample of transactions for evidence of management override. We considered possible motivations for management to seek to manipulate the accounts.

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.

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.

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

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £94,974 (2024 - £247,273 loss).

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

Little Barn Owls Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Ground Floor, 1/7 Station Road, Crawley, West Sussex, RH7 1HT.

The group consists of Little Barn Owls Limited and its subsidiary.

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

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

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

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

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

The consolidated group financial statements consist of the financial statements of the parent company Little Barn Owls Limited together with the entity controlled by the parent company (its subsidiary).

All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of the subsidiary to bring the accounting policies used into line with those used of the group.

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

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

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future.

Management have considered the consolidated loss in the period and consider that this is the result of the depreciation of property and of interest charges on loans used to finance the acquisition of the subsidiary and investment in renovating these premises up to standard of the rest of the portfolio. In the first instance the depreciation charge does not result in a cash outflow, in the second management consider that performance will improve as only two and half months of the subsidiary's performance is reflected. Therefore, in the following year the consolidated statement of profit and loss will reflect the subsidiary's results for the full year. Recent Management figures show the group has returned to profitability.

Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover comprises amounts receivable for nursery fees and government funding. Turnover is recognised for the period in which it has been earned.

Research expenditure is written off against profits in the year in which it is incurred.

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

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

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

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

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

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

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

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

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

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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

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

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

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

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

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

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

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

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.

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

Basic financial liabilities, including creditors and bank loans that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

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

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

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 through 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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

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

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

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

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

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

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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

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

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

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

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The director's estimate of the residual value and useful lives of tangible & intangible fixed assets affects the rate of depreciation and amortisation applied to both tangible & intangible fixed assets. The director's review each of the assets at the end of the financial year, and decide whether, in their opinion, if any asset needs to be impaired or the depreciation rate of that class of asset needs to be adjusted.

On 31st August 2023 it was agreed by all relevant parties to exit from one of the property leases. Proceeds of £200,000 less £4,542 of legal fees, amounting to £195,158 was received in consideration for the surrender of this lease.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024 - 1).

The Corporation tax rate increased from 19% to 25% effective from 1st April 2023.

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

The carrying value of land and buildings comprises:

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

Tangible assets with a carrying amount of £4,265,412 (2024 - £3,989,588) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

Details of the company's subsidiaries at 31 March 2025 are as follows:

During the year the company obtained two loans with Santander UK. One loan amounted to £685,125 and is repayable over 25 years, with a break clause at 5 years. Interest is accrued each year at a fixed rate of 7.8%. The second loan amounted to £177,185 and is repayable over 10 years, with a break clause at 5 years. Interest is accrued each year at a margin rate of 3.5% plus base rate which will vary from time to time.

In previous years the group had registration charges filed with Companies House. These charges consist fixed and floating charges with Santander UK over the company's assets and a negative pledge and floating charge(s) with Santander UK, for the life policy of the director Hayley Peacock. These charges all still exist at the balance sheet date.

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

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

The deferred tax liability set out above is expected to reverse within 49 years and relates to accelerated capital allowances that are expected to mature within the same period.

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

Disposal of share capital

On 30 July 2025, subsequent to the year end, Miss H Peacock sold 50% of the share capital of the company to EMD LBO Limited. This event occurred after the reporting date and therefore does not affect the financial position of the company at 31 March 2025.

Freehold Property Purchase

On 19 December 2025, the company exchanged contracts to purchase the freehold of a nursery property for £812,500. A deposit of £81,250 was paid from cash resources. Completion is expected in early 2026. The purchase will be funded by a new loan facility as part of a wider refinancing arrangement.

Loan Facility Negotiations

The company is in advanced discussions with a lender for a circa £6 million loan facility. This will replace the existing circa £4 million loan and provide additional funding for property acquisitions and expansion projects.

New Lease Agreement

On 3 December 2025, the company entered into a 15-year lease for a newly constructed nursery property. A deposit of £22,500 was paid. The lease includes stepped annual rent starting at £45,000 in 2026 and increasing to £85,750 by 2034, with subsequent rent reviews as per the lease agreement. The property is undergoing minor works and fit-out, with opening planned for early 2026.

The remuneration of key management personnel is as follows.

During the year other transactions took place at market rate between the group and companies under the common control of the ultimate controlling party of the group, Hayley Peacock.

At 31st March 2025, Little barn Owls Limited has been controlled by Miss H Peacock by virtue of the fact that she owns all the company's issued ordinary share capital.