REGISTERED NUMBER: 00223519 (England and Wales)

WARNERS (MIDLANDS) PLC

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2025

Page

Company Information

1

Strategic Report

2

to

3

Report of the Directors

4

Report of the Independent Auditors

5

to

7

Statement of Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

13

to

20

DIRECTORS:

S A Warner

C A Warner

J M Warner

M A Warner

P A Warner

SECRETARY:

S A Warner

REGISTERED OFFICE:

The Maltings

Manor Lane

Bourne

Lincolnshire

PE10 9PH

REGISTERED NUMBER:

00223519 (England and Wales)

AUDITORS:

Duncan & Toplis Audit Limited, Statutory Auditor

Enterprise Way

Pinchbeck

Spalding

Lincolnshire

PE11 3YR

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

REVIEW OF BUSINESS

2025 has been another challenging year for the print industry. Input prices have continued to rise, and although energy costs and interest rates have begun to ease, they remain high. Customers are continuing to reassess marketing spend in response to these pressures, resulting in subdued demand.

Sales declined slightly from £34.8m to £34.3m (-1.5%), yet the company still delivered a £1.18m profit, which the directors regard as a solid performance given market conditions. EBITDA fell 3.9% to £3.519m, but this remains a strong result.

After three years of significant investment, the company has consolidated capital expenditure, though £628k was still invested this year in infrastructure and automation.

Overcapacity within the sector has sustained heavy discounting by some competitors, leading us to decline certain contracts that were commercially unsustainable. We are fortunate to have a committed and skilled workforce, and this has been recognised through the April wage award, which aligned with inflation and basic performance criteria.

Operational KPI's

2025(£

)

2024(£

)

Turnover

34,341,376

34,848,117

EBITDA

3,518,967

3,661,865

Interest

60,394

41,490

Pre-tax profit

1,179,541

1,668,831

Taxation

(344,988

)

(463,862

)

Post-tax profit

834,553

1,204,969

A key objective this year has been cash generation and debt reduction, an area in which the business has performed exceptionally well. Cash levels increased by 24.8%, total debt reduced by £755k (-68%), and the acid ratio improved to 1.93. Total debt now stands at £348k, and long-term debt as at 30 September is zero.

Statement of Financial Position KPI's

2025(£

)

2024(£

)

Net asset value

26,930,594

26,796,041

Working capital

8,196,430

6,261,333

Total cash reserves

8,053,668

6,452,786

Total debt

347,667

1,103,600

Cash debt surplus

7,706,001

5,349,186

Ratios

Acid test

1.93

1.66

PRINCIPAL RISKS AND UNCERTAINTIES

Looking ahead, we expect the market to remain highly competitive, and have budgeted accordingly. Despite the recent national budget, business confidence remains fragile. However, our productivity continues to improve, with actual output per hour increasing year-on-year.

Net asset value has strengthened, and the directors remain very satisfied with the balance sheet's robustness. With our strategy of ongoing capital investment, prudent financial management, and strong corporate social responsibility, the company is well-positioned to take advantage of future market developments.

SECTION 172(1) STATEMENT

The company maintains its ambition to the be leading supplier of printing services to the specialist magazine and commercial sector in the UK. The Directors strive to achieve this by promoting and managing investment in the business and its employees as well as actively looking to nurture strong relationships with all stakeholders that include employees, customers, suppliers and the local community.

Employees and their wellbeing are of the upmost importance to the directors. The company retains all the ethos of a family firm and many of our employees have been with us over 20 years. Communication and consultation are seen as a high priority and the directors produce quarterly team briefings that are distributed to all staff keeping them informed of financial performance, new investments, projected sales, health and safety information and environmental performance. An open dialogue is maintained through union representatives.

The directors have ensured that there is constant investment in improvement of work processes and capital equipment and see this as key to making sure that we give our customers the products that they need, with raw materials from sustainable sources. The firm works for a wide variety of customers from high street names to charities and religious organizations.

The Directors recognize the importance of maintaining a strong balance sheet for the business to ensure that liquidity is strong and that all financial commitments to all stakeholders can be met comfortably. This has been achieved by maximizing cash in the business and borrowing focused on investment. The directors are mindful of protecting shareholder value and are particularly pleased that as of 2025 retained profits are now standing at £26.5m.

Suppliers are reviewed regularly and have to demonstrate a high standard of corporate social responsibility as well as capability. The directors ensure that our contractual obligations are met to these suppliers both in terms of payment performance but also in all operational matters. The company enjoys a strong reputation in the industry with our suppliers. Supply of raw material is going to be increasingly difficult in the post covid world and by maintaining such relationships and being a responsible customer will be paramount to achieve this.

Being located in the same market town since 1926 our relationships with community form an important part of our culture. The company is accredited to the environmental quality standard 14001 and directors take an active part in the implementation of the environmental management system. This ensures that all investments and operations are designed to minimize any environmental impacts.

The Directors also regularly review the company policies on conduct, ethics, ICE and equality and that these are freely available to all stakeholders.

ON BEHALF OF THE BOARD:

P A Warner - Director

10 December 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of colour, commercial and magazine printing.

DIVIDENDS

An interim dividend of 6.38686 per share was paid on 14 April 2025. The directors recommend a final dividend of 6.38686 per share, making a total of 6.38686 per share for the year ended 30 September 2025.

The total distribution of dividends for the year ended 30 September 2025 will be £ 700,000 .

DIRECTORS

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

S A Warner

C A Warner

J M Warner

M A Warner

P A Warner

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). 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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Duncan & Toplis Audit Limited, Statutory Auditor, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

P A Warner - Director

10 December 2025

Opinion

We have audited the financial statements of Warners (Midlands) PLC (the 'company') for the year ended 30 September 2025 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 September 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 four, 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:

We have identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience, knowledge of the sector, a review of regulatory and legal correspondence and through discussions with Directors and other management obtained as part of the work required by auditing standards. We have also discussed with the Directors and other management the policies and procedures relating to compliance with laws and regulations. We communicated laws and regulations throughout the team and remained alert to any indications of non-compliance throughout the audit.

The potential impact of different laws and regulations varies considerably. Firstly, the company is subject to laws and regulations that directly impact the financial statements (for example financial reporting legislation) and we have assessed the extent of compliance with such laws as part of our financial statements audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements such as depreciation of tangible fixed assets, as well as the risk of inappropriate journal entries to increase reported profitability. Audit procedures performed by the engagement team included the identification and testing of material and unusual journal entries and challenging management on key accounting estimates, assumptions and judgements made in the preparation of the financial statements. We carried out detailed substantive tests on accounting estimates, including reviewing the methods used by management to make those estimates, re-performing the calculation, and reviewing the outcome of prior year estimates.

Secondly, the company is subject to other laws and regulations where the consequence for non-compliance could have a material effect on the amounts or disclosures in the financial statements. We identified the following areas as those most likely to have such an effect: Health and Safety regulations, and Employment laws.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection. This inspection included an assessment of the company’s employment and health and safety controls. Through these procedures, if we became aware of any non-compliance, we considered the impact on the procedures performed on the related financial statement items.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. As with any audit, there is a greater risk of non-detection of irregularities as these may involve collusion, intentional omissions of the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities 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.

Alistair Main FCA (Senior Statutory Auditor)

for and on behalf of Duncan & Toplis Audit Limited, Statutory Auditor

Enterprise Way

Pinchbeck

Spalding

Lincolnshire

PE11 3YR

10 December 2025

TURNOVER

34,341,376

34,858,117

Cost of sales

22,708,952

22,970,688

GROSS PROFIT

11,632,424

11,887,429

Distribution costs

3,644,529

4,608,358

Administrative expenses

7,109,050

5,970,146

10,753,579

10,578,504

878,845

1,308,925

Other operating income

80,100

81,579

OPERATING PROFIT

4

958,945

1,390,504

Interest receivable and similar income

280,990

319,817

1,239,935

1,710,321

Interest payable and similar expenses

5

60,394

41,490

PROFIT BEFORE TAXATION

1,179,541

1,668,831

Tax on profit

6

344,988

463,862

PROFIT FOR THE FINANCIAL YEAR

834,553

1,204,969

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

834,553

1,204,969

FIXED ASSETS

Tangible assets

8

21,315,329

23,252,157

CURRENT ASSETS

Stocks

9

1,757,031

1,926,717

Debtors

10

5,332,319

4,472,154

Cash at bank and in hand

8,053,668

6,452,786

15,143,018

12,851,657

CREDITORS

Amounts falling due within one year

11

6,946,588

6,590,324

NET CURRENT ASSETS

8,196,430

6,261,333

TOTAL ASSETS LESS CURRENT LIABILITIES

29,511,759

29,513,490

CREDITORS

Amounts falling due after more than one year

12

-

(347,667

)

PROVISIONS FOR LIABILITIES

15

(2,581,165

)

(2,369,782

)

NET ASSETS

26,930,594

26,796,041

CAPITAL AND RESERVES

Called up share capital

16

54,800

54,800

Revaluation reserve

17

399,452

416,096

Capital redemption reserve

17

30,469

30,469

Retained earnings

17

26,445,873

26,294,676

SHAREHOLDERS' FUNDS

26,930,594

26,796,041

The financial statements were approved by the Board of Directors and authorised for issue on 10 December 2025 and were signed on its behalf by:

P A Warner - Director

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 October 2023

54,800

25,823,063

432,740

30,469

26,341,072

Changes in equity

Transfer

-

16,644

(16,644

)

-

-

Dividends

-

(750,000

)

-

-

(750,000

)

Total comprehensive income

-

1,204,969

-

-

1,204,969

Balance at 30 September 2024

54,800

26,294,676

416,096

30,469

26,796,041

Changes in equity

Transfer

-

16,644

(16,644

)

-

-

Dividends

-

(700,000

)

-

-

(700,000

)

Total comprehensive income

-

834,553

-

-

834,553

Balance at 30 September 2025

54,800

26,445,873

399,452

30,469

26,930,594

Cash flows from operating activities

Cash generated from operations

1

3,523,338

2,832,786

Interest element of hire purchase payments paid

(60,394

)

(41,490

)

Tax paid

(133,605

)

-

Net cash from operating activities

3,329,339

2,791,296

Cash flows from investing activities

Purchase of tangible fixed assets

(623,194

)

(3,457,217

)

Sale of tangible fixed assets

2,500

554,055

Interest received

280,990

319,817

Net cash from investing activities

(339,704

)

(2,583,345

)

Cash flows from financing activities

Capital repayments in year

(755,933

)

(1,506,070

)

Amount introduced by directors

235,132

-

Amount withdrawn by directors

(167,952

)

-

Equity dividends paid

(700,000

)

(885,245

)

Net cash from financing activities

(1,388,753

)

(2,391,315

)

Increase/(decrease) in cash and cash equivalents

1,600,882

(2,183,364

)

Cash and cash equivalents at beginning of year

2

6,452,786

8,636,150

Cash and cash equivalents at end of year

2

8,053,668

6,452,786

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Profit before taxation

1,179,541

1,668,831

Depreciation charges

2,560,021

2,271,363

Profit on disposal of fixed assets

(2,500

)

(554,053

)

Finance costs

60,394

41,490

Finance income

(280,990

)

(319,817

)

3,516,466

3,107,814

Decrease/(increase) in stocks

169,686

(55,194

)

(Increase)/decrease in trade and other debtors

(860,165

)

239,404

Increase/(decrease) in trade and other creditors

697,351

(459,238

)

Cash generated from operations

3,523,338

2,832,786

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 30 September 2025

30.9.25

1.10.24

£

£

Cash and cash equivalents

8,053,668

6,452,786

Year ended 30 September 2024

30.9.24

1.10.23

£

£

Cash and cash equivalents

6,452,786

8,636,150

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.10.24

Cash flow

At 30.9.25

£

£

£

Net cash

Cash at bank and in hand

6,452,786

1,600,882

8,053,668

6,452,786

1,600,882

8,053,668

Debt

Finance leases

(1,103,600

)

755,933

(347,667

)

(1,103,600

)

755,933

(347,667

)

Total

5,349,186

2,356,815

7,706,001

1.	STATUTORY INFORMATION

Warners (Midlands)PLC is a public 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.

The financial statements have been prepared under the historic cost convention, modified to include the revaluation of freehold land and buildings.

Significant judgements and estimates

In the application of the company's accounting policy, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experiences 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Turnover

Turnover represents amounts receivable for goods net of VAT and trade discounts.

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

Tangible fixed assets

Tangible fixed assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold land & buildings

-

Over 50 years

Plant & machinery

-

Between 6.67% & 25% per annum at cost

Fixtures & fittings

-

Between 5% & 25% per annum at cost

Motor vehicles

-

Between 25% & 33% per annum at cost

The gain or loss arising from the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset at the point of sale. The difference is credited or charged to the income statement.

Stocks

Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell and after making due allowance for obsolete and slow moving items. Any allowances or impairment losses are recognised within the income statement. Reversals of impairment losses are also recognised in the income statement.

Financial instruments

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

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

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

Basic financial assets

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

Other financial assets

Other financial assets, including 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 change in fair value is recognised in the income statement, except for investments in equity instruments that are not publicly traded and whose fair value cannot be measured reliably. These instruments are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through the income statement, 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 value and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the income statement.

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 the income statement.

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors 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 of the reporting date. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Other financial liabilities, including debt instruments that do not meet the definition of a basic financial instrument, are measured at fair value through the income statement.

Derecognition of financial liabilities

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

Equity instruments

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

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Assets obtained under hire purchase contracts or finance lease are capitalised in the statement of financial position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

2025

2024

£

£

Wages and salaries

8,563,268

8,071,033

Social security costs

926,280

834,663

Other pension costs

416,404

409,666

9,905,952

9,315,362

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

2025

2024

Management

16

8

Production

133

151

Administration

32

24

Sales

3

3

184

186

2025

2024

£

£

Directors' remuneration

695,989

721,141

Directors' pension contributions to money purchase schemes

104,000

90,000

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

5

Information regarding the highest paid director is as follows:

2025

2024

£

£

Emoluments etc

301,059

313,891

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2025

2024

£

£

Other operating leases

161,246

140,294

Depreciation - owned assets

2,276,522

1,555,419

Depreciation - assets on hire purchase contracts

283,500

715,944

Profit on disposal of fixed assets

(2,500

)

(554,053

)

Auditors remuneration - audit

27,115

25,550

Auditors remuneration - tax

8,450

7,950

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2025

2024

£

£

Hire purchase interest

60,394

41,490

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2025

2024

£

£

Current tax:

UK corporation tax

133,605

-

Deferred tax

211,383

463,862

Tax on profit

344,988

463,862