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Strata Homes Group Limited Registered number: 13132559 Annual report and consolidated financial statements For the period ended 28 June 2025
STRATA HOMES GROUP LIMITED COMPANY INFORMATION
Directors | A Weaver
| G Smith
| R Moffatt (appointed 1 July 2024)
Registered number | 13132559
Registered office | Quay Point
| Lakeside Boulevard
| Doncaster
| South Yorkshire
| DN4 5PL
Independent auditor | Grant Thornton UK LLP
| City Square House
| 11 Wellington Place
| Leeds
| LS1 4DL
Bankers | Lloyds Bank
| 14 Church Street
| Sheffield
| S1 1HP
STRATA HOMES GROUP LIMITED CONTENTS
| Page
Group Strategic Report | 1 - 12
Directors' Report | 13 - 17
Independent Auditor's Report to the members of Strata Homes Group Limited | 18 - 22
Consolidated Statement of Comprehensive Income | 23
Consolidated Statement of Financial Position | 24
Company Statement of Financial Position | 25
Consolidated Statement of Changes in Equity | 26
Company Statement of Changes in Equity | 27
Consolidated Statement of Cash Flows | 28 - 29
Notes to the Financial Statements | 30 - 68
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT FOR THE PERIOD ENDED 28 JUNE 2025
Principal activities
The principal activity of the Group is housebuilding with operations in Yorkshire and the East Midlands.
Business review
The commentary below relates to the consolidated position of Strata Homes Group Limited ("Group"), unless it specifically states it relates to the Company.
Strategic direction and progress made
The Group has gone through a period of both change in the strategic nature of the business and financial performance over the financial years 2023 to 2025. The Group has followed a strategy to reduce its exposure to open market sales (“OMS”) business stream and at the same time to increase its exposure to Pre-Sold (Partnership) business stream. The OMS business stream requires debt funding, carries a sales risk as to timing and value and build cost risk. All of which are exposed to macro-economic conditions, such as interest rates and inflation. The Pre-Sold business stream requires minimal or no debt funding once a contract is executed. There is no material sales value or receipt timing risk (the contractual counterparty is of a nature that a potential default during the contract build phase, is a remote event). The risk of build cost inflation is well mitigated due to pre-contract price testing which then forms part of the build contract value along with cost increase clauses. It is important to understand that the two business streams create different financial returns driven by their different risk profiles. OMS business stream should deliver a greater gross profit financial value, a higher gross margin percentage, but a lower return on capital compared to Pre-Sold, due to debt required for working capital funding. There are also the funding risk parameters to consider for an OMS business stream, which requires either shareholder capital or third-party debt to grow and manage. The intention of the Group is to ensure a balanced portfolio of annual home completions in the range of 40% to 60% for OMS and Pre-Sold. In the period under review, OMS represented 59% and Pre-Sold represented 41%. The board is delighted with this achievement in the current period. This compares to a 82% and 18% in the period to June 2023. Not only has the mix changed, but the number of OMS completions has decreased from 486 in the period to June 2023 to 344 in the period under review. This is a decrease of 29% in OMS and an increase in Pre-Sold for the same periods of review of 220%. The Group has successfully built up a range of key Pre-Sold customers who have the need to engage a housebuilder to deliver homes for their own needs. The Group is engaged in three sub-sectors of the Pre-Sold market. These are as follows: ∙housing associations on the building of homes beyond that required under section 106 planning consents for OMS schemes. This activity has traditionally meant that the Group finds the land on behalf of the housing association and ensures appropriate planning permission is obtained. There is then the sale of the land to the housing association, either through the disposal of land from the Group’s land bank or back-to-back deal between the landowner and the housing association. The Group then builds the agreed homes for a contracted price. In April 2025, the Group executed its largest such transaction for the build of 180 homes to be completed by August, 2028. For the contract counter party, this was also their largest such investment. ∙private equity entities that are developing their own housing stock, known as build-to-rent. The model is like that described above. In December 2025, the Group executed such a transaction to build 128 homes to be completed by June, 2027. The Group also took an equity stake in the JV that is funding the building of the homes, which when rented, will be sold to a third party. This is forecast to create a profit/cash balloon payment back to the Group in FY 2027/28. A second such contract was entered into post the end of the period under review. Further development opportunities via this JV structure are being explored. ∙land-owners who remediate land but have no build capability. The model is like that described above, except the landowner supplies the land to the end customer and the Group ensures planning and building are executed. The Group is already in the process of carrying out such agreements. - 1 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Strategic direction and progress made (continued) As a result of the various streams of Pre-Sold, the Group targets a return on sale of between 10-12% for Pre-Sold, depending on the exact nature of the proposal. The tables below demonstrate the strategic direction of the Group over the last three financial years. OMS plots (homes) and turnover are based on legal plot (homes) completion, while Pre-Sold plots and turnover are based on equivalent unit methodology. The rebalancing of the risk profile of the Group over the last three years is obvious to see.
Plot (home) numbers | FY 2025 | FY 2024 | FY 2023
OMS (1) | 344 | 434 | 486
Affordable (section 106) | 70 | 32 | 58
Part exchange | 24 | 33 | 4
Total OMS business stream | 438 | 499 | 548
Pre-Sold business stream (2) | 240 | 93 | 105
Group total plots | 678 | 592 | 653
Percentage (%) split |  |  |
OMS only (1) | 59 | 82 | 82
Pre-Sold business stream (2) | 41 | 18 | 18
1 & 2 shows the calculation of those two business streams only
Turnover £m | FY 2025 | FY 2024 | FY 2023
OMS (1) | 96.0 | 116.5 | 114.7
Affordable (section 106) | 5.3 | 3.6 | 6.2
Part exchange | 4.3 | 5.9 | 0.8
Total OMS business stream | 105.6 | 126 | 121.7
Pre-Sold business stream (2) | 59.4 | 20.1 | 11.5
OMS and Pre-Sold total turnover | 165.0 | 146.1 | 133.2
Land turnover | - | - | 16.0
Other turnover | 0.2 | 0.2 | (0.1)
Group total turnover | 165.2 | 146.3 | 149.1
Percentage (%) split |  |  |
OMS only (1) | 62 | 85 | 91
Pre-Sold business stream (2) | 38 | 15 | 9
The Group has made excellent progress regarding debt management and rebuilding confidence with its debt provider, Lloyds Bank Plc (“Lloyds”). On the 24 February 2025, the Group and Lloyds entered a one-year extension of the debt facility, with a maturity date of 29 June 2026. During the period under review, Lloyds gross drawn debt decreased from £39.0m to £18.0m and net debt (Lloyds drawn debt offset by cash held) decreased from £20.4m on 29 June 2024 to a net cash position of £0.5m on 28 June 2025. This net debt decrease of £20.9m arises from operational trading of £16.8m and related party cash investment of £4.1m executed 31 July 2024. All financial covenants up to the end of the period under review were positively achieved. Post the end of the period under review, the Group and Lloyds concluded a new facility on 17 December 2025. See below for details. - 2 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
Current year trading performance
In the period to 28 June 2025, the Group made an operating profit including exceptional items of £757k (2024: loss £1,860k). The board are pleased to see the business return to an operating profit including exceptional items after two previous years of consecutive operating losses including exceptional items. The underlying operating performance, excluding exceptional items, is noted in the table below. The three-year period detailed below, along with the above noted executed strategic change in mix of business, OMS and Pre-Sold, demonstrates the material shift in the nature of the business, its lowering of risk profile and improvement in performance, which has now set the platform for continued positive recovery over the immediate future.
£m | FY 2025 | FY 2024 | FY 2023
Operating profit as reported | 0.8 | (1.9) | (37.2)
Intangible asset impairment and amortisation | - | - | 43.8
Land impairments | 4.0 | 1.3 | -
Land sale profit | - | - | (6.7)
Restructuring costs | - | 0.6 | -
Underlying operating profit | 4.8 | - | (0.1)
As noted within the section “Strategic direction and progress made”, the Group has materially changed with the decrease in OMS plots (homes) completed over the period financial year 2023 to 2025 with this decrease in business activity being replaced by Pre-Sold plots (homes) completed. In addition, the business dealt with its highly geared net debt position in January 2024 of £55.8m, with net cash on 28 June 2025 of £0.5m, an overall cash generation of £56.3m. This was executed by the above noted strategic shift in the Group’s business model but also by focusing on cash generation as the key priority above gross margin percentage achieved. The Group made a commitment to improve the gross margin percentage over the medium to long-term. It was not possible to materially do this short-term, as the Group was already on site or about to start on site with planning approved consents. The Group has been working on house-types, housing density and supply chain issues for future sites to come on stream in future years. The Group is confident that the future overall gross margin percentage will improve in each of the next three years as a result and future financial results will reflect the SME housebuilding sector average for a blended business model of OMS and Pre-Sold. The table below shows the reported and underlying gross margin percentage (which excludes all land impairments and one-off land sales included within turnover and cost of sales) trend from financial years 2023 to 2025.
Percentage % | FY 2025 | FY 2024 | FY 2023
As reported | 6.9% | 6.6% | 11.6%
Underlying | 9.6% | 7.5% | 7.9%
Interest - financing costs
Interest relating to the working capital debt provided by Lloyds decreased year on year, because of the focus on reducing the gross drawn debt in the period January to June 2024 and then maintaining that core level materially throughout FY 2025. The financial year 2024 was higher than the previous and current financial due to higher gross debt drawn. The Lloyds interest cost is a cash item in the year. The Group has no hedging products in place and is unlikely to do so for the short term given the lower level of debt the business now carries and the outlook for further interest rate reductions. The related-party interest covers the loan notes and preference shares in issue plus the £4.1m cash investment made by some of those related parties on the 31 July 2024 (see Financing section below). All the related-party interest costs are accounted for on an accrued basis and therefore non-cash in the year. The crystalized LTIP was fully paid out by June 2025, a £1m payment in FY 2025 and therefore no further interest cost will arise. - 3 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Interest - financing costs (continued)
£m | FY 2025 | FY 2024 | FY 2023
Lloyds | 1.9 | 3.5 | 1.8
Land creditors | 0.7 | 0.6 | 0.1
Related party interest | 2.3 | 2.2 | 2.2
crystallised LTIP | - | 0.1 | 0.1
Total | 4.9 | 6.4 | 4.2
Taxation
The net corporation tax and deferred tax credit for the year was £227k (2024: £850k). This reflects the taxable loss of the Group for the year under review. Please note that the interest cost on preference share interest accrual is not a tax-deductible item, and the interest on the loan note interest accrual is only a tax-deductible item when cash paid (subject to various restrictions under HMRC tax rulings). There was no cash payment during the year relating to loan note interest cost (or prior year accrued interest) and the Group does not create a deferred tax asset on expectation of short-term immediate payment.
Debt facilities
The Group has two types of debt. The two sections below deal with each type of debt.
Lloyds
Lloyds provide a working capital facility for the Group. On 28 June 2025, the Group had a revolving credit facility (“RCF”) of £30.9m and an overdraft facility of £5.0m. This will mature on 29 June 2026. On the 28 June 2025, the Group was £18.0m (2024: £39.0m) gross drawn on the RCF and held cash of £18.5m (2024: £18.6m). Net cash was therefore £0.5m (2024: net debt £20.4m). The reduction in net debt of £20.9m was due to the Group generating cash of £16.8m plus the related party cash investment of £4.1m. Up until the new facility noted below, the RCF decreased to £25.9m on 30 June 2025. The overdraft remained at £5m over the period. A total facility of £30.9m. On the 17 December 2025, Lloyds and the Group entered a new facility. The terms of the facilities are: ∙Commencing to June 2028 ∙an RCF facility of £31.4m ∙an overdraft facility of £5.0m The facility is lower than the original facility pre-31 December 2023. The reduction in the facility reflects the strategic debt needs of the business, which has moved from purely OMS to a business split between OMS and Pre-Sold. - 4 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
Related party debt
Related parties are family members (direct and indirect) of the equity owner of the Group. The related parties held loan notes, preference shares and a cash injection in return for a short-term loan in the Group made on 31 July 2024 of £4.1m. The loan notes and preference shares were subject to a debt amendment that executed on 31 October 2025. On this date, the terms of the loan notes and preference shares were amended as follows: ∙Up to October 2025, a 5% coupon was applied to the loan notes and preference shares. From November 2025 no interest accrual is taken and only recommences on 1 January 2029. ∙£10,852k of loan notes were cancelled at par and new preference shares were issued at par for £10,852k leaving existing loan of £10,837k at par. ∙All interest accrued on the loan notes and preference shares as of October 2025 was waived. ∙The repayment deadline of the new and existing preference shares and loan notes was amended from 2 March 2028 to 2 March 2040. The above changes included the waiver and pause of interest payments, the extension of loan terms, and the cancellation of existing loan notes which were replaced with new preference share instruments. Management has assessed these changes and determined that they represent a substantial modification of the existing debt instruments. The cancellation of the original loan notes constitutes an extinguishment of the old financial liabilities and the recognition of new instruments in the form of preference shares. Under normal circumstances, any gain or loss arising on such a modification or extinguishment would be recognised in the profit and loss account. However, in this case, the transaction has been treated as a capital contribution because the lenders involved are related parties who are considered to have acted in their capacity as shareholders of the Group. The decision to forgo interest and restructure the terms was made to strengthen the Group’s capital base rather than to achieve a commercial return. Accordingly, the resulting gain has been credited directly to equity rather than through profit or loss. On the 31 October 2025, accrued interest was waived of £9.9m. The table below is a demonstration of what the balance sheet would have looked like had the debt amendment been completed on 28 June 2025 rather than 31 October 2025. The only change to the balance of loan notes and preference shares after the balance sheet date was additional interest charged of £794k. Management has assessed this modification and determined that it represents a non-adjusting event. The negotiations and resulting agreement occurred after the reporting date and do not provide additional evidence of conditions that existed at that date.
£m | Balance 28/06/2025 | Amount cancelled | New issue at par | Discount | New balance
Loan note capital | 21,690 | (10,852) | - | (5,565) | 5,273
Loan note interest | 5,040 | (5,040) | - | - | -
Preference share capital | 19,368 | - | 10,852 | (17,799) | 12,421
Preference share interest | 4,096 | (4,096) | - | - | -
Capital Contribution (Equity) | - | - | 9,136 | 23,364 | 32,500
The short-term loan of £4.1m received in the period under review was not subject to the debt amendment. At the end of the period, the capital and accrued interest owed on this debt was £4.4m. - 5 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
Consolidated Statement Of Financial Position
| FY 2025 |  | FY 2024 |  | FY 2023
| £m |  | £m |  | £m
Investments | 1.7 |  | 0.1 |  | 0.1
Intangibles | 0.3 |  | - |  | -
Tangibles | 0.7 |  | 1.0 |  | 1.2
Stock | 100.7 |  | 126.5 |  | 131.4
Trading Debtors | 22.2 |  | 14.1 |  | 14.6
Trading Creditors | (43.1) |  | (38.0) |  | (43.2)
Deferred Land Creditors | (15.8) |  | (18.0) |  | (12.0)
Corporation Tax | - |  | 0.9 |  | 0.9
Deferred Tax Asset | 1.2 |  | 1.0 |  | 0.3
Long-Term Incentive Plan crystallised | - |  | (1.0) |  | (1.8)
Sub-total | 67.9 |  | 86.6 |  | 91.5
Cash | 18.5 |  | 18.6 |  | 13.3
Lloyds Bank Plc Gross Debt | (18.0) |  | (39.0) |  | (32.0)
Lloyds Bank Plc Net Cash/(Debt) | 0.5 |  | (20.4) |  | (18.7)
Lloyds Bank Plc Gearing % | - |  | 23.6 |  | 20.4
Loan Notes | (26.7) |  | (25.6) |  | (24.4)
Preference Shares | (23.5) |  | (22.5) |  | (21.6)
Connected party loans | (4.4) |  |  |  | -
Other Loans | - |  | - |  | (0.7)
Connected Party Debt | (54.6) |  | (48.1) |  | (46.7)
Net Worth | 13.8 |  | 18.1 |  | 26.1
Investments consist of an equity stake held at the cost of £0.1m in an unquoted legal entity. There is no requirement for the Group to make any further investment. The increase in FY 2025 arises from the 10% equity stake in a legal entity that the Group entered into legal agreement to build homes for rent. The counterparty is a private equity group. The Group builds the homes via Strata Homes Yorkshire Limited, the main trading legal entity of the Group, and Strata Homes Limited funds 10% of the building cost via an increasing equity stake. In due course, the JV will sell the built homes which will have a net rent roll to a third party, and the equity stake will be repaid via a dividend distribution. The decrease in stock during the year under review reflects the strategy of moving from a predominantly OMS business to two business streams of OMS and Pre-Sold. Land has been utilized for both business streams and not replenished for OMS to the extent that would be applicable for a predominantly OMS business stream. Trading debtors increased during the year due to the increase in activity of the Pre-Sold business stream. This represents work billed for Pre-Sold for the month of June 2025, paid post the balance sheet date. Trading creditors increased between FY’s 2025 and 2024. This reflects the build activity levels over the months May and June for both periods, 2025 and 2024. - 6 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Consolidated Statement Of Financial Position (continued) Deferred land creditors decreased by £2.2m. This is due to three separate contractual payments made in the year totaling £6.8m whilst a new £2.8m deferred land creditor was contractually agreed. Corporation tax recoverable FY2024 was repaid in FY 2025. The FY 2025 corporation tax recoverable is £7k. Deferred tax asset is expected to be recovered over the short-term future as the Group returns to a position of taxable profits before tax. Related party debt as on 28 June 2025 is before the debt amendment noted above. The increase is due to the short-term cash investment of £4.1m executed 31 July 2024 plus accrued interest on the preference shares and loan notes.
Land pipeline - OMS
On the 28 June 2025, the Group had the following OMS land pipeline by financial year:
| FY 2026 | FY 2027 | FY 2028
Sites outlets controlled | 10 | 7 | 5
Site outlets uncontrolled | 0 | 1 | 3
Controlled plots | 301 | 190 | 194
Uncontrolled plots | 0 | 12 | 119
Total | 301 | 202 | 313
% Controlled plots | 100% | 94% | 62%
Plots with planning | 301 | 187 | 156
Plots without planning | 0 | 15 | 157
Total | 301 | 202 | 313
% of plots with planning | 100% | 93% | 50%
Controlled means contracts exchanged, optioned or owned. Strata Homes Group already controls land that could deliver 816 open market home sales over the three financial years to June 2028. This does not mean that all these homes will be built, as this will depend on market conditions and the growth of Pre-Sold (Partnership) homes business. Encouragingly, all open market homes sales for financial year 2026 have full planning consent and financial year 2027 93%. Strata Homes Group is therefore in an excellent position to determine how many open market homes sales it builds and sells for the next 3-5 years. - 7 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
Land pipeline - Pre-Sold
On the 28 June 2025, the Group had the following Pre-Sold pipeline by financial year:
| FY2026 | FY2027 | FY2028
Controlled plots | 317 | 218 | 89
Uncontrolled plots | 19 | 111 | 243
Total | 336 | 329 | 332
% Controlled plots | 94% | 66% | 27%
Plots with planning | 317 | 218 | 89
Plots without planning | 19 | 111 | 243
Total | 336 | 329 | 332
% of plots with planning | 94% | 66% | 27%
Controlled means contracts exchanged, optioned or owned. Strata Homes Group controls land that could deliver 997 Pre-Sold (Partnership) home sales over the three financial years to June 2028. This does not mean that all these homes will be built, as this will depend on market conditions and the growth of Pre-Sold (Partnership) homes business with contracts to be executed. Encouragingly, 94% Pre-Sold homes sales for financial year 2026 have full planning consent and financial year 2027 66%. Strata Homes Group is therefore in an excellent position to determine how many Pre-Sold (Partnership) homes sales it builds and sells for the next 3-5 years, subject to further contractual agreement with housing association and for profit private rental sector organisations.
Company Statement Of Financial Position
| 2025 |  | 2024 |  | 2023
| £m |  | £m |  | £m
Investments in subsidiaries | 65.6 |  | 93.2 |  | 93.2
Deferred Tax | - |  | - |  | 0.3
Inter-Group payables | 6.8 |  | (3.1) |  | (20.7)
Loan Notes | (26.7) |  | (25.6) |  | (24.4)
Connected party loans | (4.4) |  | - |  | -
Preference Shares | (23.5) |  | (22.5) |  | (21.6)
Net worth | 17.8 |  | 42.0 |  | 26.8
Investment in subsidiaries was impaired in FY 2023 down to £93.2m. An annual impairment test was undertaken in FY’s 2024 but no impairment was deemed necessary. A further impairment exercise was undertaken in FY 2025 and an impairment charge of £(27.6)m was incurred. Since the end of FY 2023, the Company has received dividends of £24m. The proceeds have been used to settle group payables in FY’s 2024 and 2025. The Company had £7.8m of distributable reserves on the balance sheet date. - 8 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
Consolidated Statement Of Cashflows
The material movements are noted in the table below:
£m | FY 2025 |  | FY 2024 |  | FY 2023
Loss for the year | (3.9) |  | (7.4) |  | (38.8)
Adjusting items | (2.1) |  | 15.7 |  | 37.2
Working capital movement (outflow)/inflow | 20.9 |  | (2.3) |  | (23.9)
Tax repaid | 0.9 |  | - |  | (1.3)
Net interest received/ (paid) | (1.9) |  | (3.6) |  | (2.4)
Lloyds debt net movement (repaid)/drawn | (21.0) |  | 6.3 |  | 2.0
Connected party investment | 4.1 |  | - |  | -
Equity dividends | (0.3) |  | (0.3) |  | (2.4)
LTIP payments | (1.0) |  | (0.9) |  | -
Other minor items | - |  | (2.1) |  | (0.2)
Cash inflow/(outflow) | (4.3) |  | 5.4 |  | (29.8)
During FY 2025, the Group has kept a tight control of working capital and ensured that any cash generated, along with the connected party investment of £4.1m has been used to repay Lloyds drawn debt and the LTIP liability. The equity owner is only remunerated via equity dividends.
Members Voluntary Liquidation Of Group Legal Entities
Note 17 to the financial statements list the current companies within the Group structure. During the year under review, nine legal entities were struck-off the Companies House register and since the year end and up to the date of approving these financial statements, a further one legal entity has been struck-off the Companies House register.
Principal risks and uncertainties
Economic impact of global events Over the last few years in particular, the UK economy and crucially, the housebuilding sector, has had to consider and navigate the impact of conflicts around the world and the long-term impact of BREXIT. As a result, interest rates have increased impacting both the cost of build and customer affordability; supply chain and labour shortage issues. The Group has also been affected by changes to Stamp Duty that came into effect from 1 April 2025 where the nil-rate band has been reduced to £300k. The changes have increased the upfront transaction costs for buyers in our main price market. As the directors look ahead with acceptance of the new norm of such factors, the future is perhaps a little more stable. Interest rates have started to decrease, and inflation has moved to parameters that the Bank of England generally try to maintain at, although this is not the same as deflation. The UK government has made a clear commitment to increasing housing supply across all tenures. How and when that objective starts to be physically seen in the increase in output of new housing is probably less optimistic, given the many inter-related elements that are required to be addressed from those that are short-term in nature and those that are long-term. Net overall, the housebuilding sector is more optimistic about the future than that it was. The directors have taken account of these potential impacts in their going concern assessment. The Company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide. - 9 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Economic impact of global events (continued) Climate change and increases in the frequency of extreme weather events represent a risk to the Company through disruption in on site activities and potential weather-related damages to sites and other assets. Where possible this risk is mitigated through the careful selection of sites where risks such as flooding are avoided. Climate and wider sustainability considerations are becoming increasingly important for the construction sector in general as the focus on these areas intensifies by the customers, the media, regulators, government bodes and other stakeholders. The Company has acknowledged the importance of sustainability and wider ESG considerations through the investment in a sustainability team. This team, along with the Sustainability Committee, are focused on the key risks to the business from both an operational and reporting perspective. The policies, processes and procedures within the Company will continue to develop to minimise the risks in this area. This is a long term investment recognising that sustainability and ESG will continue to develop over the next few years but also its importance to the values and culture within the Company. Land Developing and maintaining a robust land purchase programme is essential to ensure that the Group is able to deliver its short- and longer-term strategies. A significant delay in the land programme would have an adverse impact on the progress made by the Group in recent years. All land opportunities are subject to rigorous appraisals and their progress through the planning system is closely monitored and adequate time for this process has been included in the overall land programme. To identify as many land opportunities as possible the Group looks for available land across a broad geographic area and places a great emphasis on longer term strategic sites. Sales and economic environment factors Despite the more challenging economic environment during the year and in particular the challenges the Group faced and addressed, sales performance during the financial year was satisfactory. The decision by the Group to realign open market home selling prices to create a faster rate of sale at the expense of profit, created an increase in sales in the second half of the year. The Group remains aware of customer affordability against the backdrop of a higher labour and material cost of build driven by the surge in inflation over the least two years, the level of interest rates, cost of living and Stamp Duty. This position continues to be monitored closely by reviewing sales performance data both for the Group and the wider housing market. There are however early signs that customers are beginning to accept the higher cost of home ownership by purchasing smaller, less expensive homes. In addition, falling inflation and interest rates are expected to increase demand for homes, along with the early announcements of the newly elected UK Government regarding housing supply to feed into the sector over the medium to long-term. It is important that the Group can maintain the current level of sales on its existing sites and carefully manages the transition from completed to new sites to ensure sales rates across the Group are maintained. The Group makes significant investment to ensure that the physical appearance of the developments and individual properties are as desirable as possible and selling prices are closely monitored to ensure the best presentation of our products. Quality control and customer service are key focus areas throughout the customers purchase from enquiry to post completion. - 10 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Financial support for homebuyers The Government's Help to Buy scheme helped the market overcome affordability issues in the new build market. The scheme ended in 2023 and there is currently no similar scheme in operation at the date of approval of these financial statements. However, the new UK Government has made clear its objective of ensuring that the economic and financial framework is in place to increase the supply of new build across all tenure types. The Group is well positioned to both continue within the open market homes sales arena and its growing Pre-Sold (Partnership) business activity, both of which align strongly with Government policy. Availability of labour and materials The pressure on the labour and material supply chain during prior years has eased as the housing market slowed, it does however remain a risk area, as the UK Government attempts to increase new build supply of homes over the next five years of its term of office. One of the issues facing the housebuilding sector is material supply and labour, with the governments output aspirations recognised to be above the capacity of the industry from a labour perspective. The Group continues to work closely with its business partners to manage through a period of supply pressure. The strong relationships with the Group’s business partners have enabled the business to mitigate much of the delivery risk but the position continues to be closely monitored and managed. Planning The current planning application process can lead to delays in planning permission being granted at individual sites. Delays in planning approvals represent a risk to the Group's ability to deliver its future land acquisition programme. This continues to be an area of frustration and has resulted in a small number of schemes being delayed due to issues with the performance of the local authority planning teams in some areas. The Group does however mitigate these risks as far as possible through regular dialogue with local authorities to ensure that any delays are minimised. The UK Government have recognised the not fit of purpose planning system, but how it improves that process and over what period it will improve are yet to be understood. Any actions taken now will not be felt immediately. Future developments The Group continues to look for new land opportunities, including strategic land, and continues to work on land that is optioned or contracted conditionally or where negotiations are taking place. A particular focus will be on land for Pre-Sold (Partnership) contracts.
Section 172 statement
The directors consider the requirements of key stakeholders with a focus on the developments of long term relationships in all areas of the business. The directors endeavour to develop and maintain strong long term suppliers’ relationships with its key business partners by contracting on standard business terms and prompt payment in line with agreed terms. There are long standing relationships with key suppliers that ensure the quality of products and services provided and the continuity of the supply chain. - 11 -
STRATA HOMES GROUP LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Section 172 statement (continued) Through direct feedback from the Home Builders Federation surveys and other sources such as Trust Pilot, combined with regular updates from the Group’s operational teams, the directors are always aware of the strength of relationship with customers. This allows the directors to make decisions that consider the commercial and service requirements of its customer base. The directors recognises that the Group must maintain the highest standards of integrity in the conduct of its operations across the region in which the Group operates. Consequently, the directors focus on contributing as far as practical to the local communities in which it operates through both design of the housing developments and the way in which the business interacts with residents. The directors recognise the importance of maintaining high standards of business conduct and operates according to a full suite of policies. These include Health & Safety, environmental considerations, sustainability, maintaining the high quality of service plus the wellbeing and development of all our people. The directors of the Group act in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to: • the likely consequences of any decision in the long term; •the interest of the Group’s employees; •the need to foster the Group’s business relationships with suppliers and customers; •the impact of the Group’s operations on the community and environment; •maintaining the Group’s reputation for high standards of business conduct; and •the need to act fairly between members of the Group. The directors considers its employees, customers, suppliers, bank and shareholders to be its major stakeholders. When taking decisions for the long term future of the Group, the directors informally takes into consideration the interests of all these stakeholders in its decision making processes. The directors of the Group and the operating companies have a responsibility to ensure good relationships are maintained with employees, customers and suppliers which are recognised as being vital for the long term. The directors consider that the appropriate remuneration, benefits and employment procedures are in place which fairly rewards its employees in relation to the local communities in which they operate and identify opportunities for employee development where practical. This report was approved by the board on 4 February 2026 and signed on its behalf.
A Weaver Director
- 12 -
STRATA HOMES GROUP LIMITED DIRECTORS' REPORT FOR THE PERIOD ENDED 28 JUNE 2025 The directors present their report and the financial statements for the period ended 28 June 2025. As permitted under s414C(11) of the Companies Act 2006, disclosures otherwise required to be disclosed in the directors' report under s416(4) of the Act but which are of strategic importance to the Group have been included in the strategic report. This includes future developments.
Statement of directors’ responsibilities in respect of the Strategic Report, the Directors’ Report and the financial statements
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 the Group 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 for the Group's financial statements and then apply them consistently; ∙make judgments 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; and ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Financial risk management
The Group’s operations expose it to a variety of financial risks, including price risk, credit risk, liquidity risk, and cash flow risk. The Directors have established policies to monitor and mitigate these exposures to ensure the long-term viability of the business. The Group does not enter into complex financial instruments or speculative derivative contracts. Furthermore, the Group does not currently apply hedge accounting for forecasted transactions. ∙The Group operates a model whereby a large portion of sales comes our pre-sold revenue stream. Through this we are contractually entitled to regular cash payments based on specific stages of completion, providing more regular cash flow. We also manage our risk through the careful selection and monitoring of sites. ∙Credit risk is mitigated by the contractual nature of the installment payments and the security of the underlying assets. Open market sales risk is inherently low as legal completion and receipt of funds occur simultaneously. ∙The Group manages its liquidity risk through our RCF facility and overdraft with Lloyds Bank PLC, ensuring sufficient headroom to meet our working capital requirements. - 13 -
STRATA HOMES GROUP LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
Results and dividends
The loss for the period, after taxation, amounted to £3.9 m (2024 - £7.4 m). During the year the Company also paid dividends to holders of the A Ordinary shares of £0.3m (2024: £0.3m). No further dividends were proposed.
Directors
The directors who served during the period were:
A Weaver
G Smith
R Moffatt (appointed 1 July 2024)
Going concern
The Company is part of the Strata Homes Group of companies. Strata Homes Limited is the Borrower under a facility provided by Lloyds Bank Plc as Lender that matures on 29 June 2026, as was the position on the balance sheet date. Please see below for the post balance sheet date changes to the facility. The Company is a party to this facility and accordingly has entered an unlimited guarantee supported by a debenture creating a fixed and floating charge to secure the borrowing under the facility. Accordingly, the Company is dependent upon the Strata Homes Group remaining a going concern for the Company to also state that it is a going concern. As noted within the Strategic Report, Financing section, the Strata Homes Group is supported by a debt facility between Strata Homes Limited as Borrower and Lloyds Bank Plc as Lender. See note 30. Post the balance sheet date, the Strata Homes Group and Lloyds Bank Plc have entered into a new lending facility which runs to 30 June 2028. The facility comprises an overdraft facility of £5m and revolving credit facility of £31.4m, total facility of £36.4m. The revolving credit facility decreases to £28m on 01 June 2026 and to £25.9m on 01 October 2026. The overdraft remains at £5m. The Strata Homes Group Limited also has other debt owed to connected parties. The debt comprises loan notes, preference shares and a short-term loan. The loan notes and preference shares were subject to a post balance sheet debt amendment agreement executed 31 October 2025. Please refer to the Strata Homes Group Limited annual report and financial statements for the period to 28 June 2025 for further detail. No payments will be made by the Strata Homes Group to any of the related party debt holders during the going concern period. The directors of the Company and therefore the Strata Homes Group have considered the following factors in relation to concluding their going concern assumption up to 27 March 2027: ∙A new facility has been executed on 17 December 2025 between Lloyds Bank Plc and the Strata Homes Group. Please see details of facility value and terms above. ∙The Strata Homes Group maintains a rolling business plan that is updated quarterly and is reviewed by the board of the Strata Homes Group. ∙The Strata Homes Group maintains a rolling weekly cash flow report that forecasts for six months in advance and is reviewed by the Executive weekly and the board of Strata Homes Group monthly. ∙A monthly review is undertaken of all live and completed sites from a build cost and sales rate, mix and value perspective. This ensures consistent lifetime margin recognition. - 14 -
STRATA HOMES GROUP LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Going concern (continued) ∙The business now operates a two-income stream with differing investment and return profiles. Open Market Sales (“OMS”) requires Lloyds Bank Plc debt funding while Pre-Sold does not. The change in the business model has decreased the overall debt requirements and lessened the debt financing needs and liquidity risks of the business. ∙The OMS forecast for completions in the year to June 2026 is 293 homes to be completed. As at 31 January 2026, 43% are complete, 12% are exchanged, 28% are sold awaiting exchange and 17% are still to be sold with 5 months of selling period still available. ∙The Pre-Sold profit and net cash expected to be obtained in the year to June 2025 is all on site and under contract. The Company has stress tested various single and multiple plausible but severe scenarios and on a severe and implausible scenario against the Strata Homes Group’s forecasts that reflect the above plans, with a particular focus on sales rates and timing of open market completions, these being the most likely risk for the business. Based on these forecasts, sensitivities and financing these agreements, the directors have concluded the Strata Homes Group has sufficient funds to continue in operational existence for the foreseeable future.
Carbon and Energy reporting
The Group’s energy consumption includes electricity, natural gas and fuel for transport directly purchased by the group within the UK. Carbon footprint is used as a KPI, calculated through measuring kgCO2e (Kg of carbon dioxide equivalent) which is widely recognised as a reliable indicator of an organisation’s environmental impact. The kgCO2e are from a number of emission sources: −Head Office gas and electricity −Electricity usage at developments −Motor vehicle fuels usage, both cars and vans Usages have been calculated using raw data (mileage, fuel use, kWh etc) and converted to CO2e using the government published conversion factors (Greenhouse gas reporting: conversion factors 2025).
Category | Measure | 2025 | 2025 | 2024 | 2024
|  | Total (tonnes CO2e) | Total (kWh) | Total Restated (tonne CO2e) | Total Restated (kWh)
Head office | Gas | 7 | 32,751 | 7 | 33,489
| Electricity | 42 | 218,746 | 52 | 250,685
Site consumption | Gas | 287 | 1,569,898 | 154 | 841,041
| Electricity | 51 | 285,800 | 112 | 540,946
| Diesel | 568 | 2,413,908 | 447 | 1,938,805
Transport | Company owned/leased | 86 | 378,696 | 106 | 472,864
| Expensed | 237 | 1,056,377 | 300 | 1,347,273
Total |  | 1,278 | 5,956,176 | 1,178 | 5,425,103
Energy intensity ratio |  | 7.7 |  | 8.1 |
Energy intensity ratio is calculated as the quantity of CO2e for each £1m of revenue. - 15 -
STRATA HOMES GROUP LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025 Carbon and Energy reporting (continued) The transition of the car fleet to a greater mix of EV and hybrid vehicles has reduced the overall CO2e for cars, despite the increase in the size of the fleet. During the current year, management has reviewed and improved the methods used to collect and calculate energy consumption and emissions data. As a result, the figures for the prior year have been restated to reflect more accurate measurement and estimation techniques. The restatement does not impact the overall trends in energy efficiency or the Group’s approach to carbon reduction but provides a more reliable basis for comparison and ongoing monitoring.
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.
Directors' indemnities
Directors' and officers' insurance has been established for all directors to provide appropriate cover for their reasonable actions on behalf of the Company. No further directors' indemnities are in place. - 16 -
STRATA HOMES GROUP LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
Post balance sheet events
Since 28 June 2025 and up to the date of approving the financial statements, the following transactions have been concluded. As detailed in the Strata Homes Group Strategic report, the Group has successfully entered into a new lending facility with Lloyds Bank Plc, providing committed funding through to 30 June 2028. The total facility of £36.4m comprises: ∙A revolving credit facility (RCF) of £31.4m; and ∙An overdraft facility of £5m. Under the terms of the agreement, the revolving credit facility is subject to scheduled step-downs, decreasing to £28m on 1 June 2026 and further to £25.9m on 1 October 2026. The overdraft facility remains unchanged at £5m. On 31 October 2025, the Group executed a post balance sheet debt amendment agreement regarding its liabilities to connected parties. This agreement affects the terms of the Group’s existing loan notes and preference shares (further details of which are disclosed in Strata Homes Group Limited’s annual report and financial statements for the period ended 28 June 2025). The terms of the loan notes and preference shares were amended as follows: ∙The 5% coupon previously applied to loan notes and preference shares ceased in October 2025. No interest shall accrue from November 2025 until 01 January 2029. All interest accrued up to 31 October 2025 has been waived by the debt holders. ∙£10,852k of loan notes were cancelled at par and new preference shares were issued at par for £10,852k leaving existing loan of £10,837k at par. ∙The repayment deadline of the new and existing preference shares and loan notes was amended from 2 March 2028 to 2 March 2040. The debt amendment has been determined to be a substantial modification. As the lenders involved are related parties acting in their capacity as shareholders the transaction has been treated as a capital contribution. The resulting gain has been credited directly to equity rather than through the Group’s profit or loss.
Auditor
The auditor, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board on 4 February 2026 and signed on its behalf.
A Weaver Director
Quay Point Lakeside Boulevard Doncaster South Yorkshire - 17 -
STRATA HOMES GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA HOMES GROUP LIMITED
Opinion
We have audited the financial statements of Strata Homes Group Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the period from 30 June 2024 to 28 June 2025, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated and Company Statement of Changes in Equity and the related notes, 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 Group's and of the Parent Company's affairs as at 28 June 2025 and of the Group's loss for the period then ended; ∙the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙the financial statements 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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's and the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the group's and the parent company's business model including effects arising from macro-economic uncertainties such as inflation rates and the continuing cost of living crisis, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the group's and the parent company's financial resources or ability to continue operations over the going concern period. 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. - 18 -
STRATA HOMES GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA HOMES GROUP LIMITED (CONTINUED) Conclusions relating to going concern (continued) 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 the 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is 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.
Opinion 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 Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and ∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report. - 19 -
STRATA HOMES GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA HOMES GROUP LIMITED (CONTINUED) Matters on which we are required to report by exception 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.
Responsibilities of directors for the financial statements
As explained more fully in the Directors' Responsibilities Statement set out on page 13, 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 Group's and 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. - 20 -
STRATA HOMES GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA HOMES GROUP LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: ∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and parent company and determined that the most significant are financial reporting legislation being FRS 102, Companies Act 2006, and relevant UK tax legislation. ∙We understood how the group and parent company is complying with those legal and regulatory frameworks by making inquiries of management and those responsible for legal and compliance procedures. We enquired of management and those charged with governance whether there were any instances of non-compliance with laws and regulations, or whether they had any knowledge of actual or suspected fraud. We corroborated the results of our enquiries through review of meeting minutes and legal and professional fee expenditure. ∙We assessed the susceptibility of the group and parent company’s financial statements to material misstatement, including how fraud might occur, by evaluating management's incentives and opportunities for manipulation of the financial statements. This included the evaluation of the risk of management override of controls. ∙In assessing the potential risks of material misstatement, we obtained an understanding of: −the group and parent company’s operations, including the nature of their revenue and of their objectives and strategies to understand the classes of transactions, account balances, expected financial disclosures and business risks that may result in material misstatement; −the group and parent company’s control environment, including the adequacy of the training to inform staff of the relevant legislation, the adequacy of procedures for authorisation of transactions, and procedures to ensure that possible breaches of requirements are appropriately resolved. ∙Audit procedures performed by the engagement team included: −identifying and assessing the design and implementation of controls management has in place to prevent and detect fraud; −identifying and testing journal entries, in particular journal postings that had material effect on the financial statements and those determined to be large or relating to unusual transactions based on our understanding of the business; −challenging assumptions and judgments made by management in its significant accounting estimates; and −completion of audit procedures to conclude on the compliance of disclosures in the annual report and accounts with applicable financial reporting requirements. - 21 -
STRATA HOMES GROUP LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA HOMES GROUP LIMITED (CONTINUED) Auditor's responsibilities for the audit of the financial statements (continued) ∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it; ∙The engagement partner’s assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s: −Understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation; −Knowledge of the industry in which the client operates; and −Understanding of the legal and regulatory requirements specific to the entity ∙We communicated relevant laws and regulations and potential risks to all engagement team members and remained alert to indications of fraud or non-compliance with laws and regulations throughout the audit. 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 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. Victoria McLoughlin Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants Leeds 4 February 2026 - 22 -
STRATA HOMES GROUP LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 28 JUNE 2025
| 2025 | 2024
Note | £000 | £000
Turnover | 4 | 165,162 | 146,272
Cost of sales |  | (149,839) | (135,267)
Exceptional cost of sales | 5 | (3,965) | (1,300)
Gross profit |  | 11,358 | 9,705
Administrative expenses |  | (11,100) | (11,711)
Exceptional administrative expenses | 5 | (47) | (603)
Other operating income | 6 | 546 | 756
Operating profit/(loss) | 7 | 757 | (1,853)
Share of loss of joint venture |  | - | (7)
Total operating profit/(loss) |  | 757 | (1,860)
Interest receivable and similar income | 11 | 36 | 27
Interest payable and similar expenses | 12 | (4,931) | (6,383)
Loss before taxation |  | (4,138) | (8,216)
Tax on loss | 13 | 227 | 850
Loss for the financial period |  | (3,911) | (7,366)
There were no recognised gains and losses for 2025 or 2024 other than those included in the consolidated statement of comprehensive income.
There was no other comprehensive income for 2025 (2024: £NIL).
The notes on pages 30 to 68 form part of these financial statements.
- 23 -
STRATA HOMES GROUP LIMITED REGISTERED NUMBER: 13132559 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 28 JUNE 2025
|  | 28 June |  | 29 June
|  | 2025 |  | 2024
Note |  | £000 |  | £000
Fixed assets |  |  |  |  |
Intangible assets | 15 |  | 288 |  | -
Tangible assets | 16 |  | 683 |  | 1,022
Investments | 17 |  | 1,665 |  | 103
|  |  | 2,636 |  | 1,125
Current assets |  |  |  |  |
Stocks | 18 | 100,748 |  | 126,513 |
Debtors: amounts falling due within one year | 19 | 23,272 |  | 15,975 |
Cash at bank and in hand | 20 | 18,489 |  | 18,645 |
|  | 142,509 |  | 161,133 |
Creditors: amounts falling due within one year | 21 | (53,385) |  | (85,524) |
Net current assets |  |  | 89,124 |  | 75,609
Total assets less current liabilities |  |  | 91,760 |  | 76,734
Creditors: amounts falling due after more than one year | 22 |  | (77,910) |  | (58,673)
Net assets |  |  | 13,850 |  | 18,061
Capital and reserves |  |  |  |  |
Called up share capital | 26 |  | 1 |  | 1
Share premium account | 28 |  | 10,000 |  | 10,000
Profit and loss account | 28 |  | 3,849 |  | 8,060
|  |  | 13,850 |  | 18,061
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 February 2026.
A Weaver
Director
The notes on pages 30 to 68 form part of these financial statements. - 24 -
STRATA HOMES GROUP LIMITED REGISTERED NUMBER: 13132559 COMPANY STATEMENT OF FINANCIAL POSITION AS AT 28 JUNE 2025
|  | 28 June |  | 29 June
|  | 2025 |  | 2024
Note |  | £000 |  | £000
Fixed assets |  |  |  |  |
Intangible assets | 15 |  | - |  | -
Investments | 17 |  | 65,562 |  | 93,199
|  |  | 65,562 |  | 93,199
Current assets |  |  |  |  |
Debtors: amounts falling due within one year | 19 | 6,751 |  | 167 |
|  | 6,751 |  | 167 |
Creditors: amounts falling due within one year | 21 | - |  | (3,215) |
Net current assets/(liabilities) |  |  | 6,751 |  | (3,048)
Total assets less current liabilities |  |  | 72,313 |  | 90,151
Creditors: amounts falling due after more than one year | 22 |  | (54,551) |  | (48,164)
Net assets |  |  | 17,762 |  | 41,987
Capital and reserves |  |  |  |  |
Called up share capital | 26 |  | 1 |  | 1
Share premium account | 28 |  | 10,000 |  | 10,000
Profit and loss account | 28 |  | 7,761 |  | 31,986
|  |  | 17,762 |  | 41,987
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not represented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the Company for the year was £(23,925)k including £6,000k of dividends received and is before the payment of £300k of dividends (2024: £15,498k). The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 February 2026.
A Weaver
Director
The notes on pages 30 to 68 form part of these financial statements. - 25 -
STRATA HOMES GROUP LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 28 JUNE 2025
| Called up share capital | Share premium account | Profit and loss account | Equity attributable to owners of parent Company | Non- controlling interests | Total equity
| £000 | £000 | £000 | £000 | £000 | £000
At 2 July 2023 | 1 | 10,000 | 15,726 | 25,727 | 390 | 26,117
Comprehensive expense for the period |  |  |  |  |  |
Loss for the period | - | - | (7,366) | (7,366) | - | (7,366)
Total comprehensive expense for the period | - | - | (7,366) | (7,366) | - | (7,366)
Contributions by and distributions to owners |  |  |  |  |  |
Dividends - note 14 | - | - | (300) | (300) | - | (300)
Cancellation of shares - note 27 | - | - | - | - | (390) | (390)
Total transactions with owners | - | - | (300) | (300) | (390) | (690)
At 29 June 2024 | 1 | 10,000 | 8,060 | 18,061 | - | 18,061
Comprehensive expense for the period |  |  |  |  |  |
Loss for the period | - | - | (3,911) | (3,911) | - | (3,911)
Total comprehensive expense for the period | - | - | (3,911) | (3,911) | - | (3,911)
Contributions by and distributions to owners |  |  |  |  |  |
Dividends - note 14 | - | - | (300) | (300) | - | (300)
Total transactions with owners | - | - | (300) | (300) | - | (300)
At 28 June 2025 | 1 | 10,000 | 3,849 | 13,850 | - | 13,850
| The notes on pages 30 to 68 form part of these financial statements.
- 26 -
STRATA HOMES GROUP LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 28 JUNE 2025
| Called up share capital | Share premium account | Profit and loss account | Total equity
| £000 | £000 | £000 | £000
At 2 July 2023 | 1 | 10,000 | 16,788 | 26,789
Comprehensive income for the period |  |  |  |
Profit for the period | - | - | 15,498 | 15,498
Total comprehensive income for the period | - | - | 15,498 | 15,498
Contributions by and distributions to owners |  |  |  |
Dividends - note 14 | - | - | (300) | (300)
Total transactions with owners | - | - | (300) | (300)
At 29 June 2024 | 1 | 10,000 | 31,986 | 41,987
Comprehensive income for the period |  |  |  |
Loss for the period | - | - | (23,925) | (23,925)
Total comprehensive income for the period | - | - | (23,925) | (23,925)
Contributions by and distributions to owners |  |  |  |
Dividends - note 14 | - | - | (300) | (300)
Total transactions with owners | - | - | (300) | (300)
At 28 June 2025 | 1 | 10,000 | 7,761 | 17,762
| The notes on pages 30 to 68 form part of these financial statements.
- 27 -
STRATA HOMES GROUP LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 28 JUNE 2025
|  |  | 28 June | 29 June
|  |  | 2025 | 2024
|  |  | £000 | £000
Cash flows from operating activities |  |
Loss for the financial period | (3,911) | (7,366)
Adjustments for: |  |
Amortisation of intangible assets | 4 | -
Depreciation of tangible assets | 247 | 318
Interest paid | 4,931 | 6,383
Interest received | (36) | (27)
Taxation charge | (227) | (850)
Decrease in stocks | 25,765 | 10,286
Increase in debtors | (7,532) | (7,432)
Increase/(decrease) in creditors | 2,679 | (5,193)
Loss on joint venture and other investments | - | 22
Corporation tax received | 937 | -
Movement in other debtors | - | 8,075
Net cash generated from operating activities | 22,857 | 4,216
Cash flows from investing activities |  |
Purchase of intangible fixed assets | (136) | -
Purchase of tangible fixed assets | (75) | (104)
Sale of tangible fixed assets | 11 | 5
Purchase of share in associates | (2,062) | -
Interest received | 36 | 27
Net cash used in investing activities | (2,226) | (72)
- 28 -
STRATA HOMES GROUP LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE PERIOD ENDED 28 JUNE 2025
|  | 28 June | 29 June
|  | 2025 | 2024
|  | £000 | £000
Cash flows from financing activities |  |
Proceeds from new loans (note 29) | 2,286 | 23,000
Repayment of loans (note 29) | (21,000) | (16,000)
Dividends paid (note 14) | (300) | (300)
Interest paid | (4,878) | (3,561)
Payment of non-controlling interest | - | (390)
Receipt/(payment) of connected party loan | 4,100 | (672)
LTIP repaid | (995) | (858)
Net cash (used in)/from financing activities | (20,787) | 1,219
Net (decrease)/increase in cash and cash equivalents | (156) | 5,363
Cash and cash equivalents at beginning of period | 18,645 | 13,282
Cash and cash equivalents at the end of period | 18,489 | 18,645
Cash and cash equivalents at the end of period comprise: |  |
Cash at bank and in hand | 18,489 | 18,645
The notes on pages 30 to 68 form part of these financial statements.
- 29 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
1. | General information
Strata Homes Group Limited (the "Company") is a private company, limited by shares and registered in England and Wales, registered number 13132559. The registered office is Quay Point, Lakeside Boulevard, Doncaster, South Yorkshire, United Kingdom, DN4 5PL. The principal activity of the Group is housebuilding. The Group has housebuilding operations in Yorkshire and the East Midlands. The Company's accounting reference date is 30 June. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. These financial statements have been presented in pound sterling which is the functional currency of the Group, and rounded to the nearest £'000. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3). The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The following principal accounting policies have been applied:
| 2.2 | Financial reporting standard 102 - reduced disclosure exemptions
The Parent Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": ∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; ∙the requirements of Section 33 Related Party Disclosures paragraph 33.7; and ∙the requirements of Section 7 Statement of Cash Flows. - 30 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.3 | Basis of consolidation
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
| 2.4 | Going concern
The Company is part of the Strata Homes Group of companies. Strata Homes Limited is the Borrower under a facility provided by Lloyds Bank Plc as Lender that matures on 29 June 2026, as was the position on the balance sheet date. Please see below for the post balance sheet date changes to the facility. The Company is a party to this facility and accordingly has entered an unlimited guarantee supported by a debenture creating a fixed and floating charge to secure the borrowing under the facility. Accordingly, the Company is dependent upon the Strata Homes Group remaining a going concern for the Company to also state that it is a going concern. As noted within the Strategic Report, Financing section, the Strata Homes Group is supported by a debt facility between Strata Homes Limited as Borrower and Lloyds Bank Plc as Lender. See note 30. Post the balance sheet date, the Strata Homes Group and Lloyds Bank Plc have entered into a new lending facility which runs to 30 June 2028. The facility comprises an overdraft facility of £5m and revolving credit facility of £31.4m, total facility of £36.4m. The revolving credit facility decreases to £28m on 01 June 2026 and to £25.9m on 01 October 2026. The overdraft remains at £5m. The Strata Homes Group Limited also has other debt owed to connected parties. The debt comprises loan notes, preference shares and a short-term loan. The loan notes and preference shares were subject to a post balance sheet debt amendment agreement executed 31 October 2025. Please refer to the Strata Homes Group Limited annual report and financial statements for the period to 28 June 2025 for further detail. No payments will be made by the Strata Homes Group to any of the related party debt holders during the going concern period. - 31 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.4 | Going concern (continued)
The directors of the Company and therefore the Strata Homes Group have considered the following factors in relation to concluding their going concern assumption up to 27 March 2027: ∙A new facility has been executed on 17 December 2025 between Lloyds Bank Plc and the Strata Homes Group. Please see details of facility value and terms above. ∙The Strata Homes Group maintains a rolling business plan that is updated quarterly and is reviewed by the board of the Strata Homes Group. ∙The Strata Homes Group maintains a rolling weekly cash flow report that forecasts for six months in advance and is reviewed by the Executive weekly and the board of Strata Homes Group monthly. ∙A monthly review is undertaken of all live and completed sites from a build cost and sales rate, mix and value perspective. This ensures consistent lifetime margin recognition. ∙The business now operates a two-income stream with differing investment and return profiles. Open Market Sales (“OMS”) requires Lloyds Bank Plc debt funding while Pre-Sold does not. The change in the business model has decreased the overall debt requirements and lessened the debt financing needs and liquidity risks of the business. ∙The OMS forecast for completions in the year to June 2026 is 293 homes to be completed. As at 31 January 2026, 43% are complete, 12% are exchanged, 28% are sold awaiting exchange and 17% are still to be sold, with 5 monghs of selling period still available. ∙The Pre-Sold profit and net cash expected to be obtained in the year to June 2025 is all on site and under contract. The Company has stress tested various single and multiple plausible but severe scenarios and on a severe and implausible scenario against the Strata Homes Group’s forecasts that reflect the above plans, with a particular focus on sales rates and timing of open market completions, these being the most likely risk for the business. Based on these forecasts, sensitivities and financing these agreements, the directors have concluded the Strata Homes Group has sufficient funds to continue in operational existence for the foreseeable future. - 32 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.5 | Turnover
Turnover represents the fair value of the consideration received or receivable, net of value added tax and any cash incentives of new and part exchange residential properties. Turnover is recognised based on the transfer of control to the customer in accordance with the performance obligations set out in each contract, in line with FRS 102 Section 23. This may occur either at a point in time or over time, depending on the nature of the transaction. Where the outcome of a construction contract can be estimated reliably, turnover and associated costs are recognised by reference to the stage of completion at the balance sheet date. Where a loss is expected to arise on a contract, the full amount of the loss is recognised immediately in the profit and loss account. Open market turnover Open market turnover comprises income from sales of residential properties to private customers. Turnover and profit from sales to private customers are recognised at a point in time, when the legal title to the property transfers to the customer. In certain cases, the Group may accept part exchange properties as part consideration for a sale. The turnover from the new property sale is recognised in accordance with the above principles, with consideration measured at the fair value of the exchanged property plus any cash received or receivable. Part exchange properties are recorded within inventories at net realisable value, adjusted for estimated costs to legally complete. Income and costs associated with the subsequent resale of part exchange properties are presented in the residential property turnover in the period to which it relates. Contract turnover ("Pre-Sold") The Group enters into contracts for the construction and sale of affordable housing to Registered Providers and for development services to partners. These contracts are typically entered into prior to commencement of construction. Under such contracts, the Group is typically restricted from redirecting the properties or development works to another customer and has an enforceable right to payment for performance completed to date. Turnover is therefore, recognised over time, based on the stage of completion at the reporting date, determined using an input method that reflects the proportion of total estimated costs incurred to date relative to the total forecast cost. The Directors consider this method to represent an appropriate measure of progress toward complete satisfaction of performance obligations under FRS 102. The provision of land and completed dwellings under these arrangements is treated as a single performance obligation. At each reporting date, the Group assesses the stage of completion of ongoing developments and recognises accrued income for work performed but not yet invoiced, and deferred income for amounts invoiced in advance of performance, to ensure revenue is matched to the period in which the related work is undertaken. Where land is sold as part of a pre-sold contract the revenue is recognised in line with the policy below and included within the contract revenue disclosure. - 33 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued) Sale of land As a housebuilder, the Group will occasionally enter into agreements for the sale of land either on a standalone basis or as part of a wider development agreement. Turnover and associated profits are recognised at a point in time when the transfer of legal title and control of the land has been satisfied. The turnover is recorded at the agreed purchase price with all costs held for the land and ancillary costs of disposal being treated as part of the cost of sale. Land can be sold as either a full disposal of land or a part disposal. When a part disposal, a calculation is required to determine appropriate proportion of the accumulated land cost is allocated to the sale based on the relative value or net developable acre, taking into account the specific terms and key commercial terms agreed with the purchaser. Any deferred consideration is held as a debtor and discounted for time value of money when applicable.
| 2.6 | Operating leases: the Group as lessee
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
| 2.7 | Interest income
Interest income is recognised in profit or loss using the effective interest method.
| 2.8 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
| 2.9 | Borrowing costs
All borrowing costs are recognised in profit or loss in the year in which they are incurred unless they relate to the arrangement of longer term facilities. In this situation the borrowing costs are capitalised and amortised over the term of the facility.
| 2.10 | Pensions
Defined contribution pension plan The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds. - 34 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.11 | Current and deferred taxation
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and ∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
| 2.12 | Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence. - 35 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.13 | Intangible assets
Goodwill Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life. Other intangible assets Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years. The estimated useful lives range as follows:
Intellectual property | - | 5 years
Goodwill | - | 10 years
Brand names | - | 10 years
Computer software | - | 4 years
All other intangible assets, except computer software, were fully impaired in previous years.
| 2.14 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. Depreciation is provided on the following basis:
|  |  |  | Fixtures and fittings | - | 10 - 25%
|  |  |  | Computer equipment | - | 25%
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss. - 36 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.15 | Impairment of fixed assets and goodwill
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased. Refer to 2.13.
| 2.16 | Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment. Like impairment of fixed assets and goodwill noted above, investments in subsidiaries are also subject to the same process. Refer to 2.15.
| 2.17 | Associates and joint ventures
An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control. An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions. Where a group company is party to a joint venture which is not an entity that company accounts directly for its part of the income and expenditure, assets, liabilities and cash flows. Such arrangements are reported in the consolidated financial statements on the same basis. In the parent financial statements, investments in associates and jointly controlled entities are carried at cost less impairment.
| 2.18 | Land, work in progress and part exchange properties
Land, work in progress and part exchange dwellings are valued at the lower of cost and net realisable value. Work in progress includes direct production costs, site overheads and professional charges. If deferred payment terms for land are applicable, the land is held at discounted cost. Therefore, the carrying value will differ from the amount that will be ultimately paid in settling the liability. The difference between discounted cost settlement is charged to finance cost in the Statement of Comprehensive Income over the period of settlement.
| 2.19 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. - 37 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.20 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
| 2.21 | Creditors
Short-term creditors are measured at the 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.
| 2.22 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss.
| 2.23 | Financial instruments
Financial instruments are recognised in the Group's Statement of Financial Position when the Group 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 trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. - 38 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.23 | Financial instruments (continued)
Other financial assets Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment. Impairment of financial assets At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Basic financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. - 39 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.23 | Financial instruments (continued)
Other financial instruments Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss. Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy. Derecognition of financial instruments Derecognition of financial assets Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained. Derecognition of financial liabilities Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
| 2.24 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. - 40 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 2.Accounting policies (continued)
| 2.25 | Share based payments
Certain employees have been issued shares in Strata Homes Holdings Limited and the grant date fair value of share based payment awards granted and those not yet vested as at the Statement of Financial Position date is recognised as an employee expense with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The fair value of the shares is measured based on a pricing mechanism as set out in the scheme rules which reflect the terms and conditions upon which the shares were issued. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share based-payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between the expected and actual outcomes. For cash settled share based payment transactions, the fair value of the amount payable to the employee is recognised as an expense with a corresponding increase in liabilities. The fair value is initially measured at grant date and spread over the period during which the employees become unconditionally entitled to payment. The fair value is measured based on a pricing mechanism as set out in the scheme rules which reflect the conditions upon which the instruments were granted. The liability is revalued at each Statement of Financial Position date and settlement date with any changes to fair value being recognised in the profit and loss account. The share based payment scheme was cancelled in full on 31 May 2024.
| 2.26 | Government grants
Grants that become receivable as compensation for expenses or losses already, or that are intended to provide immediate financial support with no future related costs, are recognised in income in the period in which they become receivable. Where grants are received that require the fulfilment of specific performance conditions or obligations, income is recognised only as and when the related performance obligations are satisfied. The grant income is therefore matched to the period(s) in which the associated performance takes place, rather than when the grant is received or becomes receivable. - 41 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
3. | Judgments in applying accounting policies and key sources of estimation uncertainty
Critical judgments in applying the Group's accounting policies The critical judgments that the directors have made in the process of applying the Group's accounting policies that have the most significant effect on the statutory financial statements are discussed below. Revenue recognition (Note 4) The Group's revenue policy is set out in note 2.5. The Group recognises revenue over time based on or "pre-sold" contracts. This is a key source of estimation uncertainty as it is based on the stage of completion of individual contracts. Management estimates this progress using an "input method," typically based on costs incurred to date relative to total estimated costs. Assessing indicators of impairment of land, work in progress and investments (notes 17 and 18) In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been indicators of impairments identified during the current financial period due to the highest offers from independent third parties being lower than the current carrying value of some land. Consequently, the directors have performed an impairment review and written the carrying value of land down to its estimated recoverable amount, being its fair value less costs of disposal. Due to the loss in the period and the future outlook a review of the carrying value of the Company investment in subsidiary companies was also performed. The recoverable amount was determined using a Value in Use model, calculated by discounting projected cashflows at an appropriate post-tax weighted average cost of capital. As the recoverable amount was lower than the carrying amount, an impairment loss has been recognised through the profit and loss account in the Company. See note 17. Key sources of estimation uncertainty Recognition of contract results The Group recognises profits based on the stage of completion of construction contracts but losses are recognised in full when anticipated. The forecast margins and stages of completion are continually monitored to ensure profits and losses are correctly stated. Valuation of work in progress (Note 18) The carrying value of work in progress is impacted by total site expenditure, both historic and forecast, and the estimated overall site margins. The valuation of work in progress requires management to exercise judgment in assessing the expected costs to complete each development and the estimated net sales price based on current market conditions. The key sources of estimation uncertainty relate to the accuracy of forecasts for construction costs, but these estimates are reviewed regularly to ensure they reflect the most up-to-date information available. If actual costs to complete are higher than forecast or if expected selling prices or margins reduce, the carrying amount of work in progress may exceed its net realisable value. If this occurs the work in progress is written down to its recoverable amount. - 42 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 3.Judgments in applying accounting policies (continued) Recoverability of debtors (Note 19) The Group establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability, the directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of individual or groups of customers 2025: £Nil (2024: £Nil).
4. | Turnover
| An analysis of turnover by class of business is as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Residential property sales | 105,538 | 124,029
| Contract revenue ("Pre-Sold") | 59,435 | 22,003
| Other income | 189 | 240
|  | 165,162 | 146,272
| All turnover arose within the United Kingdom.
| Included within Residential property sales are open market sales, part-exchanged properties and affordable homes. Contract revenue is also referred to as "Pre-Sold" and is referred to within the Strategic and Directors Reports.
5. | Exceptional items
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Land impairment charge | 3,965 | 1,300
| Re-organisation costs | 47 | 603
|  | 4,012 | 1,903
| The Group incurred a total exceptional expense of £4,012k (2024: £1,903k), split between a land impairment of £3,965k (2024: £1,300k) (included in cost of sales) and re-organisation costs of £47k (2024: £603k) (included in administrative expenses).
- 43 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
6. | Other operating income
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Government grants receivable | 546 | 756
7. | Operating profit/(loss)
| The operating profit/(loss) is stated after charging/(crediting):
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Hire of plant and machinery | 1,936 | 2,532
| Operating lease - motor vehicles | 282 | 347
| Property rent and rates | 260 | 249
| Depreciation of tangible fixed assets | 250 | 318
| Share-based payment | - | (365)
8. | Auditor's remuneration
| During the period, the Group obtained the following services from the Company's auditor:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Fees payable to the Group's auditor for the audit of the consolidated and Parent Company's financial statements | 60 | 50
| Fees payable to the Group's auditor for the audit of subsidiary entities | 130 | 150
| Fees payable to the Group's auditor in respect of: |  |
| Other services relating to taxation | 77 | 223
| Other services - audit of Lloyds covenant certificate | 7 | 6
- 44 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
9. | Employees
| Staff costs, including directors' remuneration, were as follows:
|  | Group 28 June | Group 29 June
|  | 2025 | 2024
|  | £000 | £000
| Wages and salaries | 10,089 | 10,285
| Social security costs | 1,205 | 1,126
| Cost of defined contribution scheme | 572 | 577
|  | 11,866 | 11,988
| The average monthly number of employees, including the directors, during the period was as follows:
|  |  | 2025 | 2024
|  |  | No. | No.
|  | Housebuilding | 126 | 139
|  | Administrative | 62 | 74
|  |  | 188 | 213
| The Company has no employees other than the directors, who did not receive any remuneration (2024 - £NIL)
- 45 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
10. | Directors' remuneration
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Directors' emoluments | 684 | 667
| Group contributions to defined contribution pension schemes | 36 | 42
|  | 720 | 709
| During the period retirement benefits were accruing to 3 directors (2024 - 2) in respect of defined contribution pension schemes.
| The highest paid director received remuneration of £262 k (2024 - £314 k).
| The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £13 k (2024 - £17 k).
| Emoluments paid to key management personnel during the year was £1,280k (2024: £271k). Key management personnel include the directors of the Company, plus two subsidiary Statutory Directors, namely M Strong and M Leaf, and two Executive members, namely J Platt and P Wallwork.
11. | Interest receivable
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Other interest receivable | 36 | 27
- 46 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
12. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Bank interest payable | 1,865 | 3,560
| On loan notes | 1,355 | 1,234
| On crystallised LTIP | - | 72
| Discounted interest on deferred land creditor | 694 | 582
| Amortisation of capitalised finance cost | 53 | -
| On preference shares | 964 | 935
|  | 4,931 | 6,383
13. | Taxation
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Corporation tax |  |
| Current tax on profits for the year | 2 | (150)
| Adjustments in respect of previous periods | (67) | (1)
| Total current tax | (65) | (151)
| Deferred tax |  |
| Origination and reversal of timing differences | (162) | (699)
| Total deferred tax | (162) | (699)
| Taxation on loss on ordinary activities | (227) | (850)
- 47 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 13.Taxation (continued)
| Factors affecting tax charge for the period
| The tax assessed for the period is higher than (2024 - higher than) the standard rate of corporation tax in the UK of 25% (2024 -25%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Loss on ordinary activities before tax | (4,138) | (8,217)
| Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | (1,035) | (2,054)
| Effects of: |  |
| Expenses not deductible for tax purposes | 129 | 576
| Adjustments to tax charge in respect of prior periods | 15 | (1)
| Short-term timing difference leading to an increase (decrease) in taxation | 97 | -
| Disallowed related party interest | 341 | -
| Deferred tax asset no longer recoverable | - | 336
| Other differences | 226 | 293
| Total tax charge for the period | (227) | (850)
| Factors that may affect future tax charges
There are no changes in the rate of corporation tax in the United Kingdom that are expected to impact a future tax rates applicable to the Group.
14. | Dividends
|  |  |  |  | 28 June | 29 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Dividends approved and paid in the period | 300 | 300
| Dividends of £717.70 per A Ordinary share were paid in the year (2024: £717.70).
- 48 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
15. | Intangible assets
| Group
|  | Patents | Trademarks | Computer software | Goodwill | Total
|  | £000 | £000 | £000 | £000 | £000
| Cost |  |  |  |  |
| At 30 June 2024 | 38 | 15,134 | - | 34,778 | 49,950
| Additions | - | - | 136 | - | 136
| Transfer between asset group (Note 16) | - | - | 1,502 | - | 1,502
| At 28 June 2025 | 38 | 15,134 | 1,638 | 34,778 | 51,588
| Amortisation/ Impairment |  |  |  |  |
| At 30 June 2024 | 38 | 15,134 | - | 34,778 | 49,950
| Charge for the period | - | - | 4 | - | 4
| Transfer between asset group (Note 16) | - | - | 1,346 | - | 1,346
| At 28 June 2025 | 38 | 15,134 | 1,350 | 34,778 | 51,300
| Net book value |  |  |  |  |
| At 28 June 2025 | - | - | 288 | - | 288
| At 29 June 2024 | - | - | - | - | -
| Amounts transferred between asset groups related to computer software assets previously recognised within tangible assets. Capitalised asset costs and associated expense allocations have been reclassified from tangible assets in the current year.
- 49 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 15.Intangible assets (continued)
| Company
|  | Patents | Trademarks | Goodwill | Total
|  | £000 | £000 | £000 | £000
| Cost |  |  |  |
| At 30 June 2024 | 38 | 15,134 | 34,778 | 49,950
| At 28 June 2025 | 38 | 15,134 | 34,778 | 49,950
| Amortisation/ Impairment |  |  |  |
| At 30 June 2024 | 38 | 15,134 | 34,778 | 49,950
| At 28 June 2025 | 38 | 15,134 | 34,778 | 49,950
| Net book value |  |  |  |
| At 28 June 2025 | - | - | - | -
| At 29 June 2024 | - | - | - | -
- 50 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
16. | Tangible fixed assets
| Group
|  | Fixtures and fittings | Computer equipment | Total
|  | £000 | £000 | £000
| Cost or valuation |  |  |
| At 30 June 2024 | 3,972 | - | 3,972
| Additions | 31 | 44 | 75
| Transfer between asset group (Note 15) | (1,502) | - | (1,502)
| Disposals | (21) | - | (21)
| Transfers between classes | (397) | 397 | -
| At 28 June 2025 | 2,083 | 441 | 2,524
| Depreciation |  |  |
| At 30 June 2024 | 2,950 | - | 2,950
| Charge for the period | 215 | 32 | 247
| Transfer between asset group (Note 15) | (1,346) | - | (1,346)
| Disposals | (10) | - | (10)
| Transfers between classes | (343) | 343 | -
| At 28 June 2025 | 1,466 | 375 | 1,841
| Net book value |  |  |
| At 28 June 2025 | 617 | 66 | 683
| At 29 June 2024 | 1,022 | - | 1,022
| Amounts transferred between asset groups related to computer software assets previously recognised within tangible assets. Capitalised asset costs and associated expense allocations have been reclassified to intangible assets in the current year.
- 51 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
17. | Fixed asset investments
| Group
|  | Investments in associates | Unlisted investments | Total
|  | £000 | £000 | £000
| Cost or valuation |  |  |
| At 30 June 2024 | - | 103 | 103
| Additions | 1,562 | - | 1,562
| At 28 June 2025 | 1,562 | 103 | 1,665
| Net book value |  |  |
| At 28 June 2025 | 1,562 | 103 | 1,665
| At 29 June 2024 | - | 103 | 103
| The carried forward value of £103k is recorded at cost. The Strata Group is under no obligation to invest any further monies in the unquoted investment.
- 52 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
| Company
|  | Investments in subsidiary companies
|  | £000
| Cost or valuation |
| At 30 June 2024 | 127,399
| At 28 June 2025 | 127,399
| Impairment |
| At 30 June 2024 | 34,200
| Charge for the period | 27,637
| At 28 June 2025 | 61,837
| Net book value |
| At 28 June 2025 | 65,562
| At 29 June 2024 | 93,199
| The loss for the period and the future outlook gave rise for the need to review the carrying value of the Company investment in subsidiary companies. As a result of the impairment test, the investment in subsidiary companies were impaired by a further £27,637k, in addition to the £34,200k already impaired in financial year June 2023. A value in use model was used to determine that an impairment charge of £27.6m was required. The key assumptions used in determining this were those underlying the future forecasts and the weighted average cost of capital (WACC). After careful consideration, a post-tax WACC of 15.05% has been used. ∙If the post tax WACC used was 16.05%, an impairment charge of circa £34.6m would arise. ∙If the post tax WACC used had been 14.05%, the impairment charge would have been £19.4m. ∙If there was a 10% reduction in revenue, the impairment charge would be £28.6m. All subsidiary and joint venture undertakings are included in the consolidated financial statements. Subsidiary undertakings are accounted for using the acquisition method. The registered office for all subsidiary undertakings is Quay Point, Lakeside, Doncaster, DN4 5PL.
- 53 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
| Subsidiary undertakings
| The following were subsidiary undertakings of the Company:
| Name | Share type | 2025 Holding | 2024 Holding
| Strata Homes Holdings Limited* | Ordinary | 100% | 100%
| Strata Homes Limited | Ordinary | 100% | 85%
| Strata Homes Yorkshire Limited | Ordinary | 100% | 100%
| Strata Homes Midlands Limited | Ordinary | 100% | 100%
| Ignite Homes Limited | Ordinary | 100% | 100%
| Strata Plus Limited | Ordinary | 100% | 100%
| Strata Land & Developments Limited | Ordinary | 100% | 100%
| Strata Regeneration 2009 Limited | Ordinary | 100% | 100%
| Strata Developments Barnsley West Limited | Ordinary | 100% | 100%
| Greathome Properties Limited | Ordinary | 66.67% | 66.67%
| Hornthorpe Developments Limited | Ordinary | 66.67% | 66.67%
| Strata Sterling Barnsley West Limited | Ordinary | 100% | 100%
- 54 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
| During the year, the Company dissolved the following dormant entities, and reduced their investment to £Nil:
| Name | Share type | 2025 Holding | 2024 Holding
| Strata Homes (Guiseley) | Ordinary | - % | 100%
| Strata Homes (Wath) | Ordinary | - % | 100%
| Franzsigel | Ordinary | - % | 100%
| Tygart Limited | Ordinary | - % | 100%
| Strata Homes Regeneration Limited | Ordinary | - % | 100%
| Stampearth Limited | Ordinary | - % | 100%
| Checkhire Limited | Ordinary | - % | 100%
| Strata Homes West Midlands Limited | Ordinary | - % | 66.67%
| *Strata Homes Holdings Limited is directly held by Strata Homes Group Limited. The remaining companies are indirectly held. The percentage holding has been calculated based on a consolidated position. All Ordinary shares have a nominal value of £1. All subsidiaries have accounting reference dates of 30 June except for Hornthorpe Developments Limited, which has a respective accounting reference date of 31 July. The subsidiary companies Hornthorpe Developments Limited, Strata Land & Developments Limited, Greathome Properties Limited and Strata Plus Limited have elected to take the audit exemption available under section 479A, as a result of the parent guarantee which has been issued under section 479C of the Companies Act 2006. Strata Regeneration 2009 Limited are exempt from the requirements to obtain an audit of their financial statements by virtue of section 480 of the Companies Act 2006 in respect of the financial year ended 28 June 2025.
- 55 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
| Joint ventures
| The following were joint ventures of the Company:
| Name | Registered office | Holding
| Goldenmane Limited | Quay Point, Lakeside, Doncaster, DN4 5PL | 50%
| Beverley South Developments Limited | 11 Tower View, Kings hill, West Malling, Kent, ME19 4UY | 50%
| Jam Regeneration Limited | Quay Point, Lakeside, Doncaster, DN4 5PL | -%
| In the case of all joint ventures, the Group has a participating interest. Control is exercised at both company and directors' meetings on the basis of each joint venture party having equal votes. The accounting reference date of Beverley South Developments Limited is 30 June and for Goldenmane Limited and Aura Real Estate Investments Limited it is 31 December. During the year, the Company disposed of its investment in the joint venture Jam Regeneration Limited by way of dissolution.
| Associates
The following were associates of the Company:
| Name | Registered office |  | Holding
| *Aura Real Estate Investments Limited | Suite 7.1, 8 Exchange Quay, Salford, M5 3EJ |  | 10%
In the case of all associates, the Group has a participating interest. Control is exercised at both company and directors' meetings on the basis of each share having equal voting power. *Aura Real Estate Investments Limited is indirectly held by the Company. During the year, the Group acquired a 10% investment in Aura Real Estate Investments Limited. The accounting reference date of Aura Real Estate Investments Limited is 31 December. - 56 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
18. | Stocks
|  | Group 28 June | Group 29 June
|  | 2025 | 2024
|  | £000 | £000
| Work in progress | 55,167 | 70,920
| Land | 43,739 | 54,331
| Part exchange properties | 1,842 | 1,262
|  | 100,748 | 126,513
| Raw material, consumables and changes in finished goods and work in progress recognised as cost of sales in the year amounted to £147.8m (2024: £136.6m). There have been write downs of £4.0m to stocks (land) to net realisable during the year (2024: £1.3m).
19. | Debtors
|  | Group 28 June | Group 29 June | Company 28 June | Company 29 June
|  | 2025 | 2024 | 2025 | 2024
|  | £000 | £000 | £000 | £000
| Trade debtors | 6,657 | 5,370 | - | -
| Amounts owed by group undertakings | - | - | 6,750 | 166
| Other debtors | 3,281 | 2,496 | - | -
| Prepayments and accrued income | 12,148 | 6,212 | - | -
| Tax recoverable | 7 | 880 | 1 | -
| Deferred taxation | 1,179 | 1,017 | - | 1
|  | 23,272 | 15,975 | 6,751 | 167
| Included within Group Other debtors are Directors' loans of £86k (2024: £Nil). Amounts owed by group undertakings are unsecured and repayable on demand. No interest is charged on outstanding balances. During the year, it was identified that the prior year Group amounts owed by group undertakings was not netted off with the corresponding creditor. £1,292k has therefore been removed from the group prior year balance in note 19 and 21.
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STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
20. | Cash and cash equivalents
|  | Group 28 June | Group 29 June
|  | 2025 | 2024
|  | £000 | £000
| Cash at bank and in hand | 18,489 | 18,645
21. | Creditors: Amounts falling due within one year
|  | Group 28 June | Group 29 June | Company 28 June | Company 29 June
|  | 2025 | 2024 | 2025 | 2024
|  | £000 | £000 | £000 | £000
| Bank loans | - | 39,000 | - | -
| Long term incentive plan | - | 995 | - | -
| Land creditors | 10,396 | 7,522 | - | -
| Trade creditors | 18,615 | 23,792 | - | -
| Amounts owed to group undertakings | - | - | - | 3,215
| Other taxation and social security | 499 | 536 | - | -
| Other creditors | 1,381 | 1,387 | - | -
| Accruals and deferred income | 22,494 | 12,292 | - | -
|  | 53,385 | 85,524 | - | 3,215
| Long term incentive plan is a crystallised liability that is owed to participants of the scheme and includes accrued interest. Land creditors includes deferred consideration as discounted. Amounts owed to group undertakings are unsecured and repayable on demand. No interest is charged on outstanding balances.
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STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
22. | Creditors: Amounts falling due after more than one year
|  | Group 28 June | Group 29 June | Company 28 June | Company 29 June
|  | 2025 | 2024 | 2025 | 2024
|  | £000 | £000 | £000 | £000
| Bank loans | 18,000 | - | - | -
| Loan notes | 26,730 | 25,636 | 26,730 | 25,636
| Land creditors | 5,359 | 10,509 | - | -
| Connected party loans | 4,357 | - | 4,357 | -
| Preference shares | 23,464 | 22,528 | 23,464 | 22,528
|  | 77,910 | 58,673 | 54,551 | 48,164
| Disclosure of the terms and conditions attached to the non-equity shares is made in note 26.
| Connected party loans are unsecured and incur interest at 2% above the Bank of England base rate. The Group was funded by a £30.9m revolving credit facility and a £5m overdraft facility on the balance sheet date. The borrower is Strata Homes Limited, an indirect subsidiary of the Company. The Company is classed as the Parent within the Facility Agreement with Lloyds. The facility is secured by fixed charges over specific land, work in progress and part exchanged property and floating charges over the remainder of the assets of the Group. Interest is charged on the £30.9m revolving credit facility based on Sterling Overnight Index Average plus a Margin based on the Group's gearing level as defined in the Facility Agreement. Interest on Overdraft is based on variable market rates. Loan notes are secured on the assets of the Group and accrue interest at a fixed rate of 5%. The security is subordinate to the Lloyds debt. The 2025 £26,730k includes accrued interest of £5,040k. 2024 £25,636k includes accrued interest of £4,713k. The 2025 £4,357k Connected party loans includes accrued interest of £257k. Included in preference shares is £19,368k (2024: £19,368k) preference share capital and £4,096k (2024: £3,160k) accrued interest. As detailed in the strategic report, the loan notes and preference shares were subject to a debt amendment that executed on 31 October 2025. On this date, the terms of the loan notes and preference shares were amended as follows: Up to October 2025, a 5% coupon was applied to the loan notes and preference shares. From November 2025 no interest accrual is taken and only recommences on 1 January 2029. £10,852k of loan notes were cancelled at par and new preference shares were issued at par for £10,852k leaving existing loan of £10,837k at par. All interest accrued on the loan notes and preference shares as of October 2025 was waived. The repayment deadline was amended from 2 March 2028 to 2 March 2040.
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STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
23. | Loans
| Analysis of the maturity of loans is given below:
|  | Group 28 June | Group 29 June | Company 28 June | Company 29 June
|  | 2025 | 2024 | 2025 | 2024
|  | £000 | £000 | £000 | £000
| Amounts falling due within one year |  |  |  |
| Bank loans | - | 39,000 | - | -
| Amounts falling due 1-2 years |  |  |  |
| Bank loans | 18,000 | - | - | -
| Loan notes | 26,730 | - | 26,730 | -
| Amounts falling due 2-5 years |  |  |  |
| Other loans | - | 25,636 | - | 25,636
| Connected party loan | 4,357 | - | 4,357 | -
| Preference shares and accrued interest | 23,464 | 22,529 | 23,464 | 22,529
|  | 27,821 | 48,165 | 27,821 | 48,165
| Total loans | 72,551 | 87,165 | 54,551 | 48,165
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STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
24. | Financial instruments note
Financial assets that are debt instruments measured at amortised cost:
|  | Group 28 June 2025 £000 | Group 29 June 2024 £000 | Company 28 June 2025 £000 | Company 29 June 2024 £000
| Trade debtors | 6,657 | 5,370 | - | -
| Amounts owed by group undertakings | - | - | 6,750 | 166
| Other debtors | 3,281 | 2,496 | - | -
|  | 9,938 | 7,866 | 6,750 | 166
Financial liabilities measured at amortised cost:
|  | Group 28 June 2025 £000 | Group 29 June 2024 £000 | Company 28 June 2025 £000 | Company 29 June 2024 £000
| Trade creditors | (18,615) | (23,792) | - | -
| Land creditors | (15,755) | (18,031) | - | -
| Amounts owed to related entities | - | - | - | (3,215)
| Other creditors | (1,381) | (1,387) | - | -
| Accruals | (22,494) | (12,292) | - | -
| Bank loans and overdrafts | (18,000) | (39,000) | - | -
| Connected party loans | (4,357) | - | (4,357) | -
| Loan notes | (26,730) | (25,636) | (26,730) | (25,636)
| Preference shares | (23,464) | (22,528) | (23,464) | (22,528)
| Long term incentive plan | - | (995) | - | -
|  | (130,796) | (143,661) | (54,551) | (51,379)
- 61 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025 Financial instruments note (continued) Other assets and liabilities:
|  | Group 28 June 2025 £000 | Group 29 June 2024 £000 | Company 28 June 2025 £000 | Company 29 June 2024 £000
| Intangible assets | 288 | - | - | -
| Fixed assets | 683 | 1,022 | - | -
| Investments | 1,665 | 103 | 65,562 | 93,199
| Cash | 18,489 | 18,645 | - | -
| Stock | 100,748 | 126,513 | - | -
| Prepayments and accrued income | 12,148 | 6,212 | - | -
| Other taxation and social security | (499) | (536) | - | -
| Corporation tax - net | 7 | 880 | 1 | -
| Deferred tax and other provisions | 1,179 | 1,017 | - | 1
|  | 135,708 | 153,856 | 65,563 | 93,200
| Net assets | 13,850 | 18,061 | 17,762 | 41,987
- 62 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
25. | Deferred taxation
| Group
|  | 2025 | 2024
|  | £000 | £000
| At beginning of year | 1,017 | 318
| Credit to profit or loss | 162 | 699
| At 28 June 2025 | 1,179 | 1,017
| The prior year credit to Comprehensive Statement of Income in 2024, £699k, is net of a £336k write-off of deferred tax. This relates to accrued interest for loan notes that only benefit from a corporation tax deduction upon cash payment. This is now an unlikely even in the medium term. Deferred tax carried forward of £1,017k primarily relates to trading losses, expected to be recovered in the near future.
| Company
|  | 2025 | 2024
| At beginning of year | - | 336
| Credit to profit or loss | - | (336)
| At 28 June 2025 | - | -
| The deferred tax asset is made up as follows:
|  | Group 28 June | Group 29 June | Company 28 June | Company 29 June
|  | 2025 | 2024 | 2025 | 2024
|  | £000 | £000 | £000 | £000
| Trading losses | 1,179 | 1,017 | - | -
- 63 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
26. | Share capital
|  |  |  |  | 28 June | 29 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Shares classified as equity
|  | Allotted, called up and fully paid |  |
|  | 418 (2024 - 418) A Ordinary shares of £1.00 each | - | -
|  | 582 (2024 - 582) B Ordinary shares of £1.00 each | 1 | 1
|  |  | 1 | 1
|  |  |  |  | 28 June | 29 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Shares classified as debt
|  | Allotted, called up and fully paid |  |
|  | 19,368,204 (2024 - 19,368,204) Preference shares of £1.00 each | 19,368 | 19,368
| The rights of the £1.00 A Ordinary shares are such that the shares have full voting rights, rights to dividends and to participate in a distribution (including on winding up). The shares are not redeemable. The rights of the £1.00 B Ordinary shares are such that the shares have full voting rights, rights to dividends and to participate in a distribution (including on winding up). The shares are not redeemable. The rights of the £1.00 Preference shares are such that shares have no voting rights. The shares are entitled to a 5% cumulative preferential dividend. On a return of capital the shares receive an amount equal to the subscription price. The shares are redeemable at the option of the Company or on the 2 March 2028 if not already redeemed. The terms of the agreement were modified in October 2025 and the redemption date was extended to 2 March 2040. Refer to Related party debt section in the Strategic report for more detail. Interest accrued in relation to the preference shares was £4,096k (2024: £3,160k) making total debt due of £23,464k (2024: £22,528k). Interest accrued in the year was £936k (2024: £934k). Capital and interest paid in the period was £Nil and £Nil respectively.
- 64 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
27. | Share-based payments
| B Ordinary shares In December 2020 Strata Homes Limited issued 7,710 B Ordinary shares to three of the directors of Strata Homes Limited as part of a long term incentive plan. The total value of the shares issued was £390,000 and these were subscribed for in cash by the participants using funds provided to them as loans from Strata Homes Limited. The scheme was cancelled on 31 May 2024.
28. | Reserves
Share premium account Share premium represents the amount above the nominal value received for issue share capital, less transaction costs. Non controlling interests This represents the interest in the assets of Strata Homes Holdings Limited by the B shareholders in that company (2025: £Nil and 2024: £Nil) and interests in Hornthorpe Developments Limited, Greathomes Properties Limited held by other parties (2025: £Nil and 2024: £Nil). Profit and loss account This reserve includes the cumulative profits or losses. - 65 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
29. | Reconciliation of net debt cash flow to movement in net debt
|  | 28 June 2025 £000 | 29 June 2024 £000
| (Decrease)/increase in cash and cash equivalents | (156) | 5,363
| Decrease/(Increase) in bank debt | 21,000 | (7,000)
| (Increase) in other debt | (6,387) | (1,496)
| Change in net debt | 14,457 | (3,133)
| Opening net debt | (68,519) | (65,386)
| Closing net debt | (54,062) | (68,519)
The increase in other debt of £6,387k (2024: £1,496k) relates to accrued interest on loan notes of £1,094k (2024: £1,234k), preference share accrued interest of £936k (2024: £934k) and new connected party loans of £4,357k less debt actually paid to a related party in the period of £Nil (2024: £672k).
30. | Contingent liabilities
Under the terms of the Group's banking facilities Strata Homes Group Limited, Strata Homes Holdings Limited, Strata Homes Limited, Strata Homes Yorkshire Limited, Strata Homes Midlands Limited, Ignite Homes Limited, Strata Developments Barnsley West Limited and Strata Sterling Barnsley West Limited, have given unlimited guarantees supported by a debenture creating a fixed and floating charge to secure their bank borrowings. At 28 June 2025 the gross amount drawn against these facilities was £18,000k (2024: £39,000k).
31. | Pension commitments
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £572k (2024: £577k). Contributions totalling £75k (2024: £69k) were payable to the fund at the reporting date and are included in creditors. - 66 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
32. | Commitments under operating leases
| At 28 June 2025 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  | Group 28 June | Group 29 June
|  | 2025 | 2024
|  | £000 | £000
| Not later than 1 year | 527 | 29
| Later than 1 year and not later than 5 years | 1,329 | 711
|  | 1,856 | 740
| During the year £2,512k (2024: £3,054k) was charged to the profit and loss account in respect of operating leases.
33. | Related party transactions
|  | 28 June | 29 June
|  | 2025 | 2024
|  | £000 | £000
| Directors' loans | 86 | -
| Please refer to note 26 for balances owed to related party's in regard to preference shares. Preference shareholders are I Weaver and D Weaver. Loan notes are due to past owners of the Strata Homes Group, one of whom still owns the B Ordinary shares. See note 26. At the balance sheet date, no sponsorship existed and none has been entered into post the balance sheet date. In the year Strata Homes Yorkshire Limited sold land and traded with Aura Real Estates Investments Limited who are a 10% Associate of Strata Homes Limited. The total consideration for the land sale and contract sale was £10,874k
- 67 -
STRATA HOMES GROUP LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 JUNE 2025
34. | Post balance sheet events
Since 28 June 2025 and up to the date of approving the financial statements, the following transactions have been concluded. As detailed in the Strata Homes Group Strategic report, the Group has successfully entered into a new lending facility with Lloyds Bank Plc, providing committed funding through to 30 June 2028. The total facility of £36.4m comprises: ∙A revolving credit facility (RCF) of £31.4m; and ∙An overdraft facility of £5m. Under the terms of the agreement, the revolving credit facility is subject to scheduled step-downs, decreasing to £28m on 1 June 2026 and further to £25.9m on 1 October 2026. The overdraft facility remains unchanged at £5m. On 31 October 2025, the Group executed a post balance sheet debt amendment agreement regarding its liabilities to connected parties. This agreement affects the terms of the Group’s existing loan notes and preference shares (further details of which are disclosed in Strata Homes Group Limited’s annual report and financial statements for the period ended 28 June 2025). The terms of the loan notes and preference shares were amended as follows: ∙The 5% coupon previously applied to loan notes and preference shares ceased in October 2025. No interest shall accrue from November 2025 until 01 January 2029. All interest accrued up to 31 October 2025 has been waived by the debt holders. ∙£10,852k of loan notes were cancelled at par and new preference shares were issued at par for £10,852k leaving existing loan of £10,837k at par. ∙The repayment deadline of the new and existing preference shares and loan notes was amended from 2 March 2028 to 2 March 2040. The debt amendment has been determined to be a substantial modification. As the lenders involved are related parties acting in their capacity as shareholders the transaction has been treated as a capital contribution. The resulting gain has been credited directly to equity rather than through the Group’s profit or loss.
35. | Controlling party
The ultimate controlling party of the Group are Mr R Weaver and Mr A Weaver by virtue of their majority shareholding. These financial statements are the largest group to incorporate the results of the Company.
- 68 -