Company registration number SC028084 (Scotland)
D MCGHEE & SONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 2 AUGUST 2025
D MCGHEE & SONS LIMITED
COMPANY INFORMATION
Directors
G McGhee
S McGhee
I C McGhee
W G Blacoe
(Appointed 23 December 2024)
A McGhee
(Appointed 23 December 2024)
R I McGhee
(Appointed 23 December 2024)
Secretary
I C McGhee
Company number
SC028084
Registered office
10 Keppochhill Drive
M8 Food Park
Glasgow
United Kingdom
G21 1HX
Auditor
Azets Audit Services
Titanium 1
Kings Inch Place
Renfrew
United Kingdom
PA4 8WF
D MCGHEE & SONS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 35
D MCGHEE & SONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 2 AUGUST 2025
- 1 -

The directors present the strategic report for the year ended 2 August 2025.

Review of business

The results for the year show an operating profit of £5.484m (2024: £5.154m).

During the year the Group experienced challenging trading conditions common to the sector, primarily managing fluctuations in key ingredients and other input costs. Despite this, the business achieved an operating profit of £5.484m (2024: £5.154m) which the Directors consider an excellent result in the circumstances. Building on amounts spent in previous years on capital improvements across the group, continued investment was made in the current year including ongoing improvements to our main McGhees site in Glasgow. This demonstrates our continued commitment to provide our customers with outstanding service levels, a high quality and varied product range, and deliver new product development to satisfy customer needs.

Principal risks and uncertainties

We believe that the company can mitigate its key business risks of competition, both local and national, and of employee retention. In addition, the company maintains a wide customer base, with no material exposure to any one customer.

Due to challenges within the food sector, including ongoing inflation, the Group has completed a comprehensive review of all business risks and operations. This has resulted in improved and centralised management reporting, and the Group has continued to monitor its cash flow requirements very closely. The results achieved to date and subsequent to the year end have been strong and demonstrate the Group's ability to adapt and perform well through such challenging periods.

The Group continues to follow enhanced Health and Safety best practices, and we have retained our BRC accreditation at our annual audit.

While we work closely with our suppliers to minimise increases as far as possible, in the current environment this continues to be challenging. As ever we welcome the support and understanding of our customers.

The Board

The Company is a family-owned limited business, as has been the case since incorporation in 1950. It prides itself in being in the 4th generation of family stewardship, and in December 2024 Aisling McGhee, Commercial Director and Russell McGhee, Operations Director, were added to the Board. In addition to cementing the family connections, we appointed our Group Finance Director, Bill Blacoe to the Board. The added rigour of the next generation, supported by non- family impartial support, will help safeguard and protect the future of the Company.

Research and development

In addition to the above, the Company continues to invest in the development of new products, which the Family consider to be integral to the success of the group.

Key performance indicators ("KPI's")

Given the straightforward nature of the business, the directors are of the opinion that analysis using KPI's is not necessary in the report for an understanding of the development, performance or position of the business.

Financial instruments

Our financial risk management objectives are to ensure there is sufficient working capital and cash flow for the Group to meet the operating needs of the group and to ensure there is sufficient support for its growth strategy. This is achieved through careful management of our cash resources and by obtaining bank or other funding where necessary.

D MCGHEE & SONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 2 -
Promoting the success of the company

The D irectors of the G roup believe that they have acted in the way they consider to be both in good faith and would be most likely to promote the success of the group for the benefit of its members as a whole. The Directors duties are fully detailed in section 172 of the UK Companies Act 2006. This is summarised as follows:

• The likely consequences of any decisions in the long-term;

• The interests of the company’s employees;

• The need to foster the company’s business relationships with suppliers, customers and others;

• The impact of the company’s operations on the community and environment;

• The desirability of the company maintaining a reputation for high standards of business conduct; and

• The need to act fairly as between shareholders of the company.

Business conduct and relationships

We understand the importance of engaging with all our stakeholders and the directors regularly discuss issues concerning employees, customers, suppliers, community and environment, health and safety and shareholders which inform our decision making processes. The directors are aware that their strategic decisions can have long term implications for the business and its stakeholders, and these implications are carefully assessed.

Employees

We believe the core strength of the group is its people and we are committed to being a responsible business and employer. The group aims to recruit, develop, motivate and retain the best talent. For the business to succeed we need to engage and enable our people to perform at their best, develop their skills and capabilities, while ensuring we operate as efficiently and productively as possible.

Community and environment

The group's environmental commitment is to adopt and promote industry standards and best practices, enhancing awareness of environmental responsibilities and a reduction in harmful emissions. The group remains committed to exploring methods to enhance the sustainability of our business and its supply chain. This includes evaluating energy consumption within our production facilities, optimi s ing waste management practices, making eco-friendly choices in packaging materials, and reducing our carbon footprint during product distribution.

We are ESOS compliant, and are proactively working towards producing an achievable energy Action Plan, including benchmarking ourselves against manufacturing industry best practices and a move towards Science Based Targets.

The group maintains its active engagement and strong support for local communities. We regularly donate our products to selected charities, and in an effort to minimi s e waste, we also make contributions to local food banks.

Stakeholders

The directors are committed to openly engaging with our stakeholders, as we recognise the importance of transparency and a continuing effective dialogue. It is important to us that all stakeholders understand our strategy and objectives, and the group is committed to considering properly their questions, issues or feedback received.

By order of the board

I C McGhee
Secretary
20 February 2026
D MCGHEE & SONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 2 AUGUST 2025
- 3 -

The directors present their annual report and financial statements for the year ended 2 August 2025.

Principal activities

The principal activity of the company and group continued to be that of production of morning goods and flour confectionery.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £594,000. Preference dividends were paid amounting to £150,810. The directors do not recommend payment of a further dividend.

Directors

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

G McGhee
S McGhee
I C McGhee
W G Blacoe
(Appointed 23 December 2024)
A McGhee
(Appointed 23 December 2024)
R I McGhee
(Appointed 23 December 2024)
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

Information in respect of the Energy and carbon report is presented below for D McGhee & Sons Limited and its subsidiaries.

2025
2024
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
21,737,641
24,028,697
D MCGHEE & SONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 4 -
2025
2024
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
3,372.00
4,005.00
Scope 2 - indirect emissions
606.00
467.00
Total gross emissions
3,978.00
4,472.00
Intensity ratio
Tonnes CO2e per £'000 of revenue
0.07
0.08
Quantification and reporting methodology

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £'000 of revenue.

Measures taken to improve energy efficiency

We continue to focus on energy efficient capex across our sites, minimise all but essential travel, increase our use of recyclable packaging and are investigating carbon offset measures.

Strategic report

The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial instruments.true

Statement of disclosure to auditor

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

By order of the board
I C McGhee
Secretary
20 February 2026
D MCGHEE & SONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 2 AUGUST 2025
- 5 -

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

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

- select suitable accounting policies and then apply them consistently;

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

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

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

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

D MCGHEE & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF D MCGHEE & SONS LIMITED
- 6 -
Opinion

We have audited the financial statements of D McGhee & Sons Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 2 August 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

- give a true and fair view of the state of the group's and the parent company's affairs as at 2 August 2025 and of the group's profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

- T he information given in the strategic report and the directors' r eport for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

D MCGHEE & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF D MCGHEE & SONS LIMITED
- 7 -
Matters on which we are required to report by exception

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

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

- adequate accounting records have not been kept 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

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

Auditor's responsibilities for the audit of the financial statements

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

D MCGHEE & SONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF D MCGHEE & SONS LIMITED
- 8 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

- Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;

- Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

- Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Michael Walker
For and on behalf of Azets Audit Services, Statutory Auditor
Chartered Accountants
Titanium 1
Kings Inch Place
Renfrew
PA4 8WF
27 February 2026
D MCGHEE & SONS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 2 AUGUST 2025
- 9 -
2025
2024
Notes
£
£
Turnover
3
53,809,511
53,695,586
Cost of sales
(35,821,347)
(36,391,798)
Gross profit
17,988,164
17,303,788
Distribution costs
(7,479,295)
(6,877,388)
Administrative expenses
(5,026,295)
(5,280,742)
Other operating income
961
8,755
Operating profit
5
5,483,535
5,154,413
Interest receivable and similar income
8
57,796
-
0
Interest payable and similar expenses
9
(138,831)
(135,906)
Profit before taxation
5,402,500
5,018,507
Tax on profit
10
(1,062,113)
(1,359,410)
Profit for the financial year
25
4,340,387
3,659,097
Profit for the financial year is all attributable to the owners of the parent company.
D MCGHEE & SONS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 2 AUGUST 2025
- 10 -
2025
2024
£
£
Profit for the year
4,340,387
3,659,097
Other comprehensive income
-
-
Total comprehensive income for the year
4,340,387
3,659,097
Total comprehensive income for the year is all attributable to the owners of the parent company.
D MCGHEE & SONS LIMITED
GROUP BALANCE SHEET
AS AT
2 AUGUST 2025
02 August 2025
- 11 -
2 August 2025
3 August 2024
Notes
£
£
£
£
Fixed assets
Intangible assets
-
0
-
0
Tangible assets
12
23,573,177
20,570,305
Investments
14
179,767
137,720
23,752,944
20,708,025
Current assets
Stocks
16
1,481,369
1,503,299
Debtors
17
8,337,506
7,908,175
Cash at bank and in hand
2,654,586
2,491,468
12,473,461
11,902,942
Creditors: amounts falling due within one year
18
(8,183,953)
(9,033,921)
Net current assets
4,289,508
2,869,021
Total assets less current liabilities
28,042,452
23,577,046
Creditors: amounts falling due after more than one year
19
(1,327,188)
(1,519,495)
Provisions for liabilities
Deferred tax liability
22
3,658,841
2,596,705
(3,658,841)
(2,596,705)
Net assets
23,056,423
19,460,846
Capital and reserves
Called up share capital
24
42,000
42,000
Capital redemption reserve
18,000
18,000
Profit and loss reserves
25
22,996,423
19,400,846
Total equity
23,056,423
19,460,846
The financial statements were approved by the board of directors and authorised for issue on 20 February 2026 and are signed on its behalf by:
G McGhee
Director
Company registration number SC028084 (Scotland)
D MCGHEE & SONS LIMITED
COMPANY BALANCE SHEET
AS AT
2 AUGUST 2025
02 August 2025
- 12 -
2 August 2025
3 August 2024
Notes
£
£
£
£
Fixed assets
Tangible assets
12
14,348,753
11,249,065
Investments
14
543,767
501,720
14,892,520
11,750,785
Current assets
Stocks
16
997,027
940,765
Debtors
17
12,487,230
12,360,906
Cash at bank and in hand
2,165,045
1,639,018
15,649,302
14,940,689
Creditors: amounts falling due within one year
18
(7,467,502)
(8,057,999)
Net current assets
8,181,800
6,882,690
Total assets less current liabilities
23,074,320
18,633,475
Provisions for liabilities
Deferred tax liability
22
1,966,120
1,161,942
(1,966,120)
(1,161,942)
Net assets
21,108,200
17,471,533
Capital and reserves
Called up share capital
24
42,000
42,000
Capital redemption reserve
18,000
18,000
Profit and loss reserves
25
21,048,200
17,411,533
Total equity
21,108,200
17,471,533

As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £4,381,478 (2024 - £4,365,764 profit).

The financial statements were approved by the board of directors and authorised for issue on 20 February 2026 and are signed on its behalf by:
G McGhee
Director
Company registration number SC028084 (Scotland)
D MCGHEE & SONS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 2 AUGUST 2025
- 13 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 30 July 2023
42,000
18,000
16,364,559
16,424,559
Year ended 3 August 2024:
Profit and total comprehensive income
-
-
3,659,097
3,659,097
Dividends
11
-
-
(622,810)
(622,810)
Balance at 3 August 2024
42,000
18,000
19,400,846
19,460,846
Year ended 2 August 2025:
Profit and total comprehensive income
-
-
4,340,387
4,340,387
Dividends
11
-
-
(744,810)
(744,810)
Balance at 2 August 2025
42,000
18,000
22,996,423
23,056,423
D MCGHEE & SONS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 2 AUGUST 2025
- 14 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 30 July 2023
42,000
18,000
13,668,579
13,728,579
Year ended 3 August 2024:
Profit and total comprehensive income for the year
-
-
4,365,764
4,365,764
Dividends
11
-
-
(622,810)
(622,810)
Balance at 3 August 2024
42,000
18,000
17,411,533
17,471,533
Year ended 2 August 2025:
Profit and total comprehensive income
-
-
4,381,477
4,381,477
Dividends
11
-
-
(744,810)
(744,810)
Balance at 2 August 2025
42,000
18,000
21,048,200
21,108,200
D MCGHEE & SONS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 2 AUGUST 2025
- 15 -
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
8,251,051
6,670,202
Interest paid
(138,831)
(135,906)
Income taxes paid
(565,901)
(54,977)
Net cash inflow from operating activities
7,546,319
6,479,319
Investing activities
Purchase of tangible fixed assets
(5,332,350)
(5,289,845)
Proceeds from disposal of tangible fixed assets
186,430
757,240
Proceeds from disposal of investments
(42,047)
(12,714)
Interest received
57,796
-
0
Net cash used in investing activities
(5,130,171)
(4,545,319)
Financing activities
Repayment of bank loans
(80,861)
(106,369)
Payment of finance leases obligations
(153,186)
(142,276)
Dividends paid to equity shareholders
(744,810)
(622,810)
Net cash used in financing activities
(978,857)
(871,455)
Net increase in cash and cash equivalents
1,437,291
1,062,545
Cash and cash equivalents at beginning of year
1,217,295
154,750
Cash and cash equivalents at end of year
2,654,586
1,217,295
Relating to:
Cash at bank and in hand
2,654,586
2,491,468
Bank overdrafts included in creditors payable within one year
-
(1,274,173)
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 2 AUGUST 2025
- 16 -
1
Accounting policies
Company information

D McGhee & Sons Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 10 Keppochhill Drive, M8 Food Park, Glasgow, United Kingdom, G21 1HX.

The group consists of D McGhee & Sons Limited and all of its subsidiaries.

1.1
Accounting convention

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

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

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

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company D McGhee & Sons Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 2 August 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.

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

1.3
Going concern

The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. In satisfaction of this responsibility the directors have considered the Group's ability to meet its liabilities as they fall due.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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

D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
1
Accounting policies
(Continued)
- 17 -
1.5
Intangible fixed assets - goodwill

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

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

1.6
Tangible fixed assets

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

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

Leasehold land and buildings
Over the period of the lease
Leasehold improvements
At varying rates on cost
Plant and equipment
At varying rates on cost
Fixtures and fittings
At variable rates on a straight line basis between 6.67% and 33%
Motor vehicles
20% on cost, 25% on cost and 33% on cost

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

Deposits paid in respect of Fixtures & Fittings are capitalised within tangible fixed assets and not depreciated until the asset is available for use. Assets under construction relates to the development of a new factory which was completed during the year under review.

1.7
Fixed asset investments

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

I n the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

1.8
Impairment of fixed assets

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

D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
1
Accounting policies
(Continued)
- 18 -

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

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

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

1.9
Stocks

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

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

1.10
Cash and cash equivalents

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

1.11
Financial instruments

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

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

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

Basic financial assets

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

D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
1
Accounting policies
(Continued)
- 19 -
Impairment of financial assets

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

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

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

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

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

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

Derecognition of financial liabilities

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

1.12
Equity instruments

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

1.13
Taxation

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

D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
1
Accounting policies
(Continued)
- 20 -
Current tax

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

Deferred tax

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

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

1.14
Employee benefits

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

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

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

1.15
Retirement benefits

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

1.16
Leases

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

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

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

D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
1
Accounting policies
(Continued)
- 21 -
1.17
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

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

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

3
Turnover and other revenue

Turnover represents amounts derived from the provision of goods and services which fall within the Group's ordinary activities after deduction of trade discounts and value added tax. The turnover and pre-tax profit, all of which arises in the United Kingdom, is attributable to the Group's principal activities of production of morning foods and flour confectionery.

2025
2024
£
£
Other revenue
Interest income
57,796
-
4
Auditor's remuneration
2025
2024
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
25,500
24,250
Audit of the financial statements of the company's subsidiaries
25,200
23,950
50,700
48,200
For other services
Taxation compliance services
10,150
9,667
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 22 -
5
Operating profit
2025
2024
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
2,377,765
2,065,930
Depreciation of tangible fixed assets held under finance leases
78,520
81,791
(Profit)/loss on disposal of tangible fixed assets
(95,120)
178,420
Operating lease charges
498,683
479,338
6
Employees

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

Group
2025
2024
Number
Number
Production
316
299
Sales and distribution
111
102
Administration
17
38
444
439

Their aggregate remuneration comprised:

Group
2025
2024
£
£
Wages and salaries
15,982,417
15,559,027
Social security costs
1,543,640
1,275,322
Pension costs
347,977
332,477
17,874,034
17,166,826

Included within Staff costs are £1,528,712 (202 4: £1,740,724) of agency costs.

7
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
780,950
794,452
Company pension contributions to defined contribution schemes
32,308
26,387
813,258
820,839
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
7
Directors' remuneration
(Continued)
- 23 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2025
2024
£
£
Remuneration for qualifying services
292,137
254,792

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2024: 3).

8
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
57,796
-
0
2025
2024
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
57,796
-
9
Interest payable and similar expenses
2025
2024
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
63,593
105,104
Other finance costs:
Interest on finance leases and hire purchase contracts
75,238
30,802
Total finance costs
138,831
135,906
10
Taxation
2025
2024
£
£
Current tax
Adjustments in respect of prior periods
(23)
340
Deferred tax
Origination and reversal of timing differences
1,389,837
1,359,474
Adjustment in respect of prior periods
(327,701)
(404)
Total deferred tax
1,062,136
1,359,070
Total tax charge
1,062,113
1,359,410
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
10
Taxation
(Continued)
- 24 -

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

2025
2024
£
£
Profit before taxation
5,402,500
5,018,507
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
1,350,625
1,254,627
Tax effect of expenses that are not deductible in determining taxable profit
-
0
6,305
Tax effect of income not taxable in determining taxable profit
(10,513)
(3,179)
Adjustments in respect of prior years
(361,972)
(403)
Other permanent differences
775
186
Under/(over) provided in prior years
-
0
340
Fixed asset differences
48,948
101,534
Deferred tax not recognised
34,250
-
0
Taxation charge
1,062,113
1,359,410
11
Dividends
2025
2024
Recognised as distributions to equity holders:
£
£
Interim paid
744,810
622,810
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 25 -
12
Tangible fixed assets
Group
Leasehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 4 August 2024
606,466
9,849,246
16,516,825
4,910,701
2,616,123
34,499,361
Additions
-
0
1,798,761
2,625,318
131,419
998,240
5,553,738
Disposals
(15,117)
(2,168)
(114,011)
-
0
(811,653)
(942,949)
At 2 August 2025
591,349
11,645,839
19,028,132
5,042,120
2,802,710
39,110,150
Depreciation and impairment
At 4 August 2024
539,134
1,518,268
9,723,562
907,872
1,240,220
13,929,056
Depreciation charged in the year
17,643
343,320
983,838
349,352
765,403
2,459,556
Eliminated in respect of disposals
(40)
(2,168)
(113,945)
-
0
(735,486)
(851,639)
At 2 August 2025
556,737
1,859,420
10,593,455
1,257,224
1,270,137
15,536,973
Carrying amount
At 2 August 2025
34,612
9,786,419
8,434,677
3,784,896
1,532,573
23,573,177
At 3 August 2024
67,332
8,330,978
6,793,263
4,002,829
1,375,903
20,570,305
Company
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 4 August 2024
5,594,719
14,790,037
2,112,592
22,497,348
Additions
1,770,978
2,261,428
811,602
4,844,008
Disposals
(2,168)
(91,589)
(707,153)
(800,910)
At 2 August 2025
7,363,529
16,959,876
2,217,041
26,540,446
Depreciation and impairment
At 4 August 2024
1,347,385
8,956,997
943,901
11,248,283
Depreciation charged in the year
172,394
845,092
635,921
1,653,407
Eliminated in respect of disposals
(2,168)
(76,839)
(630,990)
(709,997)
At 2 August 2025
1,517,611
9,725,250
948,832
12,191,693
Carrying amount
At 2 August 2025
5,845,918
7,234,626
1,268,209
14,348,753
At 3 August 2024
4,247,334
5,833,040
1,168,691
11,249,065
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
12
Tangible fixed assets
(Continued)
- 26 -

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

Group
Company
2025
2024
2025
2024
£
£
£
£
Plant and equipment
1,240,234
1,101,701
221,388
-
0
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 27 -
13
Intangible fixed assets
Group
Goodwill
Negative goodwill
Total
£
£
£
Cost
At 4 August 2024 and 2 August 2025
2,605,926
(547,110)
2,058,816
Amortisation and impairment
At 4 August 2024 and 2 August 2025
2,605,926
(547,110)
2,058,816
Carrying amount
At 2 August 2025
-
0
-
0
-
0
At 3 August 2024
-
0
-
0
-
0
Company
Goodwill
£
Cost
At 4 August 2024 and 2 August 2025
2,288,263
Amortisation and impairment
At 4 August 2024 and 2 August 2025
2,288,263
Carrying amount
At 2 August 2025
-
0
At 3 August 2024
-
0
14
Fixed asset investments
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
364,000
364,000
Listed investments
179,767
137,720
179,767
137,720
179,767
137,720
543,767
501,720
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
14
Fixed asset investments
(Continued)
- 28 -
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 4 August 2024
137,720
Valuation changes
42,047
At 2 August 2025
179,767
Carrying amount
At 2 August 2025
179,767
At 3 August 2024
137,720
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 4 August 2024
364,000
137,720
501,720
Valuation changes
-
42,047
42,047
At 2 August 2025
364,000
179,767
543,767
Carrying amount
At 2 August 2025
364,000
179,767
543,767
At 3 August 2024
364,000
137,720
501,720
15
Subsidiaries

Details of the company's subsidiaries at 2 August 2025 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Fergusons Bakers Limited
United Kingdom
Ordinary
100.00
Kerr's Bakery Limited
United Kingdom
Ordinary
100.00

The registered office of Fergusons Bakers Limited is 10 Keppochhill Drive, M8 Food Park, Glasgow, G21 1HX. The registered office of Kerr's Bakery Limited is Oakfield House, 378 Brandon Street, Motherwell, ML1 1X A.

D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 29 -
16
Stocks
Group
Company
2025
2024
2025
2024
£
£
£
£
Raw materials and consumables
1,224,209
1,239,368
880,009
793,658
Work in progress
116,517
145,233
116,517
145,233
Finished goods and goods for resale
140,643
118,698
501
1,874
1,481,369
1,503,299
997,027
940,765
17
Debtors
Group
Company
2025
2024
2025
2024
Amounts falling due within one year:
£
£
£
£
Trade debtors
6,052,503
6,682,215
5,571,022
6,176,976
Corporation tax recoverable
575,000
9,076
575,000
-
0
Amounts owed by group undertakings
-
-
4,902,459
5,175,938
Other debtors
1,322,738
976,129
1,244,198
889,808
Prepayments and accrued income
387,265
240,755
194,551
118,184
8,337,506
7,908,175
12,487,230
12,360,906
18
Creditors: amounts falling due within one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans and overdrafts
20
85,934
1,355,034
-
0
976,975
Obligations under finance leases
21
302,499
127,924
166,041
-
0
Trade creditors
4,198,251
4,073,546
3,559,444
3,240,034
Amounts owed to group undertakings
1,144,000
550,872
1,756,534
1,233,449
Other taxation and social security
379,893
356,041
350,997
330,497
Other creditors
1,027,334
1,667,744
995,737
1,612,200
Accruals and deferred income
1,046,042
902,760
638,749
664,844
8,183,953
9,033,921
7,467,502
8,057,999
19
Creditors: amounts falling due after more than one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans and overdrafts
20
739,476
825,410
-
0
-
0
Obligations under finance leases
21
587,712
694,085
-
0
-
0
1,327,188
1,519,495
-
-
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 30 -
20
Loans and overdrafts
Group
Company
2025
2024
2025
2024
£
£
£
£
Bank loans
825,410
906,271
-
0
-
0
Bank overdrafts
-
0
1,274,173
-
0
976,975
825,410
2,180,444
-
976,975
Payable within one year
85,934
1,355,034
-
0
976,975
Payable after one year
739,476
825,410
-
0
-
0

The bank term loan is secured against a floating charge over the assets of the Company with all group companies providing a guarantee to the bank. The loan has interest charged at 1.9% per annum over the Bank of England Base Rate. It is repayable by installment with a bullet repayment due in April 2028.

21
Finance lease obligations
Group
Company
2025
2024
2025
2024
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
302,499
127,924
166,041
-
0
In two to five years
587,712
694,085
-
0
-
0
890,211
822,009
166,041
-

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average remaining lease term is 35 months. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Hire purchase contracts are secured over the assets to which they relate.

22
Deferred taxation

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

Liabilities
Liabilities
2025
2024
Group
£
£
Accelerated capital allowances
3,775,346
2,917,434
Losses and other deductions
(116,505)
(320,729)
3,658,841
2,596,705
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
22
Deferred taxation
(Continued)
- 31 -
Liabilities
Liabilities
2025
2024
Company
£
£
Accelerated capital allowances
2,043,570
1,299,207
Losses and other deductions
(77,450)
(137,265)
1,966,120
1,161,942
Group
Company
2025
2025
Movements in the year:
£
£
Liability at 4 August 2024
2,596,705
1,161,942
Charge to profit or loss
1,062,136
804,178
Liability at 2 August 2025
3,658,841
1,966,120
23
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
347,977
332,477

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

24
Share capital
Group and company
2025
2024
Ordinary share capital
£
£
Issued and fully paid
42,000 Ordinary of £1 each
42,000
42,000
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 32 -
25
Profit and loss reserves
Group
Company
2025
2024
2025
2024
£
£
£
£
At the beginning of the year
19,400,846
16,364,559
17,411,533
13,668,579
Profit for the year
4,340,387
3,659,097
4,381,477
4,365,764
Dividends
(744,810)
(622,810)
(744,810)
(622,810)
At the end of the year
22,996,423
19,400,846
21,048,200
17,411,533
26
Financial commitments, guarantees and contingent liabilities

The company has cross guaranteed the following borrowings of Kerrs Bakery Limited and Fergusons Bakers Limited:

a) The bank overdraft facility, which amounted to £nil at 02 August 2025 (2024: £1,272,325).

b) Loans due amounts to £825,410 at 02 August 2025 (2024: £906,271).

27
Operating lease commitments
Lessee

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

Group
Company
2025
2024
2025
2024
£
£
£
£
Within one year
790,965
637,646
536,121
522,619
Between two and five years
2,540,562
1,840,537
1,830,702
1,777,913
In over five years
145,000
528,000
145,000
528,000
3,476,527
3,006,183
2,511,823
2,828,532
28
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2025
2024
2025
2024
£
£
£
£
Acquisition of tangible fixed assets
2,962,260
1,390,149
2,856,718
1,053,423
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 33 -
29
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Purchases
Purchases
2025
2024
£
£
Group
The directors of the company
1,722,772
1,480,152
Company
The directors of the company
909,538
755,639
Rental of property
Other rental charges
2025
2024
2025
2024
£
£
£
£
Group
A company with a mutual director
514,320
446,583
2,291
519
Company
A company with a mutual director and shareholder
514,320
446,583
2,291
519

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2025
2024
£
£
Group
The directors of the company
1,162,523
1,349,134
Company
The directors of the company
1,162,523
1,349,134

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2025
2024
Balance
Balance
£
£
Group
A company with a mutual director and shareholder
936,207
351,478
Company
A company with a mutual director
936,207
351,478
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
29
Related party transactions
(Continued)
- 34 -
Other information

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

30
Controlling party

The parent company of D McGhee & Sons Limited is McGhee Group Limited. McGhee Group Limited is under the control of the McGhee family.

The largest group the company is consolidated in to is McGhee Group Limited, a company incorporated in the UK.

The group accounts can be obtained from it's registered address of 10 Keppochhill Drive, Glasgow, G21 1HX.

31
Cash generated from group operations
2025
2024
£
£
Profit after taxation
4,340,387
3,659,097
Adjustments for:
Taxation charged
1,062,113
1,359,410
Finance costs
138,831
135,906
Investment income
(57,796)
-
0
(Gain)/loss on disposal of tangible fixed assets
(95,120)
178,420
Depreciation and impairment of tangible fixed assets
2,459,556
2,147,721
Movements in working capital:
Decrease in stocks
21,930
422,498
Decrease/(increase) in debtors
136,593
(813,191)
Increase/(decrease) in creditors
244,557
(419,659)
Cash generated from operations
8,251,051
6,670,202
D MCGHEE & SONS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 2 AUGUST 2025
- 35 -
32
Analysis of changes in net funds/(debt) - group
4 August 2024
Cash flows
New finance leases
2 August 2025
£
£
£
£
Cash at bank and in hand
2,491,468
163,118
-
2,654,586
Bank overdrafts
(1,274,173)
1,274,173
-
-
0
1,217,295
1,437,291
-
2,654,586
Borrowings excluding overdrafts
(906,271)
80,861
-
(825,410)
Obligations under finance leases
(822,009)
153,186
(221,388)
(890,211)
(510,985)
1,671,338
(221,388)
938,965
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