The directors present the Strategic Report of Arena Online Limited and its subsidiary undertakings (together, the “Group”) for the year ended 30 April 2025.

The principal activity of the Group continues to be the marketing and fulfilment of online gifts, primarily flowers, plants, balloons, alcohol and confectionery. The Group operates through a combination of owned brands and long-standing strategic partner relationships, serving UK consumers across a range of occasions, and the business remains highly seasonal and operationally demanding, with performance particularly influenced by peak trading periods and the efficient deployment of labour, logistics and infrastructure.

The financial performance of the Group is summarised below:

2025         2024

(£'000)         (£'000)

Revenue                 31,174        33,933

Gross profit             11,538        12,362

Gross profit margin         37.0%        36.4%

Operating (loss) before impairment    (818)        (895)

Impairment of goodwill        (2,173)        -

Impairment of other intangibles    (54)        -

Profit/(loss) after tax        (3,081)        (979)

Net current assets             1,212        1,121

No of employees             121        124

Revenue declined year on year, reflecting sustained pressure on discretionary consumer spending and a more competitive trading environment across core gifting categories. These conditions affected both owned brands and partner channels and were amplified by the operating leverage inherent in running a large-scale fulfilment platform at lower volumes.

Gross margin remained broadly stable, reflecting continued discipline in pricing, procurement and waste reduction, alongside the cumulative effect of operational efficiency initiatives implemented over the past two years. These actions were necessary to mitigate persistent inflationary pressure, particularly in labour, logistics and energy, which remained elevated throughout the period.

Despite the improvement in operating performance compared with the prior year, the Group continued to report an operating loss before impairment, and while previously implemented cost actions did contribute to a material reduction in operating losses, they were insufficient, in isolation, to offset the combined impact of lower volumes and sustained cost pressure during the year. The reported result for the year is also affected by the impairment charge in respect of the Patch acquisition, which is described in the Brands and proposition section below.

Strategic context and execution

In the prior financial year, the Board identified the need to simplify the business, reduce structural overhead and improve the resilience of gross margins, and a central assumption underpinning that approach was that the full annualised benefit of those actions would be realised during the year ended 30 April 2025.

During FY 2024-25, management remained focused on executing against this plan: cost controls were embedded more deeply across the organisation, operational processes were refined, and service performance through peak trading periods was maintained. These efforts contributed to a substantial reduction in operating losses at Group level and reinforced confidence in the robustness of the underlying operating platform.

However, the year also demonstrated that the external environment remained more challenging, and for longer, than previously assumed. Demand weakness persisted across key categories and cost pressures did not unwind at the pace anticipated, and the Board therefore recognises that while the strategic direction was appropriate, the scale of change required to restore sustainable profitability is greater than originally expected and will continue to require disciplined execution over more than one financial period.

Brands and proposition

The Group’s brands remain central to our core purpose and ambition.

Arena Flowers provides a large audience of loyal customers with access to high quality flowers and floristry at scale, combining ethical sourcing, operational reliability and service consistency, and its role within the Group is closely tied to the ability to execute demanding peak periods for both direct-to-consumer customers and long standing strategic partners.

Patch Gardens Ltd was founded with a clear and differentiated mission: to make it easier for people to bring plants into their homes and to broaden participation in the plant category through accessible products and clear customer education. That mission remains intact and continues to underpin the brand’s proposition and customer loyalty.

During the period, management undertook a detailed reassessment of how shared services, senior management time and financing costs were allocated across the Group. This work identified a number of structural adjustments that reduced the ongoing cost base attributed to Patch and which will continue to support the profitability of the brand independent of any assumptions around revenue growth or trading recovery. The repayment of the GLIF loan will further reduce Patch’s annual financing costs and, taken together, these actions remove a material element of structural drag from Patch’s recent performance and provide a clearer baseline against which future progress can be assessed.

Following extended discussion with the Group’s auditors regarding the carrying value of the Patch acquisition, the directors have agreed to recognise an impairment charge equivalent to 50% of that carrying value within the financial statements for the year ended 30 April 2025. The Board remains wholly confident in the strategic merit of the original acquisition and in the long term value of the Patch brand, customer proposition and category positioning, each of which retains the qualities that informed the investment decision in the first instance. The impairment reflects the reality that the consumer environment and broader market conditions for discretionary home and garden categories have shifted materially since acquisition, with subdued discretionary spending, elevated input costs and a slower and less linear consumer recovery than was assumed at the point of investment. Against that backdrop, and notwithstanding the directors’ continued belief in the underlying business, the Board accepts that an impairment of this scale represents the appropriate accounting treatment at this juncture.

The Board remains committed to developing the value of the Patch brand responsibly and sustainably within a clearly defined financial framework, and future development will be paced carefully, with close regard to Group liquidity, execution risk and the long term sustainability of the brand.

Market position and growth strategy

The Group continues to review growth opportunities selectively, including potential partnerships and acquisitions that align with its operational capabilities, values and risk appetite. In the current environment, the Board has adopted a deliberately cautious approach to growth, prioritising cash discipline, operational focus and execution certainty over expansion.

This approach extends across the Group, including subsidiary brands, where the emphasis is on establishing an appropriate and sustainable cost base before considering any acceleration of growth activity.

Future outlook

The near term and medium term outlook for consumer facing business remains uncertain which informs our prudent approach in the short and mid term. Consumer confidence across discretionary categories continues to be subdued, and cost pressures, particularly in labour and logistics, remain elevated relative to historic norms, and the Board does not assume a rapid or linear return to historical profitability levels.

In the period since the year end, trading conditions have continued to reflect those underlying pressures, and management currently anticipates that the financial year ending 30 April 2026 will close with a further reported loss at Group level. While the cost actions, supplier diversification initiatives and operational efficiency measures undertaken during the year have continued to deliver tangible benefit, those benefits have been substantially offset by sustained pressure on volumes and margins across the Group’s core gifting categories, by the continued effect of structural shifts in consumer behaviour, and by the lag between investment in change and its full financial realisation.

While the Group benefits from established brands, long standing customer relationships and a proven fulfilment platform, the Board recognises that restoring sustainable profitability will require continued, disciplined execution over more than one financial period, and that further difficult decisions may be necessary in order to safeguard the Group’s longer term position and to ensure that it continues to support its teams and customers responsibly through the period ahead.

The principal risks and uncertainties facing the Group include:

• prolonged weakness in consumer demand and broader economic uncertainty across discretionary gifting categories;

• continued cost inflation, particularly in labour, logistics and energy, and the lag between the implementation of mitigating actions and their realisation in reported results;

• operational execution risk during peak trading periods, on which a disproportionate share of annual financial performance depends;

• reliance on key partner relationships and the associated concentration risk inherent in those arrangements;

• the financial performance, carrying value and funding requirements of subsidiary businesses, in particular where shifts in market conditions affect the recoverability of investment values; and

• execution risk associated with the ongoing programme of structural change and the Group’s ability to deliver intended cost and operational benefits within the planned timeframe.

These risks are reviewed regularly by the Board and are supported by detailed forecasting, sensitivity analysis and ongoing cost review, and the Board is satisfied that appropriate management actions are in place to monitor and respond to each.

The Board monitors performance primarily through management accounts, cash flow reporting and operational metrics. Key indicators include revenue, gross profit margin, operating performance before and after non-cash items, and liquidity, all of which are reviewed regularly to inform decision-making.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 April 2025.

The principal activity of the company and group continued to be the marketing and fulfilment of online gifts, primarily comprising of flowers, plants, balloons, alcohol and confectionary.

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

No ordinary dividends were paid. The directors do not recommend payment of a dividend.

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

The Group's operations expose it to credit risk, foreign exchange risk and liquidity risk. The Group manages these risks by limiting external borrowing, regular monitoring to maintain adequate cash reserves and the use of bank accounts held in foreign currencies.

The truegroup 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 post-balance sheet events and future developments.

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.

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;

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

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

We have audited the financial statements of Arena Online Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 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 30 April 2025 and of the group's loss for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

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

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

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

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

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

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

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

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

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

As part of our planning process:

• We enquired of management the systems and controls the company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management did not inform us of any known, suspected or alleged fraud.

• We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006.

• We considered the incentives and opportunities that exist in the group and company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.

• Using our knowledge of the group and company, together with the discussions held with the group and company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

• Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.

• Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.

• Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates.

• Performing a physical verification of key assets and stock items.

• Testing revenue, in particular cut-off, for evidence of management bias.

• Obtaining third-party confirmation of material bank balances.

• Documenting and verifying all significant related party balances and transactions.

• Reviewing the company board minutes for discussions of irregularities including fraud.

• Testing all material consolidation adjustments.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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

Use of our report

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

The profit and loss account has been prepared on the basis that all operations are continuing operations.

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

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £2,732,622 (2024 - £136,165 profit).

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

Arena Online Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Unit 19, Long Bank, Berry Hill Industrial Estate, Droitwich, England, WR9 9AN.

The group consists of Arena Online Limited and all of its subsidiaries.

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

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

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

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The consolidated group financial statements consist of the financial statements of the parent company Arena Online Limited together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 30 April 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 group.

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

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

The group has generated a loss for the year. The parent company itself has generated an operating profit but an overall post-tax loss for the year. The group and company is in a net current asset and net asset position at 30 April 2025, therefore at the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Management currently anticipates that the financial year ending 30 April 2026 will close with a further reported loss at Group level. While the cost actions, supplier diversification initiatives and operational efficiency measures undertaken during the year have continued to deliver tangible benefit, those benefits have been substantially offset by sustained pressure on volumes and margins across the Group’s core gifting categories, by the continued effect of structural shifts in consumer behaviour, and by the lag between investment in change and its full financial realisation.

While the Group benefits from established brands, long standing customer relationships and a proven fulfilment platform, the Board recognises that restoring sustainable profitability will require continued, disciplined execution over more than one financial period, and that further difficult decisions may be necessary in order to safeguard the Group’s longer term position and to ensure that it continues to support its teams and customers responsibly through the period ahead.

Turnover represents the fair value of consideration received or receivable for goods supplied in the normal course of business, net of trade discounts, volume rebates, value added tax, and similar sales-related taxes.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the customer. This typically occurs on delivery of goods to the end customer’s premises. Revenue is recognised only when; 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.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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 ten 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.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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

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

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

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

The useful economic life of certain assets within plant and machinery changed in the prior year from 4 years to 7 years.

In 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.

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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises of direct materials.

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.

The company 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.

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

Financial assets 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.

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

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

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

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

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

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

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

The costs of short-term employee benefits are recognised as a liability and an expense.

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

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

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

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

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

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

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

The Group’s presentational currency is Sterling (£). The results and financial position of overseas subsidiaries with functional currencies different from Sterling are translated into Sterling with assets and liabilities translated at the closing rate at the reporting date and income and expenses translated at average rates for the period, unless exchange rates fluctuate significantly in which case transaction-date rates are used. Exchange differences arising on translation are recognised in other comprehensive income.

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

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

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

As described in note 26, the group has made loans to certain officers of the group. The directors have exercised judgement when considering the recoverability of such loans, and do not consider the loans to be impaired.

Goodwill is tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill could be impaired. In order to determine if the value of goodwill has been impaired, the group relies on a number of factors, including historical data, business plans, forecasts and market data as well as considering any synergies arising from business combinations. Changes in the conditions for these judgements can significantly affect the assessed value of goodwill and its recoverable amount.

On an annual basis, management assess investments in subsidiaries for indicators of impairment. Following a review of the financial performance of Patch Gardens Limited, it was determined that the carrying amount exceeded the recoverable amount of the investment. As such, the directors have agreed to recognise an impairment charge equivalent to 50% of that carrying value within the financial statements for the year ended 30 April 2025.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2024: 4).

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

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

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

Details of the company's subsidiaries at 30 April 2025 are as follows:

Other borrowings are secured by a fixed and floating charge over the assets of the subsidiary company, Patch Gardens Ltd. Other borrowings are also secured by the legal assignment of key-person assurance policies in the name of Patch Gardens Ltd covering the life of a director.

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery and motor vehicles. No restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

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

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.

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:

At the year end the group was owed £200,000 (2024: £200,000) in respect of an interest bearing loan to a Discretionary Trust, of which one of the directors is a beneficiary.

At the year end the group was owed £55 (2024: £55) and £107,314 (2024: £107,314) by a director in respect of two interest bearing loans.

At the year end the group was owed £31,124 (2024: £31,124) by another former director in respect of an interest bearing loan.

At the year end the group was owed £100,000 (2024: £100,000) by A Wynne, company secretary, in respect of an interest bearing loan.

During the year, the total remuneration paid to key management personnel by the group was £443,646 (2024: £492,964).