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

The Group achieved turnover of £103.5m (2024 – £103.0m), this was set against a backdrop of difficult market conditions, uncertainty from the change of government in the UK with its increases to business costs of minimum wage, employment legislation and business rates.

The most material event concluding post financial year end was the Management Buyout (MBO) of the Stax Group. Nigel and Simon Wright bought out all existing shareholders and now own 100% of the share capital of the group. They have been shareholders and main board directors of Stax for 30 years. Prior to this they were owners of their family business W E Merris Ltd which Stax bought 30 years ago. The MBO provides long term continuity for all stakeholders, whilst the new owners have ambitious plans to modernise the business, their plans are evolutionary and not revolutionary.

The Group made a loss for the year of £874k which was anticipated by the Directors; the loss reflected one-off deal related costs, the closure of the loss-making Edinburgh branch together with a focus on liquidating dated stock, which helped to preserve cash balances

The Directors are pleased to report that after 6 months the Group has returned to profitability as well as generating cash and anticipate this to hold for the remainder of the financial year barring geo-political external shocks beyond its control.

The Directors are re-structuring the business to streamline operating procedures to match current and future trading conditions. Stax continues to grow its own brand business to support the independent retail sector and to drive increased overall trading margin to enable the business to absorb rising employment, property and other operating costs.

Investment in technology to improve stock accuracy and efficiency within the operation will, over the next 18 months, start to positively improve the profitability of the business. The newly released website has now settled and is offering a better customer experience, continued investment in the website remains a key business objective. Better controls over stock and a rationalisation of the SKU count will release space and working capital to support the business. The business at the halfway point for the trading year 2025/6 maintains a strong positive cash balance and retains the support of its long-term banking partner in HSBC.

Stax, through careful and strong credit control, has managed to escape the majority of customer business failures from internet traders, the business continues to develop its strategic partnerships with “bricks and mortar” retailers through the various trading organisations.

Going forward, Stax’s multi-platform trading style of Cash and Carry, Delivered Retail and local Trade business means that it spreads its business across many customers and different platforms, consequently the business retains its resilience through not being over-exposed to one single marketplace. This strategy will continue.

Nigel and Simon Wright as the Joint Owners and Joint Managing Directors of the Stax Group of companies have a lifetime of experience in the sector and strong relationships with key suppliers and customers. Branded suppliers continue to remain key to the future success of Stax, through Stax’s reliable and efficient distribution network a number of key suppliers have decided to place their confidence in Stax to be their “distributor of choice” to small independent retailers and regional wholesalers; relying and trusting Stax’s sales force to sell their products and giving them the one invoice point to control. Stax see this trend continuing.

The Directors remain confident in the long term continued success of the Stax Group of Companies.

The principal risk to the business continues to be that we trade in a very challenging market and with an uncertain economic backdrop. Through proactively strengthening our offer to reflect customer wants and needs, the width of our product offer, and our ability to react swiftly to change we are able to reduce this risk and uncertainty to acceptable levels.

We, like all businesses, are facing a tougher economic backdrop, but have improved our operating efficiency, working capital management and have a strong liquidity position to support us in these uncertain times.

Streamlined Energy and Carbon Reporting (SECR)

Our carbon footprint report is on page 6.

As a board we have a legal responsibility under section 172 of the Companies Act 2006 to act in a way we consider, in good faith, would be most likely to promote the company’s success for the benefit of its members as a whole, and to have regard to the long-term effect of our decisions on the company and all its stakeholders.

Reflective of the ownership of the business and the experience of the board, the company does not observe any official code of corporate governance.

The Board consists of Nigel and Simon Wright, joint Managing Directors, who meet monthly. The board meet with senior management monthly to set strategy, review performance, business controls, set targets and weigh the needs of all stakeholders, including employees, suppliers and customers. The decisions we take reflect the needs of the business and all its stakeholders.

Our employees are recognised by the board as being key to deliver our services to our customers and we award bonuses and service awards in recognition of this.

The company annually meets with a union to discuss the pay review, seeks to agree and ratify a proposal on this, as well as posting bulletins and communications on matters directly affecting employees.

Monthly, via its branch managers, an opportunity exists for employee matters to be raised at board level with local HR teams involved in the day to day operations enabling all employees to participate and consult directly with them, who can either locally manage and resolve or report wider matters for resolution to the board.

As a wholesaler our supplier relationship and customers’ needs are paramount to our success with our employees essential to delivering this. We have a team of people responsible for working with our suppliers to develop our offer, branch managers and sales team managing our critical customer relationships as well as branch management, HR staff and local management team engaging with our employees on a daily basis. The accreditation of ISO9001:2015 is evidence of our commitment to all stakeholders.

The company seeks to minimise its impact on the environment and work with the local community.

We have invested in balers to enable recycling of cardboard waste, in upgrading branch lighting to reduce energy consumption and in new distribution vehicles with improved fuel usage and less emissions.

The company has one corporate charity, the Rainy Day Trust, of which Stax is a Platinum Sponsor. This charity has been representative of our sector for over 175 years and Stax has been involved since the late 90’s.

On behalf of the board

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

The principal activity of the company and group continued to be that of DIY and hardware wholesalers.

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

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

Ordinary dividends were paid amounting to £157,103.

The company attempts to establish continuing relationships with its suppliers by agreeing mutually acceptable purchasing arrangements on an individual basis. Accordingly, the directors consider that the adoption of any external standard or code would prejudice the flexibility that individual arrangements can achieve for the benefit of both parties.

At the year end, the company had an average of 42 days of purchases outstanding in trade creditors (2024 - 55 days).

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.

The company continued to develop its practices in the area of employee involvement. The company is committed to improving its participative and consultative arrangements with all employees.

We will continue to focus on maintaining our business efficiency, customer acquisition and retention activities, our overseas supply chain and re-acting swiftly to changing consumer trends. Successful collaborations with key suppliers has seen us develop distribution agreements on a solus or semi-exclusive basis.

We will maintain our broad range of product categories focusing on those with growth and continue to develop all our routes to market.

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 prepared the group and parent company 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 parent 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 United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent 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 parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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.

We have audited the financial statements of Stax Trade Centres Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 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 a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 August 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 group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or 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.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company, we identified that the principal risks of non-compliance with laws and regulations related to breaches of the legal and regulatory framework that the company operates in. We considered the extent to which non-compliance might have a material effect on the financial statements. The key laws and regulations we considered in this context included UK Companies Act 2006, employment law, health and safety and tax legislation.

We also evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to the posting of inappropriate journal entries to manipulate financial results and potential management bias in accounting estimates.

As a result of the above, our audit procedures performed included:

• Discussions with management and those charged with governance in relation to known or suspected instances of non-compliance with laws and regulation and fraud.

• Agreeing financial statements disclosures to underlying supporting documentation and assessing compliance with relevant laws and regulations.

• Testing the appropriateness of journal entries and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.

• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

• Enquiring with the company’s legal advisors of whether they are aware of any non-compliance with laws and regulations.

• Communicating relevant identified laws and regulations and potential fraud risks to all engagement team members and remaining alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

• Reviewing minutes of meetings of those charged with governance.

There are inherent limitations in the audit procedures described above. The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK).

We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors of Stax Trade Centres Limited.

Use of our report

This report is made solely to the parent 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 parent 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 parent company and the parent 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.

As permitted by section 408 of the 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 £997,523 (2024 - £712,476 profit).

Stax Trade Centres Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Holloway Drive, Wardley Industrial Estate, Worsley, Manchester, M28 2LA.

The group consists of Stax Trade Centres 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, modified to include the revaluation of freehold properties at fair value. 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.

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

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

The consolidated financial statements incorporate those of Stax Trade Centres Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 30 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 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.

At the time of approving the financial statements, the directors have a reasonable expectation that the group and parent company have 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.

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.

Turnover represents the amount derived from the provision of DIY products which fall within the company's ordinary activities. Sales are recognised at the date of in-store purchase or at the time of delivery to customers.

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. Amortisation is recognised within administrative expenses.

Goodwill of M.P. Smith & Co. Limited is being amortised in equal instalments over its estimated useful life which the directors consider to be 20 years.

The remaining goodwill represents Stax Trade Centres Limited's investment in its former subsidiary undertaking. It is being amortised in equal instalments over its estimated useful economic life which the directors consider to be 20 years.

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

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

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

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

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

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

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

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.

Finished goods and goods for resale

Finished goods and goods for resale are stated at the lower of cost and estimated selling price less costs to complete and sell.

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.

Goods in transit

Goods in transit are stock that has been despatched by the supplier and paid for in full by the company prior to the reporting date, but not delivered until after the reporting date. Goods in transit are recognised at cost and the corresponding creditor is shown in other creditors.

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

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

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

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

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost. Financial assets classified as receivable within one year are not amortised.

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

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

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

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

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

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

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.

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.

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

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

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

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

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

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

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

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

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

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

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

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

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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.

Rebates

Rebates received from suppliers mainly comprise volume related rebates on the purchase of stock. Rebates are recognised on an accrued basis based on actual purchases made in the period based on individual agreements made with suppliers.

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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Intangible fixed assets are amortised over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as future market conditions and the remaining life of the asset.

Determining whether stock balances are valued correctly, requires, and is based on, up to date trading information. The Board use their knowledge of the business, the trading environment and future projections to assess whether provision is necessary in these areas.

The directors use available market-based information to determine whether the properties are valued accurately.

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

Their aggregate remuneration comprised:

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

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

The goodwill relates to the company's investment in its current subsidiary undertakings and former subsidiary undertakings. The goodwill is being amortised over the directors' estimate of its useful life of 20 years. The goodwill relating to current and former subsidiary undertakings have carrying values of £895,967 (2024: £959,965) and £328,665 (2024: £385,823) respectively. They have a remaining amortisation period of 14 years and 6 years respectively.

The goodwill relates to the company's investment in its former subsidiary undertaking and is being amortised over the directors' estimate of its useful economic life of 20 years. The goodwill has a carrying value of £328,665 (2024: £385,823) and has a remaining amortisation period of 6 years.

The carrying value of land and buildings comprises:

Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:

Land and buildings with a carrying amount of £8,664,000 were revalued to £10,570,000 in April 2025. The Directors consider that this valuation represents the fair value of the property and their assessment was based on a review carried out by an appropriately qualified external valuer, Colliers International Property Consultants Limited.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

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

Registered office addresses (all UK unless otherwise indicated):

The above subsidiaries are included in the consolidated financial statements.

The company has guaranteed the liabilities of PDS Logistics Limited in order that they qualify for the exemption from audit under Section 479A of the Companies Act 2006 in respect of the year ending 31 August 2025.

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 7 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Liabilities are secured over the assets to which they relate.

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

Deferred tax assets relating to retirement benefit obligations are expected to reverse within 12 months.

Deferred tax liabilities relating to accelerated capital allowances are expected to reverse within 10 years.

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.

The company’s subsidiary, PDS Logistics Limited, has taken advantage of the exemption available under Section 479A of the Companies Act 2006 in respect of the requirement for audit. As a condition of the exemption, the company has guaranteed the year-end liabilities of the subsidiary until they are settled in full.

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:

During the year Stax Trade Centres Limited made payments of £1,349,006 to W E Merris Pension Scheme in respect of property rentals (2024: £1,035,700). M.P. Smith & Co. Limited also made payments during the year of £130,199 in respect of property rentals (2024: £120,000).The scheme is a small self-administered pension fund of which E J Brady, D G Hibbert, N J Wright and S J Wright are members.

During the year the company purchased goods to the value of £9,091,896 (2024: £5,926,927) from Munro Importers Limited, a company in which E J Brady & S J Wright have a beneficial interest. At the balance sheet date an amount of £829,879 (2024: £869,799) was due to the company.

The company has taken advantage of the exemption available whereby it has not disclosed transactions with other companies that are wholly owned within the group.

On 13 November 2025, Folie Douce Limited and SM Wright Family Ventures Limited each acquired 50% of the shareholding of Stax Trade Centres Limited.

In the opinion of the directors, there is no overall controlling party of the company.