REGISTERED NUMBER: 03232146 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2025

FOR

UNDERLEY FURNISHINGS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

16

DIRECTORS:

B M Smith Joiner

D R Mason

J Joiner

Ms G Smith

Ms E Parsons

REGISTERED OFFICE:

Great Western Business Park

Armstrong Way

Yate

Bristol

BS37 5NG

REGISTERED NUMBER:

03232146 (England and Wales)

AUDITORS:

Lawes & Co UK Limited (Statutory Auditors)

Boyce's Building

40-42 Regent Street

Clifton

Bristol

BS8 4HU

The directors present their strategic report for the year ended 31 August 2025.

PRINCIPAL ACTIVITY AND BUSINESS MODEL

The company is a business-to-business supplier of contract furniture to the social housing sector. Established in 1996, it supplies and installs furniture and associated household items for registered providers of social housing and their contractors, ranging from individual items to the complete furnishing of multi-room accommodation schemes.

The company operates a stock-led model, holding the substantial majority of its product range across its distribution network so that it can meet the short lead times its customers require. Goods are delivered and installed by the company's own two-person teams using its own vehicle fleet. Delivery is not a doorstep service: items are placed in the room of choice, unpacked, assembled and installed as required, and packaging is removed and recycled. The cost of delivery and installation is incorporated within the price of the goods rather than charged separately. For its contracted customers, which account for approximately 65-70% of turnover, the company effectively operates as an outsourced furnishing function.

The company operates from its registered office in Yate and distribution facilities serving the south west, the north of England and Scotland.

REVIEW OF BUSINESS

The financial year ended 31 August 2025 was one of consolidation following a sustained period of rapid expansion. In the years to 2024 the company had grown turnover by approximately 20% per annum, a rate of growth which placed considerable demand on its operational infrastructure. The year ended 31 August 2024 had additionally benefited from a number of large, non-recurring orders which the company was able to fulfil without a corresponding increase in its overhead base, producing an exceptional level of profitability for that year.

The year under review did not benefit from the same volume of high-value, non-recurring work, and the directors regarded it as an appropriate point at which to consolidate and reinforce the company's infrastructure in support of future growth. During the year the company relocated one of its distribution facilities from Doncaster to a larger site at Rotherham, doubling the floor area of that facility, and made significant further investment in its delivery fleet. These actions increased the company's overhead base and depreciation charge in the year but provide the additional capacity required for the next phase of the company's development.

Turnover for the year was £12,569,537 (2024: £13,046,610), a reduction of 3.7% which reflected the absence of the non-recurring orders referred to above. Notwithstanding the reduction in turnover, gross profit increased to £5,227,466 (2024: £5,149,053) and the gross profit margin improved to 41.6% (2024: 39.5%). Operating profit was £657,159 (2024: £1,186,247) and profit before taxation was £635,972 (2024: £1,158,508), the reduction principally reflecting the planned increase in the company's overhead and depreciation base described above.

During the year one of the company's major customers temporarily reduced the level of work it placed with the company. In response to this short-term reduction in demand the company made a temporary reduction in its workforce. The customer subsequently reinstated this work with the company, and the directors consider the commercial relationship to remain strong.

The directors consider the company's financial position at the year end to be satisfactory. Net assets increased to £1,340,739 (2024: £1,279,321) after the payment of dividends of £422,392 during the year, and cash balances strengthened to £208,060 (2024: £71,879).

FINANCIAL KEY PERFORMANCE INDICATORS

The directors monitor a range of financial indicators in assessing the performance of the company. The principal indicators are set out below.

2025

2024

Turnover

£12,569,537

£13,046,610

Gross profit margin

41.6%

39.5%

Operating profit

£657,159

£1,186,247

Profit before taxation

£635,972

£1,158,508

Average number of employees

74

73

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider the principal risks and uncertainties facing the company to be as follows.

Customer concentration

The company derives a significant proportion of its turnover from a small number of key customers. A reduction in the level of work placed by, or the loss of, any such customer could have a material effect on the company's results. The directors seek to manage this risk through the quality and reliability of the company's service, by maintaining close working relationships with key customers, and by continuing to develop the company's broader customer base.

Sector and funding dependence

The company operates exclusively within the social housing sector, demand within which is influenced by central and local government policy and by the funding available to registered providers of social housing. Changes in policy or funding could affect the level of demand for the company's services. The directors monitor developments within the sector and maintain a flexible cost base in order to respond to changes in demand.

Supply chain and stock

The company's business model depends on maintaining a high level of product availability. Disruption to supply, price inflation, or the holding of obsolete or slow-moving stock could affect the company's results. The directors manage this risk through supplier relationships, stock planning and regular review of stock for obsolescence.

Competition

The company operates in a competitive market. The directors seek to differentiate the company through the breadth of its stock range, the speed of its service and its integrated delivery and installation offering.

Cost inflation

The company's results are affected by movements in employment, fuel, vehicle and property costs. The directors monitor the company's cost base and seek to recover cost increases through pricing where market conditions allow.

OUTLOOK

The work temporarily reduced by a major customer during the year has returned to the company, and the enlarged distribution facility at Rotherham provides additional capacity to support future growth. The directors are confident in the company's prospects and consider it to be well placed for the year ahead.

ON BEHALF OF THE BOARD:

B M Smith Joiner - Director

28 May 2026

The directors present their report with the financial statements of the company for the year ended 31 August 2025.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the provision of furnishing services.

DIVIDENDS

The total distribution of dividends for the year ended 31 August 2025 will be £ 422,392 .

DIRECTORS

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

B M Smith Joiner

D R Mason

J Joiner

Ms G Smith

Ms E Parsons

POLITICAL DONATIONS AND EXPENDITURE

Mears Foundation (1134941) - £17,500 (2024 - £5,000)

Various Other Charities - £814 (2024 - £166)

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Lawes & Co UK Limited (Statutory Auditors), will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

B M Smith Joiner - Director

28 May 2026

Opinion

We have audited the financial statements of Underley Furnishings Limited (the 'company') for the year ended 31 August 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 August 2025 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

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

-	the financial statements are not in agreement with the accounting records and returns; or

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

Based on our understanding of the Company and industry, we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We 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 posting inappropriate journal entries to achieve desired financial results and the manipulation of stock values and management bias in accounting estimates. Audit procedures performed by the engagement team included, but were not limited to:

- enquiries with management, including consideration of known or suspected instances of fraud and non-compliance with laws and regulations and examining supporting calculations where a provision has been made in respect of these;

- understanding and evaluating the design and implementation of management's controls designed to prevent and detect irregularities;

- challenging assumptions and judgements made by management in their significant accounting estimates, in particular, in relation to stock values and stock provisions;

- identifying and testing journal entries, in particular any journal entries posted with unusual account combinations and postings by unusual users.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

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

Paul Freeman BA FCA FCCA (Senior Statutory Auditor)

for and on behalf of Lawes & Co UK Limited (Statutory Auditors)

Boyce's Building

40-42 Regent Street

Clifton

Bristol

BS8 4HU

28 May 2026

TURNOVER

12,569,537

13,046,610

Cost of sales

7,342,071

7,897,557

GROSS PROFIT

5,227,466

5,149,053

Administrative expenses

4,570,307

3,962,806

OPERATING PROFIT

4

657,159

1,186,247

Interest receivable and similar income

8,038

-

665,197

1,186,247

Interest payable and similar expenses

5

29,225

27,739

PROFIT BEFORE TAXATION

635,972

1,158,508

Tax on profit

6

164,612

285,023

PROFIT FOR THE FINANCIAL YEAR

471,360

873,485

PROFIT FOR THE YEAR

471,360

873,485

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

471,360

873,485

FIXED ASSETS

Tangible assets

8

1,190,383

781,159

CURRENT ASSETS

Stocks

9

573,005

663,852

Debtors

10

2,222,105

2,862,407

Cash at bank

208,060

71,879

3,003,170

3,598,138

CREDITORS

Amounts falling due within one year

11

2,266,929

2,732,413

NET CURRENT ASSETS

736,241

865,725

TOTAL ASSETS LESS CURRENT LIABILITIES

1,926,624

1,646,884

CREDITORS

Amounts falling due after more than one year

12

(293,797

)

(180,467

)

PROVISIONS FOR LIABILITIES

15

(292,088

)

(187,096

)

NET ASSETS

1,340,739

1,279,321

CAPITAL AND RESERVES

Called up share capital

16

6,180

6,030

Share premium

32,749

20,449

Capital redemption reserve

24,270

24,270

Retained earnings

1,277,540

1,228,572

SHAREHOLDERS' FUNDS

1,340,739

1,279,321

The financial statements were approved by the Board of Directors and authorised for issue on 28 May 2026 and were signed on its behalf by:

B M Smith Joiner - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 September 2023

5,730

670,769

-

24,270

700,769

Changes in equity

Issue of share capital

300

-

20,449

-

20,749

Dividends

-

(315,682

)

-

-

(315,682

)

Total comprehensive income

-

873,485

-

-

873,485

Balance at 31 August 2024

6,030

1,228,572

20,449

24,270

1,279,321

Changes in equity

Issue of share capital

150

-

12,300

-

12,450

Dividends

-

(422,392

)

-

-

(422,392

)

Total comprehensive income

-

471,360

-

-

471,360

Balance at 31 August 2025

6,180

1,277,540

32,749

24,270

1,340,739

Cash flows from operating activities

Cash generated from operations

1

1,121,619

569,133

Interest paid

-

(10,998

)

Interest element of hire purchase payments paid

(29,225

)

(16,741

)

Tax paid

(199,492

)

(75,692

)

Net cash from operating activities

892,902

465,702

Cash flows from investing activities

Purchase of tangible fixed assets

(761,717

)

(120,113

)

Sale of tangible fixed assets

81,837

38,391

Interest received

8,038

-

Net cash from investing activities

(671,842

)

(81,722

)

Cash flows from financing activities

Capital repayments in year

337,363

(229,659

)

Share issue

150

300

Equity dividends paid

(422,392

)

(315,682

)

Net cash from financing activities

(84,879

)

(545,041

)

Increase/(decrease) in cash and cash equivalents

136,181

(161,061

)

Cash and cash equivalents at beginning of year

2

71,879

232,940

Cash and cash equivalents at end of year

2

208,060

71,879

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

31.8.25

31.8.24

£

£

Profit before taxation

635,972

1,158,508

Depreciation charges

262,060

150,977

Loss on disposal of fixed assets

8,595

1,130

Finance costs

29,225

27,739

Finance income

(8,038

)

-

927,814

1,338,354

Decrease/(increase) in stocks

90,847

(57,295

)

Decrease/(increase) in trade and other debtors

640,302

(601,983

)

Decrease in trade and other creditors

(537,344

)

(109,943

)

Cash generated from operations

1,121,619

569,133

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 August 2025

31.8.25

1.9.24

£

£

Cash and cash equivalents

208,060

71,879

Year ended 31 August 2024

31.8.24

1.9.23

£

£

Cash and cash equivalents

71,879

232,940

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.9.24

Cash flow

At 31.8.25

£

£

£

Net cash

Cash at bank

71,879

136,181

208,060

71,879

136,181

208,060

Debt

Finance leases

(344,077

)

(337,363

)

(681,440

)

Debts falling due within 1 year

(50,000

)

8,333

(41,667

)

Debts falling due after 1 year

(41,667

)

41,667

-

(435,744

)

(287,363

)

(723,107

)

Total

(363,865

)

(151,182

)

(515,047

)

1.	STATUTORY INFORMATION

Underley Furnishings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

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

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

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

Pension costs and other post-retirement benefits

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

3.	EMPLOYEES AND DIRECTORS

31.8.25

31.8.24

£

£

Wages and salaries

2,481,448

2,245,169

Social security costs

224,730

168,576

Other pension costs

40,287

33,002

2,746,465

2,446,747

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

31.8.25

31.8.24

74

73

31.8.25

31.8.24

£

£

Directors' remuneration

36,400

85,868

4.	OPERATING PROFIT

The operating profit is stated after charging:

31.8.25

31.8.24

£

£

Hire of plant and machinery

6,437

21,571

Depreciation - owned assets

94,673

46,058

Depreciation - assets on hire purchase contracts

167,388

104,919

Loss on disposal of fixed assets

8,595

1,130

Auditors' remuneration

10,000

10,000

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.8.25

31.8.24

£

£

Loan interest

-

10,998

Hire purchase interest

29,225

16,741

29,225

27,739

6.

TAXATION

Analysis of the tax charge

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

31.8.25

31.8.24

£

£

Current tax:

UK corporation tax

59,620

199,492

Deferred tax

104,992

85,531

Tax on profit

164,612

285,023

7.

DIVIDENDS

31.8.25

31.8.24

£

£

Ordinary A shares of £30 each

Interim

72,000

46,000

Ordinary C shares of £30 each

Interim

80,900

71,733

Ordinary D shares of £30 each

Interim

80,900

71,733

Ordinary F shares of £30 each

Interim

80,900

41,733

Ordinary G shares of £30 each

Interim

107,692

84,483

422,392

315,682

8.	TANGIBLE FIXED ASSETS

Fixtures

and

Motor

fittings

vehicles

Totals

£

£

£

COST

At 1 September 2024

229,146

1,043,556

1,272,702

Additions

34,568

727,149

761,717

Disposals

-

(285,033

)

(285,033

)

At 31 August 2025

263,714

1,485,672

1,749,386

DEPRECIATION

At 1 September 2024

41,935

449,608

491,543

Charge for year

33,470

228,591

262,061

Eliminated on disposal

-

(194,601

)

(194,601

)

At 31 August 2025

75,405

483,598

559,003

NET BOOK VALUE

At 31 August 2025

188,309

1,002,074

1,190,383

At 31 August 2024

187,211

593,948

781,159