Introduction

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

The strategic report has been prepared in terms of section 414c of the Companies Act 2006.

This report and review covers the year to 31 December 2025. Comparative figures and percentages refer to the prior year to 31 December 2024.

Turnover for the reporting period was £1,093,672 (2024: £1,940,865), a decrease of 43.7% compared to the previous financial year. Fee income, the main component of the company's turnover, was down by 30.7% in the current year compared to the prior year. Rechargeable expenses incurred on behalf of clients dropped by 74.4% reflecting a highly cautious market where clients were reluctant to commit beyond their core programmes.

The company recorded a loss before tax of £169,018 in 2025 (2024: £99,176). The cash balance marginally increased to a net position of £24,868 (2024: £24,564).

The directors believe that a particular strength of the company is the experience, intellectual capital and team spirit of its management and executive team and this was maintained in the year. However, during 2025, in common with many UK businesses, the company faced significant headwinds due to a difficult and uncertain economic climate. In particular, two new clients of significant size ran into financial problems which in turn impacted on the company’s results for the year. Nevertheless, the company considered it important to take a long term view and maintain the team and their breadth of expertise. The company is unusual as an independent public relations consultancy in bringing together under one roof specialists in corporate, financial, business to business, consumer and public affairs. This provides an ability to meet clients’ varying needs in an increasingly complex and sophisticated communication environment and the directors believe that there remains a strong demand for the skills the company offers.

The percentage of fee income derived from retained clients, one of the company's Key Performance Indicators, dipped to 71% (2024: 74%) of total fee income. This percentage nevertheless remains significantly above the industry average and is a reflection of the strength of the company's client relationships and the long term nature of much of the work that the company undertakes.

The Board is cautiously optimistic about prospects for this year. Business activity levels improved over the course of Q1 2026, although the overall macro economic situation continues to be challenging and clients are reluctant to make long term commitments.

Due to the nature of the company’s business and the assets and liabilities contained within the company’s balance sheet, the only financial risks the directors consider relevant to the company are credit risk and liquidity risk. These risks are mitigated by the nature of the debtor balances owed, the contractual terms that apply, the spread and quality of clients owing the debtor balances and monitoring procedures that are in place. Where there is a significant balance owing to the company, the recoverability of the balance is assessed and impairment provisions made as appropriate.

The key operational risk to the business is a reduction in the market and a loss of clients. The contractual terms agreed with clients mitigate risk by defining the billing cycle and contracts are subject to a notice period that provides visibility of future revenue flows. The diversity of the client base and the rolling nature of the billing cycle mitigates financial risk and the business model of the Group enables it to scale its operations in line with anticipated business levels.

The company judges performance against a number of key performance indicators covering profit margin, achievement against new business volume targets, the mix of retained clients compared to project work, debtor and creditor days and review of rolling forecasts against budget.

Going concern

Changing economic and market conditions can of course also impact the business, manifesting in risks over the rate of new business wins. The Directors believe that, given the ability of the company to flex costs, the existence of appropriate contract cancellation periods and the potential to improve liquidity through loan financing options should the need arise, it is appropriate to continue to prepare the financial statements on a going concern basis.

Future developments

Quarter 1 of 2026 has seen a modest trend of improvement with the company achieving profitability. The directors expect the level of activity in the current year to continue in this pattern.

Details of significant events since the balance sheet date are contained in note 22 to the financial statements.

Section 172 of the Companies Act 2006 requires directors to take into account the interests of stakeholders and other matters in their decision making. The directors have regard to the interests of the company's employees, customers, suppliers and investors, the impact of the company's activities on the community, the environment and the company's reputation for good business conduct when making decisions. In this context, acting in good faith and fairly, the directors consider what is most likely to promote the success of the company for all its members in the long term. This report explains how the Board engages with stakeholders.

The Board places great value on the expertise and professionalism found within the company and the directors collectively have strong relationships with the employees, facilitated by a structured HR process and regular team meetings where matters can be raised. The company aims to work responsibly with all stakeholders, including customers and suppliers and aims to foster strong relationships with all stakeholders. The company has continued to maintain long term relationships with key suppliers.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The principal activity of the company continued to be the provision of a complete range of public relations and communication consultancy services.

The results for the year are set out on page 8.

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

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

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

The company adheres to the CBI Prompt Payers Code whereby the policy is to settle the terms of payments with suppliers when agreeing terms of each transaction, ensure the suppliers are made aware of the terms of payment and abide by the terms of payment.

In accordance with section 485 of the Companies Act 2006, a resolution proposing that F M C B be reappointed as auditor of the company will be put at a General Meeting.

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

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 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;

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

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.

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 company’s auditor 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 company’s auditor is aware of that information.

We have audited the financial statements of The Communication Group plc (the 'company') for the year ended 31 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 company's affairs as at 31 December 2025 and of its 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 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 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 company and its 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, 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.

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 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.

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.

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.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered information including the following:

• the nature of the industry and sector, control environment and business performance;

• results of our enquiries of management regarding identification and assessment of the risks of irregularities;

• the internal controls and company procedures established to detect and mitigate risks of fraud or non-compliance with laws and regulations;

• the legal and regulatory framework that the company operates in which includes in this context the Companies Act and tax legislation;

• consideration of factors that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate.

As a result of considering the above we use audit procedures to respond to any potential risks. Procedures used include the following:

• reviewing the financial statement disclosures and testing supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

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

• enquiring of management to obtain an understanding of any provisions and testing the appropriateness of journal entries and other adjustments;

• evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above procedures the engagement team remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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.

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.

The Communication Group plc is a public company limited by shares incorporated in England and Wales. The registered office is 123 Victoria Street, London, SW1E 6RA.

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.

This 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:

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

• Section 33 ‘Related Party Disclosures’.

The financial statements of the company are consolidated in the financial statements of The Communication Group Holdings plc. These consolidated financial statements are available from its registered office, 123 Victoria Street, London, SW1E 6RA.

As noted in the strategic report, the directors monitor the liquidity and cash flow risk of the company carefully. The company's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to continue to operate within its currently available resources. After making reasonable enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for at least 12 months from the date of approval of the financial statements. The directors have considered contingency plans should actual performance be below the projected levels and are satisfied that there are actions that they can take which will ensure the business remains a going concern for at least 12 months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.true

Turnover represents fees earned during the year and expenses recharged to clients (excluding VAT). Turnover from fee and admin income is recognised on a straight line basis over the term of the contract. Turnover from items that are recharged to the clients are recognised as the related costs are incurred. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

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 credited or charged to profit or loss.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

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

Shares received in exchange for services are recorded as investments using the fair value of those shares at the date on which the services were performed.

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered a material impairment loss. If a material impairment loss arises then it is recognised in the profit and loss account.

Work in progress is valued at cost where it represents external expenses incurred on behalf of a client that are unbilled at the year end. Chargeable time which remains to be billed is valued at standard rates that include direct costs, an appropriate overhead and accrued profit margin. Provision is made for irrecoverable costs where appropriate.

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

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

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

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

Basic financial assets, 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.

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

Equity instruments issued by the company 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 company.

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

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

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 leases 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.

In the application of the company’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 average monthly number of persons (including directors) employed by the 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 2 (2024 - 2).

Enterprise Management Incentive Scheme:

At the start of the year, Enterprise Management Incentive options in the parent company, The Communication Group Holdings plc, were held by the directors and officers of this subsidiary company. No option has been exercised during the reporting year.

The actual charge 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:

Shares in subsidiaries

The company holds 100% of the ordinary shares in European Communication Limited and Entente

International Communication Limited. Both subsidiaries are incorporated in the United Kingdom and are

registered in England and Wales. Both subsidiaries are currently dormant.

Other investments

The investment comprises 62,000 shares in Tribeka Limited (registered office: 38 Springfield Road, London,

NW8 0QN), acquired in exchange for services. This is 0.13% of the issued ordinary share capital of Tribeka

Limited, incorporated in the United Kingdom and registered in England and Wales.

Tribeka Limited develops and supplies software, principally to supply electronic media and entertainment to

consumers.

Details of the company's subsidiaries at 31 December 2025 are as follows:

In 2020, the company received a £50,000 bank loan from Lloyds Bank plc under the Bounce Back Loan Scheme. The loan is repayable over 72 months at a fixed interest rate of 2.5% per annum. Under the scheme, there was no repayment of loan or interest for the first 12 months. The company has the option to repay all, or part, of the loan early subject to a minimum repayment of £2,000.

In 2024, the company received an interest-free loan of £50,000 from one of its directors. A further £87,000 was received from this director in 2025.

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

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The redeemable ordinary shares are redeemable by the company at any time.

All shares are held by The Communication Group Holdings plc and rank pari passu in all other respects.

There are no subsequent events post year end that need to be disclosed or adjusted for in the accounts.

The company's immediate and ultimate parent company is The Communication Group Holdings plc, which is incorporated in the United Kingdom and registered in England and Wales (registered office: 123 Victoria Street, London, SW1E 6RA) and which is the parent company of both the smallest and largest groups of which the company is a member. M Sutherland Smith, a director of the company, controls The Communication Group Holdings plc as a result of controlling 98% of the issued share capital of the company.