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

The group operates a diversified portfolio of companies across multiple sectors, including video games development, hospitality, property, and business services.

During the year ended 30 September 2025, Pneuma Group delivered a strong performance, underpinned by continued growth and targeted investment across its sectors.

Group turnover was £53,959,773 (2024: £52,986,110), with gross profit of £18,663,025 (2024: £13,442,501) and operating profit of £3,537,974 (2024: £1,570,672).

The Games division performed particularly well. Double 11 delivered a strong year, with operating profit increasing significantly following the completion of multiple titles across various platforms. The business continues to build strong partnerships and remains well positioned despite wider industry challenges.

Growth within the division has supported expansion, with two additional studios established, bringing the total to four. Cast Iron, a new studio based in Wakefield, was launched during the year. While still at an early stage as at September 2025, the studio has entered FY26 with active projects and encouraging commercial progress.

In addition, groundwork was completed for a further studio, officially launched in FY26 as Last Arrow. Led by an experienced team, this strengthens the Group’s development capability and broadens its gaming portfolio.

The Property division underwent significant change during the year. A review of strategy and capability has resulted in a clearer focus on investment and internal support. A new property in Gateshead was acquired, providing studio space for Last Arrow and complementing the existing portfolio. The Dr Browns building also progressed through refurbishment in preparation for leasing.

The division continues to support other Group businesses through development and project delivery, enabling them to remain focused on core operations. A key upcoming project is the delivery of Pitch Sports Bar, scheduled to open in FY26.

Pneuma Business Services, encompassing cleaning, facilities management, and security, continues to support Double 11. This arrangement remains under review as part of a broader efficiency programme across the Group.

An additional development is Pneuma Technology Solutions, currently in its early stages and planned for launch in FY26. This business will provide IT support services to SMEs and represents a measured expansion into a complementary market.

The hospitality sector remains challenging, with ongoing volatility affecting performance across the Group’s hospitality businesses. Boho X continues to operate in support of Double 11; however, cost efficiency and operating structure are under active review.

The Group remains committed to the launch of Pitch Sports Bar in Middlesbrough. This venue will provide a high-quality space for employees and stakeholders, while also enhancing the local offering.

During the year, the Group acquired Parkers Services Limited, a luxury chauffeur business, extending its presence into a new market and strengthening its service offering to both internal and external clients.

Additionally, investment was made in 3D Intermotive, a technology business initially focused on the automotive sector with potential for wider industrial application.

The Group operates across multiple sectors, including hospitality, property, and facilities management. While this diversification provides opportunity, it also introduces exposure to a range of external risks. The principal risks fall into two categories: market and regulatory.

Market Risks

The Group is exposed to changes in the wider economic environment, which may affect demand across its businesses. Hospitality, luxury services, and property are particularly sensitive to shifts in consumer confidence and disposable income. Inflation, interest rates, and supply chain pressures may also impact costs.

These risks are managed through active cost control and diversification of income streams. New initiatives, such as IT services, are being introduced gradually, with a focus on proven demand and operational readiness.

Within the Games division, maintaining a diverse client base and developing new partnerships remain critical, given the pace of change in the sector.

The Group also operates in competitive markets, where new entrants and changing customer expectations may affect performance. This is addressed through a continued focus on service quality, strong relationships, and brand reputation.

Legislative and Regulatory Risks

Operating across several sectors exposes the Group to a broad regulatory framework, including health and safety, employment law, food safety, construction compliance, environmental standards, and data protection.

Non-compliance or regulatory changes could result in financial penalties, reputational damage, or operational disruption. Additional considerations within the Games sector include content regulation, tax compliance, and international labour laws.

The Group monitors these obligations closely, supported by external advisors where required. Policies and procedures are regularly reviewed, supported by staff training, to ensure continued compliance. Appropriate licences, accreditations, and insurance are maintained to meet industry standards.

The acquisition of the Gateshead property represents a key step in progressing the Group’s investment strategy and supports the growth of the Games division through dedicated studio space for Last Arrow.

The development of Pitch Sports Bar will be a major focus in FY26, with significant input from the Property division. The venue is intended to provide a high-quality offering within the local area and a central hub for stakeholders.

Support functions linked to Double 11 will be reviewed during FY26, with a focus on improving efficiency and simplifying operational structures.

Double 11 delivered a strong performance, with turnover increasing by 10% and operating profit doubling year-on-year. Despite this, the business continues to focus on efficiency and cost control to manage the volatility of the sector. It remains well positioned for continued growth.

Looking ahead, the Group will continue to review its portfolio, targeting efficiencies and reallocating resources where appropriate. Further investment in the Games division is planned, including potential international expansion.

New ventures, including hospitality and IT services, alongside the integration of Parkers Services, are expected to contribute to long-term value creation.

The Board uses a set of financial and operational KPIs to measure progress against strategic objectives:

Performance is expected to improve further in FY26 as recent investments begin to deliver operational efficiencies and revenue growth.

The Directors are mindful of their duties under Section 172 of the Companies Act 2006 and have acted in good faith to promote the success of the Company for the benefit of its members as a whole.

Decisions are taken with consideration of long-term impact, ensuring alignment with growth objectives and the sustainability of each business unit. Investment during the year—including property, systems, and people—has been made with a clear focus on long-term value.

The Group recognises that its people are central to its success. A supportive working environment, open communication, and ongoing development remain priorities, alongside a continued focus on health, safety, and wellbeing.

Strong relationships with customers and suppliers are also key. The Group aims to act fairly and consistently, maintaining high standards of reliability, transparency, and professionalism. Feedback is actively considered in decision-making.

The Directors are aware of the Group’s impact on the wider community and environment. Efforts continue to minimise environmental impact and support local economies through responsible sourcing and employment.

Maintaining a strong reputation is critical, particularly as the Group expands its external presence. High standards of conduct and accountability are expected across all areas of the business.

The Directors remain committed to fair treatment of shareholders, supported by transparent reporting, effective governance, and regular Board oversight.

The Board believes this approach supports sustainable growth and long-term value creation. The Group is well positioned for the future, with a strong asset base, diversified income streams, and a clear pipeline of opportunities.

On behalf of the board

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

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

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

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

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

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

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

See disclosures within the Strategic Report regarding future developments of the company.

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the group will be put at a General Meeting.

Within the group there is one large subsidiary company which the disclosure requirements apply, Double Eleven Limited. The other subsidiaries within the group are not required to report their own energy and carbon information due to their individual company size. Pneuma Group itself does not consume in excess of 44,000Kwh of energy. The group will look to voluntary adopt further disclosure in future reporting and are committed to behaving responsibly and at high standard.

During the year ended 30 September 2025, Double Eleven Limited has gathered data regarding scope one, two and three carbon emissions (as defined by the GHG protocol) from its UK operations as defined by the requirement of the Streamlined Energy and Carbon Reporting (SECR) legislation.

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

There were no energy efficiency actions reported in 2025.

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

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

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

• select suitable accounting policies and then apply them consistently;

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

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

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

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

We have audited the financial statements of Pneuma Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2025 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 30 September 2025 and of the group's profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive); anti-bribery and corruption; and compliance with the UK Companies Act.

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

Use of our report

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

The notes on pages 17 to 40 form part of these financial statements.

The notes on pages 17 to 40 form part of these financial statements.

The notes on pages 17 to 40 form part of these financial statements.

The notes on pages 17 to 40 form part of these financial statements.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the period was £1,731,921 (2024 - £840,644 profit).

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

The notes on pages 17 to 40 form part of these financial statements.

The notes on pages 17 to 40 form part of these financial statements.

The notes on pages 17 to 40 form part of these financial statements.

Pneuma Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Central Point, 202-206 Linthorpe Road, Middlesbrough, England, TS1 3QW.

The group consists of Pneuma Group Limited and all of its subsidiaries.

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

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

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

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

• Section 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

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

The parent company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.

The parent has applied the exemption contained in section 408 of the Companies Act 2006 and has not included its individual income statement.

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 group financial statements consist of the financial statements of the parent company Pneuma Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 30 September 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

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

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

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

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.

Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as the proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Full provision is made for losses on all contracts in the year in which they are first foreseen.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

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

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 income statement.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

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 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.

Other investments in gold and silver bullion where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss.

Other investments in classic cars where, due to the unique nature of the individual vehicles fair value cannot be measured reliably, are measured at cost less impairment.

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

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

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

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

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

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

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.

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 statement of financial position 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 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.

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 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.

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

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

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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

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

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

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

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.

No key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year have been identified.

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 4 (2024 - 2).

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

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

The impairment losses in respect of financial assets are recognised in other gains and losses in the income statement.

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

More information on impairment movements in the year is given in note 13.

Investment property comprises one residential property as well as commercial properties at Central Point, Middlesbrough and Point 5, The Point, Gateshead.

The fair value of the residential investment property has been arrived at on the basis of a valuation carried out at 30 September 2025 by Sanderson Weatherall Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

The fair value of the Central Point, Middlesbrough investment property has been arrived at on the basis of a valuation carried out at 30 September 2025 by Sanderson Weatherall Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

The investment property at Point 5, The Point, Gateshead was acquired in September 2025 and so the price paid is considered an accurate reflection of the fair value of the property.

Included within other investments are classic cars held as investments at a cost less impairment of £10,418,373 (2024 - £11,934,814), a watch held at cost less impairment of £25,650 (2024 - £25,650), a minority equity investment held at cost less impairment of £250,000 (2024 - £nil) and bullion held at fair value of £444,138 (2023 - £444,138).

The directors consider that the carrying value of the classic cars is an accurate reflection of the market value at 30 September 2025.

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

For the year ended 30 September 2025 the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:

Pneuma Property Group Limited (company registration number 14721335)

Pneuma Hospitality Group Limited (company registration number 14718517)

Pneuma Commercial Property Limited (company registration number 14729720)

Hit The Space Bar Limited (company registration number 14729979)

Pneuma Games Group Limited (company registration number 15297859)

Pneuma Commercial Security Limited (company registration number 14875883)

Pneuma Commercial Cleaning Limited (company registration number 14872548)

Pneuma Residential Properties Limited (company registration number 14845915)

Fresh Element Limited (company registration number 05099000)

Boho X Hospitality Limited (company registration number 15151250)

Double Eleven Developing Limited (company registration number 14382133)

Double Eleven Development Limited (company registration number 13533413)

Pneuma Automotive Group Limited (company registration number 14844802)

Parkers Services Limited (company registration number 12031794)

Obligations under finance leases are secured against the assets to which they relate.

Obligations under finance leases are secured against the assets to which they relate.

The Coutts bank loan is denominated in sterling with a variable interest rate of 3.75% per annum over the Coutts base rate, and the final instalment is due in October 2038. The carrying amount at the year end is £1,200,663 (2024 - £1,281,356)

The Lloyds bounce back bank loan is subject to interest at 2.50% per annum and is repayable over 10 years by monthly instalments, with the final instalment due in June 2030. The carrying amount at the year end is £30,204 (2024 - £38,682)

The Coutts bank loan is secured by a mortgage debenture including a fixed and floating charge over all the assets of Pneuma Commercial Property Limited and Double Eleven Limited including the book debts, as well as a first ranking legal charge over the freehold property known as Central Point, Linthorpe Road, Middlesbrough, TS1 3QW.

Finance lease payments represent rentals payable by the group for certain items of fixed assets. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

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

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

One of our shareholders granted share options to the company over 1,000 ordinary shares of £0.01 each in the capital of the company, for the company to buy and cancel shares.

On 17 September 2025, the company exercised its option over a further 100 option shares and on this date the company repurchased and subsequently cancelled 100 £0.01 ordinary shares.

On 17 September 2024, the company exercised its option over a further 100 option shares and on this date the company repurchased and subsequently cancelled 100 £0.01 ordinary shares.

The call option is a financial contract that gives the company the right, but not the obligation to buy these shares. The call option agreement was dated 28 June 2023 and the long stop date falls on the 10th anniversary of this date. Any share repurchase is accounted for once the company has issued an exercise notice to the shareholder.

This reserve records retained earnings and accumulated losses.

Called up share capital

This represents the nominal value of shares that have been issued.

Merger reserve

This reserve records the amount above the nominal value received for shares sold by way of a share-for-share exchange as part of a group re-organisation to make the company the parent of the group.

Capital redemption reserve

This reserve records the nominal value of shares repurchased by the company.

On 30 September 2025 the group acquired 100% percent of the issued capital of Parkers Services Limited.

The useful life of goodwill is 10 years.

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:

Amounts contracted for but not provided in the financial statements:

The ultimate controlling party is L Hutchinson.