Llanmoor Development Co Limited

Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 January 2026

DIRECTORS:

B F Grey

S C Grey

T D Grey

M D Grey

C S Grey

SECRETARY:

T D Grey

REGISTERED OFFICE:

63 Talbot Road

Talbot Green

CF72 8AE

REGISTERED NUMBER:

00870710 (England and Wales)

SENIOR STATUTORY AUDITOR:

Nicholas Matthew Toye FCA

AUDITORS:

BPU Limited

Chartered Accountants

Statutory Auditor

Radnor House

Greenwood Close

Cardiff Gate Business Park

Cardiff

CF23 8AA

BANKERS:

Barclays Bank Plc

Dunraven Place

Bridgend

CF31 1JB

The Directors present their strategic report on Llanmoor Development Co Limited ("the Company") for the year ended 31st January 2026.

PRINCIPAL ACTIVITY

The principal activity of the Company remains house building and land development and there have been no significant changes to the Company's main activities during the year.

REVIEW OF BUSINESS

- Turnover decreased 5.7% to £27.6m (2025: £29.3m).

- Total sales were 101 units in the year end to 31st January 2026 (2025: 120).

- Gross Profit decreased by 14.6%.

- During the year completed the 5,000th dwelling since Company was formed.

As a consequence of developments at Hawtin Meadows & Cae Sant Barrwg coming to an end over the course of 2025, total legal completions to year end reduced to 101 units from the previous year's 120 units. These two developments had contributed 76 units in the previous financial year against 34 in year end 31st January 2026, and the first occupations at our new developments at Rossers Field, Govilon and Saint Sannans Field, Aberbargoed did not take place until July 2025.

The developments at Parc Tondu, and Saint Sannans Field traded very well over the year, Saint Sannans only fully coming on stream from the Autumn. The introduction of new elevational treatments to our homes at Saint Sannans has gone down exceptionally well with home buyers, attracted by the new styles.

Our Rossers Field development delivered 14 homes over the year, 7 of which were the Affordable Homes sold to Tai Hedyn RSL. As the development has progressed, we have seen increased visitor rates, and it is pleasing to report that sales volumes have improved since the early part of 2026.

All new homes constructed by the Company now incorporate air source heat pump heating and hot water installations as standard to comply with current and forthcoming regulatory changes to energy efficiency. The new technology has proven to be extremely popular with our buyers at a time when energy costs have continued to rise.

Housing market conditions proved to be challenging because of a number of external factor, however it was encouraging to see rates of sale improve over the fourth quarter, helped by the reductions in bank rate in August and December 2025. Confidence and affordability were further helped by mortgage providers appetite improving significantly by way reduced mortgage rates, increased income multiples and reduced levels of stress testing. Visitor and reservation rates during January 2026 saw a significant improvement as potential buyers who had deferred a move/purchase appeared to be very much back in the market to move during 2026.

The number of social homes completed as a percentage of total sales reduced to 14.85% from the previous years 21.7% as the Company built and sold a larger proportion of open market homes.

The Help to Buy Wales scheme remained an important tool to support those looking to purchase a brand-new home up to £300,000, who may only have a 5% deposit available. Over 34% of total open market sales of homes priced below the £300,000 threshold used the scheme. Whilst this is reduced from the previous year, the scheme continues to be important in enabling buyers to purchase a home. The Home Builders Federation are calling on Welsh Government to not only extend the scheme further, but to also review the threshold to a figure of £350,000.

The Company continue to focus on providing every client with the highest possible level of customer service throughout the purchase process and following legal completion by way of our Customer Care team.

STRATEGIC AND CONSENTED LAND

The Company continues to focus on securing and promoting strategic land as the most efficient and cost-effective way of securing future development opportunities.

At the year end the Company currently owned, or controlled, 879 plots with detailed planning permission; 1,502 plots with outline planning permission; 850 plots allocated in the Bridgend LDP and a further 1,500 plots being promoted through the various other regional Local Development Plan Reviews (LDP).

Following adoption of the Bridgend LDP in March 2024, the early part of 2025 was spent assembling a planning submission for the site at West Bridgend, and in August 2025 a hybrid application was submitted for a residential development of up to 850 homes, public open space, primary school, including a detailed application for the first phase of 377 homes. Progress on the application has been excellent with it likely that permission will be secured in the summer of 2026, enabling a site commencement early in 2027.

During the year we submitted an application in Bettws, Bridgend for a small development of 23 affordable dwellings, and are in discussions with a local Registered Social Landlord (RSL) concerning their construction and sale.

At Llangyfelach, Swansea good progress continues to be made towards a site commencement in the late spring/summer of 2026 with all statutory agreements in place and DCWW working on delivering drainage connection points well ahead of the first occupations in spring 2027.

A number of the LDP Reviews in South-East Wales have suffered interruptions due to resourcing issues and Welsh Government interventions, this has resulted in progress on delivering strategic sites in Rhondda Cynon Taff CBC and Caerphilly CBC being delayed.

Rhondda Cynon Taff Council carried out their LDP Preferred Strategy consultation in Spring 2024, but due to delays referenced above the Deposit Draft Consultation Period did not take place when originally anticipated and is now scheduled for Autumn 2026. We are hopeful of securing draft allocations for a number of the sites controlled in this Borough which will progress through to the Public Inquiry to be held in 2027.

A similar situation applies to the sites located in Caerphilly County BC who published their Preferred Strategy in the first part of 2025 and are now proposing the Deposit Draft Consultation in the latter part of 2026. Again, we are hopeful that several of the strategic sites we control will be included in the Deposit Draft Plan, including a recently secured site in Aberbargoed for up to 180 plots.

Detailed planning consent was secured on the second phase of our development at Saint Sannans for 40 plots shortly after the 2026 Year End, and infrastructure construction will commencement in the summer of 2026.

Post Year End a very constructive meeting was held with Merthyr Tydfil CBC who are now able to press ahead with their LDP Review, and we will be preparing candidate site submissions for our land interests in the Borough in anticipation of a call for sites in the latter part of 2026.

The Company also continues to seek to secure consented sites through tender and private treaty, as well as to continue to acquire and promote strategic land interests through Options and Conditional Contracts.

KEY PERFORMANCE INDICATORS (KPI'S)

The Company's KPI's and other financial indicators during the year were;

2026

2025

Total house sales completions

101

120

Percentage of completions sold as Affordable

14.9%

21.7%

Turnover

£27.6m

£29.3m

Operating Profit

£2.1m

£2.2m

Private forward sales*

£7.4m

£7.3m

*Private forward sales are those reserved or legally exchanged at 31st January 2026.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors continue to consider the principal risks for the Company relate to market conditions in the UK and Worldwide economy.

Other risks, as identified earlier in this report are in relation to the continued planning and regulatory delays, and the effect this has on site commencement and the delivery of housing units as a result.

The state of the World economies due to the Iran/Iraq/USA conflict is of course a significant concern to all, and this is creating uncertainty as to cost of living and general business confidence.

The extension of the Help to Buy Wales scheme to September 2026 will provide support for buyers who are unable to save a suitable deposit within the timescale that they need or wish to buy a home. We remain optimistic that the scheme will be extended further and will continue to support those who have limited deposit funding.

Whilst current world affairs affect everyone, there continues to be a substantial shortage of new homes across Wales and the UK. Governments all acknowledge the need to bring forward developments sooner rather than later and whilst any measures to improve the situation take some time, housing delivery is very high on every political party agenda. People will always need somewhere to live, whether as their first home, a larger home for their growing needs or deciding to downsize to something more manageable. Llanmoor continues to promote the homes we build across all relevant media, and our long establishment (60 Years in 2026) certainly provide potential buyers with a great deal of confidence that the Company continues to build and deliver great homes across South Wales.

Currently the Company remains debt free with a considerable cash reserve in place to be used to secure further land opportunities, and to promote and secure further strategic land once allocations and/or consent has been obtained, including funding the considerable infrastructure these large sites require.

FUTURE DEVELOPMENTS

Whilst we continue to prepare to commence development at our Pentref Rhostir, Llangyfelach, Swansea development, we envisage a start during Spring/Summer 2026 with a view to first occupations by Spring 2027. The first phase of 472 will provide a huge variety of home designs and price levels to cater for every need in the locality and the whole Swansea area.

THIS REPORT WAS APPROVED BY THE BOARD:

S C Grey - Director

13 May 2026

The directors present their report with the financial statements of the company for the year ended 31 January 2026.

DIVIDENDS

The total distribution of ordinary dividends for the year ended 31 January 2026 of £0 (2025: £0) was paid.

The total distribution of preference dividends for the year ended 31 January 2026 of £112,572 (2025: £112,581) was also paid.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 February 2025 to the date of this report.

B F Grey

S C Grey

T D Grey

M D Grey

Other changes in directors holding office are as follows:

C S Grey - appointed 30 May 2025

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.

THIS REPORT WAS APPROVED BY THE BOARD:

S C Grey - Director

13 May 2026

Opinion

We have audited the financial statements of Llanmoor Development Co Limited (the 'company') for the year ended 31 January 2026 which comprise the Profit & loss account, 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 January 2026 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 six, 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:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risks of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that 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.

The laws and regulations that we determined were most significant to the company were the Companies Act, UK Corporate Tax Laws, Employment Law, Health & Safety Regulations, Building Regulations and Planning & Environmental Law.

We obtained an understanding of how the company is complying with those laws and regulations by making enquiries to the management, and corroborated these enquiries through our review of legal and professional spend for the year.

We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, and did not identify any key audit matters relating to irregularities, including fraud. We assessed the effectiveness of internal controls that management has in place to prevent and detect fraud, including testing of manual journals and evaluating the assumptions and judgements made by management in its significant accounting estimates.

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.

Nicholas Matthew Toye FCA (Senior Statutory Auditor)

for and on behalf of BPU Limited

Chartered Accountants

Statutory Auditor

14 May 2026

TURNOVER

27,609,456

29,291,256

Cost of sales

(22,956,811

)

(23,842,581

)

GROSS PROFIT

4,652,645

5,448,675

Administrative expenses

(3,666,891

)

(3,543,766

)

985,754

1,904,909

Other operating income

2

32,074

27,718

OPERATING PROFIT

4

1,017,828

1,932,627

Profit/loss on sale of investments

5

-

(1,006,348

)

1,017,828

926,279

Income from participating interests

-

56,239

Interest receivable & similar income

1,229,277

1,381,473

2,247,105

2,363,991

Interest payable and similar expenses

6

(115,448

)

(116,269

)

PROFIT BEFORE TAXATION

2,131,657

2,247,722

Tax on profit

7

(596,358

)

(860,573

)

PROFIT FOR THE FINANCIAL YEAR

1,535,299

1,387,149

PROFIT FOR THE YEAR

1,535,299

1,387,149

OTHER COMPREHENSIVE INCOME

Freehold reversion revaluation

223,971

90,750

Freehold property revaluation

-

(75,000

)

Income tax relating to components of other comprehensive income

(41,000

)

13,000

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

182,971

28,750

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,718,270

1,415,899

FIXED ASSETS

Tangible assets

8

4,010,205

4,044,269

CURRENT ASSETS

Stocks and work in progress

9

22,345,370

24,455,984

Debtors

10

2,091,438

2,148,561

Cash at bank

36,845,163

35,364,064

61,281,971

61,968,609

CREDITORS

Amounts falling due within one year

11

4,476,485

6,984,897

NET CURRENT ASSETS

56,805,486

54,983,712

TOTAL ASSETS LESS CURRENT LIABILITIES

60,815,691

59,027,981

CREDITORS

Amounts falling due after more than one year

12

(1,593,394

)

(1,500,954

)

PROVISIONS FOR LIABILITIES

15

(511,000

)

(534,000

)

NET ASSETS

58,711,297

56,993,027

CAPITAL AND RESERVES

Called up share capital

16

5,000

5,000

Non distributable reserves

17

1,696,671

1,628,161

Retained earnings

17

57,009,626

55,359,866

SHAREHOLDERS' FUNDS

58,711,297

56,993,027

The financial statements were approved by the Board of Directors and authorised for issue on 13 May 2026 and were signed on its behalf by:

S C Grey - Director

Called up

Non

share

Retained

distributable

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 February 2024

5,000

53,829,165

1,742,963

55,577,128

Changes in equity

Total comprehensive income

-

1,530,701

(114,802

)

1,415,899

Balance at 31 January 2025

5,000

55,359,866

1,628,161

56,993,027

Changes in equity

Total comprehensive income

-

1,649,760

68,510

1,718,270

Balance at 31 January 2026

5,000

57,009,626

1,696,671

58,711,297

Cash flows from operating activities

Cash generated from operations

1

1,100,719

4,450,261

Interest paid

(2,876

)

(2,968

)

Interest element of hire purchase or finance lease rental payments paid

-

(720

)

Finance costs paid

-

(337,716

)

Tax paid

(795,784

)

(582,033

)

Net cash from operating activities

302,059

3,526,824

Cash flows from investing activities

Purchase of tangible fixed assets

(399,339

)

(270,523

)

Sale of tangible fixed assets

349,102

297,450

Sale of fixed asset investments

-

1,015,352

Interest received

1,229,277

1,381,473

Dividends received

-

56,239

Net cash from investing activities

1,179,040

2,479,991

Cash flows from financing activities

Capital repayments in year

-

(14,465

)

Net cash from financing activities

-

(14,465

)

Increase in cash and cash equivalents

1,481,099

5,992,350

Cash and cash equivalents at beginning of year

2

35,364,064

29,371,714

Cash and cash equivalents at end of year

2

36,845,163

35,364,064

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

2026

2025

£

£

Profit before taxation

2,131,657

2,247,722

Depreciation charges

330,652

366,505

Profit on disposal of fixed assets

(22,380

)

(21,161

)

Finance costs

115,448

116,269

Finance income

(1,229,277

)

(1,437,712

)

1,326,100

1,271,623

Decrease in stocks and work in progress

2,110,614

3,035,357

Decrease/(increase) in trade and other debtors

36,991

(90,059

)

(Decrease)/increase in trade and other creditors

(2,372,986

)

233,340

Cash generated from operations

1,100,719

4,450,261

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 January 2026

31/1/26

1/2/25

£

£

Cash and cash equivalents

36,845,163

35,364,064

Year ended 31 January 2025

31/1/25

1/2/24

£

£

Cash and cash equivalents

35,364,064

29,371,714

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/2/25

Cash flow

At 31/1/26

£

£

£

Net cash

Cash at bank

35,364,064

1,481,099

36,845,163

35,364,064

1,481,099

36,845,163

Debt

Debts falling due after 1 year

(1,500,954

)

(92,440

)

(1,593,394

)

(1,500,954

)

(92,440

)

(1,593,394

)

Total

33,863,110

1,388,659

35,251,769

1.	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 as modified by the revaluation of certain assets.

Turnover

Turnover represents sales of residential housing and land sales recognised on legal completion excluding value added tax.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

not provided

Plant and machinery

-

20% reducing balance

Fixtures and fittings

-

20% reducing balance

Motor vehicles

-

20% reducing balance

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible carried at revalued amounts are recorded at the fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

An increase in the carrying amount of an asset as a result of a revaluation, is recognised and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised. A decrease in the carrying amount of an asset as a result of a revaluation, is recognised to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains in equity in respect of that asset, the excess shall be recognised in profit or loss.

Stocks and work in progress

Land options are carried as stock at their cost of acquisition until planning permission is obtained. Where the directors deem it prudent to do so, planning costs are also recorded as stock.

Land stock with planning includes undeveloped land and land under development and is initially recorded at cost. Further spending on land with planning which enhances the value of the land is also recorded at cost. Once development has commenced, the cost of land is written off as plots are sold using a calculated average cost per plot.

Work in progress is measured at the lower of cost and net realisable value. Cost includes all costs of purchase, costs of conversion and other costs, including site overheads, professional charges and other attributable overheads, incurred in bringing the work in progress to its present state of development.

Full provision is made for losses on all work in progress in the year in which the loss is first foreseen.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit & loss account, 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.

Pension costs

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.

2.	OTHER OPERATING INCOME

2026

2025

£

£

Insurance commission

3,500

3,150

Rental income

10,192

3,203

Sundry income

382

3,848

Ground rent receivable

18,000

17,517

32,074

27,718

3.	EMPLOYEES AND DIRECTORS

2026

2025

£

£

Wages and salaries

3,417,475

3,490,875

Social security costs

461,405

403,350

Pensions

299,164

304,586

4,178,044

4,198,811

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

2026

2025

Production

47

52

Office

27

17

Sales & marketing

4

5

78

73

2026

2025

£

£

Directors' remuneration

892,295

893,703

Information regarding the highest paid director is as follows:

2026

2025

£

£

Emoluments etc

289,304

286,361

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2026

2025

£

£

Hire of plant & machinery

291,421

326,691

Depreciation - owned assets

330,652

362,647

Depreciation - assets on hire purchase contracts or finance leases

-

3,858

Profit on disposal of fixed assets

(22,380

)

(21,161

)

Audit fees

23,000

19,900

Auditor fees - non audit work

8,705

2,488

Rent

80,684

72,898