The directors present the strategic report for the year ended 29 December 2025.

The Company is a manufacturer of bespoke and generic point of sale and dispense products primarily for the UK drinks industry.

The policy of risk acceptance and risk management is addressed through an annual Board review process with approval and ongoing review. Compliance with regulation, legal and ethical standards is a high priority and the directors take an important oversight role in this regard.

The main risks to the business have been identified as a significant reliance on sales volume from a few key customers, as changing customer service requirements from the current customer base and global competitors from low-cost environments. The business continues to manage these risks by diversifying not only products on offer but also the customer base whilst maintaining high quality standards to our existing customers, evolving our customer service solutions and efficiently managing our cost base and procurement process to ensure we remain competitive. We have continued to invest in the business through staff recruitment, training , IT and refining our quality control systems and processes as part of the strategy of managing these risks.

As part of the Group's supply chain strategy to establish centres of manufacturing excellence across its operations, the Company decided to close its production facility in Sevenoaks and transfer the manufacture of MF beer coolers to the Celli Italia manufacturing hub in San Giovanni Marignano. This strategic initiative is expected to deliver lower unit costs through increased economies of scale, more streamlined production processes, enhanced product quality, and improved capabilities in product design, modernisation, development and industrialisation.

As part of the same strategic initiative, the Company also decided to relocate the production of plastic components from the ADS2 Biggleswade facility to the Celli UK Group manufacturing site in Thirsk. This consolidation will create an end-to-end manufacturing operation, integrating all stages of the supply chain, including centralised procurement, component manufacturing, assembly, warehousing, and logistics. The initiative is expected to improve operational efficiency and reduce unit production costs, helping to mitigate the impact of increasing raw material and energy costs.

Currency fluctuations and changes in commodity prices are also risks that we continue to actively manage.

The Company's results for the year show a modest loss from ordinary activities before taxation and exceptional items of GBP 0.8m. This represents an improvement compared with prior years and, in particular, reflects a significant recovery from the 2024 reported results, which were adversely affected by substantial accounting adjustments.

Cost of sales for 2025 was also impacted by the Company's programme to update, modernise, and optimise its product range, resulting in inventory obsolescence write-offs of approximately GBP 1.0m.

Excluding these exceptional factors, the underlying business performed in line with management's expectations and the approved budget for the year, delivering a satisfactory operational performance in a difficult business environment.

Despite the continuing challenges facing the hospitality sector, the Company increased revenue from the prior year to GBP 14.6m in 2025.

Operational efficiency initiatives contributed to an improvement in gross margin returns, while continued cost discipline and process improvements reduced administrative and other indirect operating costs from GBP 3.6m in 2024 to GBP 2.8m in 2025.

The combination of revenue growth and cost reductions resulted in a satisfactory financial performance. Although the Company reported an overall loss for the year, the result was significantly impacted by non-cash inventory obsolescence charges of approximately GBP 1.0m, arising from the modernisation and optimisation of the product range.

In the context of sustained inflationary pressures on raw materials and labour, together with increasing competition from manufacturers operating in lower-cost jurisdictions, the Directors consider the Company's underlying performance during the year to be encouraging and reflective of the effectiveness of the strategic initiatives implemented.

The industry remains highly competitive, with leading brand owners and major breweries continuing to invest in product innovation, manufacturing processes, materials, and production technologies. Customer requirements continue to evolve, particularly in response to increasing environmental and sustainability expectations. The Company is addressing these trends through the development of remanufacturing solutions, the introduction of more energy-efficient technologies, and the increased use of recyclable materials across its product portfolio.

During the year, businesses across the manufacturing and hospitality sectors continued to face significant inflationary pressures arising from higher utility, labour, and raw material costs. These factors resulted in a notable increase in the Company's cost of goods sold.

Demand for the Company's products remained resilient throughout the year despite the challenging economic environment. However, higher operating costs continued to place pressure on customers across the retail and hospitality sectors, influencing investment decisions and purchasing patterns.

The Company continues to maintain a strong pipeline of development and implementation projects, encompassing both enhancements to existing product ranges and the introduction of new products. These initiatives are intended to strengthen the Company's competitive position while meeting the evolving requirements of both existing and prospective customers.

On behalf of the board

The directors present their annual report and financial statements for the year ended 29 December 2025.

The principal activity of the company continued to that of a manufacturer of bespoke and generic point of sale

and dispense products primarily for the UK drinks industry.

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

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:

There have been no significant events affecting the company since the balance sheet date.

In 2023, the Celli Group initiated a supply chain transformation programme aimed at consolidating manufacturing operations and establishing centres of excellence for key production activities across the Group.

As part of this programme, the Company approved the transfer of its remanufacturing, injection moulding, printing, and research and development activities from its Wetherby and Biggleswade facilities to its manufacturing site in Thirsk.

This strategic consolidation supports the development of an integrated manufacturing facility capable of managing the entire production process, from product design and component manufacture through to final assembly. The new operating model is expected to improve operational efficiency by reducing production lead times and manufacturing costs while delivering economies of scale, enhanced technical expertise, procurement synergies, lower logistics and warehousing costs, more effective inventory management, continuous process improvement, and a more efficient utilisation of capital.

During the year, the Company established a dedicated remanufacturing centre at the Thirsk facility, equipped with advanced testing equipment and supported by specialist engineering teams. The centre will provide remanufacturing services across a broad range of product categories, strengthening the Group's technical capabilities, supporting its sustainability objectives, and enhancing product quality and operational performance.

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.

In assessing the appropriateness of the going concern basis of accounting, the Directors have considered the continued impact of global geopolitical and economic uncertainty, including the resulting inflationary pressures on raw materials, energy and other operating costs. The Directors have reviewed the Company's forecast for financial performance, including expected demand for its existing product portfolio, together with the resources available to the business.

The Directors have also considered the Company's available financial facilities and the continued support of its parent undertaking, Celli S.p.A., in the context of the wider Celli Group's commitment to its UK operations. Accordingly, the financial statements have been prepared on a going concern basis.

The manufacturing and hospitality sectors continue to experience challenging market conditions arising from increased material, utility and labour costs, together with constrained consumer spending. In addition, procurement groups representing major brand owners continue to exert pressure on suppliers to deliver product innovation while operating within increasingly competitive pricing and margin expectations.

The Directors have prepared detailed cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements. Given the continuing uncertainty affecting the hospitality sector, particular emphasis has been placed on the budgeting process, with key assumptions subject to detailed review and appropriate sensitivity analysis. The Directors are satisfied that the resulting forecasts are based on reasonable and supportable assumptions and reflect realistic expectations across the Company's principal revenue streams.

In preparing the going concern assessment, the Directors have considered both the base case forecast and severe but plausible downside scenarios. Should revenue levels under the downside scenario not be achieved, management has identified mitigating actions, including reductions in discretionary and fixed operating costs. Under these circumstances, the Company may also require additional financial support during the assessment period. Celli S.p.A. has confirmed its intention to provide such financial support as may be required to enable the Company to continue to meet its obligations as they fall due throughout the forecast period.

As with any company that is dependent on financial support from other group undertakings, there can be no absolute certainty that such support will remain available. Furthermore, the ability of Celli S.p.A. to provide this support is dependent upon the wider Celli Group achieving its forecast performance, which is itself subject to the prevailing conditions affecting the global hospitality and manufacturing sectors. Nevertheless, at the date of approval of these financial statements, the Directors have no reason to believe that the anticipated financial support will not be forthcoming.

Having considered the forecasts, the available mitigating actions, the financial support available from the parent undertaking, and the uncertainties described above, the Directors have concluded that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

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; 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.

Qualified opinion on financial statements

We have audited the financial statements of Celli Group (UK) Limited (the 'company') for the year ended 29 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, except for the effects of the matters described in the basis for qualified opinion paragraph, the financial statements:

• give a true and fair view of the state of the company's affairs as at 29 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 qualified opinion

Intercompany balances

We were unable to obtain sufficient appropriate audit evidence regarding the recoverability of intercompany debtors amounting to £4,577,543 (2024: £1,661,863). The entity has not provided adequate documentation to support the recoverability of these balances, and we were unable to perform alternative procedures to obtain sufficient audit evidence.

Consequently, we were unable to determine whether any adjustments might be necessary to these balances or to the related impairment provisions, if any.

Goodwill valuation

We were unable to obtain sufficient appropriate audit evidence regarding the carrying amount of goodwill amounting to £1,066,774 (2024: £1,531,850), due to limitations in the availability of supporting documentation and management’s impairment assessment.

Consequently, we were unable to determine whether any adjustments were necessary to the carrying amount of goodwill or related disclosures.

Other matters – prior year audit opinion

The financial statements of the company for the year ended 31 December 2024 were audited by us and our opinion on those financial statements was qualified in respect of the following:

Exceptional items

During the preparation of the 2024 financial statements, exceptional items relating to goods received not invoiced were identified, as described in note 4. Management corrected these errors through the profit and loss account rather than restating previous years financial statements. The corrections have a material impact on creditors.

Consequently as a result of the reported matters above, we were unable to determine whether the reported opening equity as at 1 January 2024 was materially correct. A change in the treatment of exceptional items in 2024 would impact the profit and loss account.

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 qualified opinion.

Material uncertainty related to going concern

The company incurred a net loss of £830,645 during the year ended 31 December 2025 (2024: £10,317,665 - excluding exceptional items £2,258,933). As of that date, the company’s had negative profit and loss reserves of £10,165,197 (2024: £9,334,552) which were offset against the capital contribution reserve to show positive reserves of £5,438,961 (2024: £6,269,606). As stated in note 1.2, these events or conditions, along with other matters as set forth in Note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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.

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.

As described in the basis for qualified opinion section of our report, we were unable to obtain sufficient appropriate audit evidence regarding the opening reserves for 2024, the recoverability of intercompany balances and the valuation of goodwill.

As a result, we have concluded that where the other information refers to opening balances, intercompany balances or goodwill valuation, it may also be materially misstated for the same reasons.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matters described in the basis for qualified opinion section of our report, 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 respect solely of the limitation on our work relating to opening balances, intercompany recoverability, and goodwill valuation, described above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

• we were unable to determine whether adequate accounting records had been maintained.

Except for the matters described in the basis for qualified opinion section of our report, 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:

• 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.

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.

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; 

• Reviewing minutes of meetings of those charged with governance;

• 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 company 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 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 profit and loss account has been prepared on the basis that all operations are continuing operations.

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

Celli Group (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Thirsk Industrial Park, York Road, Thirsk, YO7 3BX.

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 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 financial statements of the company are consolidated in the financial statements of Celli S.p.a. These consolidated financial statements are available from its registered office, Casino Albini, 605, 47842 San Giovanni in Marignano (RN), Italy.

In assessing the appropriateness of the going concern basis of accounting, the Directors have considered the continued impact of global geopolitical and economic uncertainty, including the resulting inflationary pressures on raw materials, energy and other operating costs. The Directors have reviewed the Company's forecast for financial performance, including expected demand for its existing product portfolio, together with the resources available to the business.true

The Directors have also considered the Company's available financial facilities and the continued support of its parent undertaking, Celli S.p.A., in the context of the wider Celli Group's commitment to its UK operations. Accordingly, the financial statements have been prepared on a going concern basis.

The manufacturing and hospitality sectors continue to experience challenging market conditions arising from increased material, utility and labour costs, together with constrained consumer spending. In addition, procurement groups representing major brand owners continue to exert pressure on suppliers to deliver product innovation while operating within increasingly competitive pricing and margin expectations.

The Directors have prepared detailed cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements. Given the continuing uncertainty affecting the hospitality sector, particular emphasis has been placed on the budgeting process, with key assumptions subject to detailed review and appropriate sensitivity analysis. The Directors are satisfied that the resulting forecasts are based on reasonable and supportable assumptions and reflect realistic expectations across the Company's principal revenue streams.

In preparing the going concern assessment, the Directors have considered both the base case forecast and severe but plausible downside scenarios. Should revenue levels under the downside scenario not be achieved, management has identified mitigating actions, including reductions in discretionary and fixed operating costs. Under these circumstances, the Company may also require additional financial support during the assessment period. Celli S.p.A. has confirmed its intention to provide such financial support as may be required to enable the Company to continue to meet its obligations as they fall due throughout the forecast period.

As with any company that is dependent on financial support from other group undertakings, there can be no absolute certainty that such support will remain available. Furthermore, the ability of Celli S.p.A. to provide this support is dependent upon the wider Celli Group achieving its forecast performance, which is itself subject to the prevailing conditions affecting the global hospitality and manufacturing sectors. Nevertheless, at the date of approval of these financial statements, the Directors have no reason to believe that the anticipated financial support will not be forthcoming.

Having considered the forecasts, the available mitigating actions, the financial support available from the parent undertaking, and the uncertainties described above, the Directors have concluded that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Goodwill represents the excess of the cost of acquisition of businesses 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.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

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.

At each reporting period end date, the company 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.

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.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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 company 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 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.

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 company 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 company after deducting all of its liabilities.

Basic financial liabilities, including creditors, 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.

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 company’s contractual obligations expire or are discharged or cancelled.

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 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 profit and loss account, 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 when the company has 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.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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.

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.

Exceptional items

Exceptional items are income or expenses that are material by size or nature and are non‑recurring, such that separate disclosure is necessary to explain the financial performance of the entity for the period.

Exceptional items are included within the relevant expense or income headings in the statement of profit or loss. Where appropriate, they are separately disclosed either on the face of the statement of profit or loss or in the notes to the financial statements to aid the understanding of users.

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 directors have considered and concluded there were no key sources of estimation uncertainty or judgements in applying the accounting policies.

Goods Received Not Invoiced

During 2024, the Company undertook a detailed review of historical creditor and debtor balances with the assistance of external advisers. As a result of this review, it was identified that certain provisions established in prior years were no longer required, as the related invoices had subsequently been recorded without being matched against those provisions. Consequently, the Company released a number of these surplus provisions, resulting in a net credit recognised as an exceptional item within the year.

Intercompany Debtors and Creditors Write-offs and Loan Write-offs

During 2024, the Celli Group, with the agreement of its shareholders, undertook a restructuring of intercompany balances across a number of Group entities. As part of this exercise, certain intercompany debtor and creditor balances involving the Company were reviewed and written off where considered appropriate. In addition, loans advanced in previous years were formally waived as part of the wider Group debt restructuring programme.

The Company's parent undertaking, Celli International, formally waived intercompany balances amounting to £15.5 million. In accordance with applicable accounting standards, this waiver has been treated as a capital contribution from the parent undertaking and recognised directly within reserves.

As the transaction represents a contribution from the Company's shareholder, it has not been recognised within the Statement of Comprehensive Income. This is a non-cash accounting adjustment and has no impact on the Company's trading activities, cash flows or underlying operational performance. The Directors are pleased to report that the Company's underlying performance during 2024 remained satisfactory and in line with expectations.

Legal and Professional Costs and Redundancy Costs

During 2024, the Company decided to cease manufacturing operations at its Sevenoaks MF production facility and transfer production activities to another Group manufacturing location. As a consequence, a redundancy programme was implemented affecting employees at the site, many of whom had more than 20 years of service with the Company. The process required specialist legal and professional support to ensure compliance with employment and regulatory requirements.

The closure of the Sevenoaks facility also involved matters relating to the termination of the property lease and the assessment of potential dilapidation obligations. Specialist dilapidation surveyors and other professional advisers were engaged to support the Company throughout this process. The associated costs have been recognised as exceptional items within the year.

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 1 (2024 - 1).

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:

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

The invoice factoring facility is secured against customer invoices under the terms of the factoring guarantee.

Amounts owed to group undertakings were written off in the prior year as described in the exceptional items note and capital contribution reserve.

The dilapidation provision relates to the closure of sites as part of the Group's supply chain strategy. Claims submitted by the landlords and their appointed agents are currently under review and subject to ongoing negotiation, with support from specialist dilapidation surveyors engaged by the Company.

The provision recognised in these financial statements represents the Directors' best estimate of the Company's expected liability at the date of approval of the accounts, based on the information available and professional advice received. Any future adjustments arising from the outcome of the negotiations will be recognised in the period in which they become known.

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.

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:

Amounts contracted for but not provided in the financial statements:

The company has taken advantage of the exemption under FRS102 not to disclose related party transactions as the company is included in the group consolidation.

The immediate parent company is Celli International Limited, a company incorporated in England and Wales.

The ultimate parent company, which is both the smallest and largest company into which the company results are consolidated into, was Celli S.p.a, a company incorporated in Italy.