REGISTERED NUMBER: 09045535 (England and Wales)

FARRALLS TRANSPORT (PROPERTIES) LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

14

Consolidated Statement of Changes in Equity

16

Company Statement of Changes in Equity

17

Consolidated Cash Flow Statement

18

Notes to the Consolidated Cash Flow Statement

19

Notes to the Consolidated Financial Statements

21

DIRECTORS:

M C Farrall

Mrs E A Farrall

M Farrall

Mrs K A Farrall

REGISTERED OFFICE:

Unit 2

Second Avenue

Deeside Industrial Park

Deeside

Clwyd

CH5 2NX

REGISTERED NUMBER:

09045535 (England and Wales)

AUDITORS:

Murray Smith LLP

Chartered Accountants

Statutory Auditors

Darland House

44 Winnington Hill

Northwich

Cheshire

CW8 1AU

The directors present their strategic report of the company and the group for the year ended 31 December 2025.

Principal Activity

The principal activity of the Group is the provision of contract distribution, general haulage, pallet network and warehousing services, carried out through its wholly owned trading subsidiary, Edwin C Farrall (Transport) Limited, together with the holding and management of commercial investment property, carried out by the parent company, Farralls Transport (Properties) Limited. The Group's customer base comprises primarily industrial, retail and manufacturing businesses serving UK and international markets.

Business review

The directors aim to provide a balanced and comprehensive review of the Group's performance during the year and its financial position at the year end. The directors consider turnover, gross margin, operating profit and gearing to be the Group's key financial performance indicators.

Group turnover for the year was £15,805,138 (2024: £16,082,725), a reduction of 1.7%, reflecting softer volumes across the general haulage and warehousing market. Gross profit was broadly maintained at £2,386,959 (2024: £2,421,663), with gross margin remaining stable at 15.1% (2024: 15.1%). Operating profit reduced to £495,092 (2024: £520,880), a decrease of 5.0%, reflecting the softer top line and continued cost pressure within the trading subsidiary.

Profit before taxation and property revaluation

Profit before taxation increased significantly to £1,357,039 (2024: £106,368), supported by a £1,286,258 gain on the revaluation of the Group's investment property. This increase reflects the continued strength of the Group's property portfolio and further reinforces the asset backing behind the balance sheet. Trading profit before taxation, ahead of this revaluation effect, was £70,781 (2024: £106,368); while lower than the prior year, the Group remained profitable at a trading level in a year in which turnover and margins across the wider sector came under sustained pressure.

Balance sheet strength and debt reduction

Group net assets increased to £6,820,138 (2024: £4,780,045), reflecting both retained trading profit and the increase in property values referred to above. Total Group borrowings reduced to £7,706,958 (2024: £8,240,836), a decrease of 6.5%, continuing the Group's progress in strengthening its balance sheet and reducing gearing, which remains a key priority for the directors.

2025 remained a challenging year for the logistics and distribution sector generally, with continuing volume volatility, elevated input costs and margin pressure. Against this backdrop, the Group's priority has rightly been stabilising the trading business and continuing to strengthen its financial position, both of which were achieved during the year.

Principal risks and uncertainties

The Group is subject to the same risks and uncertainties that affect the wider transport, storage and property sectors generally. The directors highlight the following as the principal risks currently facing the Group:

- Leverage and refinancing risk - the Group made further progress in reducing borrowings during the year and continues to prioritise deleveraging as part of its financial strategy. Group borrowings include hire purchase contracts secured against vehicle assets over several-year terms, together with bank loans secured against property and shorter-term overdraft and invoice finance facilities. The directors continue to manage the Group's overall borrowing structure and monitor movements in interest rates that could affect the cost of these facilities.

- Property valuation risk - a future reduction in commercial property values could adversely affect the Group's asset values and net assets.

- Working capital and liquidity - the Group continues to rely on invoice finance and overdraft facilities to fund day-to-day operations.

- Trading margin risk - within the trading subsidiary, the cost of operating and renewing the Group's own vehicle fleet remains the most significant influence on margin, particularly the price of new and replacement vehicles and the volatility of fuel costs. Fuel prices remain sensitive to wider geopolitical instability; the Group's gradual shift towards electric vehicles is beginning to reduce this volatility for some contracts.

- Sector and macroeconomic risk - fuel price volatility, driver and warehouse labour availability, regulatory change and general economic conditions continue to affect the wider transport and storage industry.

The directors remain confident that the Group is well-positioned to manage these risks, supported by an experienced board, an established management team, and a clear focus on reducing consolidated debt on a sustainable basis.

Financial Risk Management and Objectives

The Group uses various financial instruments to raise finance for its operations, including bank loans, overdrafts, hire purchase contracts and invoice finance. These instruments expose the Group to market risk, cash flow interest rate risk, credit risk and liquidity risk, which the directors review and manage on a regular basis.

Credit risk is managed by setting client credit limits based on payment history, credit referencing and market intelligence, reviewed regularly. Liquidity risk is managed by maintaining access to overdraft, invoice finance and loan facilities to meet foreseeable working capital needs, with short-term flexibility provided principally through invoice finance and overdraft facilities.

Having reviewed the Group's trading performance, cash flow forecasts and financing arrangements, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and continue to adopt the going concern basis of accounting in preparing these financial statements.

Financial key performance indicators

The directors use a number of key performance indicators to assess and drive Group performance, including turnover, gross margin, operating profit, net assets, gearing and average headcount. A summary of the Group's principal financial KPIs is set out below:

Key metric

FY2025

FY2024

Turnover

£15,805,138

£16,082,725

Gross profit margin

15.1%

15.1%

Operating profit

£495,092

£520,880

Profit before taxation

£1,357,039

£106,368

Net assets

£6,820,138

£4,780,045

Total Group borrowings

£7,706,958

£8,240,836

Gearing (borrowing / shareholders' funds)

113%

172%

Average number of employees

117

122

Future developments

The Group's principal strategic priority for 2026 remains the reduction of consolidated debt and gearing on a sustainable basis, with progress tracked internally. Rather than pursuing further growth in scale, the Group's focus is on increasing profitability within each operating department. The directors will also continue to review site and operating cost sustainability across the Group's locations, ensuring the cost base remains appropriate to the level of activity. The fleet and hire purchase renewal programme will continue to be reviewed to ensure new commitments are matched to serviceable cash flow, alongside the Group's ongoing transition to Net Zero through appropriately phased investment in electric vehicles and supporting charging infrastructure.

The directors remain committed to the Group's core values as a family business and to a balanced, resilient business model that supports long-term financial growth for everyone connected to the Group.

ON BEHALF OF THE BOARD:

Mrs K A Farrall - Director

18 August 2026

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

DIVIDENDS

Dividends of £98,000 (2024: £182,060) were paid during the year. The directors do not recommend a final dividend.

DIRECTORS

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

M C Farrall

Mrs E A Farrall

M Farrall

Mrs K A Farrall

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 the group 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;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information.

AUDITORS

The auditors, Murray Smith LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mrs K A Farrall - Director

18 August 2026

Opinion

We have audited the financial statements of Farralls Transport (Properties) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 December 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 the 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 directors are responsible for the other information. The other information comprises the information in the Group 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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 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.

Responsibilities of directors

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

In preparing the financial statements, the directors are responsible for assessing the group's and 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 group or the parent 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:

The audit procedures designed to identify irregularities included:

- enquiry of management and those charged with governance around actual and potential litigation and claims;

- enquiry of company staff with responsibilities for tax and compliance matters to identify any instances of

non compliance with laws and regulations;

- reviewing financial statement disclosures and testing to supporting documentation to assess compliance with

applicable laws and regulations;

- auditing the risk of management override of controls, including through testing journal entries and other

adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the

normal course of business.

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, intentional misrepresentations or through collusion.

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

Use of our report

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

Steven Williams (Senior Statutory Auditor)

for and on behalf of Murray Smith LLP

Chartered Accountants

Statutory Auditors

Darland House

44 Winnington Hill

Northwich

Cheshire

CW8 1AU

20 August 2026

TURNOVER

4

15,805,138

16,082,725

Cost of sales

13,418,179

13,661,062

GROSS PROFIT

2,386,959

2,421,663

Administrative expenses

2,785,517

2,712,190

(398,558

)

(290,527

)

Other operating income

5

893,650

811,407

OPERATING PROFIT

7

495,092

520,880

Income from other participating interests

1,682

2,169

496,774

523,049

Gain/loss on revaluation of investment property

1,286,258

-

1,783,032

523,049

Interest payable and similar expenses

9

425,993

416,681

PROFIT BEFORE TAXATION

1,357,039

106,368

Tax on profit

10

375,323

56,059

PROFIT FOR THE FINANCIAL YEAR

981,716

50,309

Profit attributable to:

Owners of the parent

981,716

50,309

PROFIT FOR THE YEAR

981,716

50,309

OTHER COMPREHENSIVE INCOME

Revaluation of land and buildings

2,067,002

-

Income tax relating to other comprehensive income

(377,345

)

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

1,689,657

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,671,373

Prior year adjustment

(497,508

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(447,199

)

Total comprehensive income attributable to:

Owners of the parent

2,671,373

(447,199

)

FIXED ASSETS

Tangible assets

13

10,966,870

8,419,003

Investments

14

Interest in joint venture

137,493

135,811

Investment property

15

5,876,303

5,529,269

16,980,666

14,084,083

CURRENT ASSETS

Stocks

16

51,953

35,437

Debtors

17

2,650,529

2,611,707

Cash in hand

14,745

12,825

2,717,227

2,659,969

CREDITORS

Amounts falling due within one year

18

6,629,313

5,803,186

NET CURRENT LIABILITIES

(3,912,086

)

(3,143,217

)

TOTAL ASSETS LESS CURRENT LIABILITIES

13,068,580

10,940,866

CREDITORS

Amounts falling due after more than one year

19

(4,026,902

)

(4,691,949

)

PROVISIONS FOR LIABILITIES

23

(2,221,540

)

(1,468,872

)

NET ASSETS

6,820,138

4,780,045

CAPITAL AND RESERVES

Called up share capital

24

15,555

17,777

Revaluation reserve

25

3,170,775

1,481,118

Capital redemption reserve

25

4,445

2,223

Profit and loss account

25

3,629,363

3,278,927

SHAREHOLDERS' FUNDS

6,820,138

4,780,045

The financial statements were approved by the Board of Directors and authorised for issue on 18 August 2026 and were signed on its behalf by:

M Farrall - Director

Mrs K A Farrall - Director

FIXED ASSETS

Tangible assets

13

-

-

Investments

14

20,000

20,000

Investment property

15

10,034,650

7,903,268

10,054,650

7,923,268

CURRENT ASSETS

Debtors

17

116,698

308,875

Cash at bank

6,445

661

123,143

309,536

CREDITORS

Amounts falling due within one year

18

1,894,827

1,567,051

NET CURRENT LIABILITIES

(1,771,684

)

(1,257,515

)

TOTAL ASSETS LESS CURRENT LIABILITIES

8,282,966

6,665,753

CREDITORS

Amounts falling due after more than one year

19

(2,440,132

)

(2,559,203

)

PROVISIONS FOR LIABILITIES

23

(1,269,084

)

(736,195

)

NET ASSETS

4,573,750

3,370,355

CAPITAL AND RESERVES

Called up share capital

24

15,555

17,777

Revaluation reserve

25

2,891,920

2,891,920

Capital redemption reserve

25

4,445

2,223

Profit and loss account

25

1,661,830

458,435

SHAREHOLDERS' FUNDS

4,573,750

3,370,355

Company's profit for the financial year

1,834,675

267,654

The financial statements were approved by the Board of Directors and authorised for issue on 18 August 2026 and were signed on its behalf by:

M Farrall - Director

Mrs K A Farrall - Director

Called up

Profit

Capital

share

and loss

Revaluation

redemption

Total

capital

account

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2024

17,777

3,908,186

1,481,118

2,223

5,409,304

Prior year adjustment

-

(497,508

)

-

-

(497,508

)

As restated

17,777

3,410,678

1,481,118

2,223

4,911,796

Changes in equity

Dividends

-

(182,060

)

-

-

(182,060

)

Total comprehensive income

-

50,309

-

-

50,309

Balance at 31 December 2024

17,777

3,278,927

1,481,118

2,223

4,780,045

Changes in equity

Purchase of own shares

-

(533,280

)

-

2,222

(531,058

)

Shares redeemed during year

(2,222

)

-

-

-

(2,222

)

Dividends

-

(98,000

)

-

-

(98,000

)

Total comprehensive income

-

981,716

1,689,657

-

2,671,373

Balance at 31 December 2025

15,555

3,629,363

3,170,775

4,445

6,820,138

Called up

Profit

Capital

share

and loss

Revaluation

redemption

Total

capital

account

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2024

17,777

870,349

2,891,920

2,223

3,782,269

Prior year adjustment

-

(497,508

)

-

-

(497,508

)

As restated

17,777

372,841

2,891,920

2,223

3,284,761

Changes in equity

Dividends

-

(182,060

)

-

-

(182,060

)

Total comprehensive income

-

267,654

-

-

267,654

Balance at 31 December 2024

17,777

458,435

2,891,920

2,223

3,370,355

Changes in equity

Purchase of own shares

-

(533,280

)

-

2,222

(531,058

)

Shares redeemed during year

(2,222

)

-

-

-

(2,222

)

Dividends

-

(98,000

)

-

-

(98,000

)

Total comprehensive income

-

1,834,675

-

-

1,834,675

Balance at 31 December 2025

15,555

1,661,830

2,891,920

4,445

4,573,750

Cash flows from operating activities

Cash generated from operations

1

2,747,955

1,318,402

Interest paid

(230,699

)

(242,098

)

Interest element of hire purchase payments paid

(195,294

)

(174,583

)

Tax paid

(856

)

(14,291

)

Taxation refund

-

76,630

Net cash from operating activities

2,321,106

964,060

Cash flows from investing activities

Purchase of tangible fixed assets

(559,603

)

(221,167

)

Sale of tangible fixed assets

150,700

74,083

Net cash from investing activities

(408,903

)

(147,084

)

Cash flows from financing activities

New loans in year

552,000

-

Loan repayments in year

(597,139

)

(272,178

)

Capital repayments in year

(1,227,853

)

(1,124,230

)

Share buyback

(533,280

)

-

(Decrease)/increase in invoice financing

174,158

163,525

Equity dividends paid

(98,000

)

(182,060

)

Net cash from financing activities

(1,730,114

)

(1,414,943

)

Increase/(decrease) in cash and cash equivalents

182,089

(597,967

)

Cash and cash equivalents at beginning of year

2

(519,618

)

78,349

Cash and cash equivalents at end of year

2

(337,529

)

(519,618

)