The directors present the strategic report for the year ended 31 March 2026.
The year represented a period of continued progress for the Group despite challenging economic conditions and a highly competitive media market.
Gross billings increased to £543.9 million (2025: £534.8 million), whilst income increased by 11.3% to £43.6 million (2025: £39.2 million). Operating profit increased by 60.9% to £3.5 million (2025: £2.2 million) and profit before taxation increased to £5.5 million (2025: £4.6 million). These results reflect the continued strength of the Group's client relationships, the quality of its people and its ability to deliver value-led growth in a complex trading environment.
During the year, the Group made a significant investment in its future through the completion of a move to new office premises. This investment was made to support greater collaboration, innovation and employee engagement and reflects the Directors' long-term commitment to the business, its clients and its people.
Whilst revenue growth was below the Group's long-term aspirations, profitability improved significantly during the year. The Directors remain focused on maintaining a balance between investment for future growth and the delivery of sustainable returns.
The Group won a number of awards for both client work, and importantly for culture, including being named as one of the best companies to work for in both Campaign Magazine and the Sunday Times.
During the period, the Group experienced the loss of Entain, one of its largest client relationships. Whilst this represents a significant change to the revenue base of the business, management acted swiftly to mitigate the impact through disciplined cost management, investment in new business activity and the continued diversification of the client portfolio. The Directors believe that the Group's broad client base, strong market reputation and proven ability to win and retain clients position it well for future growth.
The Directors remain confident in the Group's prospects. The business enters the new financial year with a strong balance sheet, market-leading talent, an enhanced operating environment and a clear strategy focused on sustainable and profitable growth.
The management team at the7stars Group has identified the following factors as major potential risks normally associated with media agencies in dynamic and changing markets. Some, such as innovation, quality service, staffing, are specific risks that require specific, identified actions to mitigate their effects. Others, such as the impact of competition, are areas addressed through strategic planning and operational management processes.
Cost inflation and legislative change
The Group's operational costs are affected by underlying cost inflation and legislative and fiscal policy changes in relation to, for example wages, rates and rent.
Competition in media industry
The Group operates in a highly competitive market and its failure to compete effectively could have a material adverse effect on its results.
Attracting and retaining key employees
The failure to hire, retain and motivate executives and other key employees could have a significant impact on its operations.
Failure or unavailability of operational infrastructure
Failure to provide services to meet customer requirements for innovation and quality could have adverse effect on its results.
Sales and marketing: new and repeat business is being secured, new markets have been developed in line with the company's strategy, and key customer relationships are monitored on a regular basis.
High value service: the Group continues to invest in people and key partnership to offer the best possible service to the customers.
Health and Safety: the company continues to seek ways of ensuring that a safe and healthy working environment is progressively improved.
Environment: new methods of achieving greater environmental effectiveness are continually being examined.
Key financial performance indicators include the monitoring and management of profitability and monetary working capital.
SECTION 172(1) STATEMENT
Director duties
The Directors of the Group, as those of all UK companies, must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows:
A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:
The likely consequences of any decisions in the long term,
The interests of the company's employees
The need to foster the company's business relationships with suppliers, customers and others -The impact of the company's operations on the community and environment
The desirability of the company maintaining a reputation for high standards of business conduct, and
The need to act fairly as between shareholders of the company
As part of their induction, a Director is briefed on their duties so that they can fulfil their duties. As the Board of Directors, our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating within the high standards of business conduct.
As Directors we fulfil our duties as follows :
Risk management
We effectively identify, evaluate, manage and mitigate the risk we face.
The management team has identified some factors as major potential risks normally associated with media agencies in dynamic and changing markets. Some, such as innovation, quality service, staffing, are specific risks that require specific, identified actions to mitigate their effects. Others, such as the impact of competition, are areas addressed through strategic planning and operational management processes.
Our People
The Group is committed to being a responsible business. Our behaviour is aligned with the expectations of our people. People are at the heart of our services. We aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and well-being of our employees is one of our primary considerations in the way we do business.
Our business relationships with customers, suppliers and others
For our growth, we develop and maintain strong client relationships. We value all of our suppliers and have year on year contracts with our key suppliers. Managing these relationships is critical in ensuring the Group delivers on its strategy. Where these relationships are tested, steps are taken to ensure that they are addressed promptly and successfully.
Community and environment
Our plans take into account the impact of the company's operations on the community and environment and our wider social responsibilities. The Group's approach is to use its position of strength to create positive change for the people and communities with which it interacts.
Our Shareholders
The Board seeks to ensure that communications are clear and its actions are in accordance with the Group's strategic aims to promote the long term success of the Company. The Board is continually seeking ways in which to engage with shareholders and investors.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2026.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
The group’s principal foreign currency exposures arise from trading with overseas companies. Group policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Development of data-driven technology to evaluate campaign performance, automate workflows and create bespoke tools that help clients assess where and how to invest is a core part of our business. the7stars Group’s R&D focus is on building operational platforms and analytical models that address the limitations of existing third-party systems.
The company's policy is to consult and discuss with employees, and any relevant representatives, at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
The company has now implemented an employee share scheme, designed to further encourage employee participation in and alignment with the company's performance.
During the year the Group made donations to charities registered in the UK amounting to £463,747 (2025: £428,078).
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
In line with the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 our energy use and greenhouse gas (GHG) emissions are set out below.
The data relates to UK emissions for the 12-month period from 1 April 2025 to 31 March 2026.
We voluntarily include energy use and emissions data for Bountiful Cow Limited (a group member) which is not obliged under SECR.
We report our emissions with reference to the latest Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol). In accordance with the 2018 Regulations, the energy use and associated greenhouse gas emissions are for those within the UK only that come under the operational control boundary. Therefore, energy use and emissions are aligned with financial reporting for the UK subsidiaries and exclude the non-UK based subsidiaries that would not qualify under the 2018 Regulations in their own right.
The 2024 UK Government GHG Conversion Factors for Company Reporting published by the Department for Energy Security and Net Zero are used to convert energy use in our operations to emissions of CO2e. Carbon emission factors for purchased electricity calculated according to the ‘location-based grid average’ method. This reflects the average emission of the grid where the energy consumption occurs. Data sources include billing, invoices and internal systems. We purchase 100% renewable electricity for our site and have included an additional net emissions figure calculated using market-based factors to account for this in our report above. For natural gas consumption, this was apportioned through the floor area occupied by the7stars within the whole building.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per square meter floor area, the recommended ratio for the sector.
The following energy efficiency actions have taken place during the period:
- Implementation of controls around our air conditioning to educate employees to not go beyond the minimum and maximum parameters.
- We have limited the office space on a Friday to only use one of our floors, saving electricity on the other floors for that one day a week.
United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company, and of the profit or loss of the group for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent company, and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of the7stars Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2026 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent 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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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 or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £30,603 (2025: £78,098).
the7stars Group Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Acre, 90 Long Acre, London, WC2E 9RA.
The group consists of the7stars Group Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company the7stars Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2026.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group and parent company have adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Commissions on media
Commissions are recognised as income when the related media is aired. Where revenue has been earned before the end of the accounting period but it has not been billed, revenue is accrued into the financial statements.
Retainer income
Retainer income relates to fees for services performed during a contractual period. These are recognised straight line on a monthly basis over the contract period as they cannot be directly attributed to a specific cost.
Performance related fees
Performance-related fee revenue is recognised when the Company becomes entitled to consideration and the relevant performance conditions have been satisfied and can be measured reliably. Performance-related fees earned before the year end but received subsequently are accrued where appropriate. Revenue is measured at the fair value of the consideration receivable.
Principal vs Agent
Where the company acts as a principal (such as when buying and selling media), the turnover recorded is the gross amount billed to clients.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the 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 if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
R&D tax credits are recognised upon their cash receipt.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black- Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
i. Impairment of investments
The recoverable amount of investments is based on future cash flows for the individual investments. In determining whether any impairment is required, management makes a number of estimates in respect of future cash flows and future earnings growth. Following their assessment and review, the directors have determined no impairment is necessary.
ii. Revenue recognition
Retainer income relates to annual fees for media services incurred during a contractual period. These are recognised straight-line on a monthly basis as they cannot be directly attributed to a specific cost.
Performance related fees relate to fees with attached criteria to be recognised. Where it is possible to reliably estimate the amount, income is accrued in respect of performance related fees that relate to work done in the financial year. Where it is not possible to reliably estimate income is recognised upon notification from the customer that the work has been completed and the work can be invoiced.
iii. Dilapidations provision
The Group recognises a provision for dilapidations where it has a present legal obligation under the terms of a lease to restore leased premises to a specified condition, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount can be estimated reliably. The provision represents management’s best estimate of the expenditure required to settle the obligation at the reporting date.
Dilapidations provisions are measured based on the expected cost of restoring the relevant leased properties to the condition required under the lease. Where the effect of the time value of money is material, the provision is discounted to present value using a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the liability. The unwinding of any discount is recognised as a finance cost.
iv. Impairment of goodwill
The value of goodwill is based on future cash flows for the investments held by the parent company. In determining whether any impairment is required, management makes a number of estimates in respect of future cash flows and future earnings growth. Following their assessment and review, the directors have determined no impairment is necessary.
v. Media writebacks and unbilled media
The company’s media writeback policy involves judgements regarding the timing and amount of accrual writebacks. Based on an aging analysis, writebacks are recognised after a specified period, determined by the percentage of invoices received against outstanding balances.
Management may override the standard process if specific information becomes available that affects the expected settlement of certain balances. These judgements can significantly impact the recognition of writebacks in the income statement.
Management also make a judgement as to whether a payment is due back to the client in accordance with unbilled media clauses.
vi. VAT enquiry
The Group is currently subject to an HMRC enquiry resulting from a voluntary disclosure regarding certain historical VAT matters. Judgement has been applied in determining both the likelihood and quantum of the potential exposure.
The provision recognised of £400,000 reflects management’s best estimate of the potential exposure based on the information available at the reporting date and professional advice obtained. However, the ultimate exposure may differ as the enquiry progresses and is finally resolved. A reasonably possible range of outcomes could be higher or lower than the amount provided.
vii. Media accruals
Media accruals are an estimate of the cost that will be incurred for media purchased from a media owner. Supplier invoices will not always be received in line with the cost accrual and therefore there can be estimation uncertainty surrounding the value of the accrual.
viii. Principal vs Agent
The presentation in the Group's 2026 financial statements reflect revenue with a principal presentation. This presentation does not impact the gross profit position of the company.
If the agent presentation was adopted, it would show the following in the statement of Profit and Loss:
The turnover and profit before taxation are attributable to the one principal activity of the group.
The Group acts as principal on media sales, with net sales after media discount but inclusive of commission earned included in the financial statements as Turnover. Commission earned on media sales by the Group is represented as gross profit in the financial statements.
The Group's gross turnover for the year which is the billable amount before media discount was £543,821,092 (2025: £534,768,633).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 7 (2025 - 7)
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 March 2026 are as follows:
Registered office addresses (all UK unless otherwise indicated):
the7stars Holdings Limited, 8th Wonder Films Limited and Local Planet UK are exempt from audit by virtue of s479A of Companies Act 2006.
The Group is currently subject to an HMRC enquiry resulting from a voluntary disclosure regarding certain historical VAT matters. Based on information currently available and professional advice received, the directors have recognised a provision for the potential exposure of £400,000.
The final outcome of the enquiry remains uncertain and could differ from the amount provided as discussions with HMRC progress. The provision represents the directors’ best estimate of the potential exposure at the balance sheet date.
A provision has been recognised for dilapidation costs of £607,635 in respect of leased properties, representing the estimated costs required to meet the Company’s contractual obligations to reinstate premises at lease expiry. The provision is based on management’s best estimate of the expected future outflow and, where material, is discounted to present value.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above is expected to reverse within 12 months and relates to timing differences between the accounting and tax treatment of certain expenses. The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the year end the consolidated group pension liability was £138,323 (2025: £134,415).
The options outstanding at 31 March 2026 had an average exercise price of £0.59, and a remaining contractual life of up to 10 years.
The weighted average fair value of options granted in the year was determined using the Black-Scholes option pricing model. The Black-Scholes model is considered to apply the most appropriate valuation method due to the relatively short contractual lives of the options and the requirement to exercise within a short period after the employee becomes entitled to the shares (the “vesting date”).
The expected life used in the model has been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.
Non-vesting conditions and market conditions are taken into account when estimating the fair value of the option at grant date. Service conditions and non-market performance conditions are taken into account by adjusting the number of options expected to vest at each reporting date.
No share based payment reserve or expense has been created for these options. A first round of options were granted in June 2023. A second round of options were granted in June 2024. A third round of options were granted in June 2025. The fair value of the options at the grant dates for all rounds were immaterial individually and in aggregate and therefore no accounting transactions were recorded for their grant. The options are only exercisable on a sale event of the company, and therefore none are exercisable at the year end date.
The preference shares held in the7stars Group Holdings have been classed as equity, as they are non-redeemable, and do not carry the right to participate in dividend distributions. In addition, no side arrangements are present that would bring into question this classification of the preference shares as equity.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel other than directors is as follows.
During the year, amounts owed to the directors of £nil (2025: £1,968,222) were repaid and amount loaned to the directors of £1,745,000 (2025: £nil). At the year end, £1,745,000 (2025: £nil) was owed from the directors.
During the year, the7stars UK Limited purchased £4,501 (2025: £7,863) of services from Local Planet International Limited, a related party by virtue of the7stars UK's 4% shareholding in Local Planet International.
During the year, the7stars UK Limited had sales of £nil (2025: £3,863) to Local Planet International Limited and at the year end there was £nil (2025: £14,096) in amounts due from Local Planet International Limited to the7stars UK.
During the year, the7stars UK had sales of £9,035 (2025: £6,651) and purchases of £7,566 (2025: £7,296) to Local Planet Italia S.r.l. At the year end the7stars UK had £nil (2025: £7,688) in amounts due to Local Planet Italia S.r.l., a company under ownership of Local Planet International Limited. All transactions have been carried out at arms length.
During the year, the7stars Holdings received £nil (2025: £5,733) from the liquidation of Alpha Century Limited. the7stars Holdings Limited was a related party of Alpha Century Limited by virtue of their shareholding in the entity.
During the year, Bountiful Cow Limited purchased services of £nil (2025: £470) from Horizon Media, Inc, a member agency of Local Planet which sits within the same group.
During the year, Bountiful Cow Limited purchased services of £163 (2025: £78) from Local Planet UK Limited, a related party by virtue of the company being a member of the Group.