The director presents the strategic report for the year ended 31 December 2025.
Logical Holdings Limited is the parent company of two North East based consultancies: Scott Logic and Marra.
Established in 2005, Scott Logic is a UK software consultancy that collaborates with leading enterprises across industries such as financial services, public sector, energy, commodities and utilities and private equity. The company specialises in bespoke software solutions, user experience and service design, data and cloud engineering, and technology strategy. Scott Logic emphasises a pragmatic, high-quality solutions and is a Certified B Corporation, reflecting its commitment to social and environmental responsibility.
Marra, founded in 2022, is a technology consultancy focused on Microsoft’s Power Platform. It builds cross-functional teams to deliver accessible, cost effective and scalable digital solutions. Marra is dedicated to fostering a diverse and inclusive workforce, actively recruiting and reskilling individuals from various backgrounds to bridge the tech skills gap.
Continuing its commitment from previous years, Logical Holdings Group remains focused on exemplar Corporate Social Responsibility, through progressive people policies, a roadmap to Net Zero and an emphasis on sustainable software engineering aimed at reducing IT’s carbon footprint.
Technological innovation remains at the core of the Group’s purpose, with artificial intelligence continuing to reshape both the consultancy landscape and our clients’ expectations. During the year, the Group strengthened its position as a specialist technology partner by deepening its capabilities across software development, data-driven insights, and automation.
Across our two trading subsidiaries, we have focused on combining specialist expertise with emerging technologies to deliver measurable outcomes for our clients. Scott Logic continued to design and build bespoke digital platforms, enabling customers to scale, modernise, and transform how they engage with their own users. In parallel, Marra expanded its work with clients’ internal teams to unlock operational efficiencies, leveraging Microsoft Power BI, Power Apps, and low‑code solutions to streamline processes and enhance decision‑making.
AI has remained a central pillar of our strategy, not only as a tool for accelerating delivery but as a catalyst for reimagining how consultancy services are designed and consumed. The Group continues to invest in responsible AI adoption—strengthening our consultants’ capability to combine machine‑generated insights with human judgement, ensuring that our clients benefit from greater speed, accuracy, and innovation while maintaining the trusted relationships that underpin our work.
As technology and client needs evolve, the Group remains committed to continuous learning, cross‑team collaboration, and the development of new service models that harness the combined strengths of data, automation, and human expertise. This approach positions us to deliver resilient, future‑ready value to our clients and supports sustainable long‑term growth across the Group.
Business performance
Historically, the Group has benefited from a diversified client base and a strong reputation for high‑quality delivery across both financial services and public sector markets. However, during the period the wider trading environment softened across several of the Group’s core sectors. Market uncertainty within financial services contributed to delays and deferrals in discretionary technology expenditure, while heightened competition in the public sector placed downward pressure on pricing and increased the concentration of spend into fewer, larger contracts. In parallel, the rapid acceleration of artificial intelligence adoption saw many clients pause elements of traditional software development as budgets were redirected into exploratory AI‑led initiatives.
These external factors resulted in reduced demand across key markets and impacted the ability of the Group’s trading subsidiary to fully replace revenues lost through lower client spending. As a result, financial performance for the year was weaker than in prior periods; however, these conditions were reflective of broader sector trends rather than issues specific to the business.
Group Strategy and Response
In response to the prolonged market softness, the Directors undertook a comprehensive review of strategy, capability and cost efficiency across the Group. The review focused on aligning the Group’s operating model with areas of ongoing and emerging client demand, improving delivery efficiency, and strengthening commercial resilience.
Actions taken included:
Rebalancing workforce skills to ensure alignment with evolving client requirements, particularly in areas experiencing growth.
Targeted investment in priority technical capabilities to support future competitiveness.
A review of the cost base and delivery model to ensure scalability and flexibility as demand recovers.
These measures position the Group to benefit from an expected improvement in market activity and to respond effectively to structural changes within the technology sector.
Financial Performance
The Group generated revenues of £37.8m (2024: £39.0m), of which approximately 44% related to financial services clients, 30% to public sector clients and 26% to other commercial sectors. The year closed with an operating loss before exceptional items of £1m (2024: profit £0.2m). Despite the reduction in profitability, the Group maintains a strong, debt‑free balance sheet and a robust liquidity position, with a year‑end cash balance of £26.5m.
The parent company’s own results primarily consist of income from its investments and the management of Group treasury activities. The Company remains adequately capitalised and continues to provide a stable platform for the Group’s operations.
Key Performance Indicators (KPIs)
We use a set of KPIs to monitor and assess the Group’s performance, ensuring that our strategy is delivering value to shareholders and stakeholders alike. These KPIs include:
Revenue Growth: Measuring the year-over-year increase in revenue, reflecting our market share and product demand.
Margins: Assessing profitability at various levels, including gross profit margin and operating profit margin, to gauge operational efficiency.
Principal risks and uncertainties
In the course of executing our strategy, the Group faces various risks and uncertainties that could impact our financial performance, operations, and long-term growth objectives. While we have put measures in place to mitigate these risks, they remain inherent in the business environment in which we operate. The key risks and uncertainties include:
Economic and Market Volatility: Global economic fluctuations and inflationary pressures may impact demand for our services. Geopolitical instability, changes in trade policies, and macroeconomic trends also present risks to our revenue growth and cost structure.
Competitive Pressures: The market in which we operate is highly competitive, with both established players and new entrants continually innovating and evolving. There is a risk that we may not be able to maintain our market share, especially as new technologies, business models, or product innovations emerge.
Technology and Cybersecurity Threats: There is an inherent risk of technological obsolescence or disruption from new technologies. Additionally, cybersecurity threats, including data breaches or cyberattacks, could jeopardize our operational continuity, customer trust, and regulatory compliance.
Regulatory and Legal Risks: Changes in laws, regulations, or industry standards—particularly related to environmental compliance, data protection, labour laws, and taxation—could result in increased costs or operational limitations. There is also the risk of potential litigation or regulatory investigations that may impact our reputation and financial position.
Talent and Workforce Management: Our ability to attract, retain, and develop key talent remains crucial to achieving our strategic objectives. A shortage of skilled labour, high employee attrition, or challenges in workforce management could hinder our ability to deliver on growth initiatives and maintain operational efficiency.
Environmental and Sustainability Risks: As environmental regulations tighten and customer preferences shift toward sustainable practices, we may face risks associated with our environmental impact, including regulatory compliance costs and reputational risks.
Execution of Strategic Initiatives: The successful execution of our strategic initiatives, including restructuring efforts and technology investments carries inherent risks. Delays or cost overruns in these initiatives could affect our ability to achieve the projected returns and long-term growth objectives.
Liquidity and Funding Risks: While we have strong liquidity at present, there is a risk that future funding requirements may not be met as efficiently as expected.
Artificial Intelligence: The rapid evolution of AI also introduces risks including increased competition from both traditional consultancies and AI-native firms, potential skills shortages, and the need for ongoing investment in talent, tools, and governance frameworks. Regulatory and ethical considerations, particularly around data privacy, security, model transparency, and intellectual property may increase compliance costs and operational complexity. There is also a risk that failure to adopt or effectively integrate AI technologies could reduce our competitiveness over the medium to long term
To address these risks, the Board is actively engaged in managing these risks, and we maintain strong governance and compliance processes to ensure we are well-prepared to respond to both current and emerging challenges.
Conclusion
While trading conditions during the year were challenging, the actions taken by the Directors have strengthened the Group’s operational resilience and better aligned its capabilities with current and emerging market demand. The Board remains confident in the medium‑term outlook and believes the Group is well positioned to deliver improved performance as market conditions stabilise and client investment cycles normalise.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2025.
Review of Business Performance
The Group comprises two trading subsidiaries. One subsidiary prepares micro‑entity accounts and continued to trade steadily during the year. The second subsidiary operates in the technology and digital services sector and experienced a more challenging trading environment, consistent with wider market conditions.
Across the Group’s core financial services and public sector markets, client confidence and discretionary technology spending reduced during FY24 and the first half of FY25. Increased competitive pressure in public sector procurement and shifts in client budgets towards emerging AI‑related initiatives further contributed to softer demand. These external factors affected revenue levels and resulted in weaker financial performance compared with prior years.
In response, the Directors implemented measures to strengthen operational efficiency and align the Group’s capabilities with areas of continuing and future demand. Actions included rebalancing workforce skills, reviewing the cost base and delivery model, and making targeted investment in priority technical capabilities.
Despite the challenging operating environment, the Group remained profitable before exceptional items and continued to maintain a strong, debt‑free balance sheet with robust liquidity and cash resources at the year end.
The results for the year are set out on page 12.
During the financial period dividends of £1,288,000 were rewarded to shareholders.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The Group is committed to sustainability and responsible business practices. During the year, we took steps to reduce our environmental footprint, as highlighted in Scott Logic’s energy and carbon report. We also remained focused on creating a diverse, inclusive, and supportive workplace for our employees. Our continued commitment to ESG factors is an essential part of our strategy for long-term value creation.
Energy and Carbon Report
Through Scott Logic, the Group are committed to providing detailed energy and carbon reporting, and comprehensive details of our disclosures are included in note 26 to the accounts.
| Emissions Source | Baseline (2021) | 2024 | 2025 |
Scope 1 | Natural Gas | 13 | 0 |
|
Company and leased cars | 4 | 0 |
| |
Total Scope 1 | 17 | 0 |
| |
Scope 2 | Heating | 28 | 26 | 24 |
Electricity |
| 14 | 15 | |
Total Scope 2 (Market Based) | 28 | 41 | 39 | |
Total Scope 3 | 1,492 | 489 | 431 | |
Total (Market Based) | 1,519 | 530 | 470 | |
Total Energy Usage (kWh) | 288,042 | 226,110 | 214,219 | |
Normaliser | tCO2e per FTE | 3.8 | 1.3 | 1.1 |
Further disclosures of the methodology used to calculate our disclosures and the energy efficiency initiatives we have made are disclosed in the detailed note.
The Directors have assessed the Group’s ability to continue as a going concern and, having reviewed the financial position and forecasts for the upcoming year, are satisfied that the Group has sufficient resources to meet its obligations as they fall due. Therefore, the financial statements have been prepared on the basis that the Group is a going concern.
We have audited the financial statements of Logical Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 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, the company 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
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the group's and 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 director either intends to liquidate the group or parent company or to cease operations, or has no realistic alternative but to do so.
The risk of material misstatement due to error or fraud has been assessed in conjunction with how internal controls may mitigate any such risk. These controls are reviewed as part of the audit by performing systems walkthroughs to ensure they are operating effectively. Analytical review and substantive testing is also performed on all material balances and therefore any instances of non-compliance should be identified or considered as insignificant. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team;
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework, in which the company operates and how the company complies with that legal and regulatory framework
inquired with management and those charged with governance about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud
discussed with management and those charged with governance any non-compliance with laws and regulations and how fraud might occur including assessments of how and where the financial statements may be susceptible to fraud.
The risk of management override of controls was also considered an area of potential misstatement due to fraud. Audit procedures performed included testing of manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business.
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.
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 section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £416,452 (2024 - £533,448 profit).
Logical Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is located on the General Information page.
The group consists of Logical 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, modified to include certain financial instruments at fair value, and in accordance with applicable accounting standards. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Logical 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 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the director has a reasonable expectation that the group and parent company have adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover and profits on long term contracts for the supply of services are recognised as the right to consideration obtained through the performance of work under the contract. Any unbilled work at a period end is recognised as turnover and accrued income.
Turnover and profits from one-off engagements of short term duration are recognised on the completion of the relevant work. The costs incurred on unfinished work are included within work in progress at cost, less a provision for any loss anticipated on the contract.
Turnover from software support provided to customers is recognised over the term of the agreement.
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.
Investments in subsidiary undertakings are recognised at cost.
Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current or deferred taxation assets and liabilities are not discounted.
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.
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.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the company will comply with conditions attaching to them and the grants will be received using the performance/accrual model.
Grants in respect of revenue expenditure are credited to revenue in order to match the income against the expenditure to which the grant relates.
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating result.
Debtors and creditors receivable/payable within one year
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.
Provisions
Provisions are recognised when the company has an obligation at the balance sheet date as a result of a past event, it is probable that an outflow of economic benefits will be required in settlement and the amount can be reliably estimated.
Current asset investments
Investments in equities are shown at fair market value. The investments are valued by investment managers, having due regard to the latest dealings, professional valuation, asset values and other appropriate financial information.
The fair value movement credited to the profit and loss account for the year £878 (2024: £39,740)
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements. If, in the future, such estimates and assumptions, which are based on management's best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and judgements will be modified as appropriate in the year in which the circumstances change.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:
The estimated useful lives of tangible fixed assets
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.
Details of the company's subsidiaries at 31 December 2025 are as follows:
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
In the event of winding up, the first £20m is distributed to A Ordinary Shares only. In all other respects, the shares rank pari-passu.
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:
Initially through Scott Logic, Logical Holdings Limited is committed to creating sustainable prosperity and safeguarding the future of the natural environment. We aspire not only to mitigate the risk of rising emissions from our own fast-growing business, but also to demonstrate climate leadership amongst our peers, industry and clients by going beyond minimum requirements. We recognise that our global operations have an environmental impact and we are committed to monitoring and reducing our emissions year-on-year; to play our part in tackling the climate crisis. We are also aware of our reporting obligations under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.
In 2022 we aligned Scott Logic with the Paris Agreement goal of limiting global warming to 1.5°C compared to pre-industrial levels, with the intention to accelerate our progress towards net zero ahead of 2050. To achieve this, we are focusing both on how we run our business and how we contribute to wider climate action.
We believe that collective action to combat the climate crisis is vital, and are taking proactive steps to lead and support the network of businesses committed to fighting the climate crisis. We are an active member of Tech Zero, a UN Race To Zero partner climate action group, and have committed to validated Science Based Targets. We will continue to work with our clients, suppliers, employees, neighbours and local communities to share best practice and help each other safeguard the future of the natural environment.
We have committed to:
2026: 90% reduction of scope 1 and 2 baseline emissions
2027: Engage with the top 75% of our supply chain (spend- based) to provide carbon impact measurement
2028: Achieve Carbon Neutrality
2030: 50% reduction of all baseline emissions
2040: Achieve Net Zero
In 2022, we published these commitments publicly on Scott Logic’s website.
2025 Performance
The following high level observations can be made about our environmental impact in 2025 compared to previous years:
Total absolute emissions across the business decreased by 11% compared to 2024. This reduction places the organisation ahead of its projected trajectory for achieving long-term net zero targets. Emissions have reduced by 69% across Scope 1, 2 and 3 against baseline (targeted 50% by 2030), and the organisation achieved a carbon positive position during the year (with carbon neutrality targeted for 2028). The emissions intensity ratio per employee also continued to decline.
Emissions associated with employee commuting decreased during the year, despite an increase in office attendance. This reduction is consistent with increased use of lower-carbon transport options, including public transport and active travel.
The organisation achieved its target of procuring 100% renewable or low-carbon electricity across all operations in 2025. However, reported emissions associated with energy consumption remained broadly unchanged, reflecting ongoing developments in industry methodologies and emissions factors.
The organisation did not meet its target to engage with the top 50% of its supply chain (by spend) to obtain carbon impact data. This was primarily due to changes in organisational capacity within procurement functions and varying levels of supplier maturity in emissions reporting.
Energy Efficiency Initiatives
During the reporting period, Scott Logic implemented the following energy efficiency and emissions reduction initiatives:
Implementation of an ISO 14001-certified Environmental Management System across the organisation, supporting a consistent approach to environmental performance management and formally embedding continuous improvement.
Establishment of an overarching Environmental Policy to provide a coherent framework across existing environmental policies and initiatives.
Methodology
The methodology used to calculate the GHG emissions is in accordance with the requirements of the following standards:
World Resources Institute (WRI) Greenhouse Gas (GHG) Protocol (revised version)
Defra’s Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting requirements (March 2019).
UK office emissions have been calculated using the Defra 2025 revised issue of the conversion factor repository.
Following an operational control approach to defining our organisational boundary, our calculated GHG emissions from business activities fall within the reporting period of 1st January 2025 to 31st December 2025.
| Emissions Source | Baseline (2021) | 2024 | 2025 |
Scope 1 | Natural gas | 13 | 0 | 0 |
Company and leased cars | 4 | 0 | 0 | |
Total Scope 1 | 17 | 0 | 0 | |
Scope 2 | Heating | 28 | 26 | 24 |
Electricity | 14 | 15 | ||
Total Scope 2 (Market Based) | 28 | 41 | 39 | |
Scope 3 | Purchased goods and services | 974 | 291 | 246 |
Capital goods | 318 | 0 | 0 | |
Fuel and energy related activities | 0 | 4 | 5 | |
Upstream transportation and distribution | 0 | 0 | 0 | |
Waste generated in operations | < 1 | 2 | 2 | |
Business travel | 14 | 71 | 63 | |
Employee commuting | 163 | 121 | 115 | |
Upstream leased assets | 0 | 0 | 0 | |
Downstream emissions | 0 | 0 | 0 | |
Other | 23 | - | - | |
Total Scope 3 | 1,492 | 489 | 431 | |
Total (Market Based) | 1,519 | 530 | 470 | |
Total Energy Usage (kWh) | 288,042 | 226,110 | 214,219 | |
Normaliser | tCO2e per FTE | 3.8 | 1.3 | 1.1 |