This strategic report outlines the performance and governance of LFF Holdings Limited (“the Group”) for the financial year ended 31 December 2025.

The directors are disappointed to report a post-tax loss of £538.8K, following a year affected by reduced levels of traditional activity in the UK and Australian markets, together with delays in anticipated green energy initiatives.

The Group's principal markets remain the United Kingdom, Australia, South East Asia and the Middle East.

The directors extend their sincere appreciation to all employees, partners and stakeholders for their continued contribution and support throughout the year. This report reflects the Group's ongoing commitment to ethical business practices, responsible governance and the creation of sustainable long-term value.

In 2025, the Group reported turnover of £93,970,326, compared with £142,218,685 in 2024. Gross profit for the year was £19,217,079, compared with £25,825,698 in the previous year.

The decline in both turnover and gross profit was primarily attributable to reduced activity in key markets and delays in the progression of anticipated green energy projects.

Despite these challenging conditions, the Group remains focused on strengthening operational performance, maintaining financial discipline and identifying opportunities for sustainable growth across its core markets.

Effective risk management remains central to the Group's governance framework and strategic planning process.

The Group undertakes regular performance reviews and risk assessments to identify, evaluate and manage potential risks that may affect the achievement of its objectives. This enables management to respond proactively to changes in market conditions, regulatory developments and other external factors.

These measures support the Group's long-term sustainability, operational resilience and ability to adapt to evolving business environments.

Ethical Standards and Global Commitments

The Group continues to uphold high standards of ethical conduct and remains an active participant in the United Nations Global Compact, committing to its principles relating to human rights, labour standards, environmental responsibility and anti-corruption.

The Group also maintains ISO 45001 certification for occupational health and safety management and ISO 14001 certification for environmental management, reflecting its continued commitment to best practice in operational management and corporate governance.

Through these internationally recognised standards, the Group seeks to ensure that its activities are conducted responsibly and in a manner that supports sustainable business practices.

Stakeholder Engagement

The directors remain committed to meaningful engagement with all stakeholders.

Employee welfare, wellbeing and career development continue to be key priorities and are supported through regular communication, training initiatives and opportunities for professional advancement. The Group recognises that its employees are fundamental to its long-term success and strives to foster an inclusive and supportive working environment.

The Group also values strong and collaborative relationships with customers, suppliers and business partners, recognising that these relationships are essential to achieving sustainable growth and maintaining operational excellence.

Environmental sustainability remains a key area of focus for the Group.

The Group retains its ISO 14001 certification and continues to seek opportunities to minimise its environmental impact through responsible operational practices and continuous improvement initiatives.

The directors also support charitable activities and community engagement programmes where these align with the Group's values and objectives. The Group remains committed to making a positive contribution to the communities in which it operates while balancing its environmental and commercial responsibilities.

Business Conduct and Shareholder Fairness

The Group is committed to maintaining the highest standards of integrity, professionalism and ethical conduct in all aspects of its operations.

As a participant in the United Nations Global Compact, the Group reports transparently on its performance in relation to ethical behaviour, sustainability and corporate governance. The directors recognise their responsibility to act in the best interests of all shareholders and are committed to ensuring that decisions are made fairly, impartially and without favouritism.

In accordance with Section 172(1) of the Companies Act 2006, the directors have had regard to the matters set out below when carrying out their duty to promote the success of the Group for the benefit of its members as a whole.

(a) The likely consequences of any decision in the long term

The Board carefully considers the long-term implications of all significant decisions through regular strategic reviews and planning activities.

A rolling three-year business plan is maintained and updated regularly to reflect operational performance, changing market conditions and emerging opportunities. This enables the Group to balance short-term priorities with its long-term strategic objectives.

(b) The interests of the Group’s employees

The Group recognises that its employees are fundamental to its success.

The directors seek to create a positive and supportive working environment through effective communication, professional development opportunities and a strong commitment to health, safety and wellbeing. The Group's ISO 45001 certification demonstrates its commitment to maintaining high standards in occupational health and safety.

Employee engagement, career progression and personal development continue to be actively encouraged throughout the organisation.

(c) The need to foster the Group’s business relationships with suppliers, customers, and others

Strong relationships with customers, suppliers and strategic partners are vital to the Group's long-term success.

The directors promote collaborative working practices, open communication and mutual trust to ensure successful and sustainable commercial relationships. These partnerships contribute significantly to operational efficiency, customer satisfaction and future growth.

(d) The impact of the Group’s operations on the community and the environment

The Group acknowledges its responsibility to minimise its environmental impact and support the communities in which it operates.

Through its ISO 14001-certified environmental management system, the Group continues to monitor and improve environmental performance. The directors also support charitable initiatives and community engagement activities that align with the Group's values and objectives

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(e) The desirability of maintaining a reputation for high standards of business conduct

Maintaining a reputation for integrity, transparency and accountability remains a key objective of the Board.

The directors promote ethical behaviour throughout the organisation and support compliance with internationally recognised standards and frameworks, including the principles of the United Nations Global Compact. These values underpin the Group's approach to governance and stakeholder engagement.

(f) The need to act fairly as between members of the Company

The Board is committed to treating all shareholders fairly and equitably.

The directors ensure that decisions are taken in the best interests of the Company as a whole and that no shareholder or group of shareholders is unfairly advantaged or disadvantaged.

The Group experienced challenging trading conditions during 2025, reflecting reduced activity in key markets and delays in the progression of anticipated green energy projects.

In response, the board has implemented initiatives focused on improving operational efficiency, strengthening profitability and enhancing the Group's ability to respond to changing market conditions.

While economic and market uncertainties remain, the directors are confident that the Group is well positioned to benefit from future opportunities. Supported by a resilient operating model, a strong commitment to governance and sustainability, and the dedication of its employees and business partners, the Group remains focused on delivering long-term value for its shareholders and stakeholders alike.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The Group's principal activity during the year under review continued to be that of supply of pipes, fittings, flanges and valves in a variety of materials.

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £900,000. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The Group is exposed to interest rate risk on cash and cash equivalents and on foreign exchange contracts. As the Group maintains all of its cash, liquid investments and foreign exchange contracts on a short term basis for liquidity purposes, this risk is not actively managed.

The Group transacts some of its business in US Dollars and EUROs. Exposure to these foreign currencies is managed using spot or forward trades.

The Group continues to evaluate its accounts receivable for potential collection risks and has made provision for amounts where collection is considered to be doubtful.

The auditor, Xeinadin Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Whilst the overall group has consumed more than 40,000 kWh of energy in this reporting period, none of the individual subsidiaries are large as defined by the Companies Act 2006. In preparing the group Director's Report, we have taken advantage of the option to exclude any energy and carbon information relating to those subsidiaries.

As the parent entity has no trading activity, there is no energy and carbon information to be reported in respect of the parent entity.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

We have audited the financial statements of LFF Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group profit and loss account, 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).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2025 and of the group's loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

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 our audit:

• The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• 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.

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

In preparing the financial statements, the directors are responsible for assessing the 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.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the group:

• Laws and regulations considered to have a direct effect on the financial statements include UK Financial reporting Standards, Companies Acts, Tax Legislation, and Distributable Profits Legislation.

• Laws and regulations considered to have an indirect effect on the financial statements include; Health and Safety Legislation, General Data Protection Regulation.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the group complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the group’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

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

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 £3,433,657 (2024 - £1,124,397 profit).

LFF Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Level 5A, Maple House, 149 Tottenham Court Road, London, W1T 7NF.

The group consists of LFF 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, to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment. Where the cost of the business combination exceeds the fair value of the group's interest in the assets, liabilities and contingent liabilities acquired, negative goodwill arises. The group, after consideration of the assets, liabilities and contingent liabilities acquired and the cost of the combination, recognises negative goodwill on the balance sheet and releases this to profit and loss, up to the fair value of non-monetary assets acquired, over the periods in which the non-monetary assets are recovered and any excess over the fair value of non-monetary assets in the income statement over the period expected to benefit.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company LFF 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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Any subsidiary undertakings sold or acquired during the year are included up to, or from, the dates of change of control or change of significant influence respectively.

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 goods and 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.

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

Revenue from orders is recognised by reference to the stage of completion of order when the stage of completion of order, costs incurred and costs to complete can be estimated reliably. The stage of completion of order is calculated by comparing order fulfilled as a proportion of total orders. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is 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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Cost of raw materials and goods for resale are valued at purchase costs on average basis of inspected goods.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

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.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

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.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

The company operates a number of defined contribution scheme for the benefit of its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. Contributions payable are charged to the profit and loss account in the year they are payable. The assets of the plan are held separately from the Group in independent administered funds.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stocks are valued at lower of cost and estimated selling price in the ordinary course of business, less estimated costs of selling expenses,. These estimates are based on the current market condition and the historical experience of selling products of similar nature. It could change significantly as a result of changes in customer demand and competitor actions.

Typical practice for the company to provide for slow moving stock even though they are not perishable and may be sold in the future depending on the project work undertaken and demand for certain specific parts. hence most prudent course of action is to write-down stock as timing and certainty of future sale is very much unknown. See note 9 for the carrying amount of the stocks and associated impairment.

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtors, the ageing profile of debtors and historical experience.

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect the current estimates, based on technological advancement, future investments, economic utilisation, intention usage of the tangible assets and the physical conditions of the assets.

The Group is engaged in supply of pipeline equipment to various industries and in the opinion of the directors, it does not carry on classes of business substantially different from each other, therefore only a geographical analysis of the business is included in the financial statements.

Other operating income includes Government Grants of £Nil (2023: £687) received by overseas subsidiaries.

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 2 (2024 - 1).

From 1 April 2023, the corporation tax rate increased from 19% to 25% for companies with profits over £250,000. A small profits rate of 19% for companies with profits of £50,000 or less and companies with profits between £50,000 and £250,000 will pay tax at the main rate, reduced by a marginal relief. These rates remain unchanged with reference to 2025 Autumn Budget.

The actual (credit)/charge 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:

Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:

Land and buildings with a carrying amount of £8,031,643 owned by subsidiaries were revalued in December 2025 by Portland Dodds Brown, Glenny LLP and Graham & Sibbald, independent valuers who are not connected with the group. The valuations were made on an open market value and fair value basis by reference to market evidence of transactions prices for similar properties.

Details of the company's subsidiaries at 31 December 2025 are as follows:

* Held by subsidiary undertakings.

The group enters into forward foreign currency contracts to mitigate the exchange rate risk for certain receivables and payables. As at 31 December 2025, the outstanding contracts all mature within 12 months of the year end. The group is committed to buy €8,960,440 (2024: €6,646,176), US$1,250,000 (2024: US$1,266,000) and AUD$3,280,000 (2024: AUD$nil) and to sell €nil (2024: €150,000), US$2,378,000 (2024: US$525,000) and AUD$1,300,000 (2024: AUD$nil) against fixed sterling amounts.

Stocks are stated after impairment of £496,735 (2024: £167,801).

During the year, an amount of £nil (2024: £83,250) was due from a director of the company. The amount was advanced on commercial terms and was fully repaid, including interest, prior to the year end. No balance was outstanding at the balance sheet date.

The maximum amount outstanding during the year was £nil (2024: £83,250).

Contingent Consideration

As part of the acquisition of the remaining 45% of LFF Scotland Holdings Ltd in 2024, the company agreed to make additional earn-out payments calculated as 22.5% of post-tax profits for the years ending 31 December 2025 and 31 December 2026.

At 31 December 2025, the company recognised a contingent consideration liability of £515,615 (2024: £1,188,134), comprising £82,220 in respect of the 2025 earn-out and £433,395 representing the estimated fair value of the 2026 earn-out. The amounts payable under these earn-out arrangements have been recognised at fair value at the reporting date, with the current and non-current portions disclosed separately within creditors.

The 2025 earn-out was determined at £82,220 (2024: £1,416,780) based on finalised results and is included within creditors falling due within one year. The contingent consideration liability will be remeasured at each reporting date, with any changes in fair value recognised in profit or loss.

Obligations under finance leases are secured on the assets concerned.

The long-term loans are secured by first legal charge over the freehold property known as Unit 4 Domino Court, Warrington Road, Manor Park, Runcorn, WA7 1SN and Christy Way, Southfields Industrial Estate, Basildon, Essex SS15 6TE.

The bank also holds a debenture incorporating a fixed and floating charge over all the current and future assets of the group.

Details of bank loans are as follow:

Loan at Christy Way

Monthly repayments of capital and interest. The loan carries 2.2% interest charged per annum over the Base Rate.

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Obligations under finance leases are secured on the assets concerned.

Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses and reversal of timing differences against future expected profits of the same period. 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.

All Ordinary A, B, and C shares rank pari passu in all respects.

Profit and loss reserves represent amounts attributable to controlling interest.

On 13 May 2025, the Group acquired 100% of the issued share capital of LFF Spromak Engineering Limited and Dyform Jenkins Dunn Ltd through its subsidiary, LFF Engineering Holdings Limited, for total consideration of £2.9 million. The acquisitions have been accounted for using the acquisition method under FRS 102. The fair value of the identifiable net assets acquired exceeded the consideration transferred by £809,840, resulting in a negative goodwill.

The group has a multilateral guarantee between LFF Holdings Limited, LFF Limited, LFF Valvenco Limited, LFF Scotland Holdings Ltd, LFF(Scotland) Ltd, LFF Glamal Holdings Limited, LFF Glamal Limited and LFF Properties Limited supported by debentures.

The company's bankers have provided group facilities of £19,910,000 (2023: £27,410,000) in respect of foreign exchange commitments, letter of credits and guarantees of which £1,301,277 (2024: £1,218,450) have been utilised.

The operating leases represent rentals payable by the group to third parties. The leases are negotiated for an average term of 20 years and rentals are fixed for 5 years with an option to extend when the lease expired at the prevailing market rate.

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 group sold goods to the value of £639,197 (2024: £661,612) and purchased goods to the value of £396,889 (2024: £91,299) with subsidiaries of FIAL International Trading Spa, companies in which the close family of A Galperti, who has an interest in the ultimate parent company.