The directors present the strategic report for the year ended 31 December 2025.

The company operates eight McDonald's franchised restaurants in the South of England, employing over 800 members of staff.

The Informal Eating Out (IEO) and Quick Service Restaurant (QSR) sectors continue to experience significant macroeconomic volatility. Key metrics, including food inflation and rising unemployment, have contributed to reduced guest counts across the sector. Despite these challenges, the business has remained resilient, supported by strong brand equity, a robust operating model and a clear strategic plan to navigate inflationary pressures and evolving consumer behaviour.

During the year, the company achieved growth in sales and cash flow through a combination of menu board price increases and a strong marketing calendar, with a continued focus on value and product innovation, including the launch of the Big Arch. Given the direct relationship between pricing strategy, the external environment and customer response, the business will continue to monitor this dynamic closely and evaluate how internal actions impact customer demand.

The financial position of the company is healthy with the balance sheet showing net assets of £1,126,828, compared with £190,964 in 2024.

The company operates in a highly competitive market where consumer behaviour directly impacts turnover and fluctuations in commodity prices affect profitability. Management continually evaluates risks with the aim of mitigating potential threats.

Economic risk

The business is exposed to inflationary pressures, fluctuating consumer confidence and labour market conditions. Key risks include food inflation and rising unemployment, both of which may impact sales growth and cost structures. Geopolitical uncertainty continues to present challenges; however, management remains focused on cost control and operational efficiency.

Regulatory risks

The business operations require compliance with a wide range of regulatory requirements, including health and safety, hygiene, employment law and licensing regulations. The introduction of Less Healthy Food and Drink (LHFD) advertising restrictions from January 2026 is expected to constrain market growth and may disproportionately impact the McDonald’s brand. Additionally, changes to Statutory Sick Pay and Business Rates present material risks.

Supply Chain Risk

Food and paper inflation of 7% to 9%, along with distribution cost pressures, continue to pose risks. Volatility in beef markets and the impact of EPR legislation are key drivers. The business mitigates these risks through global sourcing, long-term supplier relationships and RGM strategies.

Consumer Behaviour Risk

Changes in consumer preferences within the IEO and QSR markets may adversely affect performance, although they may also create growth opportunities. The business responds through menu innovation, digital loyalty programmes and enhanced delivery offerings, supported by strict adherence to McDonald’s brand standards.

Competitors

The QSR sector remains highly competitive with declining footfall across the market. Competitor pricing strategies,

promotional activity, location and product innovation may impact performance. The business leverages strong brand equity, marketing campaigns and operational excellence to maintain its competitive position.

Management, alongside the franchisor, McDonald’s, has outlined a series of key performance benchmarks to guide operational priorities and strategic decision-making throughout 2026. These benchmarks reflect a continued focus on sustainable gross profit margin growth, long-term value creation and resilience against macroeconomic pressures.

The franchisor has introduced the NEXT initiative, a long-term strategy designed to support the next phase of growth and productivity, with the customer at its core. The ambition is to become the customer’s first choice on every occasion, achieved through redefining hospitality, expanding automated ordering, and enhancing the menu with new chicken and beverage products while improving the quality of existing offerings.

Revenue growth, coupled with improvements in gross profit margin, is expected to drive an increase in average restaurant cash flow during 2026 and beyond. This objective will be supported by pricing strategies, product mix optimisation, a strong marketing calendar and disciplined cost control.

Restaurant group sales growth is projected to increase by 3% to 5% through continued implementation of Revenue Growth Management (RGM) initiatives. Individual restaurant performance will vary depending on customer experience delivery, investment levels and broader macroeconomic conditions.

Gross profit margin is forecast to improve by approximately one percentage point year-on-year. RGM remains central to the long-term ambition of achieving gross margins in excess of 70% across the restaurant group.

The business continues to operate within a challenging macroeconomic environment and remains focused on proactively managing its cost base through disciplined financial oversight and operational efficiencies. Food and paper inflation is expected to remain elevated, increasing by 7% to 9% during 2026, driven primarily by volatility in beef markets and the financial impact of Extended Producer Responsibility (EPR) legislation. Labour costs are projected to rise modestly. The business will continue to invest in its workforce through upgraded workwear, enhanced employee support initiatives and strengthened management development programmes.

Digital engagement remains a critical driver of incremental sales growth and customer loyalty. The MyMcDonald’s Rewards programme continues to perform strongly, with digital customers now accounting for more than 20% of total sales. The business will prioritise further enhancements to digital channels to deepen customer engagement and increase the contribution from loyalty and delivery platforms.

The outlook for 2026 and beyond requires continued monitoring as the business navigates inflationary pressures, regulatory changes and evolving consumer and competitor behaviour. Despite these challenges, the strategic priority remains to deliver a consistently high quality customer experience while maintaining a compelling value proposition to protect and grow market share in an increasingly competitive environment.

The company’s key performance indicators focus on measures that communicate overall financial performance and strength, including turnover and gross profit margin.

Sales for the year amounted to £37.6 million, representing an increase of £1.17m, approximately 3%, compared to 2024. The increase in sales is primarily attributable to incremental price rises.

Gross profit margin was 66.62%, compared to 65.80% in 2024, and is in line with management expectations.

Statement by the director in performance of her statutory duties in accordance with s172(1) Companies Act 2006:

The director takes into account the likely consequences of long-term decisions; build relationships with stakeholders; understand the importance of engaging with our employees; understand the impact of our operations on the communities within which we operate; and attribute importance to behaving as a responsible business.

The director considers, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 31 December 2025. In particular by reference to the approval of our business plan, which is updated on an annual basis. Our business plan was designed to have a long-term beneficial impact on the company and to contribute to its success in delivering high quality quick-service food.

Our employees are fundamental to the delivery of our plan. We aim to be a responsible employer in our approach to 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.

As the director, my intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours, and in doing so, will contribute to the delivery of our plan.

The directors present the strategic report for the year ended 31 December 2025.

On behalf of the board

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

The principal activity of the company continued to be that of the operation of McDonald's franchised restaurants.

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

Ordinary dividends were paid amounting to £94,000. The directors do not recommend payment of a final dividend.

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

The company is in a net current liabilities position at the balance sheet date, however this is a reflection of the nature of the fast food industry and not a reflection of the strength of the business.

The directors have considered the application of the going concern basis of accounting in doing so they have considered the period from the date of this report until 31 December 2027. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

The company does not carry out any independent research and development. However the franchisor, McDonald's Restaurants Limited, carries out its own research and development on behalf of all franchisees. The company makes a contribution towards this through its existing payments to the franchisor.

The company operates a policy of giving full & fair consideration to employment applications from disabled persons having regard for their aptitudes and abilities. We will support the career development and provide the appropriate training for employees who become disabled during their employment with the company.

The company has a system for providing employees with information of concern to them. It also consults employees on a regular basis so that their views can be taken into account in making decisions affecting them. It regularly explains to employees the financial and economic factors affecting the performance of the company and makes them aware of the provision of training, career development and employment of disabled employees.

Our employees are fundamental to the delivery of our plan. We aim to be a responsible employer in our approach to pay and benefits our employees receive. The health, safety and wellbeing of our employees is one of our primary considerations in the way we do business.

The board of directors take into account the likely consequences of long-term decisions; build relationships with stakeholders; understand the impact of our operations on the communities within which we operate; and attribute importance to behaving as a responsible business.

In line with the government's streamlined energy and carbon reporting requirements we are required to report our organisation's carbon emissions for the period 1st January 2025 to 31st December 2025.

Lloyd Sharp Restaurants Limited greenhouse gas emissions, reportable under SECR from 1st January 2025 to 31st December 2025, were 901 tonnes of carbon dioxide equivalent (tCO2e). These include emissions associated with electricity, natural gas, purchased fuel, transport consumption and refrigerant leaks.

The number of sites contributing to this report has not changed from last year. Lloyd Sharp Restaurants Limited total greenhouse gas emissions decreased by 21.1% compared to 2024’s figures, because purchased electricity energy consumption (kWh) has decreased by 4.6% and natural gas energy consumption (kWh) has decreased by 35%, from 2024 to 2025.

As per SECR guidelines, Lloyd Sharp Restaurants Limited’s emission intensity is calculated as the ratio of annual emissions (tCO2e) to the turnover (in £m). For FY 2025, this resulted in an emission intensity of 24.40 tCO2e per £m, which represents a 23.5% decrease compared to the previous year (31.90 tCO2e per £m).

A location based calculation of CO2e emissions is made using energy data collected from the utility energy suppliers. Scope 2 market based reporting calculation is supported with REGOs, supplied by NPower.

Energy and emissions from company owned cars were modelled using an average-size vehicle and unknown fuel type, as per data provided by the client. Transport mileage is provided on an annual basis.

Estimations are being made for refrigerants, ASDA and Roadchef as their frequency of data collection differs. Refrigerants data is collected biannually, through survey. ASDA energy is being collected on a quarterly basis, while Roadchef is being collected annually.

The methodology is consistent with the 2025 edition of the UK government GHG Conversion Factors for Company Reporting.

McDonalds uses annual turnover (tCO2e/£) to normalise and compare its emissions over time. McDonalds also uses an average cheque per site for an intensity metric figure.

The following approaches to energy efficiency are being undertaken by McDonald’s Restaurants Limited and its franchisees' restaurants:

• Reductions to the time schedule for internal lighting, external lighting (signage, car park lighting, etc.), Air Handling Unit (AHU) conditioning, kitchen extract system, etc.

• Improvement to the Car Park lighting schedule.

• Decreased temperature set points in dining and kitchen areas, e.g overdoor heater set point reduced from 28 degrees Celsius to 22 degrees Celsius.

• Increased temperature deadbands in dining and kitchen areas, especially to AHUs.

• Local control settings change from 'Always On' to 'Normal'.

• Heating set points temperature reduction.

• BMS time adjusted to sync with actual time.

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

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

We have audited the financial statements of Lloyd Sharp Restaurants Limited (the 'company') for the year ended 31 December 2025 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 company's affairs as at 31 December 2025 and of its profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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

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.

We gained an understanding of the legal and regulatory framework applicable to Lloyd Sharp Restaurants Limited and the industry in which it operates and, considered the risk of acts by Management and directors of Lloyd Sharp Restaurants Limited which were contrary to applicable laws and regulations, including fraud. These included but were not limited to compliance with the Companies Act 2006 and Employment Law. We made enquiries of the Directors to obtain further understanding of risks of non-compliance.

We focused on laws and regulations that could give rise to a material misstatement in the financial statements. Our tests included, but were not limited to:

• agreement of the financial statement disclosures to underlying supporting documentation;

• enquiries of management regarding known or suspected instances of non-compliance with laws and regulations;

• review of minutes of the Board meetings throughout the year; and

• obtaining an understanding of the control environment in place to prevent and detect irregularities.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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

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

Lloyd Sharp Restaurants Limited is a private company limited by shares incorporated in England and Wales. The registered office is 4th Floor, Llanthony Warehouse, The Docks, Gloucester, GL1 2EH.

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 company is in a net current liabilities position at the balance sheet date, however this is a reflection of the nature of the fast food industry and not a reflection of the strength of the business.true

The directors have considered the application of the going concern basis of accounting in doing so they have considered the period from the date of this report until 31 December 2027. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue arises from food and beverage sales to customers in the UK. Performance obligations are satisfied at the point goods are provided to the customer and payment is received immediately by cash, card or electronic payment

Franchise rights & fees are initially recognised at cost and are subsequently measured at cost less accumulated amortisation and impairment losses.

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

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

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

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

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are valued at the lower of cost and net realisable value, after making due allowances for obsolete and slow moving items.

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

The Company only enters into basic financial instruments that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

For financial assets measured at amortised cost, the impairment cost is measured at the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the assets effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

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.

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Equity dividends are recognised when they legally become payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

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

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

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

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

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

Basic financial liabilities, including creditors, 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 company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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

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

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

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The key estimates and judgements are as follows:

The director has reviewed the asset lives and associated residual values of all fixed asset classes, and has concluded that asset lives and residual values are appropriate.

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measure at the undiscounted cost of the future holiday entitlement so accrued at the Balance Sheet date.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

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:

The bank loans are unsecured and carry interest at rates between 1.0% and 1.45% over base. The bank loans are repayable over the terms of three, five and seven years.

The following are the major deferred tax liabilities and assets recognised by the company:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

During the year, total dividends of £94,000 (2024 - £109,600) were paid to the directors.

As as the balance sheet date, there is an amount owed to the directors Mr and Mrs Lloyd-Sharp from the company of £30,682 (2024 - £91,949) and is included in other creditors.

The amount is provided interest free and is repayable on demand.