The director presents the strategic report for the year ended 31 December 2025.
The principal activity of the Group remains the supply of pipes to the construction and building industry.
Group turnover decreased slightly to £18.4 million (2024: £18.7 million), reflecting resilience against a challenging UK economic backdrop. Throughout 2025, the UK economy experienced low growth, persistent inflationary pressures in the first half of the year, and elevated borrowing costs, all of which weighed heavily on construction activity—particularly within the residential housing sector.
Although inflation began to ease and interest rates showed early signs of stabilisation towards the latter part of the year, the cumulative impact of prior monetary tightening continued to suppress new housing starts and delay project timelines.
In response to these conditions, the Group continued to diversify into adjacent and less cyclical markets, including infrastructure and non-residential applications. This strategic shift reduced reliance on housing demand and contributed to revenue stability.
Despite ongoing cost pressures, particularly in logistics and labour, disciplined pricing, supplier management, and operational efficiencies enabled the Group to broadly maintain gross margins at 13.1% (2024: 12.4%).
Operational focus remained on efficiency and working capital discipline. Improvements in procurement processes and stock management supported consistent service delivery and mitigated supply chain volatility experienced in prior periods.
The Group ended the year in a strengthened financial position, with net assets increasing to £5 million (2024: £4.1 million) and net current assets of £4.5million (2024: £3.5 million), reflecting stable profitability and prudent financial management.
The Group operates in a dynamic and competitive environment and is exposed to a range of financial and operational risks influenced by broader UK economic conditions.
Market and Demand Risk
Demand within the construction sector, particularly residential housing, remained subdued throughout 2025 due to high borrowing costs and reduced consumer confidence. While there are early indications of recovery as inflation moderates and interest rates begin to ease, the timing and strength of this recovery remain uncertain.
Macroeconomic Risk
The Group remains exposed to wider economic factors including inflation, interest rates, and economic growth. Although inflation has moderated, cost volatility in energy, transport, and labour continues to present challenges.
Liquidity Risk
The Group maintains active oversight of cash flow and liquidity. An invoice finance facility continues to support working capital requirements and provides flexibility in managing fluctuations in customer payment cycles.
Credit Risk
Credit risk arises primarily from trade receivables. Economic pressure on customers has increased the risk of delayed payments. The Group mitigates this through robust credit control procedures, including individual credit assessments, ongoing monitoring, and the use of credit insurance where appropriate.
Competitive Risk
The market remains highly competitive, with continued pricing pressure across the sector. The Group’s strategy is to focus on specialist product areas and service quality, rather than compete solely on price, supporting margin protection and customer retention.
During 2025, the Group continued to focus on its core customer base while selectively expanding into sectors less sensitive to residential construction cycles, including infrastructure and non‑residential applications.
Despite ongoing macroeconomic challenges, EBITDA remained broadly stable at £1.7 million (2024: £1.7 million). This reflects effective cost control, pricing discipline and the benefits of diversification achieved in prior periods.
Management also uses alternative performance measures, including EBITDA, to assess the performance of the Group. Further information on the use and definition of these measures is set out below.
The Board monitors the following key performance indicators:
Turnover: £18.4 million (2024: £18.7 million)
Gross profit margin: 13.1% (2024: 12.4%)
EBITDA: £1.7 million (2024: £1.7 million)
Debtor days: 68 days (2024: 72 days)
Definition of EBITDA
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) represents operating profit as measured under UK GAAP, adjusted to exclude depreciation and amortisation of non‑financial assets and impairment charges.
EBITDA is reported as management considers that it provides a useful proxy for the Group’s underlying operating performance by excluding non‑cash items that do not directly relate to the Group’s trading activities for the period. EBITDA can be reconciled to the operating profit reported in the Consolidated Statement of Comprehensive Income as follows:
Reconciliation of EBITDA to operating profit
£’000 | 2025 | 2024 |
Operating profit | 1,563 | 1,612 |
Depreciation of tangible fixed assets | 90 | 45 |
EBITDA | 1,653 | 1,657 |
EBITDA is shown above based on underlying unrounded figures. Amounts disclosed elsewhere in the Strategic Report are rounded to the nearest £0.1 million.
Looking ahead, the Group anticipates gradual improvement in market conditions as inflation stabilises and borrowing costs begin to ease. However, recovery in the housing sector is expected to be measured rather than immediate.
Government focus on infrastructure investment and long-term housing supply may provide opportunities for growth, particularly in sectors less exposed to short-term economic cycles.
Strategic priorities for the coming year include:
Continued diversification into infrastructure and commercial markets
Expansion of the product range to align with evolving customer requirements
Ongoing investment in staff and operational capabilities
Strengthening cash flow and working capital management
The Group remains focused on sustainable growth, supported by strong customer relationships, operational discipline, and a pragmatic response to evolving economic conditions.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2025.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £145,894. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
United Kingdom company law requires the director to prepare financial statements for each financial year. Under that law, the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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. He is also responsible for safeguarding the assets of the group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of PEPS Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including material accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the director's 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 director's report.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;
Enquires with management about any known or suspected instances of fraud;
Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls;
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;
Auditing the risk of fraud in revenue by testing a sample of transactions throughout the year, to ensure they have been recorded within the accounts and by testing transactions around the year end to ensure correct cut off procedures have been applied;
Obtaining third party confirmations of material bank balances; and
Documenting and verifying all significant related party balances.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,073,240 (2024 - £733,235).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
PEPS Holdings Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Richard House, 9 Winckley Square, Preston, PR1 3HP.
The group consists of PEPS Holdings Limited and its subsidiary.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company PEPS Holdings Limited together the subsidiary.
All financial statements are made up to 31 December 2025.
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.
At the time of approving the financial statements, the director has a reasonable expectation that the group and parent company have adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover 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 the 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.
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.
Change in accounting estimate
During the year ended 31 December 2025, the group revised its estimates of the useful economic lives and residual values of certain tangible fixed assets. Previously, these assets were depreciated at 25% per year on a reducing balance basis. The director has revised their estimate to depreciate assets on a straight line basis.
This revision has been accounted for as a change in accounting estimate and has been applied prospectively from the date of the change. The revised estimates are considered to provide a more reliable allocation of the depreciable amount of the assets over the periods in which they are expected to be used by the group.
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 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.
Fixed term deposit accounts maturing more than 12 months after the balance sheet date are included in fixed asset investments as unlisted investments. Fixed term deposit accounts are initially recognised at transaction price and subsequently measured at amortised cost, using the effective interest method, unless the deposit is repayable on demand, in which case it is measured at face value.
At each reporting period end date, the group reviews the carrying amounts of its tangible 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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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 leased asset are consumed.
When the group acts as a lessor, a lease is classified as a finance lease whenever it transfers substantially all the risks and rewards of ownership of the underlying asset to the lessee, either at the end of the lease term or for the major part of the economic life of the asset. All other leases are classified as operating leases. If an arrangement contains both lease and non-lease components, the group allocates the consideration in the contract to the two elements.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
In the application of the group’s accounting policies, the director is 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.
The director estimates the market value of the investment property at each reporting date based on prices of properties sold in the local vicinity.
At the year end, the director has estimated the fair value of the property to be £204,800 (2024: £204,800) determined by the director with reference to comparable market values of similar properties in the local area. The change in value of the investment property of £nil (2024: £49,350) is recognised on an ad hoc basis in the profit and loss account within amounts written off investments.
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 1 (2024 - 1).
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:
At the year end, the director estimate the fair value of the property to be approximately £204,800 (2024: £204,800). This valuation has been determined by the director with reference to comparable market values of similar properties in the local area.
The investment property is included in the financial statements at fair value of £204,800 (2024: £204,800). Had the investment property been accounted for at historical cost, the carrying amount at 31 December 2025 would have been £254,150 (2024: £254,150).
Unlisted investments include fixed term deposit accounts held with banks due to mature after more than one year after the balance sheet date.
Unlisted investments include fixed term deposit accounts held with banks due to mature within 12 months.
Details of the company's subsidiaries at 31 December 2025 are as follows:
The bank facilities are secured by fixed and floating charges over all assets of the company and group.
The invoice finance facility from HSBC PLC is secured by a fixed and floating charge with negative pledge over all the property and undertakings of the company.
A discounting charge of base rate plus 1.75% per annum is payable on all discounted amounts.
The following are the major deferred tax liabilities and assets recognised by the group and company:
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.
The Ordinary A shares, Ordinary B shares and Ordinary C shares have distribution and capital rights.
The rights on any distribution of assets on a winding up or a return of capital vary by class of share;
A shareholders receive 0.04 pence per share. B shareholders receive 0.03 pence per share. C shareholders receive 0.02 pence per share. Any surplus assets thereafter share be distributed amongst all shareholders on a pro rata basis according to the number of shares held.
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:
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
At the year end the company was owed £562,645 (2024: £398,213) by the director. During the year, the director was charged interest of £14,432 (2024: £9,822).
After the reporting date, on 30 April 2026, the company acquired an investment property from the director for a purchase price of £305,000 plus costs. This transaction reduced the amount owing by the director to the company after the reporting date. There were additional drawdowns and repayments after the year end. At the date of the financial statements being approved, the balance of the loan account was £207,000.