Total turnover levels have increased by 8.6% from the previous financial year as a result of further expansion in the company's brand portfolio and product range accompanied by strong performance from existing key brands. Gross margin levels achieved of 13.6% have reduced from the previous financial year as a result of changes in the mix of product sales and also changes in the underlying market conditions. The directors confirm that while they are satisfied with the company’s performance and its core business activities and product range, their intention is to continue to invest in the company's structures and management team to allow for further expansion both in its distribution footprint and brand portfolio within the United Kingdom market in future years. Profit before tax generated has also increased from the previous financial year, which is reflective of efficient controls in place over business activities and overhead levels by management.

The directors closely oversee the performance of the company, through active consideration of monthly management accounts, comparison to budgeted figures and regular management meetings. Forecasted financial results for the financial year ended 31 December 2026 project strong increases in turnover and operating profit levels, with growth anticipated across both the current brand portfolio and the expected agreement of further brand relationships. Following review of actual results achieved to date per post year end management accounting records, the directors are satisfied that the budgeted results are achievable in full.

The company is exposed to financial risks that could materially and adversely affect its future operating profits or financial position. Such risks include credit risk, market risk, insolvency of supplier risk, economic and competitor risk, liquidity risk, data security and technology risks and cross border trading risks. The company seeks to limit the adverse effects of such risks on its financial performance in the following ways:

1. Credit risk

The company employs policies that require credit risk checks on potential customers before sales on a credit basis are completed which assists the company in mitigating customer credit risk. The company‘s credit control function monitors customer adherence to designated credit terms on a regular basis and takes steps where required to minimise impairment risk.

2. Market risk

(i) Cash flow and fair value interest rate risk

The company is exposed to interest rate risk in that it holds third party borrowings, in the form of overdraft, invoice discounting and loan facilities. The directors expect that interest rate levels may increase further in future financial periods in conjunction with current market trends, but they are satisfied that the company is generating sufficient cashflows from trading activities to deal with any increases were they to occur. The directors are further satisfied that the company will be able to effectively manage its borrowing facilities and related repayments into the future from positive cashflows generated from current trading activities.

(ii) Foreign exchange risk

The company faces exposure to foreign exchange fluctuations due to it undertaking transactions in currencies other than its functional currency, particularly Euros. The directors carefully manage foreign currency transactions on a daily basis to limit any potential exposure to adverse exchange rate movements.

3. Insolvency of supplier risk

In the event of a supplier being declared bankrupt or insolvent, the company would have financial exposure in that it may not be in a position to meet the demands of its customers for saleable finished products. Such risk is mitigated by the company engaging and building relationships with quality brand suppliers which have strong financial positions but also through the careful management of stock levels in conjunction with sales budgets to minimise the likelihood of stock shortages arising.

4. Economic and Competitor Risk

The economic environment and competition in the wider marketplace and specific trading sector can affect the company’s business in respect of both turnover and gross margin levels achievable. Continuing market demand for its brands is crucial to maintaining the company’s success and the directors have applied a balanced and conservative view in respect of areas in which growth and development are achievable. The company actively competes for market share in the United Kingdom sector and will endeavour to mitigate the impact of negative economic market pressures and changes in its brand and customer profiles. The company continues to maintain excellent relationships with its suppliers and customers which assists in reducing the overall risk profile.

5. Liquidity risk

Liquidity risk can arise from cash flow timing mismatches relating to the realisation of assets and discharge of liabilities. The company manages such risks through the utilisation of available financing and cashflow sources, effective credit control procedures and undertaking detailed financial reviews prior to the acceptance of any proposed financial obligation to ensure that the company can continue to operate on a profitable basis and to meet its trading and other liabilities as they fall due.

6. Data Security and Technology risk

The company is dependent primarily on information technology systems for its principle operational business and financial processes. As customer and supplier data is utilised as part of operational activities, and retained on the company's systems, there is an associated risk of a cyber security related attack which could result in unauthorised access to confidential information and resultant significant potential reputational and financial impacts. The company has in place system controls, disaster recovery and business continuity arrangements to mitigate the risk of an IT system failure, disruption to operational activities and limit the potential risk of a data breach occurring. The company utilises IT resources from another group undertaking, whose primary functions include the monitoring, identification and correction of issues in operating systems as they arise, and also engages with third-party IT consultants as required.

7. Cross Border Trading risk

The company is exposed to risks and uncertainties associated with the continuity of supply of trading stocks and the potential impact on the market of the imposition of tariffs. Volatility in the cost of raw materials used by suppliers or the imposition of changes in tariffs, import taxes or duties on goods purchased from suppliers outside of the UK could result in increased costs to the company and potential decline in margin levels. The directors have implemented safeguards to protect the supply of goods and related costs by sourcing suppliers based in the UK primarily. The directors continue to carefully monitor the impact of market conditions on the company‘s business activities and are satisfied that the company has sufficient resources available to maintain its trading activities.

The directors continue to actively assess the company’s financial position and they are satisfied that it has, in conjunction with the generation of trading profits in the current and previous financial years and it's holding of an excess of assets over liabilities at 31 December 2025, sufficient financial resources available to ensure that it can discharge its liabilities as they fall due and continue to operate as a going concern.

In addition, the company has insurances, business policies and organisational structures to limit the risks detailed above and the board of directors regularly review and reassess these risks to proactively limit the associated risk. There is a high-quality management team to manage day to day operations and relationships with the company‘s bankers, customers and brand suppliers remain strong.

The company has continued to strongly develop and expand its operations during the financial year and the directors can confirm their satisfaction with its financial performance and profits generated, which show further improvement from levels in previous financial years. These developments include the following:

- Increasing product ranges through development of close relationships with key suppliers and further engaging and marketing of new brands

- Provision of improved offerings to customers in conjunction with brand partners

- Continuing improvements to IT systems to achieve greater operational and trading efficiencies

- Employment and allocation of additional management and staffing resources to key brand promotion and operational functions

- Maintenance of warehousing and office location partnerships to allow for the utilisation of additional capacity

The directors confirm that the company’s relationships with key suppliers and customers continue to be excellent and they are satisfied that this will assist the company in continuing to expand its trading activities and profitability levels into the future. In addition, they confirm that the shareholders have committed to provide support to the company to ensure that it can take advantage of opportunities as they arise which will assist in the continued expansion of trading activity levels in future periods and its ability to discharge its current and future liabilities as they fall due.

Subsequent to the financial year end, the directors can confirm that the company continues to promote its existing product range whilst actively engaging with potential new brand opportunities.

The company‘s turnover levels have continued to improve in the post year end period and the directors confirm their expectation that further growth will be achieved which will allow for the generation of trading profits in future periods in conjunction with the availability of cashflow resources, financing facilities and the existence of excellent relationships with brand partners and a quality management team.

We identify and assess risks of material misstatement of the financial statements, whether due to fraud of error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations, we considered the following:

- results of our enquiries of management and those charged with governance about their own identification and assessment of the risks of irregularities occurring.

- any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to:

   >identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;

   >detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

   >the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential area was in respect of the valuation of trading stock and the potential for under or overstatement of trading liabilities. These risk areas were raised with management as key audit matters in the current year. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations considered in this context included the Companies Act 2006 and applicable tax legislation in the United Kingdom.

In addition, we have considered the provisions of other applicable laws and regulations which while not having a direct effect on the financial statements, compliance with their requirements may be fundamental to the company’s ability to operate or to avoid a material penalty. These included the company’s covenant requirements on existing banking facilities and agreed terms with partner suppliers.                

Audit response to risks identified

As a result of performing the above procedures, we identified the valuation of the trading stock, including assessing obsolescence impairment provisions, and recognition of liabilities as key audit areas related to the potential risk of fraud. The specific procedures we performed in response to the risks identified included the following:

- Reviewing the financial statement disclosures and undertaking specific substantive testing procedures to assess compliance with the provisions of relevant laws and regulations described as having a direct effect on the financial statements.

- enquiring of management concerning actual and potential litigation and claims.

- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

- undertaken substantive testing procedures to assess the valuation of trading stocks and verification of liabilities with suppliers.

- reading minutes of meetings of those charged with governance.

- reading the terms and conditions noted in bank correspondence and reviewing a sample of distribution agreements with suppliers; and

- in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of a potential bias, and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, including internal specialists and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit process.

There are inherent limitations in our audit procedures described above. The more removed laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

Invoice discounting facilities from RBS Invoice Finance Limited, under the umbrella of NatWest Bank Plc, provided to the company amounting to £2,532,871 at 31 December 2025 are secured by the following:

(a) A fixed charge over:

(i) all Land, all fixtures and fittings attached to that Land and all rents receivable from any lease granted out of that Land;

(ii) all plant and machinery, including any associated warranties and maintenance contracts;

(iii) goodwill;

(iv) uncalled capital;

(v) stock, shares and other securities and all income and rights relating to those stocks, shares and securities;

(vi) all intellectual property, licences, claims, insurance policies, proceeds of any insurance;

(vii) any hedging arrangements, future transactions or treasury instruments;

(viii) all Non-Vesting Debts and their Related Rights

(b) a floating charge over all the other property, assets and rights of the Client owned now or in the future which are no subject to an effective fixed charge under this deed or under any other security held by RBS Invoice Finance Limited.

Ulster Bank Limited also continues to hold a registered charge with respect to an invoice discounting facility which it previously provided to the company.

Cash flow and fair value interest rate risk

The company is exposed to interest rate risk in that it holds borrowings, primarily in the form of invoice discounting facilities. The directors expect that the cost of finance facilities may increase in future financial periods but are satisfied that the company has sufficient funds available to deal with any increases should they occur. The directors are satisfied that the company will be able to effectively manage its borrowings into the future from cashflows generated from current trading activities and confirm that the market is continually reviewed for available financing facilities on more favourable terms.

The issued share capital of the company at 31 December 2025 is confirmed as held by the following parties:

- Vetranio Unlimited, an Isle of Man registered company, holds 148 ordinary shares and is the company's parent undertaking. Vetranio Unlimited is controlled by company director Barry Connolly. This shareholding has increased as a result of the acquisition of 26 ordinary shares previously held by Grandemain Limited in October 2025.

- Calmdon Limited, a Northern Ireland registered company, holds 26 ordinary shares. Calmdon Limited is controlled by company director William Donnelly.

- Denore Limited, an Isle of Man registered company, holds 13 ordinary shares. Denore Limited is controlled by director Ivan Walpole.

- Valsam Limited, a Northern Ireland registered company, holds 21 ordinary shares. Valsam Limited is controlled by director Ryan McCann.

- Grandemain Limited, a Northern Ireland registered company, disposed of its holding of 26 ordinary shares in October 2025. Subsequent to this disposal, Grandemain Limited, which is controlled by former director Clark McIlroy, holds no direct or indirect equity interest in the company.

The company has availed of the exemption provided in Financial Reporting Standard 102, 'Related Party Disclosures', for subsidiary undertakings wholly controlled within the group, from the requirement to give details of transactions with entities that are part of the group or investees of the group qualifying as related parties.

The following balances and transactions undertaken with group and connected party undertakings require disclosure:

During the financial year, Calmdon Limited, a Northern Ireland registered company with a common director and shareholder, charged the company for management and administrative services totalling £18,000 (31 December 2024: £0). The outstanding balance at 31 December 2025 is related to the services received and has been cleared in full in the post year end period.

The company undertook the purchase and sale of finished goods, including the recharging of associated promotional activities and brand royalties, during the financial year totalling £68,916 and £1,375,011 (31 December 2024: £399,168 and £3,251,862) respectively with Richmond Marketing (NI) Limited, a Northern Ireland registered company which is under the ultimate control of the company's parent undertaking Vetranio Unlimited. In addition, Richmond Marketing (NI) Limited charged the company £71,493 (31 December 2024: £100,000) with respect to management fees relating to back-office services provided which directly assist with its operational activities.

During the financial year, the company purchased and sold finished goods, including related promotional activities, totalling £100,381 and £125,617 (31 December 2024: £21,791 and £50,652) respectively with Richmond Marketing Limited. Richmond Marketing Limited is a Republic of Ireland registered company which is also under the ultimate control of Vetranio Unlimited.

The balances outstanding as receivable by the company from group undertakings Richmond Marketing (NI) Limited and Richmond Marketing Limited are directly related to the above noted trading activities and have been undertaken under commercial terms and conditions.

The directors can confirm that the company has continued to operate on a profitable basis and to generate positive cashflows subsequent to the financial year end.

In addition to changes in the company's shareholding structure in the current financial year, further ownership changes have been completed in the post year end period, as follows:

- 21 £1.00 ordinary shares were disposed of by Valsam Limited to Vetranio Unlimited in July 2026. Valsam Limited is controlled by director Ryan McCann.

- 13 £1.00 ordinary shares were disposed of by Denore Limited to Vetranio Unlimited in August 2026. Denore Limited is controlled by director Ivan Walpole.