The director presents the strategic report for the year ended 31 March 2025.
The year ended 31 March 2025 represents a further period of operational stabilisation and financial progress for the Group. During the year management continued to focus on improving manufacturing efficiency, strengthening supply chain resilience, reducing operating costs, enhancing cash generation and positioning the business for sustainable long term growth. The Group owns and operates a portfolio of luxury furniture and cabinetry brands, including Smallbone of Devizes, Mark Wilkinson Furniture, Brookmans and McCarron & Co. The brands serve private clients, developers, architects and interior designers throughout the United Kingdom, North America and selected international markets. The operational restructuring and investment programme undertaken in previous years has substantially completed. The Group continues to benefit from investments in manufacturing capability, systems, operational processes and supply chain improvements, resulting in enhanced efficiency, reduced fixed costs and improved production flexibility. In the current financial year this is being complemented by investment in information technology and artificial intelligence, together with an expansion of the Group's social media presence, which the directors expect to further strengthen the platform for sustainable long-term growth.
Financial Performance
Turnover for the year was approximately £21.4 million (2024: £28.8 million). The reduction in revenue primarily reflects delayed installations within the international development sector, where projects are often large, bespoke and subject to extended delivery schedules, and where development cycles during the year did not allow for installation activity. Despite this, the Group remained profitable, reflecting the success of the efforts undertaken in recent years to lower the Group's breakeven point through reductions in fixed costs and improvements in operational efficiency, together with a continued focus on margin quality, cost control and project execution. The Group is also in the process of finalising plans for five large developments with several developers which, taken together, are expected to generate revenues approximately ten times larger than the developer contract that delivered strong results in the year ended 31 March 2024, and which the directors expect to provide a substantial contribution to future revenue and profitability. The balance sheet position continued to improve during the year with net liabilities reducing compared with the prior year. The directors believe that the combination of profitability and reduction of external indebtedness represents a significant milestone in the Group's ongoing recovery and development.
Balance Sheet Strengthening and Debt Reduction
A significant achievement during the year was the continued strengthening of the Group's balance sheet. During the year the Group repaid external borrowing and asset-backed finance facilities, including the repayment of the Group's CBILS borrowing, Close Brothers equipment finance facilities and other third-party lending arrangements. Since 2019 the Group has undertaken a substantial programme of balance sheet strengthening and debt reduction. Over this period approximately £11.6 million of third-party borrowings, equipment finance facilities, hire purchase obligations and other external debt have been repaid. Including associated finance costs and interest, the total value of these repayments exceeds £13 million. During the year ended 31 March 2025 the Group completed repayment of its remaining CBILS borrowing and equipment finance facilities. As a result, the Group entered the new financial year with no material external bank debt and a significantly simplified capital structure.
The Group continues to benefit from the long-term support of its principal shareholder, who has provided substantial financial backing since the acquisition and restoration of the Group's heritage brands. Since the year end, shareholder funding arrangements have been further formalised through a legally binding undertaking under which amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for a minimum period of 24 months from the date of approval of the financial statements. In addition, the Group has the benefit of committed funding facilities totalling £14.7 million, comprising facilities of £2.4 million each provided by Greyson Holdings LLC, a US limited liability company, in September 2022, June 2023 and October 2024, a further £5 million facility provided by Greyson Holdings LLC in April 2026, and a £2.5 million facility provided by Extell Development Company in September 2022, in each case as evidenced by charges registered at Companies House. The Group had previously drawn £2,794,155.27 in aggregate against these facility agreements (all drawings having been made against the Greyson Holdings LLC facilities only) and the lenders have agreed that the Group may continue to draw on the prior agreements, such that £11,905,844.73 remains undrawn and accessible to the Group for its needs. Combined with the elimination of material external bank debt and a healthy forward order book, the directors believe that the Group is appropriately funded to support its current operations and future growth plans. The Group's capital structure now reflects a long term shareholder-supported funding model rather than reliance upon external lending institutions, providing greater flexibility to pursue strategic opportunities whilst maintaining financial stability.
Extell Development Company, one of the largest developers in Manhattan, Park City, Utah and Jerusalem, Israel, has been a client of the Group for over 21 years and, in addition to providing the facility referred to above, has a development pipeline in excess of $13 billion (approximately £10 billion). The Group is in the process of finalising contracts with Extell Development Company which are expected to generate revenues in excess of £100 million, underlining the strength and longevity of the relationship.
Operational Development
The directors continue to invest selectively in manufacturing capability, systems and operational processes where such investment is expected to improve productivity, efficiency and customer service. Recent operational initiatives have focused on streamlining workflows, improving project delivery and enhancing manufacturing performance. The operational restructuring undertaken in recent years has reduced the Group's fixed cost base and improved manufacturing efficiency, providing a stronger platform for future growth and profitability. The directors have approved additional capital expenditure over the next 2 years in the amount of £5,000,000.
Investment in Information Technology and Artificial Intelligence
In addition to investment in manufacturing capability, the Group has, in the current financial year, begun to invest in information technology and artificial intelligence as part of a significant and ongoing programme of digital expansion. This investment has been made since 31 March 2025 and is therefore not reflected in these financial statements. The artificial intelligence programme is based on open-source large language models and is not expected to require significant investment in additional IT equipment. A comprehensive enterprise resource planning (ERP) system is currently being implemented across the business, accompanied by improvements to each of the Groups's core processes, from design and sales through to manufacturing, project delivery and aftercare. This investment programme also includes a comprehensive revamp and expansion of the Group's social media activities and a focus on high-end collaboration tools across the business. The Group is also in the process of enhancing the bespoke design and craftsmanship expertise developed over the past 50 years by digitising this knowledge and incorporating it into an AI-enabled database, which together support the Group in serving its clients. This investment is expected to support the further downsizing and more efficient use of both property and personnel, contributing to further reductions in the Groups's fixed cost base. The directors believe that this investment positions the Group with the capacity and scalability to more than double its annual sales and to then sustain growth rates of approximately 20 per cent compound annual growth over the medium term. The directors consider these investments to be an important element of the Groups's strategy to improve productivity through investment in capacity, strengthen client engagement and support sustainable long-term growth, and intend to continue investing in these areas where appropriate.
Showroom and Litigation Matters
The Group has previously reported issues relating to its former Knightsbridge showroom premises. Following a series of water ingress events and subsequent disputes concerning responsibility for remediation works and associated losses, the Group ceased occupation of the premises. The Group has since opened a new showroom at 100 Brompton Road, London, and during the year invested £809,346 in its fit-out (note 12). The Group has commenced legal proceedings against a number of parties in relation to losses arising from these matters, including a counterclaim in excess of £100 million filed in the High Court against the Landlord in response to the Landlord's claim against the Group of approximately £2 million (see note 28). In addition, two claims have been made against Aviva Insurance, as insurer of Unbloc Ltd, whose actions on two occasions the Group alleges caused damage to the premises, with the insurance claims being for substantial amounts in aggregate in excess of £10 million; Unbloc Ltd. has insurance coverage of £20 million. The directors believe that the Group has strong grounds to pursue recovery of certain costs and losses incurred, and consider that successful prosecution of these claims would provide further support to the Group's financial position and ongoing recovery. As legal proceedings remain ongoing, their ultimate outcome cannot presently be determined and no related asset has been recognised within the financial statements. The directors continue to monitor developments closely and will pursue recovery actions where considered appropriate and in the best interests of the Group.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Group include general economic conditions affecting demand for premium residential projects, inflationary pressures and tariff developments affecting input costs, timing and execution of major development and private client projects, supply chain disruption and labour market conditions, and the outcome of ongoing litigation and associated insurance claims. The directors regularly review these risks and seek to mitigate their potential impact through active management and ongoing monitoring.
Outlook
The directors remain encouraged by the Group's performance and strategic position. The Group's brands continue to enjoy strong recognition within the premium and ultra-high-net-worth residential markets, particularly within the United Kingdom and North America. The Group enters the new financial year with a substantial forward order book, no material external bank debt and committed long-term shareholder support. Whilst wider economic conditions remain uncertain, the directors believe that the Group is well positioned, supported by its current investment in information technology, artificial intelligence and digital client engagement, to continue improving profitability, cash generation and operational performance over the medium term.
Valuation of the Company
The directors have a strategic plan to realise the benefit of the significant investment made in the Group's brands over the past fifty years, and in particular over the past five years. Planned capital expenditure on a new, first-of-its-kind manufacturing facility is expected to increase capacity so that the Group can achieve revenues in excess of £75 million per annum. The Group has no borrowings from third parties, its borrowings being long-term funding provided by related parties, and the directors' objective is for the Group to become fully debt free and cash rich over the next three to five years. The directors believe that a future debt-free, cash-rich, multi-brand luxury business with state of-the-art manufacturing facilities would attract valuation multiples in line with those achieved by other luxury brands, in the order of 10 to 12 times EBITDA.
On 23 June 2026 Howden Joinery Group Plc completed its acquisition of the parent company of Ultima Furniture Systems Limited, trading as DIY Kitchens, a vertically integrated British kitchen manufacturer, for an enterprise value of £390 million on a cash and debt-free basis, representing approximately 8.5 times EBITDA for the twelve months to March 2026. DIY Kitchens reported revenue of £136 million and EBIT of £37 million in 2025. Although DIY Kitchens addresses a lower-tier segment of the market, the directors consider this transaction to provide a current and relevant market benchmark for the valuation of vertically integrated British kitchen manufacturers, and expect the Company's position in the luxury segment to support a higher multiple.
The Group generated operating profit of £4,360,346 in the year ended 31 March 2024 (as restated) and £4,801,443 in the year ended 31 March 2025, equivalent to EBITDA of approximately £5.1 million and £5.8 million respectively after adding back depreciation and amortisation. Applying the transaction multiple of approximately 8.5 times EBITDA on an illustrative basis would imply indicative enterprise values of approximately £44 million and £49 million respectively.
The directors expect revenue and profitability to continue to grow over the next three to five years as the Group concludes a number of large contracts. Consistent with the outlook above and the investment in technology described in this report, the directors expect the Group to achieve EBITDA of approximately £16 million in the 2028/2029 financial year, implying an indicative enterprise value in excess of £130 million on the same basis, with growth of approximately 20 per cent compounded annually expected thereafter over the longer term.
These indicative values are before taking account of the Group's heritage brand portfolio, its substantial forward order book, the development contracts in the process of being finalised (including with Extell Development Company, Four Seasons, Aman Resorts and Red Mountain LLC of Aspen, Colorado), other development opportunities and the planned expansion of several of the Group's brands.
This commentary is illustrative only, includes forward-looking expectations that are inherently uncertain, does not constitute a formal valuation of the Group and is not reflected in these financial statements, which are prepared under the historical cost convention. It is provided to assist readers in understanding the directors' view that the underlying value of the Group's brands and business substantially exceeds the carrying amounts recognised in the balance sheet.
As at 31 March 2025, the Group reported net liabilities and net current assets. The substantial majority of these liabilities relate to long-term shareholder funding provided in support of the Group's growth and development and are not repayable on demand. Greyson Holdings LLC has provided a legally binding undertaking that amounts due to it and entities owned by it will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements. In addition, the Group has access to undrawn committed funding facilities of £11,905,844.73, out of total committed facilities of £14.7 million provided by Greyson Holdings LLC and Extell Development Company, available throughout that period. The directors have reviewed detailed cash flow forecasts, current trading performance, the forward order book and available funding facilities. During the year the Group repaid external borrowing, including CBILS and equipment finance obligations. The Group is no longer materially reliant on external bank debt. After considering these matters, together with the expected continued support of the principal shareholder, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements. The directors are confident that the 2026 and 2027 accounts will yield additional profits in excess of the operating profits of £4,360,346 and £4,801,443 reported for the years ended 31 March 2024 and 31 March 2025 respectively, being £9,161,789 in aggregate.
Key Performance Indicators
| 2025 | 2024 |
| £ | £ |
Turnover | 21,370,540 | 28,799,308 |
Gross profit / loss | 10,978,029 | 16,215,404 |
Gross profit margin | 51.4% | 56.3% |
Operating profit / loss | 4,801,443 | 4,360,346 |
Operating profit margin | 22.5% | 15.1% |
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 March 2025.
The results for the year are set out on page 11.
No ordinary dividends were paid. 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:
The financial statements have been prepared on a going concern basis which assumes that the Group will continue in operational existence for at least twelve months from the date of approval of the financial statements.
The Group had net liabilities of £18,910,307 (2024: £31,476,900) for the financial period ended 31 March 2025. Greyson Holdings LLC has provided a legally binding undertaking that amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for at least 24 months from the date of approval of the financial statements, and the Group has undrawn committed funding facilities of £11,905,844.73. Further details are given in the strategic report and in note 1.2 to the financial statements.
Included in the group's strategic report is a review of the business and a description of the principal risks and uncertainties facing the company.
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.
Qualified opinion on financial statements
We have audited the financial statements of Sapphire 700 Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 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 significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for qualified opinion
Conclusions relating to going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or parent company or to cease operations, or has no realistic alternative but to do so.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and taxation legislation,
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in our audit procedures described above. The more removed that 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.
Our audit testing typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected. 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.
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 £0 (2024 - £0 profit).
Sapphire 700 Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is c/o Acuity Law Limited, 3 Assembly Square, Britannia Quay, Cardiff, CF10 4PL.
The group consists of Sapphire 700 Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Sapphire 700 Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
These financial statements are prepared on the going concern basis. The directors have reasonable expectations that the Group will continue in operational existence for the foreseeable future.
At 31 March 2025 the Group had net liabilities of £18,910,307 (2024: £31,476,900) and net current assets of £3,598,279 (2024: net current liabilities of £35,575,331). The substantial majority of the company's liabilities relate to long-term funding provided in support of the company's growth and development, which is not repayable on demand. Greyson Holdings LLC has provided a legally binding undertaking that amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements.
In addition, the Group has committed funding facilities totalling £14.7 million provided by Greyson Holdings LLC and Extell Development Company, of which £11,905,844.73 was undrawn and available to the company at the date of approval of these financial statements.
The directors have reviewed cash flow forecasts covering a period of at least twelve months from the date of approval of these financial statements, together with current trading performance, the forward order book and the funding available to the Group. During the year the Group completed repayment of its CBILS borrowing and equipment finance obligations and it is no longer materially reliant on external bank debt.
After considering these matters, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. The financial statements have therefore been prepared on the going concern basis and do not include any adjustments that would result if the company were unable to continue as a going concern.
Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.
When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.
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.
Costs of long term contracts include all direct costs and attributable profits. Provision is made in full for any foreseeable losses. Long term contracts are assessed on a contract by contract basis and reflected in the Income Statement by recording turnover and related costs as contract activity progresses. No profit is recognised until the outcome of a long term contract can be assessed with reasonable certainty. Work in progress represents costs incurred net of amounts transferred to cost of sales, less foreseeable losses and applicable payments on account not matched with turnover.
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.
Assets held under HP had a net book value of £92,515 (2024: £166,805) as at 31 March 2025.
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.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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 assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
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 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.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the group but are presented separately due to their size or incidence.
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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The directors have assessed the Group's ability to continue as a going concern based on forecasts for the following twelve months and beyond, and the continued support of the stakeholders and shareholders, and are satisfied that it has the resources to continue its business for the foreseeable future. Furthermore, the directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. Therefore the financial statements continue to be prepared on the going concern basis.
Management assess at the inception of the lease whether an arrangement is a finance or operating lease based on who bears substantially all risk and benefits incidental to the ownership of the leased items. Based on the management's assessment, the risk and rewards of owning the items leased by the group are retained by the lessor and therefore accounts for such lease as operating lease. Otherwise, the lease will be accounted for as finance lease.
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 group estimates the useful lives of intangible fixed assets and tangible fixed assets based on the period over which the assets are expected to be available for use. The estimated useful lives are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the assets. In addition, estimation of the useful lives of tangible fixed assets is based on collective assessment of industry practice, internal technical evaluation and experience with similar assets. Actual results, however, may vary due to changes in estimates brought about by changes in factors mentioned above.
The group assesses impairment on intangible and tangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the group considers important which could trigger an impairment review include the following:
- significant underperformance relative to expected historical or projected future operating results;
- significant changes in the manner of use of the acquired assets or the strategy for overall business; and
- significant negative industry or economic trends.
In determining the present value of estimated future cash flows expected to be generated from the continued use of the assets, the group is required to make estimates and assumptions that can materially affect the financial statements. These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss would be recognised whenever evidence exists that the carrying value is not recoverable. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.
An impairment loss is recognised and charged to profit or loss if the discounted expected future cash flows are less than the carrying amount. Fair value is estimated by discounting the expected future cash flows using a discount factor that reflects the risk-free rate of interest for a term consistent with the period of expected cash flows.
Recognised amounts of construction contract revenues and related work in progress reflect management's best estimate of each contract's outcome and stage of completion. This includes the assessment of the profitability of on-going construction contracts and the order backlog. For more complex contracts in particular, costs to complete and contract profitability are subject to estimation uncertainty.
Management estimates the net realisable values of stocks, taking into account the most reliable evidence available at each reporting date. The future realisation of these stocks may be affected by market-driven changes that may reduce future selling prices.
The group estimates the allowance for doubtful trade and intercompany debtors based assessment of specific accounts where the group has objective evidence comprising default in payment terms or significant financial difficulty that certain customers are unable to meet their financial obligations. In these cases, judgement used was based on the best available facts and circumstances including but not limited to, the length of the relationship.
The turnover and loss before taxation are attributable to the one principal activity of the group.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual credit for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
During the year, the Group recognised an exceptional charge of £314,090 in respect of provisions established for claims made against the Group. The provision reflects management's best estimate of the expenditure required to settle the obligations arising from these matters at the reporting date, based on legal advice received and the information currently available.
Due to the size and non-recurring nature of the claims, the charge has been presented separately on the face of the statement of comprehensive income as an exceptional item in order to assist users' understanding of the Group's underlying trading performance.
The exceptional credit of £2,243,457 in the year ended 31 March 2024 arose from the release of a rent provision.
Assets held under hire purchase had a net book value of £92,515 as at 31 March 2025 (2024: £166,805).
The debtors have been reviewed by the directors for indicators of impairment. An impairment allowance of £7,659,153(2024: £7,659,153) was recognised against trade debtors.
Finance lease payments represented rentals payable by the Group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Finance leases are secured on the assets that have been financed. All were paid off in the year.
Goods (other than appliances and any other items not manufactured by the group) are covered by a 10 year warranty from the date of delivery. Furthermore, the Group undertakes remedial work once jobs are complete. Provisions have been provided for in these respects.
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 following non-adjusting events have occurred since 31 March 2025 and have not been reflected in the balance sheet at that date:
In April 2026 Greyson Holdings LLC, a related party controlled by Mr R Shemesh, provided the Group with a further committed funding facility of £5 million, bringing the total committed funding facilities available to the Group to £14.7 million, as described in the strategic report.
Greyson Holdings LLC has provided a legally binding undertaking that amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements.
The ARX Group Limited, a wholly owned subsidiary within the Group, was dissolved on 15 July 2025.
The Group bought furniture products during the year from W J White Furniture Limited, a company in which R Shemesh is a director and shareholder, to the value of £2,791,249 (2024: £2,540,818). At 31 March 2025, the balance outstanding to W J White Furniture Limited from the Group was £1,246,057 (2024: £893,668).
At 31 March 2025 the Group owed £26,023,162 (2024: £21,319,719) in respect of loans from entities owned by Greyson Holdings LLC, which are related parties of the Group. Greyson Holdings LLC is controlled by Mr R Shemesh, a director of the Company. The balance comprises loans from group undertakings of £13,523,167 (2024: £20,169,739) and other loans of £12,499,995 (2024: £1,149,980), as analysed in note 19. The loans are interest free and have no fixed terms of repayment. Greyson Holdings LLC has provided a legally binding undertaking that these loans will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements.
No compensation was paid to key management personnel during the period (2024: £Nil).
The Group is involved in a contractual dispute concerning amounts claimed by a third party in connection with contractual obligations relating to a premises. The amount claimed is approximately £2 million. The Group has counterclaims for losses and damages that far exceed that amount in relation to this. The matter is subject to court proceedings, and the timing and amount of any potential inflow and outflow remain uncertain.