The director presents the strategic report for the Period ended 26 December 2025.

Tootonic Limited (“the Company”) is the largest independent retailer of character clothing in the UK, trading under the name ‘Character.com’. The Company offers a wide range of high quality, value for money and fashionable licensed character clothing and related products.

The Company operates primarily as an ecommerce business and, since Autumn 2023, has been developing a physical retail presence.

During the period, the Company generated turnover of £53.9 million, compared with £55.5 million in the prior period. Gross profit was £32.7 million (prior to an exceptional stock write down), representing a gross margin of approximately 61%, compared with 64% in 2024. The year on year reduction was driven by the Company taking action to reduce its stock holding in the final quarter of 2025.

Both revenue and profitability were impacted by continued global economic uncertainty, with profitability further impacted by the Company’s early stage investment in its store portfolio.

A comprehensive review of the Company’s historic stock and underperforming products was undertaken, resulting in an exceptional provision of £4.5m.

Economic and Market Conditions

The Company continues to operate in an environment affected by inflationary pressures, changes in consumer spending and global geo-political and economic uncertainty. These factors may affect both the level of consumer demand and the Company's operating costs.

The Company seeks to mitigate these risks through its diversified routes to market, offering a broad range of products at competitive prices and maintaining a strong focus on customer service. Management continues to monitor consumer demand, pricing and costs closely and regularly reviews expenditure to identify opportunities for efficiencies and cost savings.

Currency Risk

The Company is exposed to foreign exchange risk through its international trading activities and purchases from overseas suppliers.

The Company uses a third-party provider to facilitate foreign currency transactions and continues to monitor foreign exchange markets and its exposure to currency movements.

Throughout the period, the Company focused on maintaining and developing its market position while managing the pressures arising from the wider economic environment.

The Company continued to focus on maintaining healthy margins, managing its Cost of Doing Business (“CODB”) and maintaining effective control over operating costs.

Investment has continued in the Company's retail presence and its ecommerce operations, with the objective of supporting longer-term growth, strengthening the Character.com brand and broadening the Company's routes to market.

The Company also continues to develop its international customer base and product offering, while maintaining a focus on customer experience, product quality and operational efficiency.

The Company's principal financial KPI is gross margin, which was approximately 61% for the period ended 26 December 2025, compared with 64% in the prior period, prior to exceptional stock write down.

Other key indicators considered by management include turnover, gross profit, operating profit and cash generation. Turnover for the period was £53.9 million (2024: £55.5 million), with gross profit of £32.7 million (2024: £35.2 million), prior to exceptional stock write down.

Section 172(1) Statement

In accordance with Section 172 of the Companies Act 2006, the Directors continue to promote the success of the Company for the benefit of its stakeholders. In doing so, the Directors have regard to:

• the long-term viability and sustainability of the business when making strategic and operational decisions;

• maintaining close and constructive relationships with suppliers and customers;

• keeping employees informed of business developments and maintaining effective communication throughout the organisation;

• providing a high-quality customer experience across both online and physical retail channels, including a broad product range, competitive pricing and efficient delivery;

• regularly reviewing the Company's financial and operational performance to ensure that the business remains appropriately positioned to meet its obligations and achieve its strategic objectives;

• maintaining appropriate oversight of the Company's investment and growth plans.

Environmental, Social and Governance (ESG) Report
Character.com

Financial Year Ending December 2025

At Character.com, we are committed to building a more sustainable and responsible future. Our efforts focus on improving product quality, supporting ethical supply chains, and reducing our environmental footprint. Throughout 2025, we made meaningful progress in our ESG journey by advancing key initiatives, launching impactful products, and laying the groundwork for deeper engagement and accountability in 2026.

CLOTHES MADE SMARTER

Ethical Sourcing and Material Use

Sustainable Cotton Sourcing:
Having significantly expanded our use of responsibly sourced cotton in 2024 a large proportion of our cotton products are made using either organic cotton or cotton sourced through more sustainable farming practices. Our long-term target remains: 80% of our cotton products to be sustainably sourced by 2030—supporting better farming practices, improved livelihoods, and reduced environmental impact.

Traceability and Transparency:
We are committed to maintaining transparency and ethical sourcing standards and continue to improve traceability across our cotton supply chain.

Sustainable Packaging

Packaging Materials:
All new product packaging is a blend of 30% recycled plastic, which has reduced our reliance on virgin materials.  We also minimise the use of insert cards across our packaging range to help minimise overall material usage and waste.

FSC-certified Paper Products:
All swing tags and packaging are now made from FSC-certified materials, ensuring that all paper components are responsibly sourced from managed forests or recycled content. This aligns with our broader goal of ensuring sustainable sourcing across all packaging formats.

Product Innovations

Charity Partnerships:
Throughout 2025, Character.com continued to support charities and community organisations through the donation of product samples and clothing, providing practical support to families and communities.

Our charitable giving has supported a range of local and national organisations, including Wales Air Ambulance, Swansea Family Centres and Swansea-based children’s autism organisations. At a national level, we also supported Lightfund Charity through event support and donations, as well as Hospital Pyjamas and Sharewear Charity through product donations.

These initiatives enable us to use our products and resources to support organisations that are making a positive difference to children, families and communities.

GOVERNANCE

Ethical Standards and Compliance

SEDEX Membership:
Character.com remains fully registered with SEDEX, reflecting our commitment to high standards in labour rights, environmental management, and ethical business practices. Regular audits and supplier assessments ensure we meet and uphold these standards.

Supplier Code of Conduct:
All our suppliers are required to adhere to our comprehensive Supplier Code of Conduct, which sets clear expectations around fair labour, environmental responsibility, and ethical business behaviour. We continue to monitor compliance through regular evaluations and third-party audits.

Governance Oversight

Our ESG strategy remains a strategic priority for the Board. While overall responsibility lies with the CEO, day-to-day implementation and operational integration are driven by our directors and senior management team. This leadership structure ensures accountability and continuous improvement across our ESG agenda.

Looking Ahead

In 2026 and beyond, Character.com will continue to innovate and lead with purpose. Building on the solid foundations laid, we aim to deepen our impact in sustainability, inclusivity, and ethical business practices.

On behalf of the board

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

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the 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 company and of the profit or loss of the company 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 UK 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 company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The director presents his annual report and financial statements for the Period ended 26 December 2025.

The principal activity of the company continued to be that of retail e-commerce sales, and more recently, retail sales.

The results for the Period are set out on page 11.

Ordinary dividends were paid amounting to £500,000. The director does not recommend payment of a further dividend.

The director who held office during the Period and up to the date of signature of the financial statements was as follows:

bk plus Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Streamlined Energy & Carbon Report

The Company in line with the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report Regulations 2018 the energy use and greenhouse gas (GHG) emissions are set out below for the period ending 26 December 2025.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the review of the business and a description of the principal risks and uncertainties facing the company.

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

We have audited the financial statements of Tootonic Ltd (the 'company') for the Period ended 26 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 26 December 2025 and of its loss for the Period then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 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

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the director's report for the financial Period 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.

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

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

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

• certain disclosures of director's remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the 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 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 company or to cease operations, or has no realistic alternative but to do so.

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

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

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 about their own identification and assessment of the risks of irregularities;

• The nature of the industry and sector, control environment and business performance;

• Any matters we identified having obtained and reviewed the company’s policies and procedures relating to:

  • Identifying, evaluation and complying with laws and regulations and whether they were aware of any instances of noncompliance;

  • 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;

• The matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

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 for fraud in revenue recognition. 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 we considered in this context included the UK Companies Act and local tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

• Enquiry of management around potential litigation and claims.

• Enquiry of entity staff to identify any instances of non-compliance with laws and regulations.

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

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

• Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness; and assessing whether the judgements made in making accounting estimates are indicative of a potential bias.

• 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.

We also communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

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

Tootonic Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 5 Celtic Trade Park, Bruce Road, Fforestfach, Swansea, SA5 4EP.

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.

This 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:

• 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 financial statements of the company are consolidated in the financial statements of Fun Brands Group Limited. These consolidated financial statements are available from its registered office Unit 5 Celtic Trade Park, Bruce Road, Swansea, SA5 4EP.

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has 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. In assessing whether the going concern assumption is appropriate, management has taken into account all available relevant information about the future, which is at least, but is not limited to, 12 months from the date when the financial statements are authorised for issue.

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.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

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

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

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

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

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

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

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

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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

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

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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

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

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

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

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

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

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

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

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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

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

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

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

The 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 leases asset are consumed.

The right-of-use asset is initially measured at cost, which comprises the initial measurement of the lease liability adjusted for lease payments made at or before the commencement date less any lease incentives or grants received, plus initial direct costs and an estimate of the cost of obligations to dismantle, remove or restore the underlying asset and the site on which it is located.

The right-of-use asset is subsequently adjusted for remeasurements of the lease liability and applies the relevant cost model, fair value model or revaluation model as set out within the accounting policies for the applicable asset class. Where the cost model is applied, the asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, and is periodically reduced by impairment losses, if any.

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.

In the application of the company’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.

Management estimate the useful life of non- current assets based on the period over which the asset is expected to be used and provide for depreciation accordingly. Where an indication of impairment is identified, the estimation of recoverable value requires estimation.

Management exercises critical judgement in determining whether the criteria for recognising an expense has been met prior to receiving the supplier invoice. This involved assessing the point at which goods are delivered or services are substantially performed based on operational data and contract milestones. Judgement is applied at each reporting period to identify these obligations.

The valuation of inventory requires the directors to exercise significant judgement in assessing the recoverability of stock carrying values. The Company holds a diverse range of inventory items and, in determining the appropriate level of provisioning, the directors consider expected future sales demand, anticipated selling prices, stock ageing profiles, historical sales performance and estimated costs to sell.

Significant judgement is required in assessing the net realisable value of slow-moving, excess and obsolete inventory, particularly where future sales are dependent upon promotional activity or discounted selling prices. Changes in these assumptions could have a material impact on the inventory provision recognised and the carrying value of stock included within the financial statements.

Based on the information available at the reporting date, the directors consider the inventory provision recognised to be appropriate and the carrying value of inventory to be recoverable.

In the opinion of the directors, the disclosure of turnover by geographical location would be seriously prejudicial to the interests of the reporting entity and therefore this information has not been disclosed.

During the year, the Company undertook a comprehensive review of its inventory valuation methodology and recognised a stock provision of £4.5m in respect of slow-moving, excess and obsolete inventory. The provision reflects management's assessment of the amount by which the carrying value of certain inventory exceeds its estimated net realisable value.

The charge is considered exceptional due to its materiality and the non-recurring nature of the review that gave rise to the provision. Accordingly, the expense has been separately disclosed as an exceptional item within cost of sales to assist users' understanding of the financial performance for the year.

The provision was determined using historical sales data, inventory ageing information and expected future selling prices, together with any costs required to complete and sell the inventory.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2024 - 2).

The actual (credit)/charge for the Period can be reconciled to the expected (credit)/charge for the Period based on the profit or loss and the standard rate of tax as follows:

Included within tangible fixed assets are right-of-use assets, as follows:

The carrying value of land and buildings comprises:

Included within stock is a provision for £4,506,663 (2024: £nil) for obsolescent stock.

During the year, the Company recognised a provision against certain inventory items where the estimated net realisable value was lower than cost. The provision reflects management's assessment of the amounts expected to be recovered through the future sale of inventory, taking into account anticipated selling prices and costs necessary to make the sale.

The recognition of this provision has not been treated as a prior year adjustment. At the previous reporting date, management was not aware of information indicating that certain inventory items would ultimately be sold at values below their carrying amount.

Accordingly, the provision arises from new information and circumstances identified during the current financial year and represents a change in estimates and assumptions used in determining the net realisable value of inventory, rather than the correction of an error in previously issued financial statements. The prior year figures have therefore not been restated.

Management continues to monitor inventory performance and market conditions and will update the provision as necessary to ensure inventories are stated at the lower of cost and estimated selling price less costs to complete and sell.

The HSBC loan is a working capital facility. The loan is secured by by a cross guarantee and debenture between Fun Brands Limited and Harry Bear Limited, a debenture and a limited guarantee. The trade loan account has an approved ceiling of £7,000,000 whereby individual drawdowns carry flexible periods. The current drawdown balance is £6,607,542. Capex bank loans are secured by debenture including fixed charge over all present freehold and leasehold property. Interest rates on the loans vary between 5.5% to 6%.

Finance lease payments represent rentals payable by the company for properties. Leases are on fixed base rents, with variable payments within turnover rent agreements.

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

The deferred tax liability of £453,038 set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

A deferred tax asset of £1,536,304 has been recognised in respect of trading losses. Management has assessed that it it probable (more likely than not) that sufficient future taxable profits will be generated against which these losses can be utilised. The unused tax losses carry no expiry date.

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

Following the reporting date, the Company received an investor loan of £1.7 million. The funds provide additional liquidity and support the Company's operational and funding requirements. While the loan was not in place at the reporting date and is therefore treated as a non-adjusting event, the directors have considered its receipt when assessing the Company's future cash flow requirements and financial resilience.

At the period end, the company owed £811,326 (2025: £508,676) to it's parent company, Fun Brands Group Limited. The balance is unsecured, interest free and is repayable on demand.

At the period end, the company owed £50,149 (2025: £50,149) to a connected company, BGF Limited. The balance is unsecured, interest free and is repayable on demand.

The immediate and ultimate parent undertaking and controlling party is Fun Brands Group Limited, a company incorporated in England and Wales. Fun Brands Group Limited is the parent undertaking of the smallest and largest group of undertakings to consolidate these financial statements at 26 December 2025. Copies of the consolidated financial statements can be obtained from its registered office Unit 5 Celtic Trade Park, Bruce Road, Fforestfach, Swansea, SA5 4EP.