The directors of The Sleep Group Topco Limited (‘the company’) present their strategic report on the affairs of the company and its subsidiaries (together, ‘the group’), together with the audited financial statements and independent auditor’s report for the year ended 31 January 2026. The directors, in preparing this strategic report, have complied with s414C of the Companies Act 2006 and S172 relating to the directors’ duties to promote the success of the group.
The results for the financial period are given in the income statement on page 14 and in the notes to the financial statements. Results are for the year ended 31 January 2026. The profit for the period after taxation amounted to £1,605,000 (2025: £1,188,000 loss). EBITDA amounted to £13,662,000 (2025: £13,496,000).
The company's principal activity is that of a holding company. The group’s principal activity is the manufacture and distribution of sleep products including mattresses, bed bases and headboards. The group’s strategy is to focus on developing its market leading products with a clear vision to improve the sleep of the nation by delivering excellent quality, sublime customer and consumer experience and to be an employer of choice in the communities it operates in. The group’s product portfolio makes it the clear market leader in the UK. The group manufactures its product from its sites in Barnoldswick and Rochester.
The group operates two market leading brands that fit well together - Silentnight operates in the mass / middle market while Sleepeezee sits in the upper / middle market and appeals to a distinct set of consumers with a differentiated product offer. This allows both businesses to grow together stronger and have a greater combined market presence.
The principal risks and uncertainties facing the group are broadly grouped into competitive, legislative framework, raw materials, exchange rates, credit and liquidity.
Competitive environment
In the UK, the group is reliant on certain major customers for sales of product ranges which are subject to ongoing review. The group is exposed to threats from competition, including imported products, as well as fluctuations in the size of the overall market. The group aims to mitigate competitive risks by continuing to maintain its position as the UK's leading sleep group through a focus on innovation and delivering quality products and positive customer and consumer experience.
Legislative framework
The group may be exposed to changes in the legislative framework. In addition, compliance related costs and failure to comply with such legislation could result in increased costs and / or reduced sales for the group. The directors regularly monitor compliance and ensure that they are made aware of legislative changes.
The directors aim to continue the management approach which has resulted in the group growing market share and its position as the market leader. They consider that the challenges facing consumer trade and the overall economy will remain during 2026/27, however, a strategy is in place to deliver sustained strong performance from continuing operations.
Section 172 statement
The group is committed to providing a safe and healthy work environment for all employees, visitors, and other stakeholders. This is achieved through robust health and safety policies, regular communication, measurement, training, and proactive risk assessments. The group also prioritises employee involvement in health and safety matters through local staff committees and open communication channels. The group gives high priority to all environmental, health and safety matters / concerns and is committed to compliance with applicable environmental, health and safety regulations in all territories where it conducts business.
The board ensures that all decisions are taken for the long term, and both collectively and individually aims to always uphold the highest standard of conduct. Similarly, the board acknowledges that the business can only grow and prosper over the long-term if it understands and respects the views and needs of the group’s investors, customers, employees, suppliers and other stakeholders to whom it is accountable, as well as the environment it operates within.
Typically, the board fulfils its duties partly through a governance framework that delegates day-to-day decision making to the employees of the group. The board recognises that such delegation needs to be part of a robust governance structure, which covers values, how we engage with our stakeholders, and how the board assures itself that the governance structure and systems of controls continue to be robust.
The directors set the agenda for each board meeting to ensure that the requirements of section 172 are always met.
The key stakeholder groups are set out below. The many and varied engagement processes help to give a better understanding of what matters to the stakeholders. Their views and needs, as well as the consequences of any decision in the long term are then considered in the business decisions made by the board and across the entire group, at all levels. This is through various methods, including: direct engagement by board members, receiving reports and updates from members of management who engage with such groups, and coverage in our board papers of relevant stakeholder interests with regard to proposed plans.
Workforce: The strength of the business is built on the dedication of all the employees and ensuring that everyone understands their roles and responsibilities. The interests of all employees are considered when making decisions. The workforce relies on the business to provide stable employment and opportunities to realise their potential in a working environment where they can be at their best.
The board of directors regards employee engagement as a matter of great importance and actively aims to improve the board’s understanding of the employees’ views and interests as well as improving the employees’ understanding of the group’s performance.
The business invests in training, coaching and skills development to ensure the required knowledge and behaviours are aligned with the group’s strategy as it is important for employees to feel connected to the group’s purpose.
Senior managers conduct regular briefings with their departments and the organisation as a whole to ensure the effective dissemination of information and to foster employee involvement. The updates give employees a platform to raise questions and make suggestions to the board and senior management team.
The group endeavours to consult with employee representatives, on behalf of the workforce, on all matters which directly affect their employment. The group’s policy is to meet with an employee forum monthly to provide business updates and gain colleague insights.
Consumers: Our consumers are our reason for existing. It is essential that the business can design and manufacture high quality products that live up to the key values of quality, service and innovation. In doing this we will build our brand value and loyalty.
Customers: The group recognises that the partnership with third party customers is central to its strategy and the continuing success of its business. The group operates with a customer base across multiple channels. These customers are vital to the success of the group. There are periodic meetings between the customers, the senior managers and the directors of the group to understand the strategic direction of the group.
The group’s strategy is based on sustainable business relationships with our customers. The group seeks to re-invest for growth and innovation. The group is committed to continuous development of its processes to improve the overall customer experience.
Investors: The group relies on our providers of debt funding as essential sources of capital to further business objectives and to protect and manage their investments in a responsible and sustainable way that generates value.
Suppliers: The group perceives its supplier network as a major contribution to value creation, quality and innovation and hence to our success. The group’s collaboration with its suppliers is based on a mutual understanding of product and production quality, security of supplies, competitive prices and innovation, as well as the continuous integration of sustainability requirements.
Suppliers have a significant impact on our sustainability performance. It is therefore essential that our suppliers meet standards which require compliance with internationally recognised human rights, as well as labour and social standards.
Regulators: The group seeks to enjoy a constructive and cooperative relationship with the bodies that authorise and regulate our business activities. They rely on the business to comply with applicable laws, regulation and licence conditions.
Communities and the environment: Communities and the wider public expect the business to act as a responsible group and neighbour and to minimise any adverse impact there might be on local communities and the environment (see ESG reporting for further information).
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 January 2026. The interests of the company’s employees, the need to foster the company’s business relationships with suppliers, customers and others, and the streamlined energy and carbon reports are included below, as permitted by s414C (11) of the Companies Act 2006. Future developments are referred to below, in the going concern section of this report.
The results for the year are set out on page 14.
The Directors approved and paid dividends of £34.8 million during the financial year (2025: nil). The payment was made in connection with a capital return transaction to shareholders undertaken by the Company's private equity owners. In approving the dividend, the Directors considered the Company's distributable profits, cash flow requirements and future funding needs, and concluded that the payment was consistent with the long-term interests of the Company. The Company retained adequate financial resources following the transaction to support its continuing operations and investment plans.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group continues to invest in research and development, expensing costs of £942,000 (2025: £1,103,000) in the year in researching and developing new products and processes. As a result of the investment in research and development, new products continue to be launched, which are expected to continue to make a significant contribution to the growth of the business. The directors regard investment in this area as a pre-requisite for success in the medium to long-term future.
Information about matters of concern to employees is given through meetings, presentations, information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Subsequent to the year end, on 30th March 2026, the Group acquired Wow! Lifestyle Limited, a contract bed and
mattress manufacturer operating in a complementary sector. The acquisition broadens the Group’s product offering
and enhances diversification across end markets, including student accommodation and the holiday / leisure
sectors. The acquisition is expected to contribute positively to the Group’s earnings and cash flows in the medium
term.
The company has elected to dispense with the holding of annual general meetings, the laying of financial statements before the group in general meeting and the annual appointment of auditor. Grant Thornton UK LLP have indicated their willingness to be reappointed for another term and appropriate arrangements have been put in place for them to be deemed reappointed in the absence of an annual general meeting.
The Sleep Group has continued to use a carbon lens to drive strategic thinking within all entities.
In the last year Silentnight’s commitment to ESG was demonstrated by becoming a certified B Corporation. In addition to this report Silentnight publishes a full annual carbon report of all scopes and publicly shares that through the Carbon Disclosure Project. Since 2022, Silentnight has had its near-term targets validated by SBTi. Through this we are committed to:
reducing absolute scope 3 category 1 GHG emissions by 28% by 2030
reducing absolute scope 1 and 2 (market-based) GHG emissions by 52% by 2030
Sleepeezee holds a Royal Warrant from HM The King, which in part considers the business’s environmental stewardship and impact on climate.
While improvements have been made across the scopes measured in this report, both businesses are relatively advanced in their carbon reduction journeys. Further emissions reductions in Scopes 1 and 2 are dependent on wider infrastructure changes and external technology developments. Reductions have been achieved through the continued roll out of electric vehicles across the car fleets. Operational efficiencies have also contributed, supported by continuous improvement and efficiency programmes within manufacturing operations. This has included optimising production cell layouts and equipment utilisation, implementing automatic shut-off controls on energy-intensive assets, and maintaining employee engagement and energy awareness initiatives.
The SECR disclosures for both businesses have been combined to create the table below. Prior-year figures differ from those previously published because earlier reports included Scope 3 Category 5 (waste generated in operations) and Scope 3 Category 3 (fuel- and energy-related activities, including transmission and distribution losses), which are not required for SECR. Following a review, emissions associated with fuel card activity have been re-categorised from Scope 1 to Scope 3.
Energy data for this report was compiled from utility readings, meter readings and fuel card records. Greenhouse gas emissions have been calculated using the UK Government GHG Conversion Factors (2024 for the comparison year and 2025 for the reporting year), in line with the GHG Protocol Corporate Accounting and Reporting Standard and SECR guidance. Scope 2 emissions are reported on both a market-based basis (1.3 tCO₂e) and a location-based basis (558.5 tCO₂e).
The group is committed to equality and fairness. We recognise our social and legal obligations, but most importantly, we value the broad diversity of our employees. Individuals with different cultures and experiences, who can offer different ideas and perspectives, are instrumental to the success of our business and we aim to ensure that no person receives less favourable treatment on the grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy or maternity, race, religion, sex or sexual orientation, and we ensure high standards of equality are upheld at every step of the employee journey. Our comprehensive Equality and Diversity Policy clearly sets out our commitment and the expectations of all colleagues.
The group has chosen, in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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 financial risk management and future developments on pages 1 and 3 respectively.
Going concern
The group has a third-party loan of £65m taken out in January 2026, which replaced a £43m loan taken out in June 2024. The group also has access to a £10m revolving credit facility, of which it had utilised £1.5m at the balance sheet date. The loan expires in June 2030 and the revolving credit facility expires in December 2028. The financial restructuring carried out in January 2026, was to refinance on improved terms, on the back of the improved financial performance and position of the group, and to also carry out a redemption of the remaining preference shares, returning funds to shareholders and in doing so, replacing high cost existing borrowings with a lower cost instrument.
The financing reorganisation in January 2026 has further ensured the group has adequate resources to continue to develop and grow the business, especially within the contract sector, and is expected to continue in operational existence for the foreseeable future, and for at least 12 months from the date of the financial statements to July 2027. The Directors have prepared detailed financial forecasts and cash flow projections covering a period of at least 12 months from the date of approval of these financial statements. These forecasts incorporate assumptions regarding future trading performance, working capital requirements and capital expenditure. As part of the going concern assessment, the Directors have also considered reasonably possible downside scenarios including sensitivities in revenue performance and cost inflation, and assessed the resulting impact on liquidity and covenant compliance. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements. Further details regarding the adoption of the going concern basis of accounting can be found in note 1, in the statement of accounting policies in the financial statements.
As discussed on page 5, the acquisition Wow! Lifestyle Limited is expected to contribute positively to the Group’s earnings and cash flows in the medium term.
United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have 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 directors must not approve the financial statements unless they are 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 directors are 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 directors are 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. They are 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
We have audited the financial statements of The Sleep Group Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2026, 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 a summary of 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 opinion
Conclusions relating to going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the directors' responsibilities statement set out on page 9, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group's and the 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 directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
We obtained an understanding of the legal and regulatory frameworks applicable to the Group and the industry in which it operates. We determined that the most significant laws and regulations is the Companies Act 2006.
We obtained an understanding of how the Group is complying with those legal and regulatory frameworks by making inquiries of management and those responsible for legal and compliance procedures.
We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the group engagement team included:
Evaluation of the processes and controls established to address the risks related to irregularities and fraud;
Making inquiries, in respect of fraud, of those outside the finance team, including key management and the board;
Challenging assumptions and judgements made by management in the Group’s significant accounting estimates;
Identifying and testing unusual journal entries; and
Identifying and testing related party transactions.
These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
The engagement partners assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s knowledge of the industry in which the Group operates, and the understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation.
The engagement team’s discussions in respect of potential non-compliance with laws and regulations and fraud included the risk of fraud in revenue recognition.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: 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.
As permitted by s408 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 £49,785,000 (2025: £32,203,000 profit).
The Sleep Group Topco Limited (“the company”), is a private limited company domiciled and incorporated in England and Wales. The registered office is Long Ing Business Park, Long Ing Lane, Barnoldswick, Lancashire, BB18 6BJ.
The group consists of The Sleep Group Topco 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 £'000.
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 4 'Statement of Financial Position' - Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company The Sleep Group Topco Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 January 2026. 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.
The group has a third-party loan of £65m taken out in January 2026, which replaced a £43m loan taken out in June 2024. The group also has access to a £10m revolving credit facility, of which it had utilised £1.5m at the balance sheet date. The loan expires in June 2030 and the revolving credit facility expires in December 2028. The financial restructuring carried out in January 2026, was to refinance on improved terms, on the back of the improved financial performance and position of the group, and to also carry out a redemption of the remaining preference shares, returning funds to shareholders and in doing so, replacing high cost existing borrowings with a lower cost instrument.
The financing reorganisation in January 2026 has further ensured the group has adequate resources to continue to develop and grow the business, especially within the contract sector, and is expected to continue in operational existence for the foreseeable future, and for at least 12 months from the date of the approval of the financial statements to July 2027. The Directors have prepared detailed financial forecasts and cash flow projections covering a period of at least 12 months from the date of approval of these financial statements. These forecasts incorporate assumptions regarding future trading performance, working capital requirements and capital expenditure. As part of the going concern assessment, the Directors have also considered reasonably possible downside scenarios including sensitivities in revenue performance and cost inflation, and assessed the resulting impact on liquidity and covenant compliance. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements. Further details regarding the adoption of the going concern basis of accounting can be found in note 1, in the statement of accounting policies in the financial statements.
Subsequent to the year end, on 30th March 2026, the Group acquired Wow! Lifestyle Limited, a contract bed and mattress manufacturer operating in a complementary sector. The acquisition broadens the Group’s product offering and enhances diversification across end markets, including student accommodation and the holiday / leisure sectors. The acquisition is expected to contribute positively to the Group’s earnings and cash flows in the medium term.
Turnover is attributable to the principal activity of the Group and represents amounts invoiced to customers of the Group after deduction of rebates, allowances and other value added tax.
Turnover from the sale of goods is recognised when the goods are physically delivered to the customer. Licence income is recognised in the month in which it becomes due.
Research expenditure is written off against profits in the year in which it is incurred.
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.
In the separate accounts of the company, interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed or impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit an loss.
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.
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.
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..
Debt instruments are subsequently carried at amortised cost, using the effective interest rate 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.
The Group operates a number of defined contribution pension schemes for the benefit of its employees. The amount charged to the income statement in respect of pension costs is the contributions payable in the period. Differences between contributions payable in the period and contributions actually paid are shown either as accruals or prepayments in the balance sheet.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
The buy-out of plan liabilities has been calculated using the projected unit method by rolling forward the FRS 102 liabilities at previous reporting date, adjusted to reflect the FRS 102 financial assumptions applicable at buy-out effective date. As part of this calculation, actual Plan cashflows have been deducted, as well as an allowance made for actual pension increases and deferred revaluations, for the period up to the buy-out date.
The buy-out represents a settlement. Settlements are recognised when the obligations are legally discharged. Gains or losses are calculated at the settlement date as the difference between the settlement price and the discharged obligations, where the settlement price includes the transferred plan assets and any direct cash payments by the group. The resulting gain or loss is recognised in the profit or loss in the current reporting period
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.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.
Finance costs
All finance costs are recognised in profit and loss in the period in which they are incurred. Borrowing costs on financial liabilities are determined using the effective interest rate method.
Sale and leaseback
Where the company enters into a sale and leaseback transaction any excess of sales proceeds over the carrying amount of the asset is deferred and amortised over the lease term.
Lease payments under the leaseback arrangement are recognised as an expense on a straight line basis over the lease term unless another systematic basis is more representative of the pattern of benefit derived from the leased asset.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Valuation of property subject to sale and leaseback
The Company completed a sale and leaseback transaction during the year. The determination of the property's fair value represented a significant source of estimation uncertainty and was based on an independent market valuation supported by transaction evidence. The valuation incorporated assumptions relating to market yields, lease terms, covenant strength and comparable market transactions. As the gain arising on disposal was dependent on the fair value attributed to the property, variations in these assumptions could have resulted in a material adjustment to the amounts recognised in the financial statements. The Directors are satisfied that the valuation adopted reflected the property's fair value at the date of the transaction.
Turnover, which is stated net of rebates, trade discounts, allowances and value added tax, is attributable to the manufacture and sale of beds and bedroom related products.
Fees payable to Grant Thornton UK LLP for the audit of the Company’s annual accounts borne by Silentnight Group Limited and are not recharged.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2025: 3).
There are no further key management personnel outside of the directors.
The Directors receive no remuneration for services provided to the Company and are remunerated by another group company. Director remuneration is not allocated across Companies in the Group.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
The net carrying value of tangible fixed assets held under finance leases or hire purchase contracts at the year end was £1,700,762 (2025: £2,260,000)
Details of the company's subsidiaries at 31 January 2026 are as follows:
Registered office addresses of the companies are;
1 Long Ing Business Park, Long Ing Lane, Barnoldswick, Lancashire, BB18 6BJ
2 Knight Road, Rochester, Kent, ME2 2BP
The following Subsidiary undertakings claimed exemption from audit under s479A Companies Act 2006:
The Sleep Group Limited (company number: 13353092)
Silentnight Holdings Limited (company number: 07627383)
Sleepeezee Holdings Limited (company number: 01942625)
Sleepeezee Limited (company number: 01478223)
The Sleep Group Holdco II Limited (company number: 16926664)
All subsidiaries have been consolidated using the acquisition method in the parent company.
As the subsidiaries are not listed, the investments are held at cost less impairment as their fair values cannot be reliably determined.
A reversal of £60,079 for the provision for slow moving and obsolete stock was recognised in cost of sales in the year. (2025: £353,281 provided). There are no inventories pledged as securities for liabilities.
Amounts owed by group undertakings are not interest bearing and repayable on demand
Amounts owed to group undertakings in the company are interest free and are repayable on demand.
Bank loans represents a loan facility that is secured by means of fixed and floating charge over the assets of the group.
Included in bank loans is an amount for £65,000,000 (2025: £43,000,000). During the year, the company extended its existing loan facility to £65,000,000 (the "Facility"). The facility matures and is repayable in full on the 24 June 2030, and bears interest at a variable rate of SONIA plus 7.75%. The facility is secured and is subject to customary financial covenants.
As part of the refinancing, arrangement fees of £995,000 were incurred. These fees have been capitalised and are being amortised over the remaining term of the facility using the effective interest method in accordance with FRS 102.
Included in bank loans is an amount for £1,500,000 (2025: £nil) in relation to a £10m revolving credit facility, of which it had utilised £1.5m at the year end. The facility matures and is repayable in full on the 24 December 2028, and bears interest at a variable rate of SONIA plus 3.5%. The facility is secured and is subject to customary financial covenants.
The refinancing was undertaken to provide additional liquidity and to facilitate a return of capital to shareholders, including the redemption of preference shares and the payment of dividends during the year.
Finance leases are secured on the assets to which they relate. The company does not have any finance lease obligations in either period.
Onerous lease provision
The onerous lease provision is for a warehouse that was leased in 2022 to help fulfil the initial infill stage of a contract, during the year £295k of the provision was utilised. However, now that this stage has been completed the warehouse has been vacant since mid-2024 with no plans of using it in the future.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Deferred income is included in the financial statements as follows:
During the year, the Group completed a sale and leaseback transaction in relation to a freehold property.
The property was sold and simultaneously leased back under a 10-year operating lease arrangement.
In accordance with FRS 102 Section 20, the gain arising up to fair value has been recognised immediately within the profit and loss account. The excess of sale proceeds over fair value has been deferred and is being amortised over the lease term.
The lease rentals payable under the leaseback arrangement are above prevailing market rates and, accordingly, the deferred income is being released systematically over the period of expected use of the property to reflect the substance of the arrangement.
At the balance sheet date, deferred income relating to the transaction amounted to £1,825,000 (2025: £nil).
The leaseback arrangement has been classified as an operating lease as substantially all risks and rewards of ownership have not transferred.
The group operates a number of defined contribution pension schemes. These schemes are funded by contributions from the group and employees and the assets are held in separate, trustee administered funds. The unpaid contributions outstanding at the period end in respect of UK defined contribution schemes, included in creditors, are £206,000 (2025: £209,000).
The group operates a defined benefit scheme, The Sleepeezee Retirement Plan 1975. The scheme funds
are administered by a trustee and are independent of the company's finances. The company is the sponsoring
entity of the scheme.
On 12 December 2025 the group undertook a full Plan buy-out of the scheme, as a result all liabilities have been transferred to L&G and hence there are no remaining Plan liabilities or assets. The assignment of individual policies to Plan members triggered the buy out on this date.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation
were carried out at 1 April 2020 by the scheme actuary, Fellow of the Institute of Actuaries. The present value
of the defined benefit obligation, the related current service cost and past service cost were measured using
the projected unit credit method. The assumptions used in the current period are best estimate and based on market conditions as at 12 December 2025, the effective date of the Plan buy-out. Except when stated otherwise, these assumptions have been derived in a manner consistent with those used at 31 January 2025.
Assumed life expectations on retirement at age 65:
The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:
The group has no remaining defined benefit obligation at the balance sheet date.
The actual return on plan assets was £0 (2025 - £1,167,000).
All classes of A, B and C Ordinary shares have full distribution and capital rights. Preference shares carry restricted voting rights and C Ordinary shares do not carry voting rights.
During the year, the Company redeemed all of its issued preference shares, comprising 6,000,999 preference shares of £0.01 each, with an aggregate nominal value of £60,009.99. The shares were redeemed in cash on 9 January 2026.
The redemption was funded out of the Company’s distributable profits and, in accordance with the requirements of FRS 102, an amount equal to the nominal value of the shares redeemed (£60,009.99) has been transferred to a capital redemption reserve.
Following the redemption, no preference shares remain in issue.
The capital redemption reserve represents non-distributable reserve into which amounts are transferred following the redemption or purchase of a company's own shares out of distributable profits.
Share premium
The share premium account represents consideration received for shares issued above their nominal value net of transaction costs.
Profit and loss account
The profit and loss account represents cumulative profits and losses, net of dividends paid and other adjustments.
The group companies are party to an all-assets debenture arrangement dated 24 June 2024, under which each participating company has provided security over its assets in favour of Kroll Trustee Services Limited in respect of its secured obligations pursuant to its financing arrangement, which has been refinanced to £65,000,000 in the current year (2025: £43,000,000).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
On 30th March 2026, The Sleep Group Limited acquired Wow! Lifestyle Limited, a contract bed and mattress manufacturer operating in a complementary sector.
The company has taken advantage of the exemption under section 33.1A of FRS102 to not disclose transactions with other wholly owned members of the group.
During the period management fees of £507,900 (2025: £523,349) payable to HIG Group were incurred. As at 31 January 2026 £126,975 was outstanding (2025: £126,975).