Friars 938 Limited Group accounts (Group and Company)

COMPANY REGISTRATION NUMBER: 16132243

FRIARS 938 LIMITED

FINANCIAL STATEMENTS

FOR THE PERIOD ENDED

31 December 2025

FRIARS 938 LIMITED

FINANCIAL STATEMENTS

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

Contents	Page

Officers and professional advisers	1

Strategic report	2

Directors' report	5

Independent auditor's report to the members	7

Consolidated statement of comprehensive income	11

Consolidated statement of financial position	12

Company statement of financial position	13

Consolidated statement of changes in equity	14

Company statement of changes in equity	15

Consolidated statement of cash flows	16

Notes to the financial statements	17

FRIARS 938 LIMITED

OFFICERS AND PROFESSIONAL ADVISERS

The board of directors	J W Owen
	J A Munro

Registered office	Hafren House
	Llandrinio
	Llanymynech
	Powys
	SY22 6SG

Auditor	Streets Audit LLP
	Chartered accountants & statutory auditor
	Windsor House
	A1 Business Park at
	Long Bennington
	Notts
	NG23 5JR

FRIARS 938 LIMITED

STRATEGIC REPORT

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

The directors present the strategic report for the year ended 31 December 2025. Principal activities and review of the business These consolidated financial statements cover the Group’s first statutory reporting period from 12 December 2024 to 31 December 2025. To align operations, the underlying trading subsidiaries have reported for an extended 16-month period from 1 September 2024 to 31 December 2025. Statutory figures reflect trading only from the formal acquisition date in March 2025 forward, meaning these figures are not directly comparable with prior indicators The Group's ambition is to become the market leading outdoor garden specialist. Its principal activity is the design, manufacture and sale of timber garden buildings, including sheds, log cabins, summerhouses, playhouses and insulated garden rooms, from its manufacturing site. Products are sold through both B2B and B2C channels, including the Group's own website. These financial statements cover an extended period of 16 months, from 1 September 2024 to 31 December 2025. The period includes an additional four winter months, traditionally the quietest trading season for garden buildings. As a result, the figures are not directly comparable with the prior 12 month period. The Group acquired its trading subsidiary in March 2025. Consolidated turnover of £20.4m reflects trading from that date. Including pre-acquisition trading of £7.9m, the business generated turnover of £28.3m across the full 16-month period. A strong indicator that demand for the Group's products remain strong. Trading conditions remained challenging. Consumer discretionary spending stayed under pressure, and input costs rose across timber, labour, energy and transport. The Group reported an operating loss of £0.8m and an adjusted EBITDA loss of £1.2m (2024: £0.6m). The result reflects three principal factors: - the inclusion of four additional winter months, which are seasonally loss-making; - a reduction in gross margin to 40.31% (2024: 41.1%), as input cost inflation was not fully recovered through pricing; - non-recurring costs relating to the change of ownership Stock increased to £5.5m (2024: £4.8m) to support the expanded product range ahead of sprint selling season. Together with the trading result, this reduced period end cash to £1.4m (2024: £2.7m). Key performance indicators These consolidated financial statements cover the Group’s first statutory reporting period from 12 December 2024 to 31 December 2025. To align operations, the trading subsidiaries have reported for an extended 16-month period (1 September 2024 to 31 December 2025). Statutory figures reflect trading only from the formal acquisition date onward, with all pre-acquisition items stripped out. Because this is the Group's first set of accounts, no legal prior-year comparisons exist. Furthermore, this extended 16 -month timeframe includes four slow winter months, which distort the total figures with seasonal losses and make direct statutory comparisons to the prior period inaccurate. To evaluate true underlying performance, the Directors reviewed a matching 12-month pro-forma period. Under this equal comparison, core business remained strong: annual turnover rose by 9.9% to £22.2m (up from £20.2m in 2024) due to strong customer demand However, rising costs for timber, energy, wages, and transport could not be fully passed on to customers, causing the annual gross profit margin to drop to 35.1% (down from 41.1% in 2024). In response, management focused on controlling structural costs and managing working capital, which improved operational efficiency and reduced the average employee headcount to 149 (down from 154). Meanwhile, final stock levels stood higher at £5.5m (up from £4.8m. Meanwhile, final stock levels stood higher at £5.5m (up from £4.8m), reflecting the Group's investment in stock of its new and enhanced product range, ready for the financial year ahead. Outlook The Directors are confident in the Group's prospects for the year ending 31 December 2026 and beyond. The period under review was one of transition. Under new ownership, and with a Managing Director appointed in May 2026, the Group has established a clear strategic direction focused on sustainable, profitable growth. That direction is already being reflected in trading. By September 2026, turnover for the current year had already exceeded the Group's reported turnover for the whole of the prior 16-month period, with growth across both B2B and B2C channels. The Group is building on strong foundations: an established brand, proven manufacturing capability and a multi-channel route to market. It is broadening its offer through an expanding product range, which increases the opportunity to capture a greater share of customer spend. It also supports progress towards the Group's ambition of becoming the market-leading outdoor garden specialist. Management is prioritising the recovery of gross margin and underlying profitability through pricing discipline, procurement, operational efficiency and tighter control of working capital. These actions are already under way. The Directors recognise that consumer confidence and input costs will remain challenging in the near term. However, with a strengthened leadership team, the continued support of its shareholder and a clear plan, the Group is well positioned to deliver improved financial performance in the coming year. Going concern The Directors have prepared the Group's financial statements on a going concern basis. In making this assessment, the Directors have considered the Group's cash flow forecasts and financial position for the period to 31 December 2027, together with the Group's five-year forecast and the actions being taken to improve revenue, gross margin and operating costs. The Group's forecast assumes continued growth in revenue, supported by the expansion of its B2B activities, development of new customer channels, extension of its product range, improvements in website conversion and digital marketing performance, and the introduction of additional chargeable delivery services. A number of these initiatives are already underway and have generated early evidence of commercial traction. The Directors are also implementing a number of measures to improve gross margins and reduce operating costs. These include supply-chain initiatives, redesign of products, increased use of artificial intelligence in customer service and planning, strengthened logistics management and improved reporting and control over digital marketing expenditure. The Directors have identified material potential savings from these initiatives, although certain benefits remain subject to implementation and further operational evidence. The Directors have considered the Group's forecast liquidity and headroom throughout the assessment period, including the sensitivity of the forecasts to changes in trading performance, gross margins and operating costs. The Directors consider that the actions already taken, together with the company's forecast trading performance and the continuous financial support of its ultimate shareholder, James Owen, provide a reasonable basis for concluding that the Group will be able to meet its liabilities as as they fall due for the foreseeable future. Accordingly, the Directors consider it appropriate to prepare the Group's financial statements on a going concern basis. In making this assessment, the Directors have received a formal commitment from James Owen confirming that he will not demand repayment of his £2,686,166 director's loan account and will continue to provide necessary working capital funding for a period of at least 12 months from the date of approval of these financial statements. The Directors recognise that the achievement of the forecast results is dependent on the successful delivery of the operational and commercial initiatives described above and therefore continue to monitor the company's trading performance, cash position and forecast headroom closely. Principal risks and uncertainties Economic conditions. Demand relies on discretionary consumer spending, which is sensitive to economic conditions. Management monitors trading closely and adjusts pricing, marketing and product mix in response. Competition. The market is competitive. The Group responds through price monitoring, product development and a focus on quality and customer service. Input costs. The Group is exposed to movements in the cost of timber, labour, energy and transport, which it manages through supplier negotiation, pricing reviews and productivity improvements. Input costs. The Group is exposed to movements in the cost of timber, labour, energy and transport, which it manages through supplier negotiation, pricing reviews and productivity improvements. Financial risk management objectives and policies The Group uses financial instruments including loans, cash, trade debtors and trade creditors that arise directly from its operations. The main risks arising are liquidity, credit, currency and interest rate risk. The directors review and agree policies for managing each of these risks. Liquidity risk. The Group manages liquidity by ensuring sufficient funds are available to meet foreseeable needs. The Group is supported by a working capital facility and by funding from its shareholder. Credit risk. The Group is exposed to credit risk on its trade accounts. Credit checks, credit limits and monitoring practices are in place to manage this. Sales through the Group's own website are paid in advance and carry no credit risk. Currency risk. Timber and other goods are purchased from overseas, exposing the Group to exchange rate movements. The Group negotiates in sterling wherever possible. Interest rate risk. The Group is exposed to interest rate movements on its borrowing facility. The directors keep the level and cost of borrowing under regular review.

This report was approved by the board of directors on 21 October 2026 and signed on behalf of the board by:

J W Owen

Director

Registered office:

Hafren House

Llandrinio

Llanymynech

Powys

SY22 6SG

FRIARS 938 LIMITED

DIRECTORS' REPORT

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

The directors present their report and the financial statements of the group for the period ended 31 December 2025 .

Directors

The directors who served the company during the period was as follows:

J W Owen	(Appointed 12 December 2024)

Dividends

The directors do not recommend the payment of a dividend.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial period. Under that law the directors have 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 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 the company and 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 judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are 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. They are 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. Auditor

Each of the persons who is a director at the date of approval of this report confirms that:

- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.

This report was approved by the board of directors on 21 October 2026 and signed on behalf of the board by:

J W Owen

Director

Registered office:

Hafren House

Llandrinio

Llanymynech

Powys

SY22 6SG

FRIARS 938 LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FRIARS 938 LIMITED

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

Opinion

We have audited the financial statements of Friars 938 Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2025 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, 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 FRS 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 group's and of the parent company's affairs as at 31 December 2025 and of the group's loss for the period then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 group 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors 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 directors are responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:

- the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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.

Auditor's responsibilities for the audit of the financial statements

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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was that we identified the material laws and regulations applicable to the group through discussions with management, and from our commercial knowledge and experience of the group and sector in which it operates. We then assessed the extent of compliance with these laws and regulations through making enquiries of management. We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls we tested journal entries to identify unusual transactions, we assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias; and we investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to agreeing financial statement disclosures to underlying supporting documentation and reviewing correspondence with relevant regulators. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. A further description of our responsibilities 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.

MARK BRADSHAW

(Senior Statutory Auditor)

For and on behalf of

Streets Audit LLP

Chartered accountants & statutory auditor

Windsor House

A1 Business Park at

Long Bennington

Notts

NG23 5JR

21 October 2026

FRIARS 938 LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

		Period from
		12 Dec 24 to
		31 Dec 25
Note		£
Turnover	4	20,387,890

Cost of sales	( 12,180,196)
	-------------
Gross profit	8,207,694

Distribution costs		( 5,608,703)
Administrative expenses		( 2,849,196)
Other operating income	5	24,015
Exceptional administrative expenses		( 367,859)
		------------
Operating loss	6	( 594,049)

Other interest receivable and similar income	10	45
Interest payable and similar expenses	11	( 206,002)
		------------
Loss before taxation		( 800,006)

Tax on loss	12	489,303
		---------
Loss for the financial period and total comprehensive income		( 310,703)
		---------

All the activities of the group are from continuing operations.

FRIARS 938 LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 December 2025

	31 Dec 25
Note	£

Fixed assets

Negative goodwill	13	( 4,410,774)
Tangible assets	14	4,805,515
		------------
		394,741

Current assets

Stocks	16	5,548,637
Debtors	17	2,762,340
Cash at bank and in hand		1,434,364
		------------
		9,745,341

Creditors: amounts falling due within one year	18	( 10,279,446)
		-------------
Net current liabilities		( 534,105)
		---------
Total assets less current liabilities		( 139,364)

Creditors: amounts falling due after more than one year	19	( 171,338)
		---------
Net liabilities		( 310,702)
		---------

Capital and reserves

Called up share capital	24	1
Profit and loss account	25	( 310,703)
		---------
Shareholders deficit		( 310,702)
		---------

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.

These financial statements were approved by the board of directors and authorised for issue on 21 October 2026 , and are signed on behalf of the board by:

J W Owen

Director

Company registration number: 16132243

FRIARS 938 LIMITED

COMPANY STATEMENT OF FINANCIAL POSITION

31 December 2025

	31 Dec 25
Note	£

Fixed assets

Investments	15	5,486,167

Creditors: amounts falling due within one year	18	( 5,486,166)
		------------
Net current liabilities		( 5,486,166)
		------------
Total assets less current liabilities		1
		----

Capital and reserves

Called up share capital	24	1
		----
Shareholders funds		1
		----

The profit for the financial period of the parent company was £Nil.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.

These financial statements were approved by the board of directors and authorised for issue on 21 October 2026 , and are signed on behalf of the board by:

J W Owen

Director

Company registration number: 16132243

FRIARS 938 LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

	Called up share capital	Profit and loss account	Total
	£	£	£
At 12 December 2024	–	–	–

Loss for the period		( 310,703)	( 310,703)
	----	---------	---------
Total comprehensive income for the period	–	( 310,703)	( 310,703)

Issue of shares	1	–	1
	----	----	----
Total investments by and distributions to owners	1	–	1

	----	---------	---------
At 31 December 2025	1	( 310,703)	( 310,702)
	----	---------	---------

FRIARS 938 LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

	Called up share capital	Profit and loss account	Total
	£	£	£
Profit for the period		–	–

Issue of shares	1	–	1
	----	----	----
Total investments by and distributions to owners	1	–	1

	----	----	----
At 31 December 2025	1	–	1
	----	----	----

FRIARS 938 LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

	31 Dec 25
	£

Cash flows from operating activities

Loss for the financial period	( 310,703)

Adjustments for:
Depreciation of tangible assets	257,275
Amortisation of intangible assets	( 840,147)
Other interest receivable and similar income	( 45)
Interest payable and similar expenses	206,002
Tax on profit	( 489,303)
Accrued income	( 676,365)

Changes in:
Stocks	329,686
Trade and other debtors	772,090
Trade and other creditors	1,603,059
	------------
Cash generated from operations	851,549

Tax received	23,177
	---------
Net cash from/(used in) operating activities	874,726
	---------

Cash flows from investing activities

Purchase of tangible assets	( 271,721)
Acquisition of subsidiaries	( 5,486,167)
Interest received	45
Cash held by subsidiary on acquisition	1,112,390
	------------
Net cash used in investing activities	( 4,645,453)
	------------

Cash flows from financing activities

Proceeds from borrowings	5,486,167
Payments of finance lease liabilities	( 75,074)
Interest paid	( 206,002)
	------------
Net cash from financing activities	5,205,091
	------------

Net increase in cash and cash equivalents	1,434,364
Cash and cash equivalents at beginning of period	–
	------------
Cash and cash equivalents at end of period	1,434,364
	------------

FRIARS 938 LIMITED

NOTES TO THE FINANCIAL STATEMENTS

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

1. General information

The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Hafren House, Llandrinio, Llanymynech, Powys, SY22 6SG.

2. Statement of compliance

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. Accounting policies

Basis of preparation

The financial statements have been prepared on the historical cost basis and in sterling, which is the functional currency of the entity.

Going concern

We draw attention to the Directors assessment of going concern included in the Strategic Report. In line with their assessment the financial statements have been prepared on a going concern basis.

Disclosure exemptions

No disclosure exemptions have been taken by the group.

Consolidation

The financial statements consolidate the financial statements of Friars 938 Limited and all of its subsidiary undertakings.

The results of subsidiaries acquired or disposed of during the period are included from or to the date that control passes.

The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual outcome may diverge from these estimates if other assumptions are made, or other conditions arise. - Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: (i) Depreciation charges The annual depreciation charge for tangible assets is sensitive to changes in the useful economic lives and residual values of the assets. These are reviewed periodically by the Directors to ensure that they reflect both external and internal factors. (ii) Provisions for stock and debtors The group makes an estimate of the recoverable value of trade debtors and stocks. When making their assessment, management considers various factors but they remain an estimate of the actual costs. (iii) Negative goodwill The group recognised negative goodwill of £5,250,921 on the acquisition of a subsidiary undertaking during the year. Significant judgement was applied in determining: - the fair values of the identifiable assets and liabilities acquired; - that the transaction represented a bargain purchase; and - the period over which the resulting negative goodwill should be recognised in income. Having regard to the nature of the acquired assets and business, together with the circumstances giving rise to the distressed sale, the directors concluded that recognition over a period of five years appropriately reflects the expected pattern in which the economic benefits associated with the bargain purchase will be realised.

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable for goods provided, stated net of discounts, rebates and of Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in in respect of the transactions can be measured reliably.

Income tax

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

Foreign currencies

Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.

Operating leases

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

Goodwill

Negative goodwill represents the excess of the fair value of the identifiable assets and liabilities acquired over the cost of acquisition of subsidiary undertakings. Negative goodwill is recognised separately within intangible fixed assets. To the extent that the negative goodwill relates to non-monetary assets acquired, it is recognised in the profit and loss account in the periods in which those assets are recovered or consumed. Any excess negative goodwill is recognised in the profit and loss account over the period in which the Group expects to realise the economic benefits arising from the bargain purchase. The directors review the carrying value and expected release period of negative goodwill at each reporting date.

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

	Goodwill	-	20% straight line

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Freehold property	-	2% straight line
Plant and machinery	-	25% straight line
Motor vehicles	-	25-33% straight line

Land is not subject to depreciation.

Investments

Investments in subsidiaries are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition including direct labour costs. Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential. 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 the profit and loss. Reversals of impairment losses are also recognised in the profit and loss.

Finance leases and hire purchase contracts

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Financial instruments

The group only holds basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the group and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

Business combinations

Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the aggregate of the fair values, at the acquisition date, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination. Where control is achieved in stages, the cost of the business combination is the aggregate of the fair values of the assets given, liabilities incurred or assumed, and equity instruments issued at the date of each transaction in the series. Where the business combination requires an adjustment to the cost contingent on future events, the estimated amount of that adjustment is included in the cost of the combination at the acquisition date providing it is probable and can be measured reliably. Where it is not recognised at the acquisition date but subsequently becomes probable and can be measured reliably, the additional consideration is treated as an adjustment to the cost of the combination. If such expected future events do not occur, or the estimate needs to be revised, the cost of the business combination is adjusted accordingly. The unwinding of any discounting is recognised as a finance cost in profit or loss in the period it arises.

4. Turnover

Turnover arises from:

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Sale of goods	20,387,890
	-------------

The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.

5. Other operating income

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Other operating income	24,015
	--------

6. Operating profit

Operating profit or loss is stated after charging/crediting:

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Amortisation of intangible assets	( 840,147)
Depreciation of tangible assets	257,275
Foreign exchange differences	( 13,560)
Operating lease costs	73,750
	---------

7. Exceptional costs

Exceptional items comprise significant items of income and expenditure which, because of their size and nature, are disclosed separately to enable a better understanding of the financial performance of the company.

During the year costs of £367,859 were incurred and have been recognised as exceptional items within administrative expenses.

These costs principally relate to:

Redundancy and employee termination costs;

Lease dilapidation provisions;

Website and rebranding costs;

Professional and advisory fees associated with the disposal; Contract cancellation costs; and

Other directly attributable restructuring costs.

The directors consider these costs to be exceptional due to their non-recurring nature and significance to the financial statements.

8. Auditor's remuneration

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Fees payable for the audit of the financial statements	32,000
	--------

9. Staff costs

The average number of persons employed by the group during the period, including the directors, amounted to:

	31 Dec 25
	No.
Production staff	68
Distribution staff	55
Administrative staff	24
Management staff	2
	----
	149
	----

The aggregate payroll costs incurred during the period, relating to the above, were:

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Wages and salaries	4,786,334
Social security costs	579,263
Other pension costs	107,901
	------------
	5,473,498
	------------

The Directors did not receive any remuneration during the period.

10. Other interest receivable and similar income

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Interest on cash and cash equivalents	45
	----

11. Interest payable and similar expenses

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Interest on banks loans and overdrafts	201,248
Interest on obligations under finance leases and hire purchase contracts	4,754
	---------
	206,002
	---------

12. Tax on profit

Major components of tax income

	Period from
	12 Dec 24 to
	31 Dec 25
	£

Current tax:

Adjustments in respect of prior periods	( 23,177)

Deferred tax:

Origination and reversal of timing differences	( 466,126)
	---------
Tax on profit	( 489,303)
	---------

Reconciliation of tax income

The tax assessed on the loss on ordinary activities for the period is lower than the standard rate of corporation tax in the UK of 25 %.

	Period from
	12 Dec 24 to
	31 Dec 25
	£
Loss on ordinary activities before taxation	( 800,006)
	---------
Loss on ordinary activities by rate of tax	( 200,002)
Effect of expenses not deductible for tax purposes	38,148
Effect of capital allowances and depreciation	10,705
Effect of revenue exempt from tax	( 216,041)
Unprovided deferred tax	(122,113)
	---------
Tax on profit	( 489,303)
	---------

13. Intangible assets

Group	Goodwill
	£
Cost
At 12 December 2024	–
Acquisitions through business combinations	( 5,250,921)
	------------
At 31 December 2025	( 5,250,921)
	------------
Amortisation
At 12 December 2024	–
Charge for the period	( 840,147)
	------------
At 31 December 2025	( 840,147)
	------------
Carrying amount
At 31 December 2025	( 4,410,774)
	------------

The company has no intangible assets.

On 14 March 2025 the Group acquired the issued share capital of The Garden Buildings Group Limited. The acquisition resulted in negative goodwill of £5,250,921, representing the excess of the fair value of the identifiable net assets acquired of £10,737,088 over the consideration transferred of £5,486,167. The directors concluded that the negative goodwill arose principally as a consequence of the distressed circumstances surrounding the disposal of the acquired business and assets. Following a review of the fair values attributed to the assets and liabilities acquired and the consideration transferred, the directors are satisfied that the resulting negative goodwill is appropriate. The acquired net assets principally comprised freehold property, other fixed assets, cash balances and the trade and assets of the acquired business. The directors have assessed the expected period over which the economic benefits associated with the bargain purchase will be realised and have determined that a period of five years is appropriate. Accordingly, the negative goodwill is being recognised in the profit and loss account over that period. During the year £840,147 was recognised in the profit and loss account.

14. Tangible assets

Group	Freehold property	Plant and machinery	Motor vehicles	Total
	£	£	£	£
Cost
At 12 December 2024	–	–	–	–
Additions	–	537,861	29,959	567,820
Acquisitions through business combinations	4,300,000	182,394	12,576	4,494,970
	------------	---------	--------	------------
At 31 December 2025	4,300,000	720,255	42,535	5,062,790
	------------	---------	--------	------------
Depreciation
At 12 December 2024	–	–	–	–
Charge for the period	58,480	194,054	4,741	257,275
	------------	---------	--------	------------
At 31 December 2025	58,480	194,054	4,741	257,275
	------------	---------	--------	------------
Carrying amount
At 31 December 2025	4,241,520	526,201	37,794	4,805,515
	------------	---------	--------	------------

The company has no tangible assets.

15. Investments

The group has no investments.

Company	Shares in group undertakings
	£
Cost
At 12 December 2024	–
Additions	5,486,167
	------------
At 31 December 2025	5,486,167
	------------
Impairment
At 12 December 2024 and 31 December 2025	–
	------------

Carrying amount
At 31 December 2025	5,486,167
	------------

Subsidiaries, associates and other investments

Details of the investments in which the parent company has an interest of 20% or more are as follows:

	Class of share	Percentage of shares held
Subsidiary undertakings
The Garden Buildings Group Limited (direct)	Ordinary	100
Mercia Garden Products Limited (indirect)	Ordinary	100
Mercia Garden Products Limited (indirect)	Preference	100
Rosimian Limited (indirect)	Ordinary	100
Walton Web Limited (indirect)	Ordinary	100

16. Stocks

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Raw materials and consumables	1,813,124	–
Work in progress	549,429	–
Finished goods and goods for resale	3,186,084	–
	------------	----
	5,548,637	–
	------------	----

Stocks are stated after impairment provisions of £299,339.

17. Debtors

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Trade debtors	1,753,886	–
Deferred tax asset	619,568	–
Prepayments and accrued income	388,886	–
	------------	----
	2,762,340	–
	------------	----

18. Creditors: amounts falling due within one year

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Trade creditors	1,577,446	–
Amounts owed to group undertakings	–	2,800,000
Accruals and deferred income	687,575	–
Social security and other taxes	1,032,102	–
Obligations under finance leases and hire purchase contracts	49,687	–
Director loan accounts	2,686,166	2,686,166
Other creditors	4,246,470	–
	-------------	------------
	10,279,446	5,486,166
	-------------	------------

Other creditors includes a balance owing to Cynergy Business Finance Limited of £2,800,000. The hire purchase liabilities are secured on the specific financed assets. The Cynergy Business Finance Limited financing facilities are secured by fixed and floating charges over substantially all of the group's assets and undertaking in favour of Cynergy Business Finance Limited. The assets subject to security include freehold land and buildings, plant and machinery, trade receivables, bank accounts and other business assets. The group and subsidiaries have also granted security in favour of Barclays Bank PLC over designated bank accounts and deposits.

19. Creditors: amounts falling due after more than one year

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Obligations under finance leases and hire purchase contracts	171,338	–
	---------	----

The hire purchase liabilities are secured on the specific financed assets.

20. Finance leases and hire purchase contracts

The total future minimum lease payments under finance leases and hire purchase contracts are as follows:

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Not later than 1 year	49,687	–
Later than 1 year and not later than 5 years	171,338	–
	---------	----
	221,025	–
	---------	----

21. Deferred tax

The deferred tax included in the statement of financial position is as follows:

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Included in debtors (note 17)	619,568	–
	---------	----

The deferred tax account consists of the tax effect of timing differences in respect of:

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Accelerated capital allowances	154,158	–
Unused tax losses	( 749,633)	–
Provisions	( 24,093)	–
	---------	----
	(619,568)	–
	---------	----

The deferred tax asset in respect of tax losses has been recognised to the extent that the directors consider it probable that sufficient future taxable profits will arise against which the losses can be utilised. This assessment is based on the group’s approved forecasts and expected reversal of taxable timing differences. The timing of utilisation is dependent on future profitability, qualifying research and development expenditure and capital investment

22. Employee benefits

Defined contribution plans

The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 107,901 .

23. Financial instruments

The group only holds basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors, loans and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.

24. Called up share capital

Issued, called up and fully paid

		31 Dec 25
	No.	£
Ordinary shares of £ 1 each	1	1
	----	----

25. Reserves

Profit and loss account - This reserve records retained earnings and accumulated losses.

26. Analysis of changes in net debt

	At 12 Dec 2024	Cash flows	Other changes	At 31 Dec 2025
	£	£	£	£
Cash at bank and in hand	–	1,434,364	–	1,434,364
Debt due within one year	–	(5,707,191)	171,338	(5,535,853)
Debt due after one year	–	–	(171,338)	(171,338)
	----	------------	---------	------------
	–	( 4,272,827)	–	( 4,272,827)
	----	------------	---------	------------

27. Business combinations

Acquisition of The Garden Buildings Group Limited

On 14 March 2025, the company acquired the entire shareholding of The Garden Buildings Group Limited and its subsidiaries. The group's primary activity is a manufacturer and supplier of timber garden buildings. Negative goodwill of £5,250,921 arose on the acquisition and this is being released over 5 years.

The fair value of consideration paid in relation to the acquisition of The Garden Buildings Group Limited is as follows:

	£
Cash	5,486,167
	------------

FRIARS 938 LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD FROM 12 DECEMBER 2024 TO 31 DECEMBER 2025

27. Business combinations (continued)

The fair value of amounts recognised at the acquisition date in relation to The Garden Buildings Group Limited are as follows:

	Fair value
	£
Tangible assets acquired	4,494,970
Stocks acquired	5,878,323
Trade debtors acquired	2,006,943
Other debtors acquired	831,822
Cash and cash equivalents acquired	1,112,390
Trade creditors assumed	( 1,376,375)
Other creditors assumed	( 2,210,985)
	-------------
	10,737,088

Goodwill on acquisition	(5,250,921)
	-------------
	5,486,167
	-------------

28. Operating leases

The total future minimum lease payments under non-cancellable operating leases are as follows:

	Group	Company
	31 Dec 25	31 Dec 25
	£	£
Not later than 1 year	516,418	–
Later than 1 year and not later than 5 years	412,394	–
	---------	----
	928,812	–
	---------	----

29. Related party transactions

Group

At 31 December 2025, the Group owed £2,686,167 to a director. The balance is unsecured and repayable on demand. No interest was charged during the year. Other than the balance disclosed above, there were no related party transactions requiring disclosure in the current period.

30. Controlling party

The controlling party is J W Owen .