CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2025

 

		2025		2024
	Note	£	£	£	£

 

Profit for the year before taxation			1,097,292		25,467
Adjustments for: Finance costs	10	1,825,153		1,849,611
Finance income	8	(58,910)		(24,027)
Gain on disposal of property, plant and equipment	5	(77,019)		(20,634)
Amortisation and impairment of intangible assets	15	497,092		464,121
Depreciation and impairment of property, plant and equipment	16	5,462,740		5,050,181
Foreign exchange gains on cash equivalents	5	4,877		10,522
Revaluation of consideration	11	-		18,885
Equity settled share based payment expense/(credit)	32	182,462		(26,034)
Decrease in provisions		-		(45,103)
Movements in working capital: (Increase)/decrease in inventories	19	(2,628,382)		211,721
Increase in trade and other receivables	20	(2,024,385)		(1,555,918)
Increase in trade and other payables	23	4,506,173		1,258,069
Cash generated from operations			8,787,093		7,216,861
Income taxes refunded			658		13,416
Net cash inflow from operating activities			8,787,751		7,230,277
Investing activities
Purchase of intangible assets	15	(104,880)		(302,520)
Purchase of property, plant and equipment	16	(3,256,180)		(1,392,423)
Proceeds from disposal of property, plant and equipment		73,135		117,898
Interest received	8	58,910		24,027
Cash settlement in lieu of share exercise	32	-		(85,858)
Deferred consideration paid		-		(4,269,400)
Net cash used in investing activities			(3,229,015)		(5,908,276)
Financing activities
Net proceeds from issue of shares	27	1,336,970		346,900
Purchase of treasury shares	31	(402,454)		(58,584)
Proceeds from transfer of shares from EBT	30	60,000		(405,570)
Increase in invoice discounting	22	1,785,013		1,847,378
Trade loan received	22	762,457		-
Repayment of bank loans	22	(107,017)		(118,577)
Payment of lease liabilities	24	(5,484,527)		(4,718,625)
Interest paid	10	(795,240)		(785,928)
Dividends paid to equity shareholders	12	(952,645)		(916,688)
Net cash used in financing activities			(3,797,443)		(4,809,694)
Net increase/(decrease) in cash and cash equivalents			1,761,293		(3,487,693)

 

		2025		2024
	Note	£	£	£		£
Cash and cash equivalents at beginning of year			2,199,078				5,709,229
Effect of foreign exchange rates			9,441				(22,458)
Cash and cash equivalents at end of year			3,969,812				2,199,078

 

The notes on pages 55 to 88 form part of these group financial statements.

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2025

1      Accounting policies

Company information

Likewise Group PLC is a public company limited by shares incorporated in England and Wales and listed on the Alternative Investment Market (AIM). The registered office is Unit 4 Radial Park, Radial Way, Birmingham Business Park, Solihull, Birmingham, B37 7WN. The principal activity of the Group is the wholesale distribution of floor-coverings and associated products. Further information on the nature of its operations are disclosed in the strategic and directors' report.

The group consists of Likewise Group PLC and all of its subsidiaries.

 

1.1    Accounting convention

The consolidated financial statements have been prepared in accordance with UK adopted international accounting standards (IFRS) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS unless otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, except for properties held under revaluation model. The principal accounting policies adopted are set out below.

The Company financial statements have been prepared accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:

•      inclusion of an explicit and unreserved statement of compliance with IFRS; 

•      presentation of a statement of cash flows and related notes;

•      disclosure of the objectives, policies and processes for managing capital; 

•      disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;

•      a reconciliation of the number and weighted average exercise prices of share options, how the fair value of share-based payments was determined and their effect on profit or loss and the financial position;

•      the effect of financial instruments on the statement of comprehensive income;

•      related party disclosures for transactions with wholly owned members of the group.

No new or amended accounting standards effective in 2025 had a material impact on the Group or the Company.

IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027) will replace IAS 1 Presentation of Financial Statements. IFRS 18 introduces new presentation and disclosure requirements to improve comparability and transparency of financial performance.

The Group is assessing the impact of IFRS 18; however, it is not yet practicable to quantify the effect of adoption.

Other standards and amendments issued but not yet effective are not expected to have a material impact on the Group's financial statements.

 

1.2    Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Likewise Group PLC together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group's financial statements from the date that control commences until the date that control ceases.

 

1.3    Going concern

The consolidated financial statements for the Group have been prepared on a going concern basis.

The Group utilises invoice financing arrangements and has access to additional authorised facilities to support working capital. The Group has operated within these facilities throughout the year and continues to do so in 2026. The directors are confident that the Group will be able to operate within its available facilities.

The Board have assessed going concern through a cash flow model to December 2027, based on 2025 actuals, 2026 budget and 2027 forecasts. These cashflows indicate the Group has adequate resources to operate within its current financing arrangements for the foreseeable future.

Given the Group's strong balance sheet, cash reserves, available financing and positive forecast performance, the directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

 

1.4    Revenue

Revenue comprises sales of goods to customers outside the Group, less an appropriate deduction for discounts, and is stated at the fair value of the consideration net of value added tax and other sales taxes.

 

Revenue and receivables are recognised when performance obligations are satisfied and the goods are delivered to customers as this is the point in time that the consideration is unconditional, control of goods has passed and only the passage of time is required before the payment is due.

 

1.5    Goodwill

Goodwill represents the excess of the cost of acquisition of businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less impairment losses.

 

Any gain on a bargain purchase is recognised in profit or loss in the period of the acquisition where the fair value of assets acquired is in excess of the consideration paid.

 

Goodwill is not amortised but is reviewed for impairment at least annually.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. In accordance with IAS 36, an impairment loss recognised for goodwill is not reversed in subsequent periods, even if the recoverable amount of the cash-generating unit increases in a later period.

 

1.6    Intangible assets other than goodwill

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

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

 

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

 

·    Brand name                        10 - 15 years straight line

·    Customer base                   10 - 15 years straight line

·    Software                             3 years straight line

 

1.7    Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Freehold land and buildings                      2% straight line

Long Leasehold land and buildings            2% straight line

Leasehold improvements                          10% straight line

Fixtures, fittings and computer equipment  10% - 33% straight line

Plant and equipment                                 10% - 33% straight line

Motor vehicles                                          17% - 33% straight line

Right of use assets - Leasehold property   Over the term of the lease

Right of use assets - Other                        Over the term of the lease

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 Statement of profit or loss.

Properties classified as freehold and long leasehold land and buildings are measured using the revaluation model. The Group's policy is to obtain independent third-party valuations for each property on a rolling three-year cycle. In the intervening years, management assesses fair value by considering relevant market data and comparing it to the most recent external expert valuation. Where material changes are identified, properties are revalued or impaired accordingly.

Properties are therefore carried at their revalued amounts, being fair value at the date of valuation less subsequent accumulated depreciation and impairment losses. Fair value is typically based on market value.

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity. However, to the extent that a revaluation gain reverses a loss previously recognised in profit or loss, or a revaluation loss exceeds the accumulated revaluation surplus, such amounts are recognised in profit or loss.

 

1.8    Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

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

1.9    Impairment of tangible and intangible assets

At each reporting 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 group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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.

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

1.10  Inventories

Inventories are valued at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, inventories are assessed for impairment. If inventories are impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of profit or loss.

 

 

1.11  Cash and cash equivalents

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

 

1.12  Financial assets

Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

 

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

 

Impairment of financial assets

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Trade and other receivables are recorded initially at transaction price and subsequently measured at amortised cost. This results in their recognition at nominal value less an allowance for any doubtful debts. This allowance for expected credit losses (ECL) may be established where evidence of credit deterioration is observed. In order to assess credit deterioration, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward-looking information. An additional reserve is established, where required, when a loss is both probable and the amount is known.

ECLs are a probability-weighted estimate of lifetime credit losses. Under the ECL model, the Group calculates the allowance for credit losses by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance is the sum of these probability weighted outcomes. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that Group expects to receive) with a discount factor applied to such overdue amounts.

The discount matrix ("ECL Matrix") below is applied to derive an ECL for overdue amounts:

31 - 60 days overdue 0% discount

61 - 90 days overdue 0% discount

91 - 120 days overdue 5% discount

Over 120 days overdue 50% discount

The Group reserves the right to exercise its discretion in the application of discounts outside of the ECL Matrix based on extenuating circumstances that may apply from time to time to the Company's trade debtors. An example of such an extenuating circumstance may occur when an overdue amount has been collected post a reporting or measurement date.

 

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

 

1.13  Financial liabilities

The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

 

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

 

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the group's obligations are discharged, cancelled, or they expire.

 

1.14  Equity instruments

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

 

1.15  Taxation

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

 

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the Statement of Profit or Loss except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity and recognised through the Statement of Comprehensive Income. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

 

1.16  Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event and it is probable that the group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

 

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

 

1.17  Employee benefits

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 inventories or non-current 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 group is demonstrably committed to terminate the employment of an employee or to provide termination benefits

 

1.18  Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

 

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.

 

1.19  Share-based payments

The fair value of equity instruments granted to employees is charged to the Statement of Profit or Loss, with a corresponding increase in equity. The fair value of share options is measured at grant date using the Black-Scholes pricing model and spread over the period during which the employee becomes unconditionally entitled to the award. The charge is adjusted to reflect the number of shares or options that vest.

 

When the share-based payment awards vest, the Company issues new equity instruments to employees in settlement of the granted awards. The amount equal to the employees fair value of share options vested and issued is released to retained earnings.

 

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification.  Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment.  The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

 

1.20  Leases

At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

 

1.20   Leases (continued)

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

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

 

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

 

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the group's estimate of the amount expected to be payable under a residual value guarantee; or the group's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

 

The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

 

1.21  Invoice discounting

The Group has an invoice discounting arrangement. The amount owed by customers to the Group are included within trade receivables and the amount owed to the invoice discounting company is included within borrowings. The amount owed to the invoice discounting company represents the difference between the amounts advanced by the invoice discounting company and the invoices discounted. The interest element of the invoice discounting charges and other related costs are recognised as they accrue and are included in the Statement of Profit or Loss with other finance costs.

 

2      Critical accounting estimates and judgements

In the application of the company'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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

 

Deferred Tax

The recognition of deferred tax assets, particularly those arising from unused tax losses, requires significant management judgement. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the losses can be utilised. This assessment involves evaluating both the timing and the likelihood of future profitability, taking into account factors such as historical performance, forecasted earnings, industry trends, and the impact of any planned strategic initiatives.

 

In making this judgement, the Group has prudently only considered it's two-year financial forecasts, the nature and timing of expected income streams, and any expiry limitations associated with the tax losses. A deferred tax asset will be recognised up to the total of the forecast taxable profits for the two-year period of assessment as well as any deferred tax liabilities that these losses could be offset against at the balance sheet date. Changes in these assumptions or in the tax environment may result in adjustments to the amount of deferred tax assets recognised. At the reporting date, deferred tax assets have been recognised only where the Group considers it probable that sufficient taxable profits will arise to allow the benefit of the losses to be utilised.

 

Intangible assets

The Group recognises identifiable intangible assets, such as brands and customer relationships, at fair value on acquisition of the relevant subsidiaries. Any excess paid over the value of net assets acquired is recognised as Goodwill in the Consolidated Statement of Financial Position and is allocated to the appropriate business.

 

The annual amortisation charge and useful life is based on the period over which management expects to benefit from the intangible assets, based on past experience and knowledge of the business acquired.

 

Goodwill

Goodwill is recognised on acquisition of subsidiaries. This value is the excess paid over the net assets acquired which cannot be separately identified as an intangible asset. Goodwill is not amortised but is subject to an annual impairment review.

 

The impairment assessment compares the carrying value of Goodwill with its recoverable amount. The recoverable amount is determined by performing a discounted cash flow (DCF) analysis of the Cash Generating Unit (CGU) with reference to divisional budgets prepared by management. To prepare the DCF, management are required to use estimates and judgement for the parameters applied to the model of growth and termination growth rate percentages along with the discount factor. The percentages used to calculate the growth rates are based on prior performance along with budgets for the coming year. The discount factor is based on the proportion of the company's cost of capital weighted between the use of debt and equity finance.

Inventory valuation

Inventories are stated at the lower of cost and the estimated selling price less costs to complete and sell.

Inventory provisions are recognised to provide for short length stock dependent on its length and using the directors judgement of likely future sale to calculate it's likely realisable value. In addition, a provision is recognised for any aged stock, on an increasing basis, once it's been held in inventory for at least one year.

 

A significant shift in consumer market or customer demand may result in the directors inclusion of an additional specific provision based on their assessment of likely future sale.

 

Valuation of land and buildings

The Group measures its freehold and long leasehold land and buildings using the revaluation model, carrying them at fair value less subsequent accumulated depreciation and impairment losses. Fair value is typically determined with reference to market value.

 

Independent external valuation specialists are engaged to perform valuations on a rolling three-year basis. In the intervening periods, management assesses fair value by considering relevant market data and comparing it to the most recent external valuation. Where material changes are identified, properties are revalued or impaired accordingly.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity. However, where a revaluation loss exceeds previously recognised gains, or reflects a clear consumption of economic benefits, the excess is recognised in the income statement.

 

       The valuation of the Group's property portfolio is sensitive to movements in the commercial property market, and significant changes in market conditions may impact reported values. Further details are provided in Note 16.

 

3      Revenue

Revenue is derived from the wholesale and distribution of floor-coverings and related products.  The Group operates as a single, reportable segment, under IFRS 8 Operating Segments.  Therefore, no segmental analysis is presented.  No individual customer accounted for more than 10% of total revenue.  An analysis of revenue from continuing operations is set out below. 

	2025 £	2024 £
Revenue analysed by class of business
Sale of goods	163,095,329	149,793,661
	2025 £	2024 £
Revenue analysed by geographical market
United Kingdom	162,997,744	149,671,433
Rest of Europe	97,585	122,228
	163,095,329	149,793,661

 

4      Auditor's remuneration

	2025	2024
	£	£
Fees payable to the company's auditor and associates:
For audit services
Audit of the financial statements of the group and company	163,500	150,000

 

No non-audit services were provided by the company's auditor in the year ended 31 December 2025 (2024: nil).

 

5      Operating profit

	2025	2024
	£	£
Operating profit for the year is stated after charging/(crediting):
Exchange losses	4,877	10,522
Depreciation of property, plant and equipment	5,462,740	5,050,181
Profit on disposal of property, plant and equipment	(77,019)	(20,634)
Amortisation of intangible assets (included within administrative expenses)	497,092	464,121
Cost of inventories recognised as an expense	112,361,004	103,777,804
Share-based payments	182,462	(26,034)
Loss from new operations and acquisition-related costs	358,521	133,993
Exceptional investment in point of sale	286,136	349,050
Strategic relocation and restructuring costs	378,772	686,090
Exceptional investment costs	324,155	-
Exceptional bad debt and customer exit costs	-	223,054

 

The below summarises exceptional costs incurred within the table above:

 

Loss from New Operations & Acquisition Related Costs

2025 marked the completion of the Group's planned national UK infrastructure with the acquisition of the freehold distribution centre in Plymouth in February, completing the Group's nationwide distribution network.

The initial period of investment, including the site as well as the development of a capable sales team will require time to mature before delivering the anticipated returns. Consequently, whilst expected to be accretive to Group profitability over the longer term, it is anticipated to be a loss-making entity during the first 24 months of operation.

 

Loss from New Operations & Acquisition Related Costs (continued)

In the prior year, the Group also incurred acquisition-related costs associated with the final contingent consideration payment relating to the 2022 acquisition of Delta Carpets Holdings Limited. This payment was made in April 2024, and all contingent and deferred consideration obligations were fully settled in 2024.

 

Exceptional Investment in Point of Sale

Expenses incurred by increasing the Group's market presence by providing heavily discounted in-store retail displays to retailers to accelerate the Group's growth in market share via a high volume of strategic stand placements and recognised in the Consolidated Statement of Profit or Loss. The Board has adopted a prudent approach by recognising the cost as an expense in the profit or loss statement, rather than capitalising these displays as assets and incurring depreciation charges in future periods.

 

Strategic Relocation & Restructuring Costs

Strategic relocation and restructuring costs incurred during the year reflect the Group's ongoing investment in reorganising and developing the Likewise Matting business, alongside the development of A&A Carpets in Manchester, in alignment with the Group's broader strategic objectives.

Early positive signs follow the streamlined sales and admin teams in Matting, and the benefits of new management at A&A, both contributing to improved performance in Q1 2026.

Prior year costs included the initial phase of restructuring expenditure at A&A ahead of relocation to a new transhipping facility in Manchester, and dual running costs at the Scotland Distribution Hub (after a move to purpose-built premises), to support the broader growth of the Group's long-term capacity requirements.

 

Exceptional Investment & Bad debts

Relocation of Likewise Scotland in 2023, established it as the third large-scale Distribution Hub within the Group network, additional investment into a second cutting shift was made due to forecast capacity demands.

Significant upfront recruitment and training of a skilled cutting team and enhanced utilisation of existing equipment was required. The investment precedes the realisation of demand and due to the time needed to reach full operating efficiency, it was classified as a non-underlying cost in 2025, with benefits realised in FY26 and beyond.

In addition, to the successful development of the premium flooring range, Floors by Lewis Abbott, the Board recognises a significant opportunity to expand its fledgling presence in the premium segment.

The strong core range established across Carpets, Luxury Vinyl Tile (LVT) and Engineered Wood, is supported by targeted investment in its dedicated sales team to realise further opportunities for this trade brand. This initiative strengths our engagement with current customers with in-store displays, drive new stand placements, and drive incremental revenue growth of this segment.

The prior year disclosure relates to a significant bad debt on a major customer within the Rugs and Matting division, together with the strategic withdrawal of a retailer from the floor-covering market. The resulting administration led to an exceptional bad debt write-off, while the market-exit reduced trading - particularly in the second half - limiting the Group's ability to mitigate the financial impact.

Other Exceptional Items

Amortisation costs  and Share Based Payment Charges relate to non-cash reporting adjustments incurred during the year and further details can be found in notes 15 and 31 respectively.

6.  Employees

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

 

	2025 Number	2024 Number
Directors	4	4
Other employees	557	503
Total	561	507
Their aggregate remuneration comprised:	2025 £	2024 £
Wages and salaries	22,026,868	20,581,935
Social security costs	2,716,104	2,156,661
Pension costs	582,440	567,015
Share based payments	182,462	(26,034)
	25,507,874	23,279,577

The average monthly number of persons (including directors) employed by the company during the year was 14 (2024: 11).

7	Directors' remuneration	2025 £	2024 £
	Remuneration for qualifying services	529,336	521,644
	Social security costs	70,504	63,329
	Company pension contributions to defined contribution schemes	-	6,400
	Share based payments	4,602	9,406
		604,442	600,779

 

Remuneration disclosed above includes the following amounts paid to the highest paid director:

 

		2025 £	2024 £
	Remuneration for qualifying services	336,374	304,974

 

There were no additional fees paid to non-executive directors in the current or preceding year.

 

The number of directors accruing benefits under money purchase pension schemes during the year amounts to nil (2024: nil).

 

8	Interest income	2025 £	2024 £
	Financial instruments measured at amortised cost:
	Bank deposits	58,910	24,027

 

 

9	Income tax expense	2025 £	2024 £
	Current tax
	UK corporation tax on profits for the current period Adjustments in respect of prior periods	- (15,237)	9,377 (7,686)
	Total UK current tax	(15,237)	1,691
	Deferred tax Origination and reversal of temporary differences Adjustments in respect of prior periods	170,178 53,544	(750,826) -
		223,722	(750,826)
	Total tax charge/(credit)	208,485	(749,135)

 

The charge for the year can be reconciled to the profit per the income statement as follows:

 

		2025 £	2024 £
	Profit before taxation	1,097,292	25,467
	Expected tax charge based on a corporation tax rate of 25.00% (2024: 25.00%)	274,323	6,367
	Effect of expenses not deductible in determining taxable profit	1,398,741	40,534
	Movement in deferred tax not recognised	(67,298)	(678,509)
	Adjustment in respect of prior years	(10,233)	(7,686)
	Deferred tax adjustment in respect of prior years	(21,504)	-
	Fixed asset differences	57,835	53,188
	Deferred tax (charged)/credited directly to OCI	(1,344,885)	(108,424)
	Other tax adjustments, reliefs and transfers	(6,187)	(54,605)
	Temporary differences in respect of business combinations	(71,857)	-
	Taxation charge/(credit) for the year	208,485	(749,135)

 

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:

 

	2025 £	2024 £
Deferred tax liability arising on:
Revaluation of property	1,344,885	108,424
Actuarial gain on defined benefit pension scheme	17,500	112,500
	1,362,385	220,924

 

As at 31 December 2025, the Group has tax losses of £15,406,715 (31 December 2024: tax losses of £13,893,692) which are available for offset against future taxable profits.

 

10	Finance costs	2025 £	2024 £
	Interest on bank overdrafts and loans	194,593	184,466
	Interest on lease liabilities	1,177,419	1,201,163
	Interest on invoice discount facilities	453,141	463,982
	Total interest expense	1,825,153	1,849,611

Interest paid during the financial year, as reported in the consolidated statement of cash flows, comprised £194,593 (2024: £184,466) in respect of bank overdrafts and loans, £147,506 (2024: £137,480) relating to assets acquired under finance leases, and £453,141 (2024: £463,982) in respect of invoice discounting facilities.

Included within interest on lease liabilities is £1,029,913 (2024: £1,063,683) of operating lease interest recognised under IFRS 16

 

11	Revaluation of deferred consideration	2025 £	2024 £
	Loss on revaluation of deferred consideration	-	(18,885)

 

12     Dividends   Amounts recognised as distributions:		2025 per share Pence		2024 per share Pence		2025 Total £	2024 Total £
Final dividend paid		0.2500		0.2500		609,942	610,720
	Interim dividend paid	0.1375		0.1250		342,703	305,969
		0.3875		0.3750		952,645	916,689

 

13	Earnings per share	2025	2024
	Number of shares	Number	Number
	Weighted average number of ordinary shares for basic earnings per share	249,623,206	245,580,592
	Effect of dilutive potential ordinary shares:
	- Weighted average number outstanding share options	5,890,470	4,034,800
	- Warrants	2,800,000	2,800,000
	Weighted average number of ordinary shares for diluted earnings per share	258,313,676	252,415,392
		2025	2024
	Earnings	£	£
	Continuing operations
	Profit for the period from continued operations	888,807	774,602
		2025	2024
		Pence per share	Pence per share
	Earnings per share for continuing operations
	Basic earnings per share	0.36	0.32
	Diluted earnings per share	0.34	0.31

 

The diluted profit per share attributable to the ordinary equity holders of the Company has been presented to two decimal places in the current and prior year (formally presented to one decimal place).

 

14      Impairments

 

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

	2025 £		2024 £
In respect of: Financial assets -Trade and other receivables recognised in administrative expenses	244,044		393,128