Full year results for year ended 31 December 2025

4 March 2026

Full year results for the year ended 31 December 2025

SIG plc ("SIG", "the Group" or "the Company") today announces its results for the full year ended 31 December 2025 ("FY25" or "the year").

Key highlights

· FY25 results reflect continued strong commercial execution and productivity gains against a challenging market backdrop, particularly in the latter part of the year

· Group like-for-like1 ("LFL") sales flat versus the prior year, with revenues of £2.59bn (2024: £2.61bn)

· Underlying2 operating profit of £32.1m, up 28% versus the prior year (2024: £25.1m) and in line with market expectations

· Good progress on strategic actions, including those benefitting medium and longer term profitability:

o Group's operating companies continue to perform well relative to their markets

o Restructuring and productivity initiatives contributed to year over year underlying reduction in operating expenses of £39m, mitigating much of the near-term impact of lower volumes and operating cost inflation

o UK Interiors' performance transformed with a £9m year over year improvement in operating profit in its core Insulation and Drylining business

o Benelux delivered a £3.2m reduction in operating losses

· Underlying loss before tax of £20.0m; statutory loss before tax of £61.7m, reflecting £41.7m of Other items, including £29.7m of non cash impairments and £9m of restructuring costs

· Operating cash inflow3 of £43m and free cash outflow3 of £12m, reflecting strong progress on working capital initiatives

· Robust liquidity of £171m at year-end, consisting of cash balances of £81m (2024: £87m) along with undrawn RCF of £90m

· Year-end net debt of £518m (2024: £497m), including £323m (2024: £321m) of net lease liabilities; leverage unchanged at 4.7x

Commenting, Pim Vervaat, Chief Executive Officer, said:

"In 2025 the Group delivered a robust trading performance in continued difficult market conditions, and good progress in improving the underlying performance and profitability of our businesses. Cost reduction initiatives delivered a £39m saving which enabled us to deliver 28% growth in underlying operating profit despite the challenging market backdrop.

"During my first five months at SIG, I have been impressed with the capability of our people and can see a clear opportunity to increase the value that the Group can deliver for shareholders, as outlined in our update in January.

"The Group is well positioned in markets that continue to have strong long-term growth drivers. The operating leverage benefits when markets return to growth will be significant, and further opportunities for self-help have been identified. We will focus on optimising both the business performance and the business portfolio in order to create a best-in-class growth platform for building materials distribution in Europe. In 2026 we aim to deliver further financial and strategic progress, and I look forward to working with the Board and all the SIG management teams in driving substantial value over time."

Notes

1. Like-for-like is defined as sales per working day in constant currency, excluding completed acquisitions and disposals, and adjusted to exclude the net impact of branch closures and openings.

2. Underlying represents the results before Other items. Other items relate to the amortisation of acquired intangibles, impairment charges, net restructuring costs, cloud-based ERP implementation costs, costs associated with refinancing and other specific items.

3. Free cash flow is defined as all cash flows excluding M&A transactions, dividend payments, and financing transactions. Operating cash flow represents free cash flow before interest and financing and tax.

An Investor and Analyst presentation will be available on www.sigplc.com from 7:15am UK time today. A live presentation of the results followed by Q&A, hosted by Pim Vervaat, CEO, and Ian Ashton, CFO, will take place at 10:00am UK time today.

Please click the link below to join the webinar:

https://storm-virtual-uk.zoom.us/webinar/register/WN_bKcDO5-wQGGVaUt9OCkPeA

Webinar ID:

869 0673 8129

Enquiries

LEI: 213800VDC1BKJEZ8PV53

About

SIG plc is a leading pan-European supplier of specialist building products to trade customers across the UK, France, Germany, Ireland, Benelux and Poland. With leading market positions in specialist insulation, interiors and roofing products, SIG facilitates one-stop access to an extensive product range, provides expert technical advice and coordinates often complex delivery requirements. For suppliers, SIG offers a channel through which products can be brought to a highly fragmented market of smaller customers and sites that are of insufficient scale to supply direct. SIG employs approximately 6,500 employees across Europe and is listed on the London Stock Exchange (SHI). For more information, please visit the Company's website, www.sigplc.com.

Trading overview

Reported Group sales were 1% lower in the year. This included a net 1% negative impact from the combined effect of exchange rates, the number of working days, and branch closures and openings during the year.

Group LFL sales were flat versus the prior year, up 1% in H1 and down 2% in H2. Subdued demand persisted across the Group's markets throughout 2025 and softened further in the final months of the year in several geographies, notably the UK, Germany and Ireland. Given this demand backdrop, pricing pressure remained elevated, and this led to a net 1% reduction in pricing in the year, despite modest increases in input costs. The impact of this was similar across H1 and H2.

Demand in all markets remains well below historical levels, with European construction remaining at a low point in the cycle for a protracted period, without near term evidence of a meaningful recovery. Against this backdrop, our businesses continue to outperform and the majority are taking share within their end-markets.

The Group continues to make good progress on its operational initiatives, including those to drive efficiencies in costs and working capital. Most notably, the UK Interiors and Benelux businesses continue to benefit from the self-help programmes put in place last year.

In Q4 2025 we removed the separate management structure that was supporting the UK Specialist Markets businesses, and these businesses are now reported within either UK Interiors or UK Roofing. We believe these changes in management will allow us to better exploit the opportunities in these smaller specialist businesses, including synergies across our own portfolio.

Strategic progress

During 2025, the Group made good progress on its strategic goals, encompassing actions and focus on four key areas as follows:

Growth - despite the continued market weakness in 2025, we continued to deliver sales growth ahead of the market in the majority of our geographies. This was most pronounced in UK Interiors, driven by the successful turnaround programme in the UK Insulation and Drylining business, our largest business by revenue, which had a particularly strong year from a sales perspective, growing 8% in H1, 3% in H2, and 5% for the full year.

Execution - the Group has focused on improving execution in order to deliver consistent and profitable growth. In 2025 the Group continued to focus on streamlining its operating costs to mitigate the impact of weaker demand, but also to improve ongoing efficiency to drive higher margin and operating leverage when markets recover. Most notably, the UK Interiors and Benelux businesses continued to benefit from the self-help programmes put in place in Q4 2024. In December 2025, as part of the early phase of a portfolio review, we closed one of the smaller UK businesses, Mayplas, as it did not have the ability to deliver sustainable profitable growth. Across the Group as a whole, restructuring actions in 2025, including headcount reduction and realigning our branch footprint in some areas, led to a decrease in underlying operating costs of £39m, driven by these savings initiatives. 

Modernisation - the progressive modernisation and digitalisation of our operations is creating an important opportunity for the Group to increase profitability and efficiency sustainably over the medium and longer term. In 2025 we continued to expand our customer facing e-commerce platforms, with our French Interiors business launching its new e-commerce site in the pilot phase in the final quarter of the year, following the launch of a similar platform in Germany in 2024. These in-house developed platforms allow us to provide a more seamless and convenient customer experience.

Specialisation - as noted above, the former UK Specialist Markets businesses are now reported within either UK Interiors or UK Roofing. Growing in higher margin categories remains a key focus and we believe these changes will allow us to better exploit the opportunities in these smaller specialist UK businesses, including synergies across our own portfolio. The strategic assessment being undertaken of each business in the Group is also driving clarity on areas of specialism that we can develop in the future.

Vision 2030

In January 2026, the Group outlined its new Vision 2030 strategy, with the aim of creating an agile, focused and best-in-class pan-European distribution platform in building materials. In the medium and longer term, it is expected that this can deliver an operating margin of 3%-5% through the cycle, alongside robust and predictable cash generation.

The Group's immediate priorities are to improve the operating margin through further cost and efficiency programmes, including improved procurement. This will also help maximise the upside potential from operational leverage as markets recover and revenues grow. The Group also remains committed to sustaining investment in commercial initiatives to drive continued local market outperformance.

Procurement will be a key area of enhanced focus in 2026 and beyond. The Group's current annual procurement spend is c£2.3bn, and the aim is that by applying best practice we achieve an annualised benefit of at least 1% of spend from 2027.

We will, in addition, assess opportunities to simplify and optimise the current business portfolio to enhance the Group's focus on its most attractive growth markets to accelerate outperformance and deliver value creation.

Sustainability

While improving the Group's financial performance remains the key priority, we also made improvements in many of the Group's sustainability metrics during the year. Operational carbon emissions were lowered by 1%, and we further reduced waste that goes to landfill and completed our five-year focus period for our waste improvement programme. Despite the actions taken to reduce headcount and costs, the Group's employee engagement levels remained broadly stable, with our businesses keeping employee engagement as a key priority.

Balance Sheet

Continued focus on working capital management drove an improved performance in operating cash flow and resulted in a material reduction of the free cash outflow in the year to £12.0m (2024: £38.6m). This, along with some favourable currency movements, resulted in year end cash balances of £81.3m (2024: £87.4m). The Group's revolving credit facility ("RCF") of £90m was undrawn throughout 2025 and remains undrawn at the date of this report. Maintaining healthy liquidity headroom remains a key priority for 2026, and additional facilities are now available, specifically receivables factoring in selected markets, to support this.

Year-end net debt was £518.2m (2024: £497.3m). Combined with the higher profitability in the year, this resulted in year-end leverage of 4.7x (2024: 4.7x). Year-end net debt excluding lease liabilities was £194.9m (2024: £175.9m). Net lease liabilities, including an unfavourable currency movement, increased by £1.9m. Bond debt, including accrued interest, increased by £14.9m due to an unfavourable currency movement.

Dividend

No dividend will be paid for 2025. The Board reiterates its commitment to return to paying a dividend, appropriately covered by underlying earnings, when it is prudent to do so. Continued successful strategic execution, including sensible investment where appropriate, will deliver sustainable, profitable growth and cash generation as markets recover, allowing the Board to consider a range of capital allocation options.

Outlook

The Group continues to expect softness in market conditions in 2026 and, to the extent there is a recovery, that it is more likely to materialise in the second half of the year. Trading in the first weeks of 2026 has also been adversely affected by particularly poor weather across Europe, and as a result LFL sales for the first two months of the year have been weaker than expected. We expect improvement over the balance of the year, along with continued progress on self-help measures on both costs and working capital. We therefore expect to deliver further financial and strategic progress in 2026, and expect to maintain healthy levels of liquidity throughout the year.

The operational gearing in our business model applies equally strongly in conditions of rising demand, and the Group remains well positioned to benefit from the market recovery when it occurs. This also underpins the Board's confidence that the Group will deliver its targeted 3-5% operating margin range in the medium-term. This, combined with our focus on portfolio optimisation, which will continue at pace throughout 2026, will support the Board's overarching goal of delivering meaningful value creation over the medium and long-term.

FINANCIAL REVIEW

The Group again managed effectively the impact of challenging market conditions during 2025. At an underlying profit level, the effects of continuing subdued demand and marginally falling prices were more than mitigated by significant cost reduction, including ongoing restructuring and productivity initiatives, and solid progress on working capital initiatives. These actions also position the business to deliver a step-up in profitability and cash generation when markets return to growth. The Group has maintained robust liquidity and continued to invest in support of its commercial initiatives, enabling the businesses to outperform their local markets.

Revenue

Group revenue of £2,591.0m (2024: £2,611.8m) was 1% lower on a reported basis, including a net 1% negative impact from the combined effect of exchange rates, the number of working days, and branch closures and openings during the year. LFL revenues, which are adjusted to exclude the impact of branch closures and openings, were flat year-on-year. Within this, the impact of sales price deflation was approximately 1%.

Operating costs and profit

Gross profit decreased 2.0% to £627.1m (2024: £640.0m) at a gross profit margin of 24.2% (2024: 24.5%). The reduction in gross margin reflects greater than normal pricing pressure as a result of the weak demand environment.

The Group's operating costs decreased by 3.2% to £595.0m (2024: £614.9m). The decrease was primarily due to savings initiatives, including restructuring actions taken from H2 2023 onwards, partially offset by inflation, with the biggest impact of the latter being on wages and salaries. Operating costs in the year also benefited from £3.5m profit on the sale of properties in France Roofing and Poland.

The Group's underlying operating profit increased to £32.1m (2024: £25.1m), at an operating margin of 1.2% (2024: 1.0%). The reported operating loss was £9.4m (2024: £3.8m) after Other items of £41.5m (2024: £28.9m). Other items includes £23.4m impairment of goodwill and intangibles relating to Miers and other former UK Specialist Markets businesses, £6.3m impairment of right-of-use assets in the UK Interiors business, £9.0m of restructuring costs and £1.3m of ERP implementation costs.

Segmental analysis

UK

Following a change in the UK management structure announced in November 2025, we now report two segments in the UK, with the various Specialist Markets businesses separated out and reported within Interiors and Roofing. The 2024 segmental information has been restated in order to present it on a consistent basis with the 2025 numbers.

Revenue in UK Interiors, a specialist insulation, interiors and construction accessories distribution business, increased 1% to £673.1m (2024: £665.0m). LFL revenue was up 3% year-on-year, with the business outperforming the market. The increase in revenue and good progress on operating cost reductions, which were only partially offset by the impact of pricing pressure on the gross margin, resulted in the business reporting an improved profit of £7.7m (2024: £0.6m). The Insulation and Drylining business that forms the majority of UK Interiors had a particularly strong year from a sales perspective, growing 8% LFL in H1, 3% in H2, and 5% for the full year. Its resulting turnaround in profit was the driver of the profit improvement in UK Interiors as a whole.

Revenue in UK Roofing, a specialist roofing merchant, which now also includes our Building Solutions business, increased 1% to £453.4m (2024: £448.7m), with LFL revenue up 2%. This was despite a weak market, and was driven by the business's successful execution of its multi-year programme of business development and growth initiatives. Operating margin was stable, and this resulted in an operating profit of £14.3m (2024: £13.9m).

France

France Interiors, a structural insulation and interiors business trading as LiTT, saw reported revenue decrease by 5% to £189.9m (2024: £200.4m), and by 6% on a LFL basis. This was driven by lower market demand, particularly in the new-build residential segment. The revenue decline, coupled with increased margin pressure, resulted in a £1.4m decrease in underlying operating profit to £4.8m (2024: £6.2m).

Revenue in France Roofing, a specialist roofing business trading as Larivière, decreased by 5% to £388.4m (2024: £410.1m), and also by 5% on a LFL basis. Demand and volumes were lower due to continued softening of the new-build market and input price deflation. The decreases in revenue and gross margin were more than offset by reduced operating costs and also £3.0m of profit on the disposal of certain properties, resulting in an operating profit increase of £1.7m to £9.7m (2024: £8.0m).

Germany

Revenue in Wego/Vti, our specialist insulation and interiors distribution business in Germany, decreased 1% to £432.5m (2024: £438.5m). LFL revenue decreased 3%, though the business outperformed a soft overall market. Gross margin percentage remained stable year-on-year, whilst operating costs increased marginally, with inflation being mostly offset by cost savings, resulting in lower operating profit of £1.3m (2024: £4.7m).

Poland

In our Polish business, a market-leading distributor of insulation and interiors products, revenue increased to £260.5m (2024: £241.4m), representing an 8% increase on a reported basis and 5% on a LFL basis. The impact of a weak market was more than offset by further improvements in our market position. However, the impact of this sales growth was more than offset by pricing pressure and operating cost inflation, resulting in lower operating profit of £4.0m (2024: £4.6m).

Benelux

Reported revenue from the Group's business in Benelux decreased to £91.6m (2024: £103.6m) with a c13% impact from the strategic decision to close seven branches in late 2024. LFL revenue, adjusted for these branch closures, was up 2%, helped by an inflationary tailwind. Gross margin improved due to favourable product mix in the remaining branches. The closures generated material operating cost savings, resulting in a lower underlying operating loss of £1.3m (2024: loss of £4.5m).

Ireland

Our business in Ireland comprises a specialist distributor of interiors and exteriors, and three separate specialist contracting businesses offering office fit-out, industrial infrastructure coatings services and kitchen/bathroom interiors fit-out. Revenue decreased by 2% to £101.6m (2024: £104.1m), and by 3% on a LFL basis, driven by a deterioration in the market in H2. This, coupled with operating cost inflation, resulted in reduced operating profit of £2.7m (2024: £3.3m).

Reconciliation of underlying to statutory result

Other items, being items excluded from underlying results, amounted to a charge of £41.7m for the year (2024: £30.5m) on a pre-tax basis and are summarised in the table below:

Other items are disclosed separately in order to provide a better indication of the underlying earnings of the Group. Further details of other items in 2025 are as follows:

· Non-cash impairment charges in the year relate to right-of-use asset impairment in the UK Interiors business (£6.3m) and impairment of goodwill and other intangible assets in the Miers and other former UK Specialist Markets businesses (£23.4m), as a result of a reduction in future cash flow forecasts due to continued challenging market conditions.

· Net restructuring costs in the year comprised £2.8m of redundancy and related staff costs and £6.2m of branch closure costs. The latter includes £4.2m non-cash impairment of right-of-use assets and tangible fixed assets, of which £3.5m relates to a head office property which is no longer being fully occupied by the Group, offset by £1.1m gain on lease terminations, all related to restructuring across the Group.

· Cloud-based ERP implementation costs relate to project configuration and customisation costs associated with strategic cloud computing arrangements, which are expensed, rather than being capitalised as intangible assets.

· Other specific items comprised income relating to an investment property no longer in use by the Group and other credits relating to the finalisation of amounts included in previous years.

Taxation

The effective tax rate for the Group on the total loss before tax of £61.7m (2024: £44.8m loss) is a "negative tax rate" of 3.9% (2024: negative 8.5%).

The tax charge for the year of £2.4m is related to taxable profits made in the majority of our EU markets. Tax losses in the UK and Benelux, which cannot be surrendered or utilised cross border, are not currently recognised as deferred tax assets, and this impacts the effective tax rate. Due to a reduction of the profit before tax in the overseas operating companies and the ongoing losses in the UK, the Group has generated an overall loss before tax which, alongside the positive P&L tax charge in the overseas operating companies, has resulted in the negative effective tax rate.

In accordance with UK legislation, the Group publishes an annual tax strategy, which is available on our website (www.sigplc.com).

Pensions

The Group operates a number of pension schemes, four of which provide defined benefits based upon pensionable salary. One of these schemes, in the UK, has assets held in a separate trustee administered fund, and three are overseas book reserve schemes. The largest defined benefit pension scheme is the UK scheme, which was closed to further accrual in 2016.

The Group's total pension charge for the year, including amounts charged to interest after Other items, was £7.5m (2024: £8.3m), of which a charge of £1.0m (2024: £1.1m) related to defined benefit pension schemes and £6.5m (2024: £7.2m) related to defined contribution schemes.

The total net liability in relation to defined benefit pension schemes at 31 December 2025 was £16.4m (2024: £18.2m). The latest triennial actuarial valuation of the UK scheme was as at 31 December 2022 and was concluded in March 2024. The scheme remains well funded. The next triennial valuation as at 31 December 2025 has recently commenced.

Financial position

Overall, the net assets of the Group decreased by £59.3m to £120.5m (2024: £179.8m), with a cash position at year end of £81.3m (2024: £87.4m) and net debt of £518.2m (2024: £497.3m), which includes net lease liabilities of £323.3m (2024: £321.4m). Excluding lease liabilities net debt was £194.9m (2024: £175.9m).

The movement in net debt mainly reflects the movement in cash noted below. Net lease liabilities increased by £1.9m in the year, including an unfavourable currency impact.

Cash flow

1. Operating cash flow represents free cash flow before interest and financing and tax. Free cash flow is defined as all cash flows excluding M&A transactions, dividend payments and financing transactions.

2. Cash and cash equivalents at 31 December 2025 comprise cash at bank and on hand of £81.3m (2024: £87.4m) less bank overdrafts of £nil (2024: £nil).

During the period, the Group delivered £52.0m of operating cash flow before exceptional cash spend, which represents a 162% conversion of the underlying operating profit. Post exceptional cash, the conversion was 133%. The higher profit in the year and continued working capital discipline were the key drivers of higher year-on-year operating cash flow, partially offset by slightly higher lease repayments. The Group reported a free cash outflow of £12.0m (2024: £38.6m). This improvement versus the prior year resulted from the improved operating cash flow, partially offset by the increased interest payments following the refinancing in October 2024.

Capex during the year was £16.0m (2024: £16.1m).

"Other" in the cash flow includes payments to the Employee Benefit Trust of £1.7m (2024: £0.8m) to fund share plans, £2.5m payment to the defined benefit pension scheme in the UK, add back of non-cash P&L items, provision movements, and proceeds on sale of property, plant and equipment. Cash exceptional items are those that are related to Other items in the Consolidated income statement, and include restructuring costs and ERP implementation costs.

Financing and funding

The Group's debt funding comprises ?300m of 9.75% and ?13.5m of 5.25% fixed rate secured notes, maturing in October 2029 and November 2026 respectively, and an RCF of £90m which matures in April 2029. The secured notes are subject to incurrence-based covenants only. The RCF has a leverage maintenance covenant that was set at 6.5x for 2025, and is set at 5.5x for 2026 and 5.0x thereafter, all of which only apply if the facility is over 40% drawn at a quarter end reporting date. The RCF was undrawn throughout 2025, and remains undrawn at the date of this report.

The Group's liquidity position remained robust throughout 2025, and at the end of the period stood at £171m, consisting of cash of £81m and the £90m undrawn RCF noted above.

Directors' responsibility statement on the Annual Report

The responsibility statement below has been prepared in connection with the Company's full Annual Report for the year ended 31 December 2025. Certain parts solely thereof are not included within this announcement.

We confirm that to the best of our knowledge:

(a) the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

(b) the Strategic report includes a fair review of the development and performance of the business and the position of the Company, and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

(c) the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

This responsibility statement was approved by the Board of Directors on 3 March 2026 and signed on its behalf by:

Cautionary statement

The securities of the Group have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or transferred, directly or indirectly, in, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any relevant state or other jurisdiction of the United States. There has been and will be no public offering of the securities of the Group in the United States.

This announcement has been prepared to provide the Company's shareholders with a fair review of the business of the Group and a description of the principal risks and uncertainties facing it. It may not be relied upon by anyone, including the Company's shareholders, for any other purpose.

This announcement contains forward-looking statements that are subject to risk factors including the economic and business circumstances occurring from time to time in countries and markets in which the Group operates and risk factors associated with the building and construction sectors. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions because they relate to events and/or depend on circumstances that may or may not occur in the future and could cause actual results and outcomes to differ materially from those expressed in or implied by the forward-looking statements. No assurance can be given that the forward-looking statements in this announcement will be realised. Statements about the Directors' expectations, beliefs, hopes, plans, intentions and strategies are inherently subject to change and they are based on expectations and assumptions as to future events, circumstances and other factors which are in some cases outside the Group's control. Actual results could differ materially from the Group's current expectations.

It is believed that the expectations set out in these forward-looking statements are reasonable but they may be affected by a wide range of variables, which could cause actual results or trends to differ materially, including but not limited to, changes in risks associated with the level of market demand, fluctuations in product pricing and changes in foreign exchange and interest rates.

The Company's shareholders are cautioned not to place undue reliance on the forward-looking statements. This announcement has not been audited or otherwise independently verified. The information contained in this announcement has been prepared on the basis of the knowledge and information available to Directors at the date of its preparation and the Company does not undertake any obligation to update or revise this announcement during the financial year ahead.

Consolidated income statement

For the year ended 31 December 2025

1 Underlying represents the results before Other items. Other items have been disclosed separately in order to give an indication of the underlying earnings of the Group. Further details are disclosed in Note 3.

Consolidated statement of comprehensive income

For the year ended 31 December 2025

Consolidated balance sheet

As at 31 December 2025

Consolidated statement of changes in equity

For the year ended 31 December 2025

The share option reserve represents the cumulative equity-settled share option charge under IFRS 2 "Share-based payment" less the value of any share options that have been exercised.

The hedging and translation reserves represent movements in the Consolidated balance sheet as a result of movements in exchange rates and movements in the fair value of cash flow hedges which are reflected in equity through Other comprehensive income.

Treasury shares relate to shares purchased by the SIG Employee Benefit Trust to satisfy awards made under the Group's share plans which are not vested and beneficially owned by employees.

The merger reserve represents the premium on ordinary shares issued in a previous year through the use of a cash box structure.

Consolidated cash flow statement

For the year ended 31 December 2025

1 Cash and cash equivalents comprise cash at bank and on hand of £81.3m (2024: £87.4m) less bank overdrafts of £nil (2024: £nil).

1. Basis of preparation

The Group's financial information has been prepared in accordance with the recognition and measurement requirements of UK adopted international accounting standards. It has been prepared on a basis consistent with that adopted in the previous year. The Financial statements have been prepared under the historical cost convention except for derivative financial instruments and unquoted investments which are stated at their fair value.

Whilst the financial information included in this Preliminary Results Announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Preliminary Results Announcement does not constitute the Company's statutory accounts for the years ended 31 December 2025 and 31 December 2024 within the meaning of Section 435 of the Companies Act 2006 but is derived from those statutory accounts.

The Group's statutory accounts for the year ended 31 December 2024 have been filed with the Registrar of Companies, and those for 2025 will be delivered following the Company's Annual General Meeting. The Auditor has reported on the statutory accounts for 2025 and 2024. Their report for 2025 and 2024 was (i) unqualified, (ii) included no matters to which the auditor drew attention by way of emphasis and (iii) did not contain statements under Sections 498 (2) or 498 (3) of the Companies Act 2006 in relation to the financial statements.

Disclosure restatement - segmental reporting

Reported operating segments for the UK have been changed during the year to align with changes in the UK leadership structure, and the segmental reporting disclosure has been updated to reflect the way in which information is reported to the Chief Operating Decision Maker. The prior year comparatives have been restated to be consistent with the current year presentation.

Going concern

The Group closely monitors its funding position throughout the year, including monitoring compliance with covenants and available facilities to ensure it has sufficient headroom to fund operations.

The Group's financing facilities comprise ?300m fixed rate secured notes, due October 2029, ?13.5m fixed rate secured notes, due November 2026, and a £90m Revolving Credit Facility (RCF) that expires in April 2029. One of the trading businesses also has a £0.5m bank loan repayable over the period to June 2026. The secured notes are subject to incurrence-based covenants only, and the RCF has a leverage maintenance covenant which is only effective if the facility is over 40% (i.e. £36m) drawn at a quarter end reporting date. The RCF was undrawn at 31 December 2025 and has remained undrawn at the date of this report.

The Group has adequate available liquidity and on the basis of current forecasts is expected to remain in compliance with all banking covenants throughout the forecast period to 31 March 2027 ("the going concern period").

The Directors have considered the Group's forecasts which support the view that the Group will be able to continue to operate within its banking facilities and comply with its banking covenants. The Directors have considered the following principal risks and uncertainties that could potentially impact the Group's ability to fund its future activities and adhere to its banking covenants, including:

· prolonged challenging trading conditions in the Group's larger businesses, leading to lower volumes;

· pricing pressure on sales and modest net input cost deflation; and

· current economic and political uncertainties, potentially further impacting market demand.

The forecasts on which the going concern assessment is based have been subject to sensitivity analysis and stress testing to assess the impact of the above risks and the Directors have also reviewed mitigating actions that could be taken. Following two years of market-driven downturn in 2023 and 2024, with LFL revenue declines of 2% and 4% respectively, subdued demand persisted across the Group's markets in 2025, with demand remaining well below historical levels and markets experiencing longer than anticipated delays to the start of meaningful recovery, resulting in flat LFL revenue for the year. Continued market uncertainty, alongside continued market share gains, is reflected in the base forecasts for 2026. Further progress is also expected on working capital. A severe but plausible downside scenario has been modelled, which factors in a reduction in revenue from the base forecast (and a reduction from the 2025 actual revenue), together with a reduction in gross margin, and results in a 61% reduction in underlying operating profit from the base forecast for the 12 months to 31 March 2027. Certain mitigations are also included, for example delaying planned headcount increases, reducing discretionary spend and delaying non-essential capital expenditure. Under this scenario the analysis shows that sufficient cash would be available without triggering a breach of the leverage covenant at a relevant quarter end date.

Reverse stress testing has also been performed, which shows that the Group could withstand up to an 8% reduction in revenue from the base forecasts for the nine months to the forecast liquidity low point of 30 September 2026, or up to 14% reduction for the 12 months to 31 March 2027, before triggering a covenant breach. Up to £90m RCF is available to meet working capital requirements during the month, providing this is reduced to £36m before the quarter end date if the leverage covenant is expected to be breached. Further cash phasing mitigations would also be available to avoid the requirement to draw over £36m at a quarter end date if required.

The Directors have considered the impact of climate-related matters on the going concern assessment and this is not expected to have a significant impact on the Group's going concern assessment to 31 March 2027.

On consideration of the above, the Directors believe that the Group has adequate resources to continue in operational existence for the forecast period to 31 March 2027 and the Directors therefore consider it is appropriate to adopt the going concern basis in preparing the 2025 Consolidated financial statements.

New standards, interpretations and amendments adopted

The Group has adopted the following amendments which apply for the first time in 2025:

· Amendments to IAS 21: The effects of changes in foreign exchange rates

This did not have any impact on the Financial statements of the Group.

2. Revenue and segmental information

In accordance with IFRS 8 "Operating Segments", the Group identifies its reportable operating segments based on the way in which financial information is reviewed and business performance is assessed by the CODM. Reportable operating segments are grouped on a geographical basis.

Other segment information

1 The 2024 segmental information has been restated in order to present on a consistent basis with the current year, as explained in Note 1.

Geographic information

The Group's non-current operating assets (including property, plant and equipment, right-of-use assets, goodwill and intangible assets but excluding lease receivables, deferred tax and financial assets) by geographical location are as follows:

3. Operating expenses

a) Analysis of operating expenses

b) Other items

Loss after tax includes the following Other items which have been disclosed in a separate column within the Consolidated income statement in order to provide a better indication of the underlying earnings of the Group: