Northern Bear : Annual Report & Audited Accounts (2025 Northern Bear Accounts)

About this update from Northern Bear Plc

Annual Report and Financial Statements 2025 Main Board Managing Directors of Subsidiary Companies Executive Directors John Davies CEO Julian Davis CFO Martin Briggs Managing Director Jennings Roofing Ltd Steven Luke Managing Director Wensley Roofing Ltd Matty Rowley Managing Director Springs Roofing Ltd Steve Roberts Director Non-Executive Directors John Gilstin Joint Managing Director Isoler Ltd Josh Watson Joint Managing Director Isoler Ltd Michael Nesbit Commercial Director Arcas Building Solutions Ltd Simon Carr CBE Non-Executive Chairman Harry Samuel Non-Executive Director Michael Nesbit acting as Managing Director H Peel & Sons Ltd Stuart Dawson Managing Director Alcor Handling Solutions Ltd Phill Burridge Managing Director MGM Ltd Martin Boden Non-Executive Director Howard Gold Life President Nigel Shorney Managing Director J Lister Electrical Ltd Jason Harrison Managing Director Northern Bear Safety Ltd Northern Bear's PLC Management Team Front cover - MGM Ltd - Auckland Castle, Bishop Auckland Jennings Roofing Ltd Contents Advisors 1 Chief Executive Officer's Report 3 Strategic Report 10 Directors' Report 14 Corporate Governance Report 19 Independent Auditor's Report to the Members of Northern Bear plc 28 Consolidated Statement of Comprehensive Income 37 Consolidated Balance Sheet 38 Company Balance Sheet 39 Consolidated Statement of Changes in Equity 40 Company Statement of Changes in Equity 41 Consolidated Statement of Cash Flows 42 Notes to the Financial Statements 43 Isoler Ltd - Training Centre, Durham Auditor Sanery LLP Alcor Handling Solutions Ltd - Team Valley Advisors Nominated broker Hybridan LLP 10 Wellington Place Leeds LS1 4AP Bankers Virgin Money plc 94−96 Briggate Leeds LS1 6NP Legal advisors Mincons Solicitors LLP 5 Osborne Terrace Jesmond Newcastle upon Tyne NE2 1SQ Nominated advisor Strand Hanson Limited 26 Mount Row London W1K 3SQ 3rd Floor Moor Place 1 Fore St Ave London EC2Y 9DT Registrar MUFG Corporate Markets Central Square 29 Wellington Street Leeds LS1 4DL Registered office A1 Grainger Prestwick Park Prestwick Newcastle upon Tyne NE20 9SJ 1 Arcas Building Services Ltd - Nano Labs, Northumbria University 2 Chief Executive Officer's Report Introduction I am delighted to report the results for the year to 31 March 2025 ("FY25") for Northern Bear Plc ("the Company") and its subsidiaries (together, "the Group"). This year has seen a strong performance from the operating businesses, with the exception of H Peel & Sons Limited ("H Peel"), which as previously announced was closed in May 2025. All of the Group's subsidiaries have benefited from the very dry winter period and also our strategy of maintaining a balanced mix of private and public sector clients. Trading Revenue in the year was £78.1m (2024: £68.7m) and gross profit increased to £19.2m (2024: £15.9m) at a gross margin of 24.6% (2024: 23.1%). Growth in revenue has been achieved through further investment in people, training and the relocation of businesses to support future growth plans. The improved gross margin resulted from a move in the sales mix into the higher−margin areas of the Group's business and continued careful contract selection and execution. Administrative expenses have increased to £15.9m (2024: £13.5m). The increase largely relates to the investments referred to above, increased legal and professional costs and increased depreciation. General overheads also increased in line with the growth in revenue. The Group incurred one−on provision costs in FY25 of £0.4m in relation to the costs of the closure of H Peel. These costs have been included in the calculation of alternative performance measures in note 31 below. After taking account of these costs, the Group reported an operating profit of £3.4m (2024: £2.4m) and basic earnings per share of 16.8p (2024: 9.5p). Northern Bear Roofing Our roofing businesses have performed ahead of management expectations with growth in revenue from £32.4m in FY24 to £33.1m in FY25. The dry winter period has assisted in delivering the strong performance and our decision to invest in training and certification to enable our roofing teams to install photovoltaic roof systems has added to both revenue and profitability in the Springs Roofing Ltd - Whickham Police Station, Gateshead 3 Jennings Roofing Ltd second half of the year. Operating profits in the roofing division increased to £2.5m (2024: £2.3m). We will continue to invest in decarbonisation solutions within this division. This strategy will require short term investment in relocating businesses to support our growth plans, but will continue to strengthen our market position in this sector, particularly in public and private sector housing. Northern Bear Specialist Building Services Our building services division had a very strong year with revenue increasing from £32.5m in FY24 to £41.2m in FY25 and a corresponding increase in gross margin from 24.1% to 25.1%. There has been significant growth in the delivery of passive fire stopping at Isoler Limited, our fire protection business. Whilst this has largely been market driven, our strategy of providing a one stop solution to end user / landlord clients is providing new work streams and opportunities both inside and outside the North East region. Against this backdrop, we will be making further investment in the management infrastructure, including a specialist compliance team in FY26 to further enhance our onering and provide a stable platform for future growth. Arcas Building Solutions Limited has performed well during year and stabilised its trading performance after challenges in the previous year. Improvements in the quality and delivery of contracts has resulted in improved margin performance during the year. Our other contracting business, MGM Limited, has also traded strongly during the year with growth in both revenue and profitability. We have previously announced our decision to close H Peel. Losses in FY24 of £0.2m lead to a full review of the business and a decision to close was made in early 2025. The company will continue to trade and fulfil all its contractual obligations in FY26. A provision for closure and associated costs of £0.4m has been made and the consolidated results for FY25 include trading losses of £0.5m. Further details on the provisions are included in note 21. Northern Bear Materials Handling Our materials handling business had another good trading year in FY25. During the period, we made further investment into the hire fleet which will assist in growing our stable, long term hire revenues. 4 Chief Executive Officer's Report (continued) Cash Flow and Bank Facilities Cash generated from operations in FY25 was £7.7m (2024: £1.1m). The cash position at 31 March 2024 was significantly impacted by the timing of Easter and, as a result, the balance increased significantly in early April 2024. However, the cash generation in FY25 is primarily due to the Group's strong trading performance and demonstrates our ability to turn profits into cash. In FY24, we funded the purchase of ordinary shares by way of a tender oner in October 2023 using a five year £3.5m amortising term loan with Virgin Money plc, our existing bankers. The loan balance at 31 March 2025 has reduced to £1.5m as a result of early repayments of £1m, made in addition to normal quarterly repayments, facilitated by our strong cash generation. Our net bank cash position at 31 March 2025 was £2.5m (31 March 2024: £2.2m net debt). The net cash position consisted of £4.0m cash and cash equivalents (2024: £1.0m) and £1.5m bank debt (2024: £3.2m). As we have emphasised in previous years' results, our net cash (or net bank debt) position represents a snapshot at a particular point in time and can move by up to £1.5m in a matter of days, given the nature, size and variety of contracts that we work on and the resulting working capital balances. The lowest cash position during FY25 was £2.1m net bank debt, the highest was £2.5m net cash, and the average was £0.4m net bank debt. While the Group's working capital requirements will continue to vary depending on the ongoing customer and contract mix, we believe that our financial position and bank facilities provide us with ample cash resources for the Group's ongoing operational requirements. Strategy & Dividend In September 2024, the Group paid a final dividend of £0.3m representing a 2p dividend per ordinary share. In FY24, significant returns of capital were made to shareholders, being £3.1m by way Wensley Roofing Ltd Isoler Ltd - Head oƒce, Durham 5 of tender oner (plus associated costs) and a further £0.8m in dividends. Our priority is to now to repay the remaining term debt and continue to invest in our businesses to generate further growth and create shareholder value. However, whilst prioritising the repayment of the term debt, we recognise the importance of a regular dividend to the Company's shareholders, whilst prioritising the repayment of the term debt, and the Directors propose the payment of an increased final dividend of 2.5 p per share plus a special dividend of 1p per share, in recognition of this year's outstanding performance. This will be payable on 24 September 2025 to shareholders on the register on 29 August 2025. This is obviously subject to shareholder approval at the Annual General Meeting which will be held on 9 September 2025. Our intention is to continue with a progressive dividend policy, subject to the Group's relative performance and after considering the Group's available cash, working capital requirements, corporate opportunities, debt obligations, and the macro− economic environment at the relevant time. Outlook Our forward order book remains strong and is expected to support our trading performance in the coming months, subject to any business−specific considerations noted in the trading statement above. As we have regularly reported, the timing of Group turnover and profitability is difficult to predict, despite the continued strong order book, and our results are subject to monthly variability. We will continue to update shareholders with ongoing trading updates. We have made a good start to FY26 and results to date have been in line with management expectations. People I have now been in my role as Chief Executive Officer for over a year and, following a number of Board changes in FY24, there have been further changes in FY25. Anil Khera Anil resigned from his role as Non− Executive Director on 17 July 2024, as the Executive and Non− Executive Team was restructured and the Board would like to thank Anil for his hard work and contribution to the Company and wishes him well for his future endeavours. Tom Hayes Tom resigned as a Director of the Company and its subsidiaries on 31 December 2024. Tom continued to work with the Group in a part time capacity until 31 March 2025. The Board would like to take this opportunity to thank Tom for his contribution to the Group over the last 10 years and wish him every success in his new role. Wensley Roofing Ltd - Lead Dome, Newcastle City Centre 6 Chief Executive Officer's Report (continued) People (continued) Simon Carr CBE Simon Carr, who joined the Group on 17 July 2024 as Non−Executive Chairman, is a highly experienced individual with over 45 years' experience in the construction industry, having sat on the boards of both private and public companies. He was notably recognised in the 2020 Queen's Birthday Honours List, receiving a CBE for services to the construction industry and charity. Simon sits on the board of trustees at Beverly Minister Old Fund and is the chair of the board of Road Link (A69) Limited and Road Link (A69) Holdings Limited (both companies that Henry Boot Plc hold a majority shareholding in). He is also the Independent Company Secretary and past national chair of the National Federation of Builders. Simon was previously the Managing Director of Henry Boot Construction Limited and sat on the Executive Committee of Henry Boot Plc. He was also a private− sector board member for the Sheffield City Region Local Enterprise Partnership Board for eight years, sitting on a number of associated public and private sector boards. Simon sat on the CBI Construction Council for six years and is a past president of the Yorkshire Builders Federation. Julian Davis Julian joined as Group CFO on 9 May 2025 and brings extensive financial and sector−specific experience to Northern Bear. He began his career at KPMG, where he qualified as a chartered accountant. During this time, he worked closely with both listed and privately owned businesses across a range of sectors. Subsequently, Julian served for ten years as CFO at a prominent regional residential developer. As a key member of the executive team, he was responsible for shaping and delivering strategic initiatives and driving financial and operational performance. Following a 12−month career break, Julian joins Northern Bear, bringing with him significant experience in the construction, contracting, and housebuilding sectors. Our workforce As always, our loyal, dedicated, and skilled workforce is a key part of our success and we make every enort both to retain and protect them through continued training and health and safety compliance, supported by our health and safety advisory business, Northern Bear Safety Limited. Conclusion I am delighted with the Group's results for the year and look forward to continuing working with Simon and the Board in my role as Chief Executive Officer. Once again, I would like to wholeheartedly thank all our employees for their hard work and commitment, and our shareholders for their continued support. John Davies Chief Executive Officer 21 July 2025 7 J Lister Electrical Ltd - York Racecourse, York 8 Arcas Building Services Ltd - Teaching Labs, Northumbria University 9 Strategic Report The Directors present their Strategic Report for Northern Bear plc (the Company and its subsidiaries, together "the Group") for the year ended 31 March 2025. REVIEW AND ANALYSIS OF THE BUSINESS DURING THE CURRENT YEAR Principal Activities There have not been any significant changes in the Group's principal activities set out in the Directors' Report in the year under review. The Directors are not aware, at the date of this report, of any likely major changes in the Group's principal activities in the year. The subsidiary undertakings of the Group are listed in note 14 of the Notes to the Financial Statements. Objective and strategy Having established the Group via an acquisition strategy and subsequently restructured operations during the economic downturn from 2009 to 2011 through the disposal of non−core businesses, the Group now has an established portfolio of mature businesses wholly focused on the support services sector. Our strategy is to invest in the Group, with a view to future growth and creation of shareholder value, through a combination of organic growth, strengthening our teams (including via new business ventures) and, to the extent accretive, bolt−on acquisitions. Organic growth is expected to be via both investment in and expansion of the Group's existing businesses, and through providing new services to the existing, long established customer base. Further details of how the Directors intend to promote long− term value for shareholders are provided in the Corporate Governance Report. Key performance indicators The Group uses several financial key performance indicators to measure performance and these are communicated to the Board of Directors through monthly reports. The primary financial measurements, as identified and discussed in the Chief Executive Officer's Report, are: Revenue £78.1m (2024: £68.7m) Gross margin 24.6% (2024: 23.1%) Operating profit £3.4m (2024: £2.4m) Cash generated from operations £7.7m (2024: £1.1m) The primary non−financial key performance indicators relate to three Health & Safety areas in our businesses which are site activities, documentation, and environmental. Site inspections are held on a regular basis by our Health & Safety business (Northern Bear Safety Limited) which assess the enectiveness of each company in these areas. Following these inspections, a report is prepared, and should any issues be identified they would immediately be brought to the Board's attention for appropriate action as and when required. The Board considers that the key performance indicators used are an enective system tailored specifically to the demands of the sector. Financial performance and position Commentary on financial performance during the year and financial position at the reporting date is included in the Chief Executive Officer's Report. Statement on risks relating to the Group's business The nature of the building services industry means that the Group is subject to a number of risk factors. Some of these factors apply to the building services industry generally, while others are specific to the Group's activities within that market. Sector demand The Group currently consists of ten trading businesses which operate in three main segments of the support services sector of the economy. The Group is therefore exposed to varying activity levels within these diverse industries. The exposure of the Group to the new house build sector is a relatively small part of Group turnover; our exposure to public sector markets is greater. Consequently, any sustained material reduction in Government expenditure programmes will have an adverse enect on the financial position of the Group. This risk is largely outside the control of the Group; however, the Directors monitor public sector markets closely and this informs decision making within the Group. Competition Some of the businesses within the Group have competitors who may be able to accept lower financial returns than that required by the Group. Competition with these companies could adversely anect the Group's profitability and financial position. In order to mitigate this risk, significant senior management enort is invested in the review of contract tendering and ongoing contract profitability. Key clients There can be no guarantee that the Group's key clients will not change suppliers. While each of the Group's businesses has many longstanding relationships with a number of key customers, the failure to satisfy the needs of these customers could harm the Group's business. Furthermore, these customers may be facing challenges within their own businesses. Providing a quality service to the Group's customers is at the heart of what we do, and we seek regular customer feedback to ensure that our standards meet their needs. 10 Strategic Report (continued) Statement on risks relating to the Group's business (continued) Dependence on personnel The Group continues to be dependent on the continued services of its senior management, and we aim to retain our key people via fair remuneration with incentives to be entrepreneurial and grow their companies over time. Retaining qualified personnel, consultants and advisors is important to the continued successful operation of the Group's business. There can be no assurance that the Group will be able to recruit or retain its personnel in the future, which could have an adverse enect upon the Group's business and financial position. The loss of any of the Group's senior personnel could impede the achievement of its objectives. Health & Safety performance Our employees are key to our business and their welfare and safety is critical to the Group and its stakeholders and at the forefront of every decision we make. Health & Safety is managed by our in−house safety business, Northern Bear Safety Limited, which ensures compliance with relevant standards and monitor performance on an ongoing basis. Any failures in this area would have an adverse impact on the Group's business. Contract risk The majority of the Group's businesses operate via an appropriate contract/order for our various building services. In order to generate trading profits the businesses are required to submit tenders at appropriate prices, manage operational contract delivery, and agree any variations to the contract with the customer. All are monitored closely at both Group and subsidiary level, including monthly contract margin reports. Should any of these fail to be managed enectively then it could possibly impact on the Group's profitability. Insurance cover The Group maintains a prudent level of insurance cover and regularly reviews all policies in conjunction with our brokers. Any failure to maintain adequate insurance cover could expose the Group to uninsured losses. The Group has an acceptable claims history for major insurances but in the event that this changes it could impact on annual insurance premiums. Underperformance of acquired businesses The Board has a detailed process for the evaluation of potential acquisitions, which includes financial, tax, and legal due diligence processes as required. Acquisitions are also typically structured to make an element of consideration dependent on post− acquisition performance. Notwithstanding this, should any acquired businesses significantly underperform against expectations then it could have an adverse impact on shareholder returns. Financial instruments The Group has exposure to risks from its use of financial instruments which include credit risk, liquidity risk and market risk. A full discussion of these risks and how they are managed is included in note 24 to the financial statements. Macro−economic environment There has been significant uncertainty in the UK macro− economic environment for a number of years following the UK decision to exit membership of the European Union and exacerbated by the more recent global economic and political uncertainties. At the time of preparing these accounts, ongoing issues such as the war in Ukraine, US tarins and the Iran and Israel conflict continue to create uncertainties around global markets and performance. The Directors consider that the principal risk arising from this uncertainty relates to the Group's supply chain. Although principal suppliers are UK based, a number of products are ultimately sourced from overseas and hence any difficulties with the import process, or a weakening of the pound against relevant foreign currencies, could cause pressures on the Group's supply chain. Carbon reporting As required under the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, the Group has considered whether it falls within the scope of the Streamlined Energy and Carbon Reporting (SECR) framework for the reporting period ended 31 March 2025. The Group is, however, exempt from detailed energy and carbon disclosures under the SECR regulations on the basis that its total energy consumption in the UK during the reporting period was below 40,000 kilowatt hours. This exemption is permitted under Regulation 13 of the 2018 Regulations. The Group continues to monitor its energy usage and environmental impact and will ensure full compliance with reporting obligations should it exceed the reporting threshold in future periods. The Directors have taken the option to exclude energy and carbon information from the annual report which relates to a subsidiary that would not be obliged to report in its own right under the Streamlined Energy and Carbon Reporting framework. Neither the parent company nor any of its subsidiaries are obliged to report and hence no disclosure has been included. The environmental impact of the Group's activities, including carbon emissions and energy usage, is carefully considered, and the maintenance of high environmental standards is a priority. Further, the Directors note that the Group's roofing and construction activities often help to make buildings more energy efficient and hence have a positive impact on energy usage and carbon emissions. 11 Section 172 (1) Statement The Directors of the Company consider that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, having regard to Section 172 (a)−(f) of the Companies Act 2006. Further information on how the Company interacts with its stakeholders and the wider community is included in the Corporate Governance Report. The following disclosures form the Directors' statement required under section 414CZA(1) of the Companies Act 2006. Stakeholder engagement Our success relies upon good relations with a range of dinerent stakeholder groups, both internal (employees) and external (including customers, suppliers, and shareholders), all of whom have an interest in our business and may be impacted by the decisions we take. The manner of our engagement with them is described below, and we comment further on stakeholder responsibilities in the Corporate Governance report. Employees The Board has always highlighted that the Group's loyal, dedicated and skilled workforce is a key part of our success. Continuing to invest in our workforce, ensuring their safety, and regular engagement with them is a key part of our management approach. The Group has a relatively flat management structure with the MD of each business reporting directly to the Executive Directors of the Company. John Davies, our Chief Executive Officer, also splits his time between our Group companies and has regular contact with the wider employee base. We have an open−door style of management across the Group and our employees have an opportunity to share their views as needed. In addition, regular information sharing and safety updates are provided to the workforce. Customers Providing a quality service to the Group's customers is at the heart of what we do, and we seek regular customer feedback to ensure that our standards meet their needs. Our companies engage continually with their customers to build strong working relationships for the long term. Suppliers Our relationships with our supply chain, in particular our building materials suppliers, are an important part of our ability to deliver outstanding service to the Group's customer base. We engage with our suppliers as part of day−to−day operations to ensure they maintain the quality and availability of supplies. Shareholders The Board engages with our shareholders through a number of channels including the Annual Report, Interim Report, the Annual General Meeting, and regular informal communication including one−on−one meetings, telephone conversations, and emails. Hybridan LLP acts as Broker and they initiate research coverage to support engagement with existing and potential shareholders. The Company lists contact details on both its website and all RNS announcements should shareholders wish to contact the Board and we will always endeavour to respond promptly. Communities and environment The Directors are aware of the Group's responsibilities to the communities in which it operates and take this very seriously. As a significant employer in our communities, we support local employment and apprenticeship schemes and seek to operate safely and ethically while monitoring our environmental impact. The principal charity that the Group supports is St Oswald's Hospice, and regular events, including an annual golf day, have been held to raise funds. Our subsidiaries also regularly support charities and community organisations in their local areas. Principal decisions taken during the year Dividend For every dividend decision the Board will take into account the Group's relative performance, available cash resources and distributable reserves, along with working capital requirements, corporate opportunities, debt obligations, and the macro− economic environment at the relevant time. Discussions concerning dividend levels are a regular part of our engagement with shareholders, and the Board also takes their views into considerations. The Company paid a final ordinary dividend of 2 pence per share in respect of the financial year ended 31 March 2024. The Board intends to declare a final ordinary dividend of 2.5 pence per share plus a special dividend of an additional 1 pence per share for the financial year ended 31 March 2025, subject to shareholder approval at the forthcoming Annual General Meeting. Outlook The future outlook for the business is included in the Chief Executive Officer's Report. Julian Davis Chief Financial Officer 21 July 2025 12 J Lister Electrical Ltd - Harry Fairhurst Building, York 13 Directors' Report The Directors present their Annual Report and Financial Statements for the year ended 31 March 2025. Principal activities The principal activity of the Group is to operate businesses in the North of England active in the support services sector. Furthermore, these businesses can be augmented with bolt on acquisitions or by the creation of new ventures. The Group comprises the Company and a number of subsidiaries which operate in three main operating segments, being Roofing activities, Materials Handling activities, and Specialist Building Services activities. In addition, the Company and certain intermediate holding companies provide corporate and other non− trading services, and this is classified as a separate operating segment for management information purposes. Future outlook The future outlook for the business is included in the Chief Executive Officer's Report. Going concern For the purposes of their assessment of the appropriateness of the preparation of the Group and Parent Company's accounts on a going concern basis, the Directors have considered the current cash position and forecasts of future trading including working capital and investment requirements. During the financial year the Group met its day to day working capital requirements through bank facilities with Virgin Money plc. These facilities were refinanced in October 2023 and at that point comprised a £3.5m term loan, a £1.0m revolving credit facility, and a £1.0m bank overdraft. At 31 March 2025 the Group had cash and cash equivalents of £4.0m, with nothing drawn on the overdraft or revolving credit facility, and £1.5m outstanding on the term loan. The overdraft facility is renewable annually and the current facility expires on 30 June 2026. The revolving credit facility was most recently renewed on 20 October 2023 and is committed to 20 October 2026. The term loan was drawn down on 23 October 2023 and is repayable in full in equal quarterly instalments by 30 September 2028. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group is expected to have sufficient cash resources to meet its requirements for at least the next 12 months from the date of signing the financial statements. Accordingly, the adoption of the going concern basis in preparing the financial statements remains appropriate. The Directors have a reasonable expectation of successful renewal for all bank facilities when they fall due based on a long standing and strong working relationship with the bank. Strategic Report As permitted by paragraph 1A of Schedule 7 to the Large and Medium−sized Companies and Groups (Accounts and Reports) Regulations 2008 certain matters which are required to be disclosed in the Directors' Report have been omitted as they are included in the Strategic Report. These matters relate to financial risk management objectives and policies and exposure to price risk, credit risk, liquidity risk and cash flow risk. Dividend The Directors propose the payment of a final dividend of 2.5p per share plus a special dividend of an additional 1p per share in respect of the financial year ended 31 March 2025. This dividend payment is subject to shareholder approval at the forthcoming Annual General Meeting. It has not been included in creditors as it was not approved before the financial year end. A final ordinary dividend of 2 pence per share was paid in respect of the financial year ended 31 March 2024. 14 Directors' Report (continued) Share repurchase via tender offer During the previous year the Company repurchased 5,000,000 of its ordinary shares via a tender oner to shareholders at a fixed price of 62 pence per ordinary share. The tender oner completed in December 2023. No share repurchases have occurred during the current financial year. Directors The Directors who held office during the year were as follows: HJ Samuel JP Davies TE Hayes (resigned 31 December 2024) SM Roberts MB Boden A Khera (resigned 17 July 2024) SA Carr (appointed 17 July 2024) JN Davis (appointed 9 May 2025) The Directors who held office at the end of the financial year had the following interests, including family interests, in the ordinary shares of the Company and share options according to the register of Directors' interests: 31 March 2025 Shares 31 March 2025 Options HJ Samuel − − JP Davies 41,228 100,000 SM Roberts 813,300 100,000 MB Boden 45,000 − SA Carr − − JN Davis − − In total the Directors' interests in the ordinary shares of the Company totalled 899,528 shares (2024: 893,000), representing 6.5% (2024: 4.7%) of allotted shares at the year end. All the Directors benefited from qualifying third party indemnity provisions up to and including the date of this report. Significant shareholdings At 30 June 2025, the Company had been notified or was aware of the following shareholders with 3% or more of the issued share capital of the Company: Number of ordinary Shareholder shares in which interested % of issued share capital NA Beaumont−Dark 3,298,500 24.0 D O'Hare 850,000 6.2 SM Roberts 813,300 5.9 D Jay 523,000 3.8 Political and charitable contributions Neither the Company nor any of its subsidiaries made any political contributions during the year (2024: £nil). Charitable donations by the Company during the year amounted to £3,333 (2024: £3,960). 15 Employees The Group provides equal opportunities to all stan and employees and recruits the most suitably qualified person for each position. Full and fair consideration is given to applications for employment from disabled persons. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Where an existing employee becomes disabled, the Group's policy is to provide continuing employment under normal terms and conditions wherever possible. The Directors recognise the importance of good communications and inform and consult with employees' representatives on all matters likely to anect them. The Group operates a range of schemes to involve employees in the financial performance of the business including profit related and other cash bonus arrangements and share option schemes. Further information on engagement with the Group's employees is provided in the Corporate Governance Report. Supplier payment policy The Group recognises the importance of maintaining good relationships with its suppliers and is committed to fair and timely payment practices. It is the Group's policy to: Agree clear payment terms with suppliers at the outset of any commercial relationship; Ensure suppliers are made aware of these terms and that they are followed; Pay undisputed invoices in accordance with agreed terms and applicable contractual or statutory obligations. For most suppliers, the Group's standard payment terms are 30 days from the month end following the date of invoice, although specific terms may vary depending on the nature of the goods or services provided and the contractual arrangement in place. The Group does not follow any formal code or standard on supplier payments but seeks to ensure that payment practices remain fair, transparent, and in line with sector norms. The Group's average creditor payment period for the year ended 31 March 2025 was 51 days (2024: 54 days), calculated in accordance with government guidance on the disclosure of payment practices. Statement of Directors' Responsibilities The Directors are responsible for preparing the Strategic Report, Directors' Report, Corporate Governance Report, and the Group and Parent Company financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. As required by the AIM rules of the London Stock Exchange they are required to prepare the Group financial statements in accordance with the requirements of the Companies Act 2006 and UK− adopted international accounting standards and have elected to prepare the Parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", 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 anairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent Company financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether the consolidated financial statements comply with UK−adopted IFRS and the parent company financial statements are prepared in accordance with UK GAAP/FRS 101 in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements; provide additional disclosures when compliance with specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 16 Directors' Report (continued) Statement of Directors' Responsibilities (continued) The Directors are responsible for the maintenance and integrity of the corporate and financial Disclosure of information to auditor The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is By order of the board Julian Davis Chief Financial Officer A1 Grainger information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may diner from legislation in other jurisdictions. Annual general meeting The business of the AGM is set out in the accompanying circular to shareholders. The AGM is to be held on 9 September 2025 at the Company's registered office, A1 Grainger, Prestwick Park, Prestwick, Newcastle upon Tyne, NE20 9SJ. unaware; and each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. Auditor In accordance with Section 489 of the Companies Act 2006, a resolution for the reappointment of Sanery LLP as auditor of the Company is to be proposed at the forthcoming Annual General Meeting. Prestwick Park Prestwick Newcastle upon Tyne NE20 9SJ 21 July 2025 Calisto Glass Facades Ltd - Castle, Legrand, Cramlington 17 MGM Ltd - Historic Repairs, Auckland Castle Alcor Handling Solutions Ltd - Team Valley Loading Bay, Gateshead 18 Corporate Governance Report The Directors of Northern Bear plc (the "Company" or "Northern Bear") recognise the importance of good corporate governance and have adopted the revised 2024 Corporate Governance Code produced by the Quoted Companies Alliance (the "QCA Code"). Insofar as it is practicable given Northern Bear's size and the constitution of its Board, the Directors (the "Directors" and together the "Board") seek to comply with all provisions of the QCA Code. The QCA Code contains ten broad principles of corporate governance and requires companies to provide disclosures in their Annual Report and Financial Statements, and on their website, explaining how they are meeting these principles, including any areas of deviation. Full details of the Company's application of the ten principles can be viewed on the Company's website at https://http://northernbearplc.com/invest or−relations/corporate− governance/. An extract of relevant disclosures for the Annual Report and Financial Statements, as identified in the Code, is provided below. Chair's corporate governance statement This statement explains how the Group complies with the ten principles of the 2024 QCA Code. As Chair, my key responsibility is to lead the Board enectively and to ensure the Company's governance framework supports the long−term sustainable success of the business. I also ensure that there is a healthy culture of challenge, openness, and accountability. The Board supports a corporate culture based on ethical behaviour, integrity, and respect. This culture is embedded through direct and regular engagement with management and stan, open communication, and a clear set of values. Northern Bear benefits from a decentralised management structure where each business Managing Director reports directly to the Executive Directors. This ensures alignment across the Group and provides ongoing oversight of culture, risk, and performance. The Board remains closely involved with all business units and stakeholders to monitor culture, engagement, and compliance. There are no major areas where our governance structure and practices diner from the expectations set by the Code, other than that given the size and nature of the Group we do not consider it necessary to have a formal Board performance evaluation process in place as suggested by Principle Seven, or to include formal Audit Committee and Remuneration Committee reports in the Annual Report and Financial Statements as suggested by Principle Ten. There are no key governance related matters that have occurred during the year and there were no significant changes in governance arrangements. Company Purpose, Business Model and Strategy The Group's purpose is to build better, more sustainable environments for communities by delivering high−quality construction and building services across the residential, commercial, and public sectors. Our business model is built around delivering a broad range of building related services, delivered through semi−autonomous individual trading businesses. We operate across three core divisions: Residential construction: working with national and regional housebuilders to deliver both private and anordable housing schemes. Public sector frameworks: delivering schools, healthcare facilities, and infrastructure through long−term framework agreements. Specialist contracting: providing electrical, mechanical, and health & safety consultancy services. Our strategy focuses on sustainable growth, operational excellence, and client satisfaction, and is underpinned by: A disciplined approach to contract selection and risk management; Development of in−house capability and supply chain resilience; and A commitment to safety, compliance, and environmental standards. Key challenges to strategy execution include: Labour and material cost inflation, which places pressure on fixed−price contracts; Supply chain constraints, especially for specialist subcontractors and imported materials; Planning and regulatory delays, which can impact project timelines and cash flows; Recruitment and retention of skilled personnel, amid industry−wide talent shortages; and Navigating the evolving requirements around sustainability and ESG reporting. The Board regularly reviews the Group's strategic objectives and monitors progress against key milestones to ensure delivery remains aligned with shareholder interests and long−term value creation. Environmental and Social Responsibilities The Group recognises that strong environmental and social performance is fundamental to long−term value creation and is increasingly central to investor expectations. We are committed to operating responsibly and reducing our environmental footprint while creating positive social impact in the communities where we operate. 19 The business continues to develop ways of measuring environmental performance plus social value and workforce engagement. At the current time, these measure are qualitative with the aim to develop robust quantitative measures in the future. Environmental Performance We have adopted an approach to environmental management, and aim to focus on the following for the year ended 31 March 2026: Scope 1 and 2 carbon emissions: Minimise tCO3e, as measured in accordance with SECR requirements. Energy consumption: Minimise energy consumption, across all businesses using renewable supplies wherever possible. Waste management: Minimise construction waste was diverted from landfill through recycling and reuse. Fleet transition: Aim to transition to 50% of company vehicles being electric or hybrid by 2030. Social Value and Workforce Engagement The Group is dedicated to making a positive social impact through: Local employment and apprenticeships: Wherever practical our teams include apprentices or trainees. We support talent development through structured learning and mentoring programmes. Community investment: We invest in local community projects and sponsorships during the year, including support for local charities. Health and safety: We had no RIDDOR events in the year, and continue to embed a zero−harm culture across all operations. The Board and senior leadership team receive reports on key environmental and social KPIs, and these are increasingly factored into strategic planning, tendering processes, and project delivery. Establish a strategy and business model which promote long-term value for shareholders Having established the Group via an acquisition strategy and subsequently restructured operations during the economic downturn from 2009 to 2011 through the disposal of non−core businesses, the Group now has an established portfolio of mature businesses wholly focused on the support services sector. Jennings Roofing Ltd 20 Corporate Governance Report (continued) Establish a strategy and business model which promote long-term value for shareholders (continued) We operate in three main segments: Roofing, Materials Handling, and Specialist Building Services. Each business has strong market positions, experienced leadership, and well−established customer relationships. Our strategy is designed to deliver long−term shareholder value by focusing on: The continued success of its existing operations, all of which are well established businesses with strong reputations in their markets. Support for existing operations to expand where there is an opportunity for growth. This would typically be investment in the overhead base, including premises and management, to support revenue and profit growth where a business is performing well; Providing new services where possible to the existing, long established customer base. Examples of businesses developed within the Group include Arcas Building Solutions, Northern Bear Safety, and Callisto Glass Facades. Any new ventures are unlikely to be capital intensive and hence would have limited downside in the event that they do not meet expectations. Further bolt−on acquisitions where appropriate, taking into account the Company's acquisition criteria of being a well−established, consistently profitable and cash generative building services business with a strong management team committed to remaining in place. Acquisitions would also need to predictably enhance earnings and provide an attractive return on investment. The Board meets regularly to review strategic direction, risks, and opportunities. It assesses market developments, customer needs, and internal performance to ensure the business model remains robust and aligned with stakeholder interests. Promote a corporate culture based on ethical values and behaviors The Board aims to promote a corporate culture across all aspects of our business that is based on sound ethical values and behaviours, and believes that this is critical to our continued success. Our businesses are all well established in their respective markets and sustaining this is dependent on how they interact with all stakeholders, including customers, suppliers, employees and regulators. Any unethical behaviour would have an adverse impact on the future success of our companies. As previously mentioned, the Group has a relatively flat management structure and the Company's Executive Directors are closely involved with our subsidiary companies and stakeholders. This allows them to monitor corporate culture across the Group to ensure that it meets our shared values. Seek to understand and meet shareholder needs and expectations The Board understands the importance of providing shareholders with clear information on the Group's activities, financial performance and position. The Group's website contains copies of all RNS announcements made to shareholders. We also have an email news feed via our website to provide more regular operational updates on our subsidiary businesses in order to provide a broader picture of our activities. The Directors with primary responsibility for shareholder engagement are John Davies, CEO, and Julian Davis, CFO. The Board has made an investor presentation available on the Company's website and communicates regularly on an informal basis with shareholders. The Company lists contact details on both its website and all RNS announcements should any shareholders wish to communicate with the Board and we will always endeavor to respond promptly to such queries. The annual general meeting provides a further opportunity for shareholder engagement via an informal open Q&A session following the formal business of the meeting. Having sought feedback from the shareholder base, the large majority of shareholders are happy with this approach and the level of communication provided. We do keep our process for shareholder engagement under regular review based on feedback received and will continue to do so in the future. We note that significant numbers of votes have been cast at recent annual general meetings and that the votes have been overwhelmingly in favour of the resolutions proposed in recent years. Should any significant votes be cast against a resolution the Board would always seek to engage with shareholders to understand the reasons for this. Take into account wider stakeholder interest, including social and environmental responsibilities, and their implications for long-term success The Directors recognise that the Group requires strong relationships with all key stakeholders, including its employees, customers, suppliers, and all other external stakeholders. The Board has always highlighted that the Group's loyal, dedicated and skilled workforce is a key part of our success. To maintain this, we seek to continually invest in our workforce, regardless of short term economic conditions, through training new operatives and apprenticeship schemes. 21 Wensley Roofing Ltd - St Bede's Church, South Shields 22 Corporate Governance Report (continued) Take into account wider stakeholder interest, including social and environmental responsibilities, and their implications for long-term success (continued) Ensuring our employees' safety is critical to the Group and our in house safety business, Northern Bear Safety, ensures compliance with relevant standards and monitors performance on an ongoing basis, providing formal monthly reports to the Executive Directors. The Group has a relatively flat management structure with the MD of each business reporting directly to the Company's Executive Directors and senior management team, John Davies, Steve Roberts, Julian Davis and Wendy Edgell. The Executive Directors have regular contact with MDs via monthly operational updates, as well as regular contact with the wider employee base. The Board considers that this provides an appropriate mechanism for employee feedback. The Group's responsibilities to the wider stakeholder base including customers, suppliers, shareholders and regulators, are also recognised and regular communication is maintained in order to understand their needs, interests and expectations. Responsibility for stakeholder engagement is with both the Company's Executive Directors and subsidiary Managing Directors. The Directors are aware of the Company and its subsidiaries' responsibilities to the communities within which they operate and take this very seriously. The Group's principal charity is St Oswald's Hospice and regular events, including an annual golf day, have been held to raise funds. Our subsidiaries also have discretion to support local charities and community organisations. The environmental impact of the Group's activities is carefully considered, and the maintenance of high environmental standards is a priority. Embed effective risk management, considering both opportunities and threats Risk management is embedded at all levels of the Group. The Board is responsible for identifying principal risks and ensuring that appropriate controls and mitigations are in place. The Audit Committee supports the Board in its oversight. The Strategic Report provides a detailed statement of risks relating to the Group's business and, where possible, any actions taken to mitigate them. The key risks discussed are: Sector demand; Competition; Key clients; Dependence on personnel; Health and safety performance; Contract risk; Insurance cover; Underperformance of acquired businesses; Financial instruments, including credit risk, liquidity risk, and market risk; and Macro−economic environment. With the exception of the last two items, the Board considers the remainder of the list to be inherent to the Group's businesses. The Group's strategy is regularly reviewed along with the key risks impacting it as part of the Board's annual business planning and budgeting process, where detailed operational budgets are prepared for each subsidiary and approved by the Board. The Group's performance against its strategy and the associated risks is also monitored through preparation and review of monthly management accounts and associated Key Performance Indicator reports. The Group's risk processes have been strengthened with the appointment of Simon Anderson as the Group's Risk and Legal Consultant. Simon has extensive experience in the construction sector and was previously a partner in a construction law firm at one of the North's leading firms. Simon's role is to work closely with the individual businesses on general and specific risk issues and oversee the contractual legal requirements of the Group. Accepting that no systems of control can provide absolute assurance against material misstatement or loss, the Directors believe that the established systems for internal control within the Group are appropriate to the business. The Board is aware of the requirement for the company's auditor to be sufficiently independent of management and is comfortable that this requirement is met. Maintain the Board as a well-functioning, balanced team led by the Chair The Board currently comprises: Non−Executive Chair (Simon Carr CBE); Chief Executive Officer (John Davies); Chief Financial Officer (Julian Davis); Executive Director (Steve Roberts); Two Independent Non− Executive Directors (Martin Boden and Harry Samuel). The Board has a balance of skills, experience, and independence. All Non−Executive Directors are considered independent and constructively challenge management. The relevant experience, skills, and capabilities for each Director are as follows: Simon Carr CBE - over 45 years of experience in the construction industry with extensive leadership experience in both private and public companies, as well as influential positions in industry bodies. 23 John Davies - previously held leadership roles in two large construction businesses in the North East and has substantial industry knowledge, experience, and contacts. Steve Roberts - has been involved with the Company since its flotation and provides Board continuity as well as extensive commercial and financial experience. Steve is a Chartered Accountant and was formerly Executive Chairman and Finance Director of the Company. Julian Davis − Julian began his career with KPMG where he qualified as a Chartered Accountant in 1999 where he worked across a broad range of sectors in audit, consulting and advisory roles. He moved into industry in 2014 and held the position of Chief Financial Officer at a prominent regional residential developer before joining Northern Bear in May 2025. He brings significant experience in the construction, contracting and housebuilding sectors. Harry Samuel - extensive leadership experience in the financial services and housing sector, including CEO of RBC Investor & Treasury Services, and CEO of Anordable Housing Communities Limited. Martin Boden - Martin is a Chartered Accountant with extensive experience of Group CFO roles in UK listed and privately owned high growth businesses. All Directors commit sufficient time to their roles. Group Chief Executive and Group Chief Financial Officer -full time roles. Other Executive Directors -variable with time commitment dependent on both the Group's strategic and operational activities. Non−Executive Directors -attendance at Board meetings, Annual General Meeting, Audit and Remuneration Committee meetings, and ad−hoc support as required. Board meetings are held approximately every two months, with additional meetings as required. During the year, four scheduled meetings took place. The attendance record of each Director over the past 12 months, showing both the number of meetings held during their tenure and the number attended, was: Total meetings Attended Simon Carr CBE 3 3 Harry Samuel 4 4 John Davies 4 4 Tom Hayes 4 4 Steve Roberts 4 4 Martin Boden 4 4 Anil Khera 1 1 The Group is managed operationally via regular informal Executive Directors' meetings, as well as quarterly Managing Directors meetings for all subsidiary Managing Directors chaired by John Davies. The Board considers that this structure of meetings provides an appropriate balance between operational and strategic management and that it allows Board meetings to focus on the latter. Climate-Related Risks and Opportunities The Board recognises that climate change presents both strategic risks and commercial opportunities for the Group. We are exposed to a range of climate− related risks including: Transitional risks arising from evolving legislation and regulation, including building regulations, energy performance standards, and disclosure obligations; Physical risks such as increased weather−related disruption to site operations (e.g. flooding, high winds, extreme temperatures); Market risks as clients and investors increasingly favors low−carbon and sustainable solutions. Ensure Directors have the necessary skills and capabilities The Directors bring a broad mix of sectoral, financial, legal, public markets, and operational expertise. Biographies are published on the Company's website. Skills are kept up to date through participation in industry events, technical briefings, and regular Board development sessions. The Company Secretary advises the Board on governance and regulatory requirements. The Company Secretary, Wendy Edgell, assists the Chair and the Board in preparing for and running enective Board meetings, including the timely dissemination of appropriate information. Wendy also keeps up to date with relevant legal, statutory and regulatory requirements and advises the Board accordingly. Evaluate Board performance based on clear and relevant objectives Following the QCA Code, the Board undertakes regular internal monitoring of collective and individual performance using agreed key performance indicators and detailed financial reports. The key performance indicators used include financial measures such as revenues, gross margins, operating profit, and cash flow from operations. The primary non−financial key performance indicators relate to three Health & Safety areas which are site activities, documentation, and environmental. Given the size and nature of the Group, we do not consider it necessary to have a formal Board performance evaluation process in place as suggested by principle seven of the Code. Succession planning is an important part of our business and we regularly engage with all Group and subsidiary Directors as to their plans for the medium to long term in order to plan enectively for any departures. The Board regularly considers the need for the periodic refreshing of its membership. 24 Corporate Governance Report (continued) Establish a remuneration policy which is supportive of long-term value creation and the company's purpose, strategy and culture The Board seeks to remunerate management using simple pay structures that incentivise them to create long−term shareholder value through a combination of salaries, performance−linked discretionary bonuses, and share option schemes. The remuneration committee is responsible for setting and approving incentive targets for the Executive Directors. Given the simple nature of the remuneration structure, the Remuneration Committee does not produce an annual remuneration report for shareholder approval. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other key stakeholders The Company communicates clearly with shareholders and stakeholders via: An updated investor website; AGM and regular shareholder meetings; Regulatory news announcements; and Periodic investor presentations. Feedback is encouraged and considered by the Board. The Chair, CEO, and CFO are available for engagement with shareholders, and major shareholders are consulted on governance and strategy matters where appropriate. Committees The Board is supported by an Audit Committee and Remuneration Committee. The Audit Committee and Remuneration Committee operate as set out in commentary elsewhere in this report. Annual general meeting ("AGM") Our AGMs are usually conducted via a show of hands from those present, with proxy votes available if required. At the previous six AGMs, all resolutions were unanimously passed with the exception of the meeting held in 2021. At the 2021 meeting proxy votes were cast against Resolutions 7 and 8 in respect of share issuance authorities and pre− emption rights and these resolutions were not passed. Audit committee The Group's Audit Committee typically meets three times per year, being at the audit planning stage, prior to finalisation of the Group's Annual Report and Financial Statements, and prior to release of the interim report and financial statements. In the last 12 months there were two Audit Committee meetings attended by Martin Boden (2 meetings), Tom Hayes (2 meetings), Harry Samuel (1 meeting), Anil Khera (1 meeting) and Steve Roberts (1 meeting). Remuneration committee The Remuneration Committee meets at least annually and usually following the financial year end and prior to the agreement of annual bonus payments. Other meetings are held as required, for example to approve any issue of share options. In the last 12 months there was one Remuneration Committee meeting which was attended by Harry Samuel, Martin Boden and Anil Khera. Historical Reports Archived Annual Report and Financial Statements, governance disclosures, and AGM materials covering the last five years are available on the website. These demonstrate the Group's commitment to transparency and continuous improvement in governance. Omitted disclosures Given the size and nature of the Group, we do not consider it necessary to have a formal Board performance evaluation process in place as suggested by principle seven of the Code. Accordingly, we have not published any disclosure information in respect of this. We have not included formal Audit Committee and Remuneration Committee reports in the Annual Report and Financial Statements, as suggested by principle ten of the Code, as the Board considers that information available in these and previous financial statements together with the corporate website provide sufficient information with regard to the reporting of the Audit Committee and Remuneration Committee activity. The Board will continue to review the disclosure of the Audit and Remuneration Committee. Oversight of Auditor Independence The Audit Committee plays a key role in ensuring the integrity of the financial reporting process, including maintaining the independence and objectivity of the external auditor. During the financial year, the Committee: Reviewed and approved the scope, planning, and fees of the annual audit; Confirmed that no non−audit services were provided by the auditor which could impair independence; Received written confirmation from the auditor of their compliance with ethical standards on independence; 25 Evaluated the performance of the external auditor, including feedback from finance stan and management; Considered the appropriateness of auditor rotation in accordance with the FRC's Ethical Standard and AIM Rules. Based on these activities, the Committee is satisfied that the external auditor has remained independent and enective throughout the corporate reporting cycle. Conclusion The Board believes that the Group's governance practices are consistent with the principles of the QCA Code and reflect best practice for an AIM listed company of its size and complexity. The Board remains committed to continuous improvement and welcomes feedback from stakeholders on its governance approach. Simon Carr CBE Non−Executive Director 21 July 2025 MGM Ltd - Auckland Castle, Bishop Auckland 26 J Lister Electrical Ltd - Solar Project, University of York Northern Bear Safety Ltd - Team Valley, Gateshead 27

View stock analysis, news, and events for Northern Bear Plc