Annual Report 2025 (Annual Report)

Pebble Beach Systems Group plc

A leading global software provider of specialist automation solutions for the broadcast and streaming markets.

STRATEGY

1-2 Business Overview

3-5 Non-Executive Chairman's Statement 6-17 Strategic Report

GOVERNANCE

18-19 The Board

20-23 Directors' Report

24-30 Corporate Governance Statement 31-33 Remuneration Report

FINANCIALS

34-39 Independent Auditor's Report

To The Members of Pebble Beach Systems Group plc

1. Consolidated Statement of Profit and Loss

2. Consolidated Statement of Comprehensive Income

3. Consolidated Statement of Financial Position

4. Consolidated Statement of Changes in Shareholders' Equity

5. Consolidated Statement of Cash Flows

45-74 Notes to the Consolidated Financial Statements

1. Company statement of profit or loss and other comprehensive income

2. Company Statement of Financial Position

3. Company Statement of Changes in Shareholders' Equity

4. Company Statement of Cash Flows

79-89 Notes to the Company Financial Statements

COMPANY INFORMATION

1. Analysis of Shareholders

2. Shareholder Information

   BUSINESS OVERVIEW

   Founded in 2000 and based in the UK, Pebble Beach Systems Group plc ("Pebble" or "the Group" or "the Company")

   is a world leader in designing, delivering and supporting advanced workflow automation systems for media broadcasters. Its playout and integrated channel software product offering is widely recognised as 'best of breed'.

   The Company has a global customer base, with installations across more than 60 countries. Its solutions are scalable, supporting media broadcasters operating single channels to over 150 channels. Currently Pebble software supports over 1,000 channels.

   RESULTS HIGHLIGHTS

   STRONG RESULTS AND IMPROVED PLATFORM FOR FUTURE GROWTH

   Year ended 31 December	2025	2024	Change
   Revenue	£12.2m	£11.5m	+7%
   Annual recurring revenue	£6.6m	£6.1m	+8%
   Adjusted EBITDA*	£4.2m	£3.3m	+27%
   Adjusted EBITDA margin	34%	29%	+5%
   Statutory profit before tax	£2.2m	(£1.3m)	+267%
   Adjusted basic earnings per share**	2.7p	0.9p	+200%
   Statutory basic earnings per share	2.2p	(1.1p)	+300%
   Cashflow from operations (excl. non-recurring items***)	£4.0m	£4.1m	-5%
   Annualised value of recurring revenue (ARR)	£6.7m	£6.3m	+8%
   Net debt (excl. IFRS 16 leases)	(£1.9m)	(£3.7m)	-49%
   Significant improvement across key financial measures supported by:

   • strategic decisions implemented in Q1;

   • increased revenues and stronger margins; and

   • robust base of growing annual recurring revenue.

   Group revenue up 7% to £12.2m (2024: £11.5m). Recurring revenue 8% higher at £6.6m (2024: £6.1m):

   • comprises c.64% of Group revenue excluding third-party hardware (2024: 61%);

   • provides good revenue visibility;

   • annualised value of recurring revenue at year-end up 8% at £6.7m (2024: £6.3m).

     Adjusted EBITDA up 27% to £4.2m (2024: £3.3m) - reflected good growth in gross profit and reduced cost base.

     Adjusted basic EPS up 200% to 2.7p (2024: 0.9p) as a result of strong adjusted PBT growth and a substantial reduction in net finance charges.

     Strong cash generation; 94% of adjusted EBITDA converted to cash (2024: 126%).

     Net debt (excluding IFRS 16 leases) significantly reduced - £1.9m at year-end (31 December 2024: £3.7m):

   • £1.0m of debt repaid, in line with strategic focus on continued reduction of the Group's debt; and

   • on track to achieve net cash during FY 2026.

     BUSINESS OVERVIEW CONTINUED

     OPERATIONAL

     Strategic actions taken in Q1 to refocus R&D direction and reduce cost base:

   • annualised cash savings of £2.0m achieved; and

   • Internet Protocol based R&D reduced.

     Total new orders (from existing and new customers) up 2% to £13.9m (2024: £13.6m):

   • project orders up 25% to £6.4m (restated 2024**** : £5.1m), with good demand from streaming market;

   • support and maintenance orders (also known as SLAs) of £7.5m (restated 2024**** : £8.5m) with £0.9m of renewals immediately after year-end.

     New customers included:

   • global streaming platform broadcasting live events, with 1-year support and maintenance agreement;

   • major US sport rights holder, with 1-year support and maintenance agreement; and

   • global streaming platform introducing live sporting events, with 5-year support and maintenance agreement.

PROSPECTS

Trading in Q1 2026 has been encouraging and the Board believes that Pebble is well-positioned to achieve its objectives for FY26 and beyond.

Tom Crawford, newly appointed Non-Executive Chairman of Pebble Beach Systems Group plc, said,

"Pebble has delivered a strong performance, which reflects a combination of factors - the strategic actions taken in the first quarter of the year, higher revenue and margins, and focus on our growing base of recurring income.

The Company has a firm platform from which to go forward and we expect the business to move into a net cash position in 2026. The balance sheet should continue to strengthen thereafter given the highly cash generative nature of the business, and this opens up further opportunities for us. Notwithstanding the current economic uncertainties arising from the situation in the Middle East, we expect Pebble to continue to progress and believe there are good prospects for ongoing growth and development over the medium term."

NOTES

* Adjusted EBITDA is defined as operating profit or loss before depreciation, amortisation and impairment of acquired intangibles, amortisation and impairment of capitalised development costs, share based payment expense or credit, non-recurring items and exchange gains or losses charged to the income statement.

** Adjusted basic earnings per share is calculated on the same basis as basic earnings per share except for the adding back of the after-tax effect of the adjustments for amortisation and impairment of acquired intangibles, share based payment expense or credit, non-recurring items and exchange gain or losses.

*** See note 6 to the Consolidated Financial Statements.

****The comparative figure for FY24 project orders has been restated to align them with FY25 where the value of the initial support and maintenance agreement ("SLA") has been excluded from the total value of new project orders and instead accounted for within the total value of support and maintenance agreements, which includes renewals and extensions.

INTRODUCTION

Pebble's results for the year show a significant improvement after the challenges of 2024. They are also

ahead of original market expectations, as outlined in the trading update issued on 28 January 2026, with revenue

up by 7% to £12.2m (2024: £11.5m) and adjusted profit before tax up by

2.7x to £3.0m (2024: £1.1m). On a reported basis, the Company moved into profit, with a profit before tax of

£2.2m compared to a loss before tax of £1.3m in 2024. Our close focus on debt reduction, helped by the strongly cash generative nature of the business, resulted in a 49% decrease in net debt (excluding IFRS 16 leases) to £1.9m

at the year-end (31 December 2024:

£3.7m). The Company remains on track to move into a net cash position during the course of this year.

These results are very encouraging and reflect three main factors; the benefits of the strategic decisions implemented in the first quarter of 2025, increased new orders and the Company's very robust and rising base of recurring income. New orders, from existing

and new customers, include both project orders and recurring support and maintenance (also referred to as SLAs) agreements. The strategic

actions taken refocused the Company's research and development priorities and reduced costs, resulting in the maintenance of strong cashflow from operations (excluding non-recurring items) of £4.0m (2024: £4.1m).

We have entered 2026 in a significantly improved financial shape, and trading in the first quarter of the new financial

year has been encouraging. The Board's attention remains on increasing new orders from both new and existing customers, driving margins and profitability, with particular focus on building recurring revenues. We are well placed to continue to make good

progress and to consider further options for growth. We view prospects positively.

FINANCIAL OVERVIEW

Group revenue for the 12 months to 31 December 2025 increased by 7% to £12.2 million (2024: £11.5 million).

Recurring revenue, derived almost entirely from support and maintenance contracts (SLAs), grew by 8% to £6.6 million (2024: £6.1 million), with the increase reflecting price rises as well as additional new agreements and

renewals/extensions. Recurring revenue accounted for 64% of total revenues excluding third-party hardware revenue (2024: 61% excluding third-party hardware) and provides good revenue visibility. Third-party hardware revenue is excluded from the percentage of recurring revenue as a proportion of total revenues in order to provide a better understanding of the Company's own revenue streams.

We secured a total of £13.9 million of new orders over the year, a 2% increase on the prior year (2024

restated: £13.6 million). Approximately

£6.4 million of this total was new project orders (2024 restated: £5.1 million), either from new customers or from the existing customer base.

Support and maintenance orders (comprising new orders, extensions and renewals) accounted for the balance, and amounted to £7.5 million (2024 restated: £8.5 million). Immediately following the year-end, a further £0.9 million of support and maintenance contracts (all renewals/extensions)

were signed. The most important and valuable revenue is from support and maintenance contracts and remains a very reliable and visible income stream. This reflects both the typically very high level of annual renewals and the multi-year term of many agreements.

Growth in higher margin recurring revenue helped to drive an 8% increase in gross profit to £9.5 million

(2024: £8.8 million), and gross margin improved to 78% (2024: 77%). Adjusted EBITDA rose by 27% to £4.2 million (2024: £3.3 million), and the adjusted EBITDA margin increased significantly to 34% (2024: 29%), principally due to portfolio focus and cost reductions.

During the year the Company incurred non-recurring costs of £0.8 million

as part of the strategic restructure undertaken in Q1.

The Company generated an operating profit of £2.6 million, compared to a loss in the prior year (2024: loss of £0.8 million, which included the one-off £2.7 million impairment charge).

R&D expenditure as a proportion of revenue reduced to 19.5% (2024: 24.3%) in line with the strategic decisions

taken to scale back the development of Internet Protocol (IP) only technology, given soft market uptake. As a result,

a lower level of development cost was capitalised and amortised in the year, at

£0.9 million and £0.6 million respectively (2024: £2.2 million capitalised and

£0.8 million amortised, excluding the impact of the one-off intangible asset impairment).

Net finance costs decreased by 24% in 2025 reflecting the Group's repayment of £1.0 million of its term loan and a reduction in interest rates to 8.47% (2024: 9.77%).

Adjusted profit before tax (which excludes share-based expenses or credits, foreign exchange gains or losses, non-recurring items and the impairment of intangibles) increased significantly to £3.0 million (2024: £1.1 million) and, similarly, adjusted earnings per share rose to 2.7p (2024: 0.9p). On a reported basis, the Company moved into profit, with profit before tax of

£2.2 million (2024: loss before tax of

£1.3 million) and reported earnings per share of 2.2p (2024: loss of 1.1p).

CASH FLOW AND BALANCE SHEET

In April 2026, an extension to the existing loan facility was agreed with the Company's bankers, Santander, maintaining the Company's £3.6 million loan facility until 28 April 2028. As the loan agreement was not signed until April 2026, it is classified as a post balance sheet event. As required by IAS 1, the full value of the loan has been classified as current. However,

it should be noted that this extension agreement has a repayment schedule of £1.0 million per annum, in line with the previous loan agreement.

Cash generated from operations was strong although lower than the prior year, with 94% of adjusted EBITDA converted to cash (2024: 126%), enabling us to continue to reduce debt levels significantly. The difference between the two years is accounted for by delayed receipts for support and maintenance (SLA) renewals/ extensions. The Company closed the year with net debt (excluding IFRS 16 leases) down by 49% or £1.8 million to

£1.9 million (31 December 2024: £3.7 million), with gross bank debt as at 31 December 2025 reduced to £3.6 million (31 December 2024: £4.5 million) and cash balances higher at £1.6 million (31 December 2024: £0.8 million).

OPERATIONAL OVERVIEW

We are very encouraged by the increase in new project orders booked, which was up by 25% year-on-year

to £6.4m (2024: £5.1m). The existing customer base generated some 40% of this revenue, with the balance from new clients, secured mostly via our partner network.

Completed projects in the year included a new playout and integrated channel system for a national broadcaster in the Nordics. Our solution is supporting 28 channels for this existing customer, each channel broadcasting in multiple languages

with highly complex workflows and the majority broadcasting live events. In a second phase of work

for this customer in 2026, we will be supporting a move to a new location. We also completed the installation of our 'Pebble Playout in a Box' solution for a private broadcaster operating

in Dubai, for use across six channels. The work was completed to a very tight deadline to meet a sports programme series. A new customer, a cable and satellite broadcaster based in Asia, required a new main playout and integration channel system, with multichannel disaster recovery system. It operates eight production channels and from engineering start to 'go-live', the project was completed over approximately eight months.

It is worth noting that of the eight new customers we added this year, two were streaming companies. Our advanced workflow automation technology has relevance in two critical areas for the streaming market, the incorporation of advertising within streaming companies' content and the broadcasting of live events. With streaming companies' models changing in this direction, we are optimistic of further opportunities for us. The new contract win, announced on 16 February 2026, with a Tier 1 US streaming company, was driven by this new customer's move into live sports programming. Worth an initial £1.3 million over its five-year term, it was secured after a rigorous review process, driven by the customer's desire to adopt a highly configurable, 'best-of-breed' solution. The win will be a valuable reference customer for us and is

another clear demonstration of Pebble's capability in live sports broadcasting.

We expect the new relationship to deepen and grow over time.

We were delighted to recognise our long-standing customers and sales partners over 2025 as part of our own 25th anniversary. We used the leading

industry trade shows and exhibitions, including BroadcastAsia (BCA) in Singapore, CABSAT in Dubai, and the International Broadcasting Convention (IBC) in the Netherlands, to present over 50 dedicated awards. The awards recognised five, 10, 15 and 20+

years of relationships, reflecting the depth and breadth of the Company's connections. There was a highly positive reaction to this initiative from our customers and partners.

We were also very pleased to receive the Gold Award (Playout Category) at the Digital Media World Awards 2025, which highlighted the reliability and feature-rich nature of our solution. We also won 'Best in Broadcast Playout' for 'Pebble Playout in a Box' at the BroadcastPro Middle East Awards and were delighted to be shortlisted as a Finalist for the 2025 ASBU BroadcastPro Middle East Innovative Project of the Year Award. This was for our collaboration with stc tv, the entertainment streaming service

offered by STC Group across a number of countries in the region.

As previously reported, at the beginning of the year, we refocused the Company's research and development priorities and took the decision to

scale back Internet Protocol native development. This was in light of slow market demand towards the full adoption of IP infrastructure and

continuing preference for on-premises solutions or hybrid delivery models.

The result is that we have freed up resource, reduced costs significantly and our R&D has been refocused on areas of greatest customer value. As previously reported, PRIMA, the new software platform we launched in April 2024 to support the transition to a cloud-based operating model, is no longer a core focus. However, importantly, we have integrated its

key benefits into our existing platform, which is capable of supporting all

delivery models, on-premise, cloud-based and hybrid. Our reorganised R&D resource provides for clear accountability, enhanced efficiency, and faster delivery.

In the last six months we worked on developing an integrated AI and intelligent automation capabilities

framework. Our core playout solution requires frame-accurate precision and is less suitable to AI but in mid-April 2026, we presented our AI integration vision at the National Association

of Broadcasters (NAB) Show in Las Vegas. This is the world's largest annual convention for professionals in media, entertainment and technology, and

we were encouraged by initial market reaction. We will continue to integrate AI tools into our platform and are well-positioned in this area.

Our relationships with our sales partners are long-standing and remain strong. As well as being the principal conduit of new business, they bring local market knowledge, and we are encouraged by the potential new customers relationships in the pipeline.

BOARD CHANGES

On 1 December 2025, Non-Executive Chairman, John Varney, retired from the Company after fourteen years of service, almost nine of which were as Chairman. On behalf of the Board, we would like to place on record

our thanks to John for his significant contribution over many years. John's guidance and counsel were valued and much appreciated. John's successor is Tom Crawford, who joined the Board as Non-Executive Chairman on 1 December 2025.

Tom has over 25 years' experience with publicly quoted companies, especially software businesses. He has a strong track record of building and growing international product-based software and services companies, both organically and through acquisition.

He was previously Chief Executive Officer of Aptitude Software Group Plc, the listed global financial management software company, and led its successful expansion into North America and Asia Pacific, as well as into new market verticals. He was also previously Chairman of Attraqt Group, the AIM-quoted SaaS ecommerce solutions provider and Chairman of AIM-quoted K3 Business Technology Group, which provided business-critical software solutions. He is currently

Chairman of Made With Intent, the realtime AI-driven ecommerce start-up.

After the reporting period, on 31 March 2026, Chris Errington, who represented Pebble's largest shareholder, Kestrel Partners LLP ("Kestrel"), on the Board, retired as a partner of Kestrel and therefore also stepped down as a Non-Executive Director of Pebble on that date. The Board extends its thanks to Chris for his valuable contribution to the Company over the past five years.

In place of Chris, on 31 March 2026, Oliver Scott was appointed to the Board as a Non-Executive Director, becoming Kestrel's new representative. Oliver also succeeded Chris as Chairman of Pebble's Remuneration Committee. Oliver is a Managing Partner of Kestrel.

DIVIDEND

The Company is currently unable to make distributions to shareholders. This is a result of historic accumulated losses on its retained profit and loss account within total equity. However,

the Board believes it is now appropriate to commence the necessary legal processes to create distributable reserves through a reorganisation of the Company's existing reserves. This will place the Company in a position to start dividend distribution when appropriate. The proposed reorganisation of reserves will require shareholder approval at a general meeting and

court sanction. We will update shareholders further in due course.

SUMMARY AND PROSPECTS

The business made good progress over 2025. The actions we took to refocus our growth plans provide a firm base for further profitable, higher margin growth. The Company's model is delivering increasingly recurring revenues and is highly cash generative and we remain on track to achieve a key objective of moving into a net cash

position in 2026, with the balance sheet expected to continue to strengthen thereafter.

Trading in the first quarter of the current financial year has started in line with expectations and the sales

pipeline has encouraging opportunities in our core marketplace of international, national, regional and specialised broadcasters. We are also seeing

more opportunities with streaming companies. As they shift to growth strategies, supported by advertising, and use live sports/events to attract subscribers, playout technology, like ours, becomes relevant.

While there are currently general economic uncertainties, reflecting the situation in the Middle East, we believe that the Company is well-positioned

to make good progress this year and remain confident of prospects for Pebble to grow and develop over the medium term.

Tom Crawford

Non-Executive Chairman

Peter Mayhead

Chief Executive 27 April 2026

WHAT WE DO

Pebble is a leading global software business specialising in designing, delivering and supporting advanced workflow automation systems for the media broadcasters and streamers.

The Company's primary product is playout automation software. This is used by television channels, streaming services and other media companies to manage what goes on air without constant human intervention. It automatically controls the sequence of programmes, advertisements, promotions, graphics and channel branding, making sure each item plays at the right time and in the correct order. Instead of an operator pressing

buttons, the system follows a schedule, switches between live and recorded content and handles last-minute changes with minimal errors.

Pebble also provides integrated channel solutions, which take playout automation software further by combining several broadcast functions - such as content storage, playout, graphics and sometimes monitoring

- into a single unified platform. The objective is to run an entire television or streaming channel from one system, rather than multiple disparate pieces of hardware and software stitched

together. This makes operations simpler and more efficient, reduces costs

and helps media companies deliver consistent, reliable channels across traditional television, web, and mobile with fewer technical hurdles.

Pebble's website is: http://www.pebble.tv.

OUR KEY STRENGTHS

• Over 25 years of experience in the broadcast market, with proven market leading technology

• Strong reputation for excellence -product offering and services

• Long customer relationships -predominantly 10 years+ once established

• Global, blue-chip customer base

• Well-established third-party sales channel

• Robust and growing base of recurring revenue

• Strong profitability and good cash flows

• Expectation of net cash position in FY26

• Well-positioned for further growth and development

  OUR CUSTOMERS

  Pebble's customers are broadcasters, service providers and streaming companies, the latter a more emerging market. Broadcaster and service providers are typically Tier 1 or Tier

  2 international, national, regional or specialised broadcasters or service providers. Customers may offer generalist channels, providing a mix of news,

  soap operas and variety shows, or they may offer thematic channels, focusing exclusively on a single type of topic, such as news, sports, music or documentaries for niche audiences. Streaming companies are now increasingly adopting cloud-based playout software as they move into live events and develop their advertising models.

  The Company has a global customer base, with installations predominantly in Europe, the USA and the Middle East and Africa, but also Latin America and Asia/Pacific.

  Customers include:

• CNBC (Consumer News and Business Channel), a leading American cable and satellite business and financial news network;

• Fox News, the American multinational cable news and political commentary channel;

• IMG, which operate B2B-focused live sports networks mainly for the travel industry and provides broadcast services for major sports leagues; and

• TV Globo, the largest commercial television network in Latin America.

  WHY CUSTOMERS CHOOSE OUR SOLUTIONS

  Pebble is a leading operator in the playout automation market and its product set is widely acknowledged as 'best of breed'. We believe that our

  customers choose our solutions for the following reasons:

• Reputation: Pebble technology is recognised as 'best of breed' in playout automation;

• Flexibility: Pebble technology can be deployed on-premises or via the cloud (private or public);

• Ease of integration: seamless integration into customers' existing infrastructure and third-party systems, which also reduces costs and implementation risks;

• Scalable: Pebble technology can support multiple channels and complex broadcasting; and

• Partnership approach: deep product knowledge, responsive support, ongoing product development.

  HOW WE SELL

  Customers are reached mainly through third-party partnerships, but also via Pebble's own direct sales team. Pebble has established a global network of partners, which include value-added resellers, systems integrators, and service providers. This approach provides global reach without a large direct sales force, and partners bring local market knowledge and support capability. Pebble and its partners work together with end-customers, and Pebble remains the principal in all contracts for its software and services.

  MARKET POSITIONING

  The Company's primary product offering is playout automation to execute linear broadcasting schedules and live event programming for broadcast channels and streaming services. Linear schedules are the fixed and pre-determined timetables of programming where content is aired on a specific channel at set times. This processing includes the composition of graphics, video effects, audio processing, and other services such as subtitles and captioning. The

  viewer must therefore tune in when the content is broadcast unlike with nonlinear, on-demand streaming.

  Pebble's core market primarily consists of television broadcast companies, and service providers that offer outsourced services for the broadcasters. This global market is typified by Pebble customers such as, Fox News, CNBC, IMG, TV Globo. Pebble's technology is also

  used by some major streaming services, carrying live content or advertising.

  Pebble's other core software technology is the management and processing of media associated with broadcast and streaming services, both file-based media and live media streams. Pebble addresses all the requirements of modern broadcast services.

  All Pebble's solutions meet the demanding, mission-critical requirements of broadcast operations, which must maintain flawless execution of programming. Its solutions are architected to achieve the highest levels of performance, including for security and highest-grade resilience.

  Pebble is widely recognised as providing market-leading service.

  The Company manages the customer relationship through the entire system lifecycle, using its extensive domain knowledge to deliver solutions tailored to customers' specific needs, and to provide 24/7 support.

  Pebble's portfolio of software-based solutions consists of:

  Automation: a highly scalable, enterprise-level playout solution for broadcasters, streamers, and service providers. The software allows flexible deployment on physical or virtual machines, either on-premises or on the cloud, with exceptional levels of system resiliency.

  Integrated Channel: under the control of our Automation software, this solution provides all the functionality of a broadcast chain, including audio, video and graphics functionality.

  Remote: real-time, thin-client access to the playout environment via secure web interfaces. It is easy to use with intuitive interfaces to control, monitor and manage channels remotely.

  Workflow: a tool for the design and management of complex media workflows. It handles the ingest, indexing, and movement of media to support broadcast channels and streaming services.

  MULTI-PLATFORM CONTENT DELIVERY

  For Pebble, multi-platform content delivery is its ability to deliver complex workflows to support our customers' linear and Video On Demand, OTT (i.e. Over-the-Top streaming services that deliver video and audio content directly over the internet) and On-demand requirements. It forms the core of the Company's current revenue streams and are the focus of continual development and enhancement.

  4K/ULTRA-HIGH DEFINITION ("UHD") PRODUCTION

  4K and UHD TV global sales have consistently increased since 2014 according to recent industry statistics. Pebble has already delivered a number of UHD systems to customers.

  INTERNET PROTOCOL INFRASTRUCTURE

  IP infrastructure has been an area of focus for Pebble for some time, in line with customers' stated requirements and we continue to cement our position as the experts in IP. Although many of our customers are either transitioning to IP infrastructure from legacy SDI deployments (i.e. traditional non-

  IP digital video) or implementing IP infrastructures in a new broadcasting facility or greenfield site, a considerable number are continuing to operate in hybrid IP/SDI environments. Pebble supports all of these implementations.

  CLOUD COMPUTING:

  PUBLIC, PRIVATE, & HYBRID

  As broadcast and streaming services evolve, the media technology industry is constantly seeking more flexible and efficient use of IT infrastructure. Use of cloud computing is a significant trend in the market, and this is a combination of public services such as Amazon and Google, private cloud deployed on

  a customer's own infrastructure, and hybrid which is a combination of both.

  To date, Pebble has delivered systems into a small number of new IT-centric playout facilities. The Company's solutions have primarily

  been supporting broadcasters as they expand their current SDI-based facilities to utilise cloud capabilities.

  To complement Pebble's development roadmap and to broaden the Group's product offering, Pebble is also looking for in-organic opportunities

  in these areas that would accelerate the diversification of the Company's portfolio. Areas of specific focus for potential acquisition opportunities are: production functions, such as graphics and file-based workflows that support on-demand streaming applications; media planning; scheduling; advertising; and distribution.

  STRATEGIC REPORT CONTINUED

  STRATEGIC PRIORITIES

  Pebble's mission is to maintain and expand its position as a leading provider of automated playout solutions globally.

  The Board aims to grow the business organically, expanding its capabilities, developing new software solutions and extending the product portfolio including through the acquisition of additional technology capabilities.

  STRATEGIC PRIORITIES 2026 GOALS

  Position Pebble to achieve long-term success

  Maximise business from existing playout capabilities

  Attract investors to support our long-term future

• Target capabilities at growth markets emerging from the ongoing technology transition.

• Maximise value generation from Pebble's leading position in the broadcast market

• Focus growth on recurring revenue and cash profitability

• Be in a position to raise capital for expansion when required.

• Identify the specific needs of streaming players looking to bring live content to their platforms and align product development accordingly.

• Continue to monitor traditional broadcasters as they look to adopt Internet Protocol-centric solutions.

• Develop roadmap to bring a virtualized/cloud version of our fully featured playout offering to market in time for IBC2026, the premier global media, entertainment and technology show, taking place

  in mid-September 2026.

• To have become Net Cash positive.

• Maintain position as the go-to provider of complex (Tier 1) playout solutions.

• Deliver 2026 business plan.

• Build contracted recurring revenue and order pipeline to underpin success in 2027.

• Commence development of appropriate AI capability

to enhance performance of playout solutions.

* Adjusted EBITDA is defined as operating profit or loss before depreciation, amortisation and impairment of intangibles, amortisation and impairment of capitalised development costs, share based payment expense or credit, non-recurring items and exchange gains or losses charged to the income

statement. The Directors believe that adjusted EBITDA provides additional useful information on annual trends to shareholders. These measures are used by management for internal performance analysis and incentive compensation arrangements. The term "adjusted" is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measures reported by other companies.

** Adjusted profit before tax is defined as profit before tax excluding share-based payment expenses or credits, foreign exchange gains or losses charged to the income statement and non-recurring items.

KEY PERFORMANCE INDICATORS

Revenue provides a measure of work delivered and is the key measure of growth. The increase over the year reflected higher demand from streaming platforms and the continued rise in support and maintenance (also known as SLA) revenue.

Recurring revenue (predominantly from support and maintenance (SLA) agreements) rose due to the increase in both the quantity and the value of support and maintenance agreements. These agreements are typically renewed annually, but also include multi-year terms and the total lifespan is typically 10 years.

Annualised value of recurring revenue ("ARR") is the total recurring revenue a business would generate over a 12-month period based on its current recurring revenue. The increase has been driven by projects going live in year.

New orders are a measure of new business secured during the year and is a mix of project orders and support and maintenance orders. The increase in project orders year-on-year was mainly driven by an increase in demand from streaming platforms while new support and maintenance orders showed a small contraction.

Adjusted EBITDA is defined as operating profit or loss before depreciation, amortisation and impairment of acquired intangibles, amortisation of capitalised development costs, share based payment expense or credit, non-recurring items and exchange gains or losses charged to the income statement. The increase in the financial year reflected the rise of both project revenue and support and maintenance revenue as well as the reduced cost base.

Adjusted EBITDA margin is calculated by dividing adjusted EBITDA for the financial year by revenue for the financial year.

Adjusted EBITDA less capitalisation is defined as operating profit or loss before depreciation, amortisation and impairment of acquired intangibles, amortisation of capitalised development costs, share based payment expense, non-recurring items and exchange gains or losses charged to the income statement, and before the benefit of capitalised development costs.

Adjusted EBITDA less capitalisation margin. This is adjusted EBITDA less capitalised development costs in the financial year divided by revenue for the financial year.

EBITDA is defined as operating profit or loss before depreciation, amortisation and impairment of intangibles, and amortisation of capitalised development costs.

Adjusted earnings The principal adjustments to earnings are made in respect of the amortisation of intangibles, share based payment expense or credit, non-recurring items and exchange gains or losses charged to the income statement and their related tax effects.

Adjusted earnings per share is calculated on the same basis as basic earnings per share except for the adding back of the after-tax effect of the adjustments for amortisation and impairment of acquired intangibles, share based payment expense or credit, non-recurring items and exchange gain or losses.

Earnings per share is calculated by dividing net income by the number of shares outstanding.

Profit/(Loss) for the year is after all costs but before taxation on profit or loss.

Calculated as capitalised development costs less amortisation in the period plus R&D expenses charged in the period divided by revenue.

During 2025, Pebble undertook a strategic restructure of the business which resulted in a higher than normal headcount turnover.

TAXATION

There is a tax credit for the year of £0.5 million for continuing operations (2024: £Nil). This arose as a result of the recognition of a deferred tax asset of £0.5 million (see note 22).

NET ASSETS/(NET LIABILITIES)

The Statement of Financial Position at 31 December 2025 is summarised as follows:

The increase in net current liabilities is due to the accounting treatment of the loan facility and includes the full loan balance of

£3.6 million. After the year-end an extension to this loan agreement was agreed. This extension agreement has a repayment schedule of £1.0 million per annum in line with the previous loan agreement.

CASH FLOWS

The Group held cash and cash equivalents of £1.6 million at 31 December 2025 (2024: £0.8 million). The table below summarises the cash flows for the year.

CASH FLOWS FROM OPERATING ACTIVITIES

Net cash generated from operating activities was £2.8 million (2024: £3.6 million), comprising cash flow from operations of

£3.2 million (2024: £4.1 million) and interest paid of £0.4 million (2024: £0.5 million). Cash flow from operations includes £0.8 million of restructuring costs recognised during the year; excluding these material items, underlying cash flow from operations is £4.0 million.

The cash generated from operations of £4.0 million represented a 94% conversion of adjusted EBITDA. This compares with

£4.1 million and a conversion rate of 126% in 2024.

The cash outflow from investing activities amounted to £0.9 million (2024: £2.4 million) which comprised £0.9 million in respect of the capitalisation of development costs (2024: £2.2 million) and £Nil in respect of capital expenditure

(2024: £0.2 million).

The cash outflow from financing activities amounted to £1.1 million (2024: £1.1 million) which comprised £1.0 million (2024: £1.0 million) of bank loans and £0.1 million (2024: £0.1 million) in respect of lease payments.

TERM LOAN

In April 2026, an extension to the existing loan facility was agreed with our bankers Santander, maintaining the Company's

£3.6 million loan facility until 28 April 2028. This extension agreement has a repayment schedule of £1.0 million per annum consistent with previous years and a new covenant test based on an EBITDA to debt-servicing cost ratio.

RETURNS TO SHAREHOLDERS

The Directors do not recommend the payment of a final dividend for the year ended 31 December 2025 (2024: Nil).

The Company has historic accumulated losses on its retained profit and loss account within total equity. As a result, the Company is currently unable to make distributions to shareholders. The Board has commenced the necessary legal process to create distributable reserves through a reorganisation of existing Company reserves allowing the Company to make future

distributions to shareholders. The process will involve first seeking the approval of shareholders at a general meeting and then obtaining the necessary permissions of the Court. Further information on this process will be communicated to shareholders in due course.

GOING CONCERN

The Directors are required to assess the Group's ability to continue to trade as a going concern. The Board concluded, from a thorough assessment of the detailed forecasts, that the Group will have sufficient resources to meet its liabilities during the review period through to April 2027 and that it is appropriate that the Group prepare accounts on a going concern basis.

Detailed disclosure has been made in Note 2 to the consolidated financial statements.

As in previous years, the Group is exposed to a number of risks in its everyday business, and in order to minimise those risks, policies and procedures are in place and are adopted by those who work within the business.

Risk is ultimately managed by the Board which is supported by operational and compliance reporting structures. The Board sets out below what it considers to be its main risks:

Risk description Mitigation

Risk profile

TECHNOLOGY TRANSITION RISK

The broadcast industry includes traditional linear channels and a shift to streaming, with streaming overtaking linear TV viewing for the first time in 2025.

Demand for broadcast automation software is currently growing as broadcasters invest in efficiency and IP infrastructure, but the Board considers this short to medium term with other technology requirements, such as cloud-playout, emerging medium term.

The primary risk is misjudging the timing or direction of the shift from on-premises to cloud or streaming-native architectures.

COMPETITIVE AND MARKET RISK

Established broadcast automation competitors have made advances in hybrid and cloud-capable playout.

Approximately 48% of revenue is from European markets and 37% from North America, both experiencing advertising revenue decline, save for live events and sports, which constrains broadcaster capex over time.

KEY PERSON AND TALENT RISK

With approximately 50 employees, the Group is naturally dependent on a small number of specialists, particularly in the development function where

deep expertise in the core automation codebase is concentrated. The next tier of management leadership is in development, with several team lead roles newly established.

CUSTOMER CONCENTRATION RISK

Project revenue can be concentrated in a small number of large international contracts in any given year.

Less than 8% of revenue is generated in the United Kingdom, with the international footprint creating exposure to pockets of geopolitical instability, currency movements, and varying regulatory environments.

The Group has cloud-playout IP but has currently suspended related marketing due to lack of demand. In addition, a feasibility study on enhanced cloud and virtualised capabilities is underway with positive initial results, and a virtualised playout roadmap is targeted for IBC 2026. The Group has active involvement in the NMOS IP standardisation initiative through AMWA, shaping the transition rather than responding to it. A strategic priority over the next 12 months and beyond is focused on identifying and targeting growth markets arising from this transition.

The Group targets Tier 1 broadcasters requiring complex, mission-critical playout where integration depth, domain expertise, and the risk of migration create durable competitive advantage. Investment in AI-augmented capabilities and IP control is intended to extend relevance into adjacent workflow segments.

The Group operates structured performance and development processes. A new team lead structure was established in 2025, distributing technical leadership more broadly. The team is currently stable. Retention is supported by a values-led culture, flexible remote working, and direct CEO engagement programmes.

Heading into FY26, we had contracted ARR of £6.7m, representing 54% of forecasted revenue, providing structural resilience and reducing reliance on project order timing. The SLA base is spread across a large number of long-standing customer relationships that renew reliably.

High

Medium

Medium

Medium

Risk description Mitigation

Risk profile

PRODUCT EXECUTION AND DELIVERY RISK

A formal software release process was introduced in 2025 and is still bedding in. Naturally, some technical debt exists within the codebase. Fixed-price project delivery to large broadcast customers can create exposure to margin compression from scope creep or resource constraints. Investment allocation between maintaining existing codebases and developing

new virtualisation and AI capabilities needs careful management.

CAPITAL, FUNDING AND GOING CONCERN RISK

The Group's strategic plan requires investment in new product capabilities at a time when the broadcast market is changing. The ability to fund this from organic cash generation is a key business plan assumption.

AI AND TECHNOLOGY INNOVATION RISK

AI is reshaping broadcast operations rapidly. Moving too slowly risks being outpaced by competitors; over-committing at the expense of core product stability carries delivery and reputational risk. AI capability development is a first-time 2026 annual goal and internal capacity to execute this alongside existing commitments is regularly reviewed.

FINANCIAL REPORTING AND GOVERNANCE RISK

The finance function is small relative to its AIM reporting obligations. The continuing development of management reporting, cashflow forecasting, and KPI frameworks is important as business complexity evolves. The Board has been refreshed during the period.

SUPPLY CHAIN AND SINGLE-SOURCE SUPPLIER RISK

The Dolphin Integrated Channel product depends on Dell for its server platform and Matrox for video processing. A structural RAM DIMM shortage has

extended Dell lead times to approximately five months with unit costs up ~43%. New fabrication capacity is not expected until 2028. Hardware is approximately 16% of revenue and the same constraints affect all comparable vendors.

The new release process introduces structured milestones and quality assurance gates. Four development team leads were appointed in 2025. Fixed-price exposure is managed through bid review and scope control disciplines. The CEO monitors the balance between maintenance and innovation as a standing agenda item.

The bank facility was refinanced in April 2026 to April 2028 on a new EBITDA to debt-servicing cost

covenant, with comfortable headroom. Recurring SLA revenue provides cash flow predictability. The Board has net cash of £1.3m and a strategic priority for 2026 is to maintain cash generation and deepen support from investors for growth.

The Group's strategy positions AI as a complementary intelligence layer around the core product rather

than a replacement for it. The deterministic nature of frame-accurate linear playout means the core engine is not threatened by AI substitution. Protected AI development time has been agreed within the CTO's 2026 objectives.

Financial controls are well established. The Head of Finance has regular engagement with the CEO and a non-executive director with a finance background. The Group holds Cyber Essentials

certification. The 2026 finance goals include formal management accounts cadences, cashflow forecasting development, and statutory compliance.

Revenue recognition has been decoupled from hardware delivery on a number of contracts. Hardware is being priced at point of order on new quotes. The model of customers or partners procuring hardware directly is being assessed for wider adoption.

The Group's virtualisation roadmap would reduce hardware dependency over time.

Medium

Medium

Medium

Medium

Medium

Risk description Mitigation

Risk profile

REPUTATION AND SERVICE QUALITY RISK

Pebble's customers operate mission-critical live broadcast environments where failures are immediately visible. The Group's ability to retain and win customers depends on consistent delivery quality across projects and support. A material service failure or pattern of unresolved issues could generate negative market perception that is hard to reverse in a specialist market.

CYBER SECURITY AND BUSINESS CONTINUITY RISK

As a fully remote software business, the Group is dependent on digital infrastructure for all operations. A cyber incident could disrupt operations, compromise data, and damage customer confidence. Regulatory supply chain security requirements in the broadcast sector are tightening.

CREDIT AND CURRENCY RISK

Less than 8% of revenue is from the UK. The primary foreign currency exposures are to the US Dollar

and Euro. Adverse exchange rate movements could impact reported sterling revenues and margins. Credit risk is well managed with the majority of customers demonstrating good payment discipline.

GEOPOLITICAL AND MACROECONOMIC RISK

The Group operates across 60+ countries and is exposed to geopolitical instability, sanctions regimes, and macroeconomic conditions. The conflict in Ukraine demonstrated this risk - Russian customers became inaccessible from 2022. The Middle East represents the most material current area of monitoring given customer concentration in the region.

Process improvement is underway in the customer fulfilment function to strengthen incident management and customer satisfaction measurement.

The 2026 functional goals include specific targets to drive satisfaction levels and actively manage of support levels. The new team lead structure and release process are intended to improve delivery predictability.

The Group holds Cyber Essentials certification. IT infrastructure is subject to ongoing review as part of the 2026 IT functional goals, which include migration to scalable and supported tools and services.

Currency exposure is managed through natural hedging. The Group monitors debtor ageing and credit exposure as part of routine financial management. A broad geographic spread of customers and mix of USD and EUR contracts provides natural currency diversification.

The Group's genuinely diversified geographic spread limits the impact of any single regional disruption.

Recurring SLA revenue is typically resilient to short-term macro shocks. The sales function maintains a global pipeline across multiple regions.

Medium

Medium

Medium

Low

The following matters fall under the broad definition of Section 172:

LONG TERM DECISION MAKING

It is the Board's responsibility to ensure the Company's medium to long-term success.

In Q1 25 the Group commenced and completed strategic action to

scale back specific R&D and focus on existing core capabilities as a broadcast solutions specialist. As a result (and outlined in the trading update issued on 28 January 2026), there was a significant reduction of the existing cost base resulting in a rebalancing that delivered annualised cash savings and sustainable free cash inflows.

OUR STAKEHOLDERS

The Board considers engagement with stakeholders to be a significant part of its activities.

During 2025 Peter Mayhead (CEO), assisted by Paul Inzani (Head of Finance), was responsible for liaison with institutional shareholders

and held individual meetings with institutional shareholders and analysts following the full year and half year results announcements to the Market. Additional meetings with institutional investors and analysts were arranged throughout the year. All Board members receive feedback from the CEO from the Market presentations and meetings, throughout the year.

The Board members are all willing to engage with shareholders should they have a concern that is not resolved through the normal channels.

OUR EMPLOYEES

The Group consider our employees to be our greatest asset and crucial to the success of our business.

We have lines of communication in place to ensure that employees are consulted with and kept informed of issues relevant to them.

Internal staff surveys conducted since our move to remote working have shown that the benefits of less

commuting time, greater flexibility and better work-life balance, have resulted in increased productivity and happy employees, and gives us more scope to ensure we have a global, highly capable, and flexible employee base.

With remote working, the business is able to attract the best talent from anywhere in the world.

CUSTOMERS

The Sales and Operations teams work with customers to understand their business needs and operational requirements regarding existing and new solutions.

In January 2026 the Group appointed a vice president for customer fulfilment, strengthening its senior leadership focus on customer delivery and operational performance to ensure

end to end project delivery and services, supporting consistent, reliable deployments for customers worldwide and long-term client success.

In 2025 we held our annual Pebble User Group in London, when customers came together to talk openly about what is happening inside their playout operations. The event reinforced

that the strongest solutions come from listening to the people who rely on them every day. Users shared how Pebble Automation gives them the control they need across mixed environments, how Pebble Remote

supports new hybrid operating models, and how Integrated Channel fits into changing delivery requirements. These insights directly influence how we prioritise development. Customer input shapes more than features. It shapes how we think about the future of playout and the real world challenges our technology must meet.

SUPPLIERS

The Group sources its products from manufacturers in Europe and North America. By establishing long-term relationships with suppliers, the Group seeks to provide the supply of high-quality products, both integrated

and configured, and maintain good forecasting to ensure cost and lead time estimates remain accurate.

PARTNERS

The Group has a long history of partnering with other vendors and system integrators to deliver solutions to the end user. Through our in-house development and fulfilment team, we have the ability to partner with most suppliers of the different elements

of the value chain to provide market leading solutions to the end users.

THE IMPACT OF THE COMPANY'S OPERATIONS ON THE COMMUNITY AND THE ENVIRONMENT

Due to the nature of our business, the Group has a minimum impact on the community and environment.

Nonetheless, the Group is committed to minimising our impact on the environment by reducing our waste and carbon footprint through energy management and recycling schemes.

The Group takes account of the need to protect the environment and

promote public health and safety and to conduct our activities in order to promote sustainable development.

This includes:

• Maintaining a system of environmental management, which collects, evaluates and monitors information on environmental, health and safety impacts of activities;

• Maintaining contingency plans for preventing, mitigating and controlling serious environmental and health damage;

• Recycling or re-using wherever possible waste from operations. If this is not possible then waste must be disposed of safely;

• Ensuring that the consumption of energy and other resources are minimised;

• Developing products that have no undue environmental impact, are safe to use, are efficient in their consumption of energy and natural resources and can be reused, recycled or disposed of safely; and

• Providing training to employees

  in environmental health and safety matters including the handling

  of hazardous materials and the prevention of environmental accidents.

  MAINTAINING OUR REPUTATION FOR HIGH STANDARDS OF BUSINESS CONDUCT

  Maintaining our reputation for high standards of business conduct remains fundamental to the long-term success and sustainability of the Group. We are committed to operating with integrity, transparency and accountability

  across all aspects of our business, ensuring compliance with applicable laws, regulations and AIM market expectations.

  Our governance framework is supported by clearly defined policies, regular training and a culture promoting ethical decision-making

  at every level of the organisation. We foster a culture in which employees feel empowered to raise concerns, supported by whistleblowing procedures. Through ongoing monitoring, risk assessment and continuous improvement, we seek not only to uphold our standards but to strengthen the trust placed in us by shareholders, customers, employees and wider stakeholders.

  
  
  

  Tom Crawford

  Non-Executive Chairman 27 April 2026

  THE BOARD

  Tom Crawford

  Non-Executive Chairman

  APPOINTED TO THE BOARD:

  December 2025

  INDEPENDENT:

  Yes

  SKILLS AND EXPERIENCE:

  Tom has over 25 years' experience with publicly quoted companies, especially software business. He has a strong track record of building and growing international product-based

  software and services businesses, both organically and through acquisition.

  Previously Chief Executive Officer of Aptitude Software Group Plc, the listed global financial management software company, and led its successful expansion into North America and

  Asia Pacific, as well as into new market verticals. He was also previously Chairman of Attraqt Group, the AIM-quoted SaaS ecommerce solutions provider and Chairman of AIM-quoted K3 Business Technology Group, which provided business-critical software solutions. Tom is currently Chairman

  of Made With Intent, the real-time AI-driven ecommerce start-up.

  OTHER RELEVANT EXTERNAL APPOINTMENTS:

• Chair of Made With Intent Ltd

• Director of Vastude Ltd

  BOARD COMMITTEE MEMBERSHIPS:

• Remuneration Committee - Member

• Audit Committee - Member

• Nomination Committee - Chairman

  Peter Mayhead FCCA, MBA

  Group Chief Executive Officer

  APPOINTED TO THE BOARD:

  January 2018

  INDEPENDENT:

  No

  SKILLS AND EXPERIENCE:

  Peter joined Pebble Beach Systems as CEO in January 2018 and has led the business through a period of significant strategic and financial

  transformation. Under his leadership the Group has returned to profitability, grown recurring revenue to 64% of total revenue, and delivered a step-change in earnings through a disciplined combination of cost restructuring, product refocusing, and commercial execution.

  In 2025, Peter led a strategic repositioning of the Group's R&D investment away from speculative IP-only development toward core automation strengths and emerging technology integration, delivering

  annualised cost savings of £2.0m while maintaining the product capabilities that underpin Pebble's market-leading position. The Group delivered adjusted EBITDA of £4.2m in FY2025, up 27%

  year-on-year, with adjusted profit before tax of £3.0m.

  Peter brings over 20 years of leadership experience in broadcast technology.

  Prior to Pebble, he served as CFO of Pro-Bel Ltd, where he played a central role in the business turnaround that led to its merger with Snell & Wilcox, creating one of the leading broadcast infrastructure groups of its era.

  Peter holds an MBA from Henley Business School and is a Fellow of the Association of Chartered Certified Accountants.

  OTHER RELEVANT EXTERNAL APPOINTMENTS:

• N/A

  BOARD COMMITTEE MEMBERSHIPS:

• Executive Board - member

  Richard Logan BA, CA Senior Independent Non-Executive Director

  APPOINTED TO THE BOARD:

  May 2020

  INDEPENDENT:

  Yes

  SKILLS AND EXPERIENCE:

  Richard's extensive knowledge of growing companies and acquisitions comes from his long career within a variety of highly successful companies including serving as CFO at Iomart Group PLC, a cloud computing company quoted on AIM, from 2006 until his retirement in 2018.

  Richard holds a BA in Accountancy from the University of Stirling, and is a member of ICAS.

  Richard attends conferences, webinars and seminars to ensure he is up to date with current developments.

  OTHER RELEVANT EXTERNAL APPOINTMENTS:

• Chairman of Kerrera Topco Limited (Appointed 26 August 2025)

  BOARD COMMITTEE MEMBERSHIPS:

• Remuneration Committee - Member

• Audit Committee - Chairman

• Nomination Committee - Member

  Oliver Scott (from 31 March 2026)

  Non-Executive Director

  APPOINTED TO THE BOARD:

  March 2026

  INDEPENDENT:

  No

  SKILLS AND EXPERIENCE:

  Oliver has spent his entire career in the fields of investment, corporate finance and M&A. He is a Managing Partner of Kestrel, the independent investment manager, which he co-founded in 2009. Kestrel is Pebble's largest shareholder and Oliver is their appointed representative on the Board of Pebble.

  Oliver has extensive non-executive director experience; He is currently Chairman of K3 Business Technology Group Ltd and a non-executive director of Redcentric PLC. Previous non-executive board positions have been at Idox PLC, IQGeo Group PLC, Gresham Technologies PLC and KBC Advanced Technology PLC.

  OTHER RELEVANT EXTERNAL APPOINTMENTS:

• Managing Partner of Kestrel Partners LLP

• Director of K3 Business Technology Group plc

• Director of Redcentric plc

  BOARD COMMITTEE MEMBERSHIPS:

• Remuneration Committee - Chairman

• Audit Committee - Member

• Nomination Committee - Member

  DIRECTORS' REPORT

  The Directors present the annual report of Pebble Beach Systems Group plc together with the audited Group and Company financial statements for

  the year ended 31 December 2025, which were approved by the Directors on 27 April 2026. The Group and Company financial statements have been prepared in accordance with

  UK-adopted international accounting standards.

  A review of the Group's trading and an indication of future developments are contained in the Chairman and Chief Executives Report on pages 3, 4 and 5.

  Disclosures relating to information which is strategically important to the Group are made within the Strategic Report on pages 6 to 17.

  RESULTS AND DIVIDENDS

  The results for the year ended 31 December 2025 are set out in the consolidated statement of profit and loss on page 40. The Group has reported an operating profit of £2.6 million (2024: operating loss £0.8

  million). After accounting for net finance costs, the consolidated statement of profit and loss shows a profit before taxation of £2.2 million (2024: loss before tax £1.3 million).

  The net result for the year was a profit of £2.7 million (2024: loss of £1.3 million); in 2025 this includes recognition of a £0.5 million deferred tax asset.

  The Directors do not recommend payment of a final dividend for the year ended 31 December 2025 (2024: Nil pence per ordinary share).

  The Company has historic accumulated losses on its retained profit and loss account within total equity. As a result, the Company is currently unable to make distributions to shareholders. The Board has commenced the necessary legal process to create distributable reserves through a reorganisation of existing Company reserves allowing the

  Company to make future distributions to shareholders. The process will involve first seeking the approval of shareholders at a general meeting and then obtaining the necessary permissions of the Court. Further information on this process will be communicated to shareholders in

  due course.

  TERM LOAN

  At 31 December 2025, the Group's net debt (excluding debt related to leases) was £1.9 million (2024: £3.7 million), comprising net cash of £1.6 million (2024: £0.8 million) and the term loan from Santander of £3.6 million (2024:

  £4.5 million).

  In April 2026, an extension to the existing loan facility was agreed with our bankers Santander, maintaining the Company's £3.6 million loan facility until 28 April 2028. This extension agreement has a repayment schedule of £1.0 million per annum consistent

  with previous years and a new covenant test based on an EBITDA to debt-servicing cost ratio.

  RESEARCH AND DEVELOPMENT

  During the year ended 31 December 2025 the Group's capitalised expenditure on R&D was

  £0.9 million (2024: £2.2 million).

  The R&D expenditure as a proportion of our revenue is 19.5 per cent

  (2024: 24.3 per cent).

  DIRECTORS

  The Directors of the Company who served during the year and up to the date of approval of the financial statements are as follows:

• John Varney

  (Non-Executive Chairman/Director) (to 1 December 2025)

• Tom Crawford

  (Non-Executive Chairman/Director) (from 1 December 2025)

• Peter Mayhead

  (Chief Executive Officer)

• Richard Logan (Senior Independent

  Non-Executive Director)

• Chris Errington

  (Non-Executive Director) (to 31 March 2026)

• Oliver Scott

  (Non-Executive Director) (from 31 March 2026)

  Short biographies of each director are provided on pages 18 to 19.

  Details of the Directors' service contracts, letters of appointment, disclosure of interests in shares and options, are given in the Remuneration Report on pages 31 to 33. During the year the Group maintained insurance providing liability cover to its Directors and officers.

  BOARD CHANGES AND SERVICE CONTRACTS

  During the year, the following Board changes took place:

  John Varney, Non-Executive Chairman, retired from the Board on 1 December 2025.

  Tom Crawford was appointed Non-Executive Chairman of the Company on 1 December 2025.

  The Directors' service contracts and letters of appointment are available for inspection by appointment during business hours on any weekday between the date of the notice and the Annual General Meeting at the Company's registered office and at the venue of the Annual General Meeting from 15 minutes prior to the commencement until its conclusion. Should a stakeholder wish to inspect the service contracts we request that you register to do so by email at investors@pebble.tv or by telephone by calling +44 (0) 75 55 59 36 02 so that an appointment may be arranged.

  Please see the AGM Notice that accompanies this report, and page 23 for details of our AGM.

  After the reporting period, on 31 March 2026 Chris Errington stepped down as a Non-Executive Director of Pebble, and Oliver Scott was appointed to the Board as a Non-Executive Director on 31 March 2026. Oliver

  also succeeded Chris as Chairman of Pebble's Remuneration Committee. Oliver is a Managing Partner of Kestrel, Pebble's largest shareholder.

  MATERIAL INTEREST IN CONTRACTS

  No director, either during or at the end of the financial year, was materially interested in any significant contract with the Group or any subsidiary undertaking.

  SHARE CAPITAL

  Details of the Group's share capital are shown in note 23 to the consolidated financial statements.

  The Group's share capital comprises one class of ordinary shares and as at 27 April 2026 there were in issue

  126,603,134 fully paid ordinary shares of 2.5 pence each. All shares, except for those held by the employees' share trust, are freely transferable and rank

  pari passu for voting and dividend rights.

  The Group has been notified of the following beneficial interests in more than 3 per cent of the Company's issued share capital as at February 2026.

  Percentage Shareholder shareholding

  Kestrel Partners LLP	24.60%
  Dowgate Capital	10.19%
  Hawk Investment Holdings Limited	7.89%
  Hargreaves Lansdown Nominees Limited	7.81%
  Interactive Investor	7.32%
  Mr M Bennett	3.37%

  AJ Bell, Stockbrokers 3.36%

  FINANCIAL RISK MANAGEMENT

  The Group's policies on financial risk management are set out in note 3 to the consolidated financial statements.

  ENVIRONMENTAL AND SOCIAL RESPONSIBILITY

  In addition to our commitment to robust governance the Board also considers, where appropriate, the significance of environmental and social matters.

  The following matters fall under the broad definition of Social and Environmental Responsibility:

  OUR EMPLOYEES

  The Group consider our employees to be our greatest asset and critical to the success of our business. We

  believe that happy employees, working in a motivated environment, directly contribute to our strategy, performance and reputation.

  The Board has a keen interest in the development and morale of the employees. The Group provides employees with access to training

  carried out both within the organisation and on external accredited courses that are relevant to an employee's role and development.

  We have lines of communication in place to ensure that employees are consulted with and kept informed of issues relevant to them.

  Clear statements of behaviour and work ethics of employees are explained in detail within our staff handbook, which includes our Policies on Anti-Bribery; Whistle-blowing; Gifts and Entertainment; Share Dealing; Systems, Internet and Email; Social Networking; Capability Procedures; Disciplinary Procedure; Capability/Disciplinary Appeal Procedure; Grievance Procedure; Personal Harassment

  Policy and Procedures; and our Equal Opportunities Policy.

  REMOTE WORKING

  The business has operated a fully remote working model since 2022 and this strategic move delivers operational benefits in terms of resilience, organisational growth and employee satisfaction.

  Internal staff surveys conducted since our move to remote working have shown that the benefits of less

  commuting time, greater flexibility and better work-life balance, have resulted in increased productivity and happy employees, and gives us more scope to ensure we have a global, highly capable, and flexible employee base.

  With remote working, the business is able to attract the best talent from anywhere in the world.

  In our remote working world, our employees have the opportunity to arrange face-to-face meetings with their colleagues, use of our

  communication platforms, and we hold an annual two-day All-Staff Conference which brings all employees together.

  This face-to-face event has a theme of making connections and building

  and maintaining relationships between employees, partners, and customers.

  OUR COMPANY VALUES

  We are proud of our Company Values which our employees live by and demonstrate across our working day. Our values positively influence how and why we do things and sum up what our company culture stands for.

  As a result of ensuring we always work with our Company Values in mind, we have built stronger and deeper relationships with our customers through both good and challenging times.

  BE THE EXPERT

  We are proud of our expertise and enthusiastic about sharing knowledge. We are always learning.

  DIRECTORS' REPORT CONTINUED

  FIND A SOLUTION

  We are agile and versatile. We will not give up.

  DO THE RIGHT THING

  We operate with integrity, openness and honesty to earn and deserve trust.

  SUCCESS THROUGH PARTNERSHIP

  We are passionate about the power of collaborative, supportive relationships.

  EVERY PEBBLE MATTERS

  We embrace talent, treat each other with respect, and work to build a friendly, supportive environment.

  OWN YOUR SUCCESS

  We will take responsibility for ensuring we have what we need, to be successful in our roles and future ambitions.

  OUR EQUAL OPPORTUNITIES POLICY

  The Group adopts a formal equal opportunities policy.

  HEALTH AND SAFETY

  It is the policy of the Group to ensure the health and welfare of employees by maintaining a safe place of work and this now includes how our employees operate remotely. This policy is based on the requirements of national employment legislation in the countries where the Group operates, including the Safety, Health and Welfare at

  Work Act 1989.

  ENVIRONMENTAL MANAGEMENT

  The Group is committed to minimising our impact on the environment by reducing our waste and carbon footprint through energy management and recycling schemes.

  Our shareholders are encouraged to receive communications from the

  company in electric form thus helping to reduce environmental impact. The majority of our annual reports and AGM notices are received electronically by our shareholders, who receive notification of when and how to electronically access the documents by simply clicking on the links we provide. For those shareholders who wish to continue to receive printed copies, the documents are posted.

  DIRECTORS' INDEMNITY INSURANCE

  A Directors' and Officers' liability insurance policy is maintained for all Directors.

  STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

  The Directors are responsible for preparing the group Strategic Report and Directors' Report and the financial statements in accordance with applicable law and regulations. The Directors are also responsible for ensuring that they meet their responsibilities under the AIM Rules.

  Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the

  financial statements in accordance with UK-adopted international accounting standards. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the company and group for that period.

  In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable

  and prudent;

• state whether applicable UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

  The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

  The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and

  dissemination of financial statements may differ from legislation in other jurisdictions.

  DISCLOSURE OF INFORMATION TO THE AUDITOR

  In the case of the individuals who are Directors of the Company at the date when this report was approved:

• so far as each of the Directors is aware, there is no relevant audit information of which the Group's auditor is unaware; and

• each of the Directors has taken all the steps they ought to have taken individually as a director in order to make themselves aware of any relevant audit information and to

establish that the Group's auditor is aware of that information.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held on Wednesday 24 June 2026. Please see the AGM Notice that accompanies this report for details.

Share capital resolutions will be proposed at the Annual General Meeting to renew for a further year the Directors' authority to allot equity securities for cash other than to existing shareholders on a pro rata

basis and to authorise purchases by the Company of its own shares.

GOING CONCERN BASIS

The Directors are required to assess the Company's and the Group's ability to continue to trade as a going concern.

At 31 December 2025, the Group's net debt (excluding IFRS 16 leases) was £1.9 million, comprising cash of

£1.6 million and the term loan from Santander of £3.6 million.

We enjoy a close relationship with our bank and have regular review meetings with them. In April 2026, we agreed an extension to the existing loan through to 28 April 2028, maintaining the

£3.6 million loan facility at the same level of commitment, with repayment levels of £1.0 million consistent

with previous years and appropriate financial covenants. There have been no breaches in financial covenants to date and no breaches are anticipated in the going concern period. Following the conclusion of the re-structuring process, management are forecasting a stronger cashflow forecast through 2026.

The Directors are confident that any loan extensions required post April 2028 would be granted on reasonably similar terms given the historic track record.

To assess the appropriateness of preparing financial statements on a going concern basis, management prepared detailed projections of the consolidated statement of profit and loss, the statement of financial position and cash flow statements through to April 2027. This review period extends to April 2027, which is looking forward 12 months beyond the date of approval of these financial statements. The projections were tested against the debt service cover covenants required by the loan facility.

These projections used the forecast for 2026 and were updated for current trading and forecasts. This analysis was then extended to the end of April 2027. The projections were stress tested in two ways. Project orders

for 2026 were reduced by 50%, then reduced by 50% with 20%

loss in SLA revenue applied. The existing support service contracts, where revenue is recognised over time were assessed based on historic renewal rates, to establish the likely renewal of this recurring revenue.

Management reviewed the levels of marketing and discretional bonus spend to mitigate any reductions in revenue. Even with the revenue drop, management concluded the business will remain a going concern. The Board has concluded from its thorough assessment of the detailed forecasts and ability to enact any mitigating actions, if required, that the Group

will have sufficient resources to meet its liabilities during the review period through to April 2027, that it will meet the bank covenants and that it is appropriate that the Group and the

Company prepare accounts on a going concern basis.

INDEPENDENT AUDITOR

The independent auditor, S&W Audit (a trading name of S&W Partners Audit Limited, formerly CLA Evelyn Partners

Limited), has indicated its willingness to continue in office.

A resolution to re-appoint S&W Audit as auditor will be submitted to shareholders for approval at the 2026 Annual General Meeting.

The Strategic Report and Directors' Report were approved and signed by order of the Board.

Tom Crawford

Non-Executive Chairman 27 April 2026

As Non-Executive Chairman, I am responsible, together with the Board, for ensuring the Company's long-term success and for upholding robust standards of corporate governance.

These standards are fundamental to maintaining business integrity, appropriate strategy and sustaining

the confidence of our shareholders and wider stakeholders.

The Group is committed to embedding honesty, integrity and fairness across its culture and operations. With an international presence, we comply with local laws and customs, uphold high standards of business practice, and operate with respect for the cultures of the countries in which we do business.

In accordance with AIM Regulation, the Board has regard to the 2023 QCA Corporate Governance Code (the "QCA Code") and applies its principles as appropriate, taking into account the Company's size, structure and operational profile.

Further information on governance requirements for AIM-listed companies is available on the Group's website at https://www.pebbleplc.com.

The Board periodically reviews the Group's governance framework to ensure it remains appropriate, effective and aligned with the Group's evolving scale, activities and resources.

Further details of the requirements for AIM companies can be found on the Group website at https://www.pebbleplc.com.

THE ROLE OF THE BOARD

BOARD COMPOSITION AND OPERATION

During 2025 and up to the date of publication of this report, the Board consists of the following Board members:

John Varney

(Non-Executive Chairman) (to 1 December 2025)

Tom Crawford

(Non-Executive Chairman) (from 1 December 2025)

Richard Logan (Senior Independent

Non-Executive Director)

Peter Mayhead

(Chief Executive Officer)

Oliver Scott

(Non-Executive Director) (from 31 March 2026)

Chris Errington

(Non-Executive Director) (to 31 March 2026)

The Board considers the current governance arrangements appropriate for the size and structure of the Group. Board meetings are attended by the Non-Executive Chairman, the Senior Independent Non-Executive Director, a Non-Executive Director, the CEO and the Head of Finance, with the Company Secretary also in attendance. The Board operates in accordance with a formal schedule of matters reserved for its decision, which is reviewed annually.

KEY MATTERS INCLUDE

Strategy and values; Corporate governance; Annual operating and expenditure budgets; Treasury policies; Significant capital and revenue projects; Risk management strategies including approach to/appetite for

risk; Systems for internal control; Board and key management appointments; Remuneration policies; Acquisitions and disposals; and any other matter which has a material consequence for the Group.

The Board delegates all authorities to senior management other than those contained in the schedule of

matters reserved to the Board, on the understanding that they will, at all times, act in accordance with the best interests of the Group, its shareholders and staff. Their actions will be consistent with the Group's financial and strategic plans and objectives and in conformity with relevant legislation and best practice, and they will report regularly to the Board on the execution of these responsibilities.

In addition, the Board has established three permanent committees: the Audit Committee, the Nomination Committee, and the Remuneration Committee. These operate within defined terms of reference, which are reviewed by the Board annually. Full details of the terms of reference are provided on the Group website at https://www.pebbleplc.com.

The Board meet up to twelve times during the year, excluding ad hoc meetings convened solely to deal with procedural matters. Attendance at Board and Committee meetings during 2025, expressed as the number of meetings attended compared to the number entitled to attend, was as follows:

TIME COMMITMENT

The Executive Directors are expected to devote substantially the whole of their time, attention and ability to their duties, whereas, as one would expect, the Non-Executive Directors have a lesser time commitment. The Non-Executive Chairman has committed to spend as much time as is required to meet the needs of the business. It is agreed that each of the Non-Executive Directors will dedicate the equivalent of 2 days per month. The Non-Executive Directors have all confirmed that they are able to allocate sufficient time to meet the expectations of their role,

and they are required to obtain the Non-Executive Chairman's agreement (or, in the case of the Non-Executive Chairman, the Chief Executive's agreement) before accepting additional commitments that might affect the time they are able to devote.

BALANCE AND SIZE

The Directors consider that the Board is well-balanced and appropriate for the scope and activities of the Group.

Where Directors are unable to attend Board meetings they are advised

of the matters to be discussed in advance of the meeting and given the opportunity to provide their views to the Non-Executive Chairman or Senior Independent Non-Executive Director.

In addition to the formal scheduled meetings the Board holds informal discussions with the Executive Director and senior operational managers

on strategy, business development, product, delivery, staff and talent and other topics important to the Group's progress throughout the year.

APPOINTMENT AND ELECTION OF DIRECTORS

The rules governing the appointment and replacement of Directors are

set out in the Company's Articles of Association. The Company's Articles of Association require any new director appointed by the Board to retire

from office and offer themselves for election by shareholders at the next Annual General Meeting following their appointment and at least once every three years thereafter.

For our 2026 AGM, Tom Crawford and Oliver Scott will stand for election having been appointed as directors

of the Company by the Board since the previous AGM. Richard Logan and

Peter Mayhead will voluntarily stand for re-election by shareholders.

All Directors have been elected or

re-elected within the last three years. The Board supports the election of Tom Crawford and Oliver Scott, and the

re-election of Richard Logan and Peter Mayhead, and confirms that, having taken into consideration the results of the performance evaluation undertaken in the year, the Directors being

proposed for election and re-election have demonstrated commitment to their responsibilities and continue

to perform effectively, and subject to shareholder approval will be

reappointed for a further three years.

Biographical information for each of the Directors are set out on pages 18 to 19.

NON-EXECUTIVE CHAIRMAN

John Varney, who had been with the Group since October 2011, initially as Non-Executive Director followed by his appointment as Non-Executive

Chairman in 2017, stepped down from the Board on 1 December 2025. During the year John was supported by the two Non-Executive Directors.

Tom Crawford was appointed as Non-Executive Chairman on 1 December 2025 and will be supported by the two Non-Executive Directors.

SENIOR INDEPENDENT DIRECTOR

Shareholders can seek to raise any concerns they may have with the Senior Independent Director, where they have not been addressed through the normal channels of Non-Executive Chairman and Group Company Secretary, or where these channels are not deemed appropriate. The Senior Independent Director is responsible for leading the other Non-Executive Directors in the annual evaluation review of the performance of the

Non-Executive Chairman.

THE NON-EXECUTIVE DIRECTORS

The Non-Executive Directors bring external view and insight to the Board, providing a range of experience and knowledge from other industry sectors. The terms of appointment for the

Non-Executive Directors are available for inspection, by appointment, at the Group's registered office during normal business hours and at the AGM venue for 15 minutes prior to, and during, the Annual General Meeting.

THE COMPANY SECRETARY

The Company Secretary is responsible for ensuring all appropriate information is with the Board and its Committees

in order for them to make appropriate decisions. They are also responsible for reporting on all corporate governance issues to the Board.

RESPONSIBILITY FOR RISK AND INTERNAL CONTROL

The Board has overall responsibility for the Group's system of internal control although it should be recognised that it can provide only reasonable and not absolute assurance against material misstatement or loss. The Board considers the control structure if there are any internal structural changes throughout the year

The Directors confirm that there is an internal control framework and an ongoing process for identifying, evaluating and managing significant risks faced by the Group, which is reviewed by the Board, and that this process was in place throughout the

year ended 31 December 2025 and up to the date of this report.

The Group has an internal control system in place which is designed to protect shareholders' investments by safeguarding the assets of the Group and facilitating its efficient operation. The Board considers that appropriate internal controls are integral to the sound management of the Group, and it is committed to maintaining financial, operational and risk management control over all its activities.

The Board aims to take business risks in an informed and proactive manner, such that the level of risk is aligned with the potential business rewards. Management reviews risk exposures against current business risk level tolerances. The aim of risk

management is to provide reasonable assurance that the risks associated with achieving business objectives are understood and that these risks are

being responded to appropriately at all levels within the organisation.

The key elements of internal control within the Group to monitor the key risks are described below:

CONTROL ENVIRONMENT

There is a clear organisation structure in place, levels of authority are

well defined and responsibility for operational control of the business is delegated to senior managers.

Whilst management guidelines and a comprehensive management reporting package are in place, the Group also monitors these controls by other means including internal review.

IDENTIFICATION AND EVALUATION OF RISKS AND CONTROL OBJECTIVES

The Board has the primary responsibility for identifying and evaluating the major risks facing the Group and developing appropriate policies and procedures to manage them. It identifies the key risks faced by the Group, and delegates

responsibility for managing those risks to executive and senior management. The effectiveness of the risk control procedures in place is reported to the Board on at least an annual basis.

FINANCIAL REPORTING

The Group operates a comprehensive budgeting, financial reporting and forecasting system. The operating segment is required to complete management accounts on a monthly basis which compare actual results with budget, forecast and prior year; these are reviewed at both executive and Board level meetings to ensure that variances and discrepancies are identified and acted upon on a timely basis.

Towards the end of each financial year the operating departments prepare budgets for the following year. The Board reviews budgets before they are formally adopted. The Group reports to its shareholders at the half year and full year-ends.

MAIN CONTROL PROCEDURES AND MONITORING SYSTEMS USED BY THE BOARD

There are a number of key control procedures in place that are reviewed by the Board. These cover the key risks faced by the Group and are predominantly of an operational and financial nature.

The Group finance function consolidates the Group results monthly, and a financial review is presented at each Board meeting, accompanied

by appropriate Key Performance Indicators for the Group. The Group compiles forecasts of profits and cash flows reflecting current expectations, which are also monitored by the Board. Reviews of the performance and financial position of the Group are included in the Chairman and Chief Executives Report and the Strategic Report on pages 3 to 5, and 6 to

17. The Board uses these, together with the Directors' Report on pages 20 to 23, to present a balanced and understandable assessment of the Group's position and prospects.

In addition, the Board considers the following matters:

COMMERCIAL RISK

Significant commercial contracts are reported to the Board and are controlled by the use of appropriate vetting processes and authorisation levels.

INVESTMENT APPRAISAL

The Group has a clearly defined framework for controlling and reporting acquisitions, disposals and capital expenditure including the use of appropriate authorisation levels.

LEGAL MATTERS

Significant litigation and legal matters are reported to the Board.

OPERATING BUSINESS FINANCIAL CONTROLS

The executive management has defined the financial controls and procedures that each operating department is required to comply with. Key controls over major business risks include reviews against Key Performance Indicators and exception

reporting. The operating departments make periodic assessments of exposure to major business risks and the extent to which these risks are controlled.

These are reviewed by the executive management.

STRATEGIC PLANNING

The executive management are responsible for keeping the Board appraised of the execution of the Group strategy. The Board reviews strategic plans as part of the ongoing business planning process and has been closely involved in the review of the strategy undertaken during 2025.

COMPUTER SYSTEMS

Much of the Group's financial management information is processed by and stored on computer systems. Accordingly, the Group has established controls and procedures over the security of data held on computer systems.

The Group holds a Cyber Essentials Certificate of Assurance award. This is a UK government backed scheme to ensure a level of best practice in IT platform management. This helps

drive our IT based processes to ensure our systems and tools are secure and maintained.

The Company engages with the DPP security initiative and are active

members in industry groups supported by the UK National Cyber Security Centre (NCSC), for sharing best practice and keeping up to date with industry security considerations.

INSURANCE

The Group's programme of insurance covers the major risks to the Group's assets and business and is reviewed annually by the Board.

INTERNAL AUDIT

The Group does not have an internal audit function although the head office team fulfils some functions of an internal audit department. The Directors believe the Group falls into the category of small for this purpose.

The Audit Committee reviews the need for an internal audit department at least annually.

BOARD PERFORMANCE EVALUATION

During Q1 2026 the Non-Executive Chairman, on behalf of the Board, conducted a Board Effectiveness Review (BER) for FY2025 in accordance with the QCA Code for Board evaluation.

Board discussions considered: Value creation: how well are the purpose, strategy and culture being

developed and communicated? Value transformation: how effective is the business model, the relationship

with stakeholders, the management and the mitigation of principal risks and uncertainties? Value protection: how effective is the monitoring and measurement of business performance and the quality of policies governance and compliance?

The BER for FY2025 consisted of an open discussion of Board performance in respect of the three headline topics mentioned above. This qualitative process of open discussion with each Board member present, considered how well we performed against the goals set by the framework we set ourselves as a Board. This enables executive and Non-Executive Directors to express views on the degree to which the Board fulfilled

its responsibilities and achieved best practice in the past year.

The Non-Executive Chairman drew together the findings of the review and reported them to the whole Board at the next Board meeting.

The Board Effectiveness Review indicates a strong overall performance. The Board is operating effectively,

with clear governance structures and a focus on strategy, business model and performance to promote long-term value for shareholders.

The Board demonstrates a clear understanding of the company's purpose, market environment and strategy , and allocates appropriate time to strategic oversight and performance review. Engagement with shareholders is constructive and transparent, with a good balance achieved between shareholder expectations and the long-term interests of the business.

There is commitment to ethical standards and wider stakeholder responsibilities.

Appropriate policies and practices are in place, supported by a culture that

encourages openness and accountability, alongside increasing awareness of environmental and social impact.

Risk management and internal controls are well embedded, with the Board maintaining clear oversight of key risks and mitigation plans. The Board operates as a balanced and effective team, with diverse skills and experience, open discussion, and constructive challenge supporting robust decision making.

The Board remains committed to ongoing evaluation and development, with governance frameworks and committee structures considered fit for purpose and aligned with good practice. Overall, the review reflects

a good standard of governance with scope for further refinement.

THE AUDIT COMMITTEE

MEMBERSHIP AND DUTIES

In the period, Richard Logan chaired the Audit Committee. John Varney (until 1 December 2025) and Chris Errington served on the Committee throughout the year. From 1 December 2025 following his appointment to the Board, Tom Crawford served on the Audit Committee.

The Committee also meets with the external auditor without the presence of the Executive Directors, for independent discussions.

The Audit Committee's responsibilities include: making recommendations to the Board regarding the appointment of the external auditor based on its review of the scope of work, cost-effectiveness and independence of the external auditor; keeping under review the effectiveness of the Group's system of internal controls and risk management and reporting to the Board its findings; monitoring the financial reporting process; reviewing and challenging the actions and judgements of management in relation to the interim and annual financial statements before submission to the Board; reviewing

the Company's arrangements for its employees to raise concerns in

confidence about possible wrongdoing; and reviewing the Company's procedures for detecting fraud.

In order to ensure the independence and objectivity of our auditor, S&W Partners Audit Limited, the Committee regularly reviews the remuneration received by them for audit and audit-related services. These reviews ensure a balance of objectivity, value for money and compliance with our requirement for independence. S&W Partners Audit Limited did not undertake any non-audit related work in FY25.

The Audit Committee confirms that it conducted an assessment of the external auditor and determined that adequate policies and safeguards were in place to ensure that their

independence and objectivity had not been impaired during 2025.

ACTIVITIES OF THE AUDIT COMMITTEE

The Audit Committee met twice during 2025 and once up to the date of publication of this report in 2026 and reported its conclusions to the Board.

In these meetings the Audit Committee:

• reviewed the accounting policies;

• reviewed the announcement of the financial results of the Group for the years ended 31 December 2024 and

  31 December 2025 prior to approval by the Board;

• considered and reviewed the 2024 and 2025 annual reports and financial statements, paying

  particular attention to critical areas of management judgement, together with the external auditor's findings reports on the annual reports;

• considered, discussed and approved the audit plan with the external auditor for the 2025 audit;

• considered and recommended to the Board the appointment of the auditor which will be put to shareholders for approval at the AGM;

• reviewed and considered the Audit Findings Report from the external auditor at the conclusion of their audit, and reported to the Board on the results of the review;

• reviewed the reports from management on the Group's main risks and the assessment and mitigation of those risks;

• approved the statutory audit fee for 2025;

• monitored the independence and undertook an evaluation of the effectiveness of the external auditor;

• reviewed useful life of intangible assets;

• challenged the impairment of intangible assets in the financial results for the year ended

  31 December 2025;

• reviewed the policies introduced to comply with the UK Bribery Act 2010;

• reviewed the policies introduced to comply with the Economic Crime and Corporate Transparency Act (ECCTA); and

• reviewed the Code of Conduct which sets out how the Group's employees are able to raise concerns over financial or other irregularities in confidence. This policy was in place throughout the year.

In addition, the Audit Committee reviewed the need for an internal audit department and concluded that there was not a requirement given the present size of the Group and internal

control reviews undertaken by the head office function.

A resolution to re-appoint S&W Audit as auditor will be submitted to shareholders for approval at the 2026 Annual General Meeting.

FINANCIAL REPORTING

During the year, the Audit Committee reviewed the appropriateness of the Group's interim and full year financial statements, including the consideration of significant financial reporting judgements made by management taking into account reports from management and the external auditor. The main areas of focus considered by the Committee during the year were

as follows:

Area of focus How addressed

VALUATION OF GOODWILL AND INTANGIBLE ASSETS

The audit committee reviewed the valuation of goodwill and intangible assets to ensure assets are valued correctly and not overstated in the context of the trading performance of the relevant cash generating units.

INVESTMENTS IMPAIRMENT ASSESSMENT

The audit committee reviewed the valuation of investments held in subsidiary companies, including any impairment below carrying value which could have a material impact on the parent company's financial statements.

GOING CONCERN

The audit committee has reviewed the forecast which shows steady costs and an increasing revenue which is driving an increasing profit. They have also considered sensitivities within the forecast.

The audit committee agreed that the conclusion that no impairment was required for either goodwill or intangible assets was reasonable.

The audit committee agreed that the conclusion that no further impairment was required for the trading entities was reasonable.

The audit committee is satisfied that there is sufficient headroom within the forecast.

THE NOMINATION COMMITTEE

During the year, until stepping down from the Board on 1 December 2025, John Varney chaired the Nomination Committee. Richard Logan and Chris Errington served on the Committee throughout 2025. The Group Company Secretary also attends the meetings.

Following his appointment as Non-Executive Chairman on 1 December 2025 Tom Crawford was appointed Chairman of the Nomination Committee and was supported by Richard Logan and Chris Errington.

The Nomination Committee reviews the structure, size and composition of the Board and its committees.

There was one formal meeting of the Committee during the year.

THE REMUNERATION COMMITTEE

Details of the Remuneration Committee are provided in the Remuneration Report as set out on pages 31 to 33.

RELATIONS WITH SHAREHOLDERS

The Board welcomes enquiries from both institutional and private investors throughout the year and responds either verbally or in writing to enquiries received from both. The Non-Executive Directors are available to attend meetings with shareholders if they are requested to do so.

The Group, via its website, provides information on the Group, including all stock exchange announcements and downloadable copies of the most recent report and financial statements and interim statements. The website

also provides a communication channel to the Group via email. Shareholders may elect to receive all shareholder documents electronically by registering with the Group's registrars.

The Group uses its AGM as an opportunity to communicate with its shareholders and encourages their participation. As in previous years, shareholders will have the opportunity for a question and answer session with members of the Board at the next AGM on 24 June 2026.

Further details are included in the notice of the meeting which separately accompanies the annual report and can be viewed on the Company's website: https://www.pebbleplc.com.

The notice of the AGM is sent to shareholders, and is available on the Company website, at least 21 clear days in advance of the date of the meeting and contains details of the separate resolutions that are proposed for shareholder approval. Separate resolutions are proposed on each substantially different issue and the number of proxy votes cast

for each resolution is disclosed by the Chairman at the meeting. Shareholders have the option of submitting their voting instructions electronically or by returning the personalised proxy form which separately accompanies the annual report.

Documents relating to the Company's governance and the full terms of reference of its standing Committees are also available on the Company's website: https://www.pebbleplc.com.

By order of the Board

Tom Crawford

Non-Executive Chairman 27 April 2026

As Chairman of the Remuneration Committee, since my appointment to the Board on 31 March 2026, I am pleased to present the Group's remuneration report for the financial

year ended 31 December 2025, which has been approved by the Board.

Other members of the Committee that served throughout the year were John Varney (to 1 December 2025), Chris

Errington (to 31 March 2026), Tom

Crawford (from 1 December 2025), and Richard Logan.

As the Group is not required to provide a directors' remuneration report in accordance with schedule 8 to SI 2008/410, this disclosure is made voluntarily and is not intended

to comply with all the requirements of schedule 8 of SI 2008/410.

COMMITTEE ACTIVITIES

The Remuneration Committee's main responsibility is to ensure that remuneration of executives is appropriate and aligned with shareholder interests, producing

sustainable value creation through the delivery of our business strategy.

The responsibilities of the Committee are to advise upon and make recommendations to the Board on the Company's remuneration policies and, within the framework established by the Board, to recommend the remuneration of the Executive Directors. The remuneration of Non-Executive Directors is a matter for the

Board as a whole and is recommended by the Executive Directors taking account of the time spent on Board and Committee matters. No director plays a part in any discussion about his own remuneration.

No member of the Committee has any personal financial interest in the Company or Group (other than as a shareholder or director) and there are no conflicts of interest arising from cross-directorships or day-to-day involvement in running the business.

The Committee measures the performance of the Executive Directors as a prelude to recommending their annual remuneration, bonus awards and share plan awards to the Board for final determination.

The focus of the Committee is on ensuring that a competitive and appropriate base salary is paid to directors and where appropriate senior managers, together with incentive arrangements that are aligned with shareholders' interests and with

long-term business strategies, being transparent, and measured against challenging benchmarks.

REMUNERATION REPORT PART A (NOT SUBJECT TO AUDIT)

REMUNERATION POLICY

The date from which it is intended by the Company that the remuneration policy is to take effect is 1 January 2026.

Each year, the Remuneration Committee reviews the remuneration policy, taking into account both the external market (including environmental, social and corporate governance issues) and the Company's strategic objectives over

the short and the medium term. The framework has been designed as an integral part of the Company's overall business strategy.

The following table summarises the key routine elements of remuneration policy:

AND FEES

ALL BENEFITS

retain high-calibre individuals by providing an appropriate level of basic fixed income whilst avoiding excessive risk arising from over-reliance on variable income.

The basic salary reflects the market rate for the individual, their role, skills and experience.

To aid retention and be competitive in the marketplace.

Healthcare benefits in order to minimise

Set with reference to individual performance, experience and responsibilities.

Benchmarked against appropriate companies by the Remuneration Committee.

Non-Executive Directors are paid a fee consistent with market rates.

Car allowance (CEO) Medical insurance (CEO)

Permanent health insurance (CEO) Life assurance (CEO)

salary and fees

CEO up to

£20,000

N/A

internal budgets and, where applicable, investors'

POLICY ON PAYMENT FOR LOSS OF OFFICE

All payments due will normally be made in accordance with the Contract of Employment and Service Agreement of the executive concerned and will be sufficiently detailed to ensure transparency.

REMUNERATION REPORT PART B (SUBJECT TO AUDIT)

REPORT ON EXECUTIVE DIRECTORS' EMOLUMENTS

Directors' emoluments and pension contributions for the year ended 31 December 2025 were as follows:

The fee for the services of Chris Errington is paid to Kestrel Partners LLP and not to Chris Errington directly (see note 27).

DIRECTORS' INTERESTS IN SHARES

The table below shows the interests of the Directors in office in the share capital of the Company.

*Chris Errington is a partner of, and during 2025 held a beneficial interest in, Kestrel Partners LLP. Mr. Errington is also a shareholder in one of Kestrel's Clients ("Kestrel Kappa Investments Ltd") and is therefore deemed to have a beneficial interest in Kestrel Kappa Investments Ltd.'s entire legal holding in Pebble.

Kestrel Kappa Investments Ltd holds 865,058 Shares, and other clients of Kestrel, in which Mr Errington has no beneficial interest, hold 29,828,494 Shares. On a combined basis, Kestrel indirectly holds voting rights over 30,693,552 Shares in Pebble, which represents 24.63% per cent of Pebble's issued share capital.

DIRECTORS' INTEREST IN SHARE AWARD SCHEMES

The interests of the directors in share award schemes were as follows:

1 Granted under the 2019 Share Option Scheme and 1,483,333 vested at 31 Dec 2025 (2024: none vested).

2 Granted under the 2019 Share Option Scheme and all vested at 31 Dec 2025 (2024: all vested).

Further details concerning share option schemes can be found in note 23.

Post year-end on 23 February 2026 Peter Mayhead exercised, in aggregate, 2,000,000 options over ordinary shares of 2.5p each ("Ordinary Shares" and "Options") at an exercise price of 6.18 pence per Ordinary Share.

Following the above transactions Peter Mayhead holds 1,245,109 Ordinary Shares, which represents approximately 0.98 per cent of Pebble's issued share capital following Admission.

POLICY REPORT APPROVAL

This report was approved by the Board of directors on 27 April 2026 and signed on its behalf by:

Oliver Scott

Non-Executive Director

Chairman of the Remuneration Committee

OPINION

We have audited the financial statements of Pebble Beach Systems Group plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Consolidated statement of profit and loss and statement of comprehensive income and Company statement of comprehensive income, the Consolidated and Company statement

of financial position, the Consolidated and Company statement of changes in shareholders' equity, the Consolidated and Company statement of cashflows and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards.

In our opinion the financial statements:

• give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2025 and of the group's and of the parent company's profit for the year then ended;

• of the group and of the parent company have been properly prepared in accordance with UK-adopted international accounting standards; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

  BASIS FOR OPINION

  We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

  OUR APPROACH TO THE AUDIT

  The Group comprises of eight reporting components. Three components were subject to audit procedures for Group reporting purposes. Four non-trading subsidiaries, which were subject to restructuring in the prior year, have now entered liquidation and were therefore assessed as out of scope for the current year's Group audit. In addition, one trading subsidiary that was audited in the prior year is no longer material to the Group as has been assessed as out of scope. As a result, audit procedures were performed over three components in the current year.

  The scope of our work encompassed 100% of the group's revenue, 99% of the group's profit before tax, and 97% of the group's net assets.

  KEY AUDIT MATTERS

  Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period, and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the

  financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

  Key audit matter Description of risk How the matter was addressed in the audit

  Revenue recognition (group) - see note 2 of

  the consolidated financial statements

  The specific nature of the risk of material misstatement in revenue recognition has been noted in contracts that span the year-end, with a particular focus on professional services revenue.

  Revenue is a key performance indicator of the Group. Revenue based targets may place pressure on management to distort revenue recognition.

  The Group enters into contracts that involve complex development that will take a number of months to complete.

  Estimating the required number of man-days for a project involves

  significant judgement, which impacts the portion of revenue recognised within the financial year. As a result, there is a risk that revenue in relation to open projects that span year end is not recognised appropriately.

  Our audit work included, but was not restricted to the following:

• Performed walkthroughs to obtain an understanding of processes and controls governing recognition of

  revenue and assessed the design and implementation of processes and controls applied;

• Performed substantive testing on a sample of revenue transactions in the year to evaluate whether the accounting policies adopted by the directors are

  in accordance with the requirements of IFRS 15: Revenue from Contracts with Customers, and whether management accounted for revenue in accordance with the accounting policies;

• We developed an understanding of the key performance obligations by obtaining copies of a sample of

  contracts and evaluated management's assessment of performance obligations, allocation of contract proceeds and subsequent revenue recognition to determine whether the revenue has been recognised in accordance with the terms of contract and revenue recognition policy;

• Assessed whether revenue recognition aligns with the requirements of IFRS 15: Revenue from Contracts with Customers by evaluating the application of accounting policies to non-cancellable contracts, including consideration of performance obligations, estimates of man-day requirements, allocation of proceeds, and timing of revenue recognition;

• We tested a sample of revenue transactions to obtain audit evidence supporting the revenue recognised during the year, such as proof of delivery of goods, approved timesheets and contracts with customers; and

• For contracts that spanned the year end, we re-calculated the expected deferred and accrued income and compared our expectations against management's calculation of revenue recognised in the year, investigating any differences where necessary.

  Key audit matter Description of risk How the matter was addressed in the audit

  Valuation of investment in subsidiaries (parent company) - see note B of the parent company's financial statement

  Recognition of a deferred tax asset

  We identified valuation of investment in subsidiaries in the parent company as one of the most significant assessed risks of material misstatement due

  to error.

  Within the parent company the total investments in subsidiaries pertains to the investment in Pebble Beach Systems Limited.

  Management has used a value in use model to assess the recoverable value of the investments held by the parent company. The value in use

  model is subjective due to the inherent uncertainty involved in forecasting

  and discounting estimated future cash flows (specifically the key assumptions around revenue growth, gross attrition rate and the weighted average cost of capital (WACC) used to discount the cash flows).

  The group recognised a deferred tax asset ("DTA") of £540k. Following a reduction in cost base, the Group has returned to profitability and forecasts that future taxable profits will be sufficient to utilise these losses.

  The assessment of recoverability of deferred tax assets requires significant judgement, particularly where there

  is a history of losses. Recoverability depends on the probability of generating sufficient future taxable profits within an appropriate timeframe and the alignment between the nature of the underlying losses and the projected taxable profits against which they may be offset (e.g., distinctions between trading, non-trading, and capital losses).

  Given these inherent judgements, we considered the recoverability of the deferred tax asset to be a key audit matter.

  Our audit work included, but was not restricted to, the following:

• Challenged the assumptions used in the impairment model for investments in subsidiaries;

• Tested the mathematical accuracy of management's model;

• Assessed the appropriateness of the impairment review methodology, assumptions concerning growth rates and inputs to the discount rate against available market data with the assistance of experts;

• Compared previously forecast revenue growth rates and gross profit margins with those achieved in previous years;

• Reviewed sensitivity analysis to calculate the minimum growth rates needed to avoid an asset impairment and compare them to those achieved in previous years;

• Engaged our internal valuation specialists to assess the WACC rate applied; and

• Assessing the accuracy and sufficiency of financial statement disclosures.

  Our audit work included, but was not restricted to, the following:

• We engaged our internal tax experts to assist in evaluating the nature and eligibility of the

  brought-forward tax losses and their availability for offset against forecast taxable profits, including consideration of relevant tax legislation;

• We evaluated management's financial forecasts, including the assumptions underpinning projected profitability. We compared these forecasts to historical performance and assessed whether they reflected the Group's operational improvements following the cost base reduction;

• We inspected supporting tax computations and documentation to confirm the nature, quantum, and utilisation criteria of the carried-forward losses;

• We tested the accuracy of management's deferred tax calculations and performed sensitivity analyses on key assumptions to understand the impact of alternative outcomes on the recoverability assessment; and

• We evaluated whether the disclosures in the financial statements appropriately describe the key assumptions and judgements applied in assessing recoverability.

  OUR APPLICATION OF MATERIALITY

  The materiality for the group financial statements as a whole ("group FS materiality") was set at £244,000. This has been determined with reference to the benchmark of the group's revenue, which we consider to be one of the principal

  considerations for members of the company in assessing the group's performance. Group FS materiality represents 2% of the group's revenue as presented on the face of the consolidated income statement.

  The materiality for the parent company financial statements as a whole ("parent FS materiality") was set at £243,000. This has been determined with reference to the benchmark of the parent company's total assets as it exists only as a holding company for the group and carries on no trade. However, since this materiality level exceeds the materiality set for the group financial statements, it has been capped at £1,000 below the group FS materiality.

  Performance materiality for the group financial statements was set at £183,000, being 75% of group FS materiality, for purposes of assessing the risks of material misstatement and determining the nature, timing and extent of further audit procedures. We have set it at this amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds group FS materiality. We judged this level to be appropriate based on our understanding of the group and its financial statements, as updated by our risk assessment procedures and our

  expectation regarding current period misstatements including considering experience from previous audits. The level of 75% was set to reflect that there are some areas of judgement and estimation in the financial statements.

  Performance materiality for the parent company financial statements was set at £182,000, being 75% of parent FS materiality. The level of 75% was set to reflect that there are some areas of judgement and estimation in the financial statements.

  CONCLUSIONS RELATING TO GOING CONCERN

  In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

  Our evaluation of the directors' assessment of the group and parent company's ability to continue to adopt the going concern basis of accounting included, but was not limited to, the following procedures:

• Reviewing bank statements to monitor the cash position of the group post year-end, and obtaining an understanding of significant expected cash outflows (such as capital expenditure) in the forthcoming 12-month period;

• Considering the group's funding position and requirements; and

• Reviewing and challenging management's loan covenant compliance calculations, including checking the accuracy of inputs, recomputing the covenant ratios, assessing key assumptions used in forecasts, and inspecting loan agreements to confirm the correct covenant definitions were applied.

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

  Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

  OTHER INFORMATION

  The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

  We have nothing to report in this regard.

  OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

  In our opinion, based on the work undertaken in the course of the audit:

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

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

  MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

  In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

  We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the directors' responsibilities statement set out on page 22, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal

control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

We obtained a general understanding of the group's legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations; the Group's policies and procedures regarding compliance; and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the Group's industry and regulations. We obtained this understanding for significant components through discussions with Group management.