32816-Lucy-Group-AR-2025 web ready spreads_FINAL

Notes to the Accounts continued

FINANCIAL STATEMENTS

7. Tax on profit on ordinary activities continued The tax assessed for the period is lower (2024: lower) than the standard rate of corporation tax in the UK of 25% (2024: 25%). The differences are explained below:

8. Earnings per share The earnings per share have been calculated using the profit attributable to shareholders of Lucy Group Limited as the numerator. This has been adjusted by a profit of £854k in 2025 (2024: £570k profit) to remove the profit attributable to the non-controlling interest.

2025 £000

2024 £000

2025 £000

2024 £000

55,570

Profit on continuing activities before tax

85,210

45,243

Profit on ordinary activities after taxation attributable to Lucy Group Limited shareholders

71,342

492

Weighted average number of shares (000s)

492

13,893

Tax charge at average UK corporation tax rate of 25% (2024: 25%)

21,303 (1,161) (5,690)

9,198p

Earnings per share

14,504p

1,103

Adjustments in respect of prior periods

(3,969)

Different tax rates applied in overseas jurisdictions

9. Dividends

904

Expenses not deductible

759 101

(2,054)

(Recognition)/derecognition of previously (unrecognised)/recognised deferred tax assets

2025 £000

2024 £000

(426)

Income not taxable

(978) (950)

274

Losses not recognised for deferred tax

Amounts recognised as distributions to shareholders in the year: Final dividend for the year to 31 December 2024: 179p (2023: 170p) per share Interim dividend for the year to 31 December 2025: 128p (2024: 122p) per share Special dividend for the year to 31 December 2025: 400p (2024: 600p) per share

(27)

Deferred tax not recognised

250

880 630

836 600

(225)

Other

(336)

9,473

Group current tax charge for the period

13,298

1,968 3,478

2,952 4,388

Factors affecting future tax charges At the balance sheet date the Group has unused tax losses of £16.4m (2024: £14.9m) available for offset against future taxable profits. A deferred tax asset has been recognised on £1.6m (2024: £19k) of these losses as it is considered probable that there will be future taxable profits available in the Group. Deferred tax assets have not been recognised on £14.8m (2024: £14.9m) of these losses because it is not probable that future taxable profit will be available against which the Group can use the benefits therefrom. Estimates and assumptions, including uncertainty over income tax treatments The Group is subject to income tax in several jurisdictions and significant judgement is required in determining the provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. As a result, the Group recognises tax liabilities based on estimates of whether additional taxes will be due. These tax liabilities are recognised when, despite the Group’s belief that its tax return positions are supportable, the Group believes it is probable that a taxation authority would not accept its filing position. In these cases, the Group records its tax balances based on either the most likely amount or the expected value, which weights multiple potential scenarios. The Group believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many factors including past experience and interpretations of tax law. Uncertain tax positions of £0.2m exist as at 31 December 2025 (2024: £0.2m). This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact income tax expense in the period in which such determination is made.

690

Dividend paid to shareholders of non-controlling interest

–

4,168

4,388

915

Proposed final dividend for the year to 31 December 2025: 186p (2024: 179p) per share

880

10. Goodwill The movements in the net carrying amount of goodwill are as follows: Gross carrying amount

2025 £000

2024 £000

3,678

Balance 1 January

3,678

6,912

Additions

– –

(162)

Impairment loss recognised

10,428

Balance 31 December

3,678

Impairment of goodwill Goodwill arising on business combinations is not amortised but is reviewed on an annual basis, or when there is an indicator that goodwill has been impaired. Goodwill acquired in a business combination is allocated to a cash-generating unit according to the level at which goodwill is monitored by management. Recoverable amounts are based on value in use, which is calculated from cash flow projections using information from the Group’s latest medium-term plans, which are reviewed by the Directors. The medium-term plans cover a five-year period; the growth rate used to extrapolate beyond the medium-term plans is zero. The key assumption used in the value-in-use calculations is the discount rate. Discount rates have been estimated based on current market assessment of the time value of money as well as future expectations for changes in market conditions. Impairment reviews were performed as at the year end by comparing the carrying amount of goodwill to the recoverable amount of each asset. The review resulted in an impairment of £162k in Lucy Electric Digital Solutions Limited in the year (2024: no changes).

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Lucy Group Ltd Annual Report & Accounts 2025

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