STRATEGIC REPORT.

CHIEF EXECUTIVE OFFICER ‘S REPORT

Business review, results and dividends

All trading and property assets of Trafalgar Property Group Plc (Group) are held in the name of the Group or its subsidiaries as follows:

Trafalgar New Homes Limited (TNH)

Trafalgar Retirement+ Limited (TR+)

Selmat Limited (Selmat)

Combe Bank Homes (Oakhurst) Limited (Oakhurst)

Combe Homes (Borough Green) Limited (Borough Green)

Life Hydroponic Assets Ltd

TNH continues to be the main trading subsidiary but given the lack of activity in Selmat, Life Hydroponic Assets Ltd and TR+ it was decided that an impairment provision be made against these inter company accounts with TPG together with provision against the associated management charges issued by TPG. The effects on the company balance sheet can be seen in note 9 to the company accounts.

Mortgages of £nil (2023: £675,698 ) exist on the properties held by Selmat and a mortgage of £450,100 (2023 – £nil) exist on the property held by TNH.

As notified in an RNS dated 29 May 2024, the company is in preliminary discussions regarding the possible acquisition of Ecap Esport Ltd, these discussions remain ongoing. Should such a transaction proceed on the currently envisaged terms, it would be classified as a reverse takeover in accordance with Rule 14 of the AIM Rules for Companies. Accordingly, the Company's shares were suspended from trading on AIM and will remain so until either the publication of an admission document setting out, inter alia, details of the proposed transaction or until confirmation is given that these discussions have ceased.

The principal activity of the Group continues to be that of a regional property developer focused upon Kent, Surrey, Sussex and the M25 ring south of London together with investment in residential property, which have a rental income of £nil (2023: £18,183). The consolidated results of the year’s trading are shown below. The consolidated loss for the year was £516,723 (2023: Loss £843,626). Management believes the key indicators of performance for the Group are the revenue and profitability achieved during the year.

Principal risks & uncertainties

Set out below are certain risk factors which could have an impact on the Group's long-term performance. The factors discussed below should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties facing the Group.

The principal risks and uncertainties facing the Group are:

1. Direct costs may escalate and eat into gross profit margins due to unexpected interest rate movements and high inflation rates putting pressure on material costs.

2. There may be uncertainty in obtaining adequate finance thus putting pressure on the going concern of the Group.

3. Heavy overheads may be incurred especially when projects have been completed and before others have been commenced.

4. The Group could commit too much to future capital projects.

5. The Group’s reliance on key members of staff.

6. The market may deteriorate, damaging liquidity of the Group and future revenues.

7. The potential reverse takeover, announced by the Group on 29 May 2024, may not complete.

The Group considers that it mitigates these risks with the following policies and actions:

1. The Group affords its bankers and other lenders a strong level of asset and income cover and maintains good relationships with a range of funding sources from which it is able to secure finance on favourable terms for the initial purchase of potential development sites. The Plc also has access to shareholder funding via placing of shares in the market. A full statement regarding going concern is shown in the accounting policies on page 23.

2. Direct costs are outsourced on a fixed price contract basis, thereby passing on to the contractor all risk of cost overspend, including from increased material, labour or other costs.

3. Most other professional services are also outsourced, thus providing a known fixed cost before any project is taken forward and avoiding the risk that can arise in employing in-house professionals at a high unproductive overhead at times when activity is slack.

4. Buying decisions for capital projects are taken at Board level, after careful research by the Directors personally, who have substantial experience in various business sectors and markets.

The Group has focused on a niche market sector of new home developments in the range of four to twenty units. Within this unit size, competition to purchase development sites from land buyers is relatively weak, as this size is unattractive to major national and regional house builders who require a larger scale to justify their administration and overheads, whilst being too many units for the smaller independent builder to finance or undertake as a project. Many competitors who also focus on this niche have yet to recapitalise and are unable to raise finance.

5. Many of the activities are outsourced and each of the Directors is fully aware of the activities of all members.

6. The Group has a corporate governance policy appropriate for a small publicly listed Company with ambitions substantially to raise its profile within the wider investor community.

7. The directors will consider alternative reverse takeover opportunities and have underpinned any cash flow implications of the current target by taking a loan from them to be used for any abort fees.

Operations review

Group turnover for the year amounted to £nil (2023: £18,183), as there was no rental income received given the remaining investment property had been disposed of during the year and this had been written down to its sale value in the 2023 accounts. The group carried forward at 31 March 2024 the costs incurred relating to the Speldhurst construction amounting to £775,374 as shown in Note 11 to the accounts.

After taking into account the overheads of the Group, there was a loss recorded for the year of £516,723 (2023: £843,626).

There will be no tax charge and the Company now has tax losses being carried forward of £6,704,650 (2023: losses £6,296,440).

The loss per share during the year was (0.15p), (2023: loss per share 0.34p).

Directors’ duties under S172

The Directors believe that, individually and together, they have acted in a way that they have consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, having regard, amongst other things, to:

a. the likely consequences of any decision in the long term,
b. the interests of the Company’s employees,
c. the need to foster the Company’s business relationship with suppliers, customers and others,
d. the impact of the Company’s operations on the community and environment,
e. the desirability of the Company maintaining a reputation for high standards of business conduct, and
f. the need to act fairly between members of the Company.

The Board of Directors is collectively responsible for formulating the Company’s strategy, which is to invest in property development but will also consider other opportunities where those prospects will better deliver growth to its shareholders as indicated by the RNS issued 29 May 2024 where the directors are in early stage discussions with Ecap Esport Ltd for a potential reverse takeover. Of course, the Board cannot predict the future but aims to make decisions that it considers are in the best interest of all shareholders at the time.

The Board engages with its stakeholders in a number of pre-planned ways, these include; review meetings with our brokers and advisors, shareholders have the ability to email the Company directly and the Board will reply to questions within the regulatory limits, the Company issues RNS communications on a regular basis and the Company’s web site is continuously updated to inform our stakeholders. The Company’s annual report is also an opportunity to update our stakeholders.

Our employees are one of the primary assets of our business and will be critical to the future success of the Company. First and foremost, the Directors strive to ensure a safe working environment for all its staff and contractors, and we are proud of our safety achievements in 2023/24. We also seek to reward employees with remuneration packages which align the interests of the Company and its shareholders with those of the employees. Employees are also provided with challenging work and external training opportunities to ensure their continual development.

The Directors believe they have acted in the way they consider most likely to promote the success of the Company for the benefit of its members as a whole, as required by Section 172 (1) of the Companies Act 2006.

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