STRATEGIC REPORT.

CHAIRMAN’S REPORT

On behalf of the Board, I present Trafalgar Property Group Plc (the Group), results for the year ended 31 March 2023 which includes one investment property sale completed in the year. The overall result continues to be disappointing, as can be seen in the attached Accounts and Strategic Report. The option we had in Leatherhead Surrey for a scheme to build seven properties has now lapsed even though planning permission was finally granted. The owners have received an offer elsewhere but will revert to us if this does not materialize.

Orchard House in Hildenborough remained on the books at 31st March 2023, however, the sale of the property was completed in September 2023 for a consideration of £940,000.

In June contracts were exchanged on a scheme in Speldhurst that had planning permission for a detached property. We reapplied for and received full planning permission for the construction of one and two bedroom apartments, however, it has since been decided that a single detached barn would be built. Build contracts have been signed and funding is in place from Lloyds Bank. This contractor is on site and the project is proceeding well.

During the year the company raised £400,000 (before costs) through the issuance of 133,333,333 new ordinary shares at a price of 0.3p per share.

Financials

The year under review saw the Group turnover at £18,183 (2022: £64,839), with a loss after tax of £843,626 (2022: Loss £486,336).

Management have performed a review of the assets and liabilities of the underlying subsidiaries which form the value of the anticipated profits on ongoing developments.

Due to the uncertainties and timing of these planning appeals, it has been agreed by management not to include any future anticipated profits of developments in their assessment.

The cash on the balance sheet at the end of the year was £17,148 (2022: £12,753) and the Group continues to have sufficient bank facilities for all planned activities.

A further share issue was undertaken on 18 August 2023 raising net proceeds of £115,000 to provide working capital for the company.

Business Environment and Outlook

No new directors were appointed to the Group in the year but James Dubois retired as Non-Executive Chairman of the Group on 23rd March 2023 due to health reasons. We all wish James the very best for the future.

The effects of the Covid-19 pandemic had affected our business since March 2020 as sales of completed units were delayed with the planning process being negatively impacted. We continue to proceed in a period of high inflation, cost of living still close to a forty year high and high interest rates. Like most businesses, we are aware of our need to conduct ourselves carefully to preserve the health of our staff and customers and to conserve our cash reserves.

Paul Treadaway

Chairman

15 December 2023

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 (Inc. 24 October 2022)

Life Hydroponic Asset Ltd was incorporated in October 2022. The subsequent acquisition of a dedicated research and development site is a step in the Company’s plan to facilitate its vertical hydroponic strategy, with opportunities for research relevant to food, cosmetic and pharmaceutical products. The parent company owns 100% share of the Company.

Mortgages of £675,698 (2022:£924,373) exist on the properties held by Selmat. The shares of the parent company are quoted on the London Stock Exchange AIM market.

The principal activity of the Group continues to be that of investment in residential property, which have a rental income of £18,183 (2022: £64,839). The consolidated results of the year’s trading, are shown below. The consolidated loss for the year was £843,626 (2022: Loss £486,336). 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.

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. 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.

Operations Overview

Group turnover for the year amounted to £18,183 (2022: £64,839), representing no sales but rental income received. Investment properties have continued to be shown in current assets this year as a result of the impending sales of the remaining properties since the year end. The gross loss includes costs written off following a termination by the vendor of the Leatherhead site amounting to £29,750. In additional, two investment properties were sold for net consideration of £649,618 and there was a loss on disposal on this of £12,382 The property portfolio was revalued at year end and this showed an decrease in value of £122,751.

After taking into account the overheads of the Group, there was a loss recorded for the year of £843,626 (2022: £486,336).

There will be no tax charge and the Company now has tax losses being carried forward of £6,296,440 (2022: losses £5,453,582).

The loss per share during the year was (0.34p), (2022: loss per share 0.34p).

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