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Report and financial statements
31 December 2025
Contents
Directors, officer and other information
Statements of directors’ responsibilities
Corporate governance statement
Statements of profit or loss and other comprehensive income
Statements of financial position
Statements of changes in equity
Notes to the financial statements
Directors, officer and other information
Directors: Carmelo Hili Claudine Cassar Dorian Desira Karen Pace Massimiliano Eugenio Lupica Peter Hili (appointed on 23 April 2025) Valentin-Alexandru Truta
Secretary: Adrian Mercieca
Registered office: Nineteen Twenty-Three, Valletta Road, Marsa MRS 3000
Country of incorporation: Malta
Company registration number: C 36522
Auditor: Grant Thornton Fort Business Centre Triq L-Intornjatur, Zone 1 Central Business District Birkirkara CBD1050 Malta
Principal bankers: BRD – Groupe Societe Generale S.A., 1-7 Ion Mihalache Boulevard, Sector 1, Bucharest 011171, Romania
EUROBANK S.A. 8 Othonos str, 105 57 Athens
HSBC Bank Malta Plc Mill Street, Qormi QRM 3101 Malta
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The table below presents the total energy, water, and fuel consumption for each market during 2025.
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The chart below illustrates the progress achieved since 2019 in transforming our primary guest packaging and increasing the use of certified fibre-based materials.
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*Funds donated in local currency and presented here at an exchange rate of 0.2.
The following table shows the overall contribution of the group towards the respective RMHC chapters.
The following table presents the number of families assisted in Ronald McDonald Houses for each market in 2025.
*Funds donated in local currency and presented here at an exchange rate of 0.2. **Sponsorships include cultural events, commercials events, social events, support to local communities, and sport related events and sponsorships.
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Turnover
CapEx
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OpEx
In 2025, total operating expenses of excluding amortization and depreciation amounted to Eur630,817,932 (which includes Cost of Sales, Selling and Other Expenses, and excludes Administration Costs). Of this, Eur8,163,761 ( 1.3% ) constitutes maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment by the Group that are necessary to ensure the continued and effective functioning of such assets incurred during the relevant financial year. In 2025, the taxonomy OpEx for Premier Capital was non-material (under 5%) with respect to the total OpEx of the Group. Therefore, according to section 1.1.3.2 of Annex I of Delegated Regulation of July 6th, Premier Capital only discloses the denominator (2025 OpEx denominator: Eur8,163,761).
Results and dividends
The results for the year ended 31 December 2025 are shown in the statements of comprehensive income. The Group’s profit for the year after taxation was Eur41,221,257 (2024 – Eur49,844,854 ), whilst the Holding Company’s profit for the year after taxation was Eur51,412,332 (2024– Eur55,000,335 ). During the year, the directors declared an interim dividend of Eur47,000,000 and they do not recommend the payment of a final dividend.
Events after the end of the reporting period
No material events occurred after reporting date.
Likely future business developments
The Group continues to operate within a global macroeconomic environment characterised by heightened volatility, uncertainty, complexity and ambiguity. The ongoing wars in Ukraine and Iran add uncertainty which holds back investment, weakens consumer confidence and drives further cost pressures should these conditions persist. While none of the Group’s businesses are directly exposed to the areas affected by these conflicts, the Directors remain vigilant to the potential indirect effects such developments may have, including on supply chains and consumer confidence, across the markets in which it operates. In this context, the Group continues to closely monitor external developments and to actively manage risks through established governance and oversight mechanisms. The Group’s geographical spread is considered to provide a degree of resilience against short‑term economic and geopolitical shocks.
Directors
The directors who served during the period were:
Carmelo Hili (Chairman and CEO) Claudine Cassar Dorian Desira Karen Pace Massimiliano Eugenio Lupica Peter Hili (appointed on 23 April 2025) Valentin-Alexandru Truta
In accordance with the Holding Company’s articles of association all the directors are to remain in office.
Going Concern
After reviewing the Group’s and the Holding Company’s budget for the next financial year, and other longer-term plans, the directors are satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements.
Auditors
A resolution to reappoint Grant Thornton as auditor of the Company and the Group will be proposed at the forthcoming Annual General Meeting.
Signed on behalf of the Group's Board of Directors on 23 April 2026 by Carmelo Hili (Chairman and CEO) and Massimiliano Eugenio Lupica (Director and Audit Committee Chairman) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Group Financial Statements 2025.
Statement of directors’ responsibilitiesYear ended 31 December 2025
The directors are required by the Companies Act (Cap. 386) to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (EU), which give a true and fair view of the state of affairs of the Holding Company and its Group at the end of each financial year and of the profit or loss of the Holding Company and its Group for the year then ended. In preparing the financial statements, the directors should:
The directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Holding Company and the Group and which enable the directors to ensure that the financial statements comply with the Companies Act (Cap. 386). This responsibility includes designing, implementing and maintaining 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. The directors are also responsible for safeguarding the assets of the Holding Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of responsibility pursuant to the Capital Markets Rules issued by the Malta Financial Services Authority (MFSA)
We confirm that to the best of our knowledge:
Signed on behalf of the Group's Board of Directors on 23 April 2026 by Carmelo Hili (Chairman and CEO) and Massimiliano Eugenio Lupica (Director and Audit Committee Chairman) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Group Financial Statements 2025. Corporate governance statement
Introduction
Pursuant to the Capital Markets Rules as issued by the Malta Financial Services Authority (MFSA), Premier Capital p.l.c. (the ‘Company’) is hereby reporting on the extent of its adoption of the Code of Principles of Good Corporate Governance (the ‘Code’) contained in Appendix 5.1 of the Capital Markets Rules.
The Board acknowledges that the Code does not dictate or prescribe mandatory rules but recommends principles of good practice. Nonetheless, the Board strongly believes that the Code is in the best interest of the shareholders and other stakeholders since it ensures that the Directors, Management and employees of the Group adhere to internationally recognised high standards of corporate governance.
The Group currently has a corporate decision-making and supervisory structure that is tailored to suit the Group’s requirements and designed to ensure the existence of adequate checks and balances within the Group, whilst retaining an element of flexibility, particularly in view of the size of the Group and the nature of its business. The Group adheres to the Code, except for those instances where there exist particular circumstances that warrant non-adherence thereto, or at least postponement for the time being.
Additionally, the Board recognises that, by virtue of Listing Rule 5.101, the Company is exempt from making available the information required in terms of Capital Markets Rules 5.97.1 to 5.97.3; 5.97.6 and 5.97.8.
The Board of Directors
The Board of Directors of the Company is responsible for the overall long-term direction of the Group, in particular in being actively involved in overseeing the systems of control and financial reporting and that the Group communicates effectively with the market.
The Board of Directors meets regularly and is currently composed of seven members, two of which are completely independent from the Company or any other related companies.
Executive Directors Mr Carmelo Hili (Chairman and CEO) Mr Peter Hili Mr Valentin - Alexandru Truta
Non-Executive Directors Mr Dorian Desira Ms Karen Pace
Independent Non-Executive Directors Ms Claudine Cassar Mr Massimiliano Eugenio Lupica
Board Meetings are attended by the Chief Officers of the Group in order for the Board to have direct access to the financial, commercial, operational and development aspects of the Group. This is intended to, inter alia, ensure that the policies and strategies adopted by the Board are effectively implemented.
The remuneration of the Board is reviewed periodically by the shareholders of the Company.
The Company ensures that it provides directors with relevant information to enable them to effectively contribute to board decisions.
The directors are fully aware of their duties and obligations, and whenever a conflict of interest in decision making arises, they refrain from participating in such decisions.
Audit Committee
The Terms of Reference of the Audit Committee, which were approved by the Malta Financial Services Authority (MFSA), are modelled on the principles set out in the Capital Markets Rules. The Audit Committee assists the Board in fulfilling its supervisory and monitoring responsibility by reviewing the Group financial statements and disclosures, monitoring the system of internal control established by management as well as the audit processes.
The Board of Directors established the Audit Committee, which meets regularly and is currently composed of the following individuals:
Mr Massimiliano Lupica (Chairman) Ms Claudine Cassar Ms Karen Pace
This satisfies the requirement established by the Capital Markets Rules that the Audit Committee is composed of non-executive directors, the majority of which being independent.
The Board considers Ms Karen Pace, to be competent in accounting and/or auditing in terms of the Capital Markets Rules. Furthermore, the Board considers that the Audit Committee, as a whole, to have relevant competence in the sector the Company is operating.
The Audit Committee met nine times during 2025. Communication with and between the company secretary, top level management and the Committee is ongoing and considerations that require the Committee’s attention are communicated and decided between meetings (when necessary) through electronic communication.
Internal Control
While the Board is ultimately responsible for the Group’s internal controls as well as their effectiveness, the executive responsibility for the running of the Company’s business is vested in the Chief Executive Officer who reports directly to the Board.
The Group’s system of internal controls is designed to manage all the risks in the most appropriate manner. However, such controls cannot provide an absolute elimination of all business risks or losses. Therefore, the Board, inter alia, reviews the effectiveness of the Group’s system of internal controls in the following manner:
Relations with the Capital Market
The capital market is kept up to date with all pertinent and obligatory information through the Company’s announcements uploaded on the Malta Stock Exchange portal and also on its website. The Company also publishes other information on its website, including updates on new restaurant openings, awards and other credentials to ensure consistent dialogue with the market.
Non-compliance with the Code
Premier Capital plc adopts the Code of Principles of Good Corporate Governance contained in Appendix 5.1 of the Capital Market Rules. The adoption of the Code is not mandatory in nature however the Directors are strongly of the opinion that the adoption of the Code is in the best interest of the Company, its shareholders and other stakeholders since it provides the necessary framework to ensure that the directors, management, and employees of the company work towards the right set of principles and ethical standards. The only instances of non-compliance with the Code are listed below.
Principle 7: Evaluation of the board’s performance Under the present circumstances, the board does not consider it necessary to appoint a committee to carry out a performance evaluation of its role as the board’s performance is always under scrutiny of the shareholders of the Company.
Principle 8: Committees Under the present circumstances, the Board does not consider it necessary to appoint a Remuneration and Nominations committee as decisions on these matters are taken directly by the Company’s shareholders.
Principle 10: Institutional shareholders , This principle is not applicable since the Company has no institutional shareholders.
Signed on behalf of the Group's Board of Directors on 23 April 2026 by Carmelo Hili (Chairman and CEO) and Massimiliano Eugenio Lupica (Director and Audit Committee Chairman) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Group Financial Statements 2025.
Signed on behalf of the Group's Board of Directors on 23 April 2026 by Carmelo Hili (Chairman and CEO) and Massimiliano Eugenio Lupica (Director and Audit Committee Chairman) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Group Financial Statements 2025.
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Notes to the financial statements 31 December 2025
1. Company information and basis of preparation
The accounting policies adopted are set out below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; - Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and - Level 3 inputs are unobservable inputs for the asset or liability.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Holding Company determines when transfers are deemed to have occurred between Levels in the hierarchy at the end of each reporting period.
2. Material accounting policies
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Holding Company and entities controlled by the Holding Company (its subsidiaries). A subsidiary is an entity that is controlled by the Holding Company. The Holding Company controls an investee when the Holding Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, in preparing these consolidated financial statements, appropriate adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the group entities.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except where the exceptions to the recognition or measurement principles apply.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date and the resulting gain or loss, if any, is recognised in profit or loss. Amounts previously recognised in other comprehensive income in relation to the acquiree are accounted for in the same manner as would be required if the interest were disposed of.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Holding Company.
Where the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 Financial Instruments or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the consolidated statement of comprehensive income. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Investment in subsidiaries
A subsidiary is an entity that is controlled by the Holding Company. The Holding Company controls an investee when the Holding Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Investments in subsidiaries, in the Holding Company’s financial statements are stated at cost less any accumulated impairment losses. Dividends from the investments are recognised in profit or loss.
At each reporting date, the Holding Company reviews the carrying amount of its investments in subsidiaries to determine whether there is any indication of impairment and, if any such indication exists, the recoverable amount of the investment is estimated. An impairment loss is the amount by which the carrying amount of an investment exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs to sell and value in use. An impairment loss that has been previously recognised is reversed if the carrying amount of the investment exceeds its recoverable amount. An impairment loss is reversed only to the extent that the carrying amount of the investment does not exceed the carrying amount that would have been determined if no impairment loss had been previously recognised. Impairment losses and reversals are recognised immediately in profit or loss.
Property, plant and equipment
The Group’s property, plant and equipment are classified into the following classes – land and buildings, improvement to premises, motor vehicles, plant and equipment and other equipment. The Holding Company’s property, plant and equipment are classified into furniture, fixtures and other equipment.
Property, plant and equipment are initially measured at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the Group’s management. Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Expenditure on repairs and maintenance of property, plant and equipment is recognised as an expense when incurred.
Land and buildings are held for use in the production or supply of goods or services or for administrative purposes. Subsequent to initial recognition, land and buildings are stated at cost less any accumulated depreciation and any accumulated impairment losses. Land and buildings are measured at fair value based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings. A revaluation surplus is credited to other reserves in shareholders equity.
Improvements to premises incorporate all costs incurred, including acquisition costs and other costs attributable to bring the leased premises to the design, specifications and conditions requested by McDonald’s. Subsequent to initial recognition, improvements to premises are stated at cost less any accumulated depreciation and any accumulated impairment losses.
Other tangible assets are stated at cost less any accumulated depreciation and any accumulated impairment losses.
Property, plant and equipment are derecognised when no future economic benefits are expected from their use or upon disposal. Gains or losses arising from derecognition represent the difference between the net disposal proceeds, if any, and the carrying amount, and are included in profit or loss within administrative expenses in the period of derecognition.
Depreciation
Depreciation commences when the depreciable assets are available for use and is charged to profit or loss so as to write off the cost, less any estimated residual value, over their estimated useful lives, using the straight-line method, on the following bases:
No depreciation is charged on land.
The depreciation method applied, the residual value and the useful life are reviewed, and adjusted if appropriate, at the end of each reporting period. During the year, the Group revised its depreciation policy.
In the case of right-of-use assets, expected useful lives are determined by reference to comparable owned assets or the lease term, if shorter. Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Intangible assets
An intangible asset is recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group and the Holding Company and the cost of the asset can be measured reliably.
Intangible assets are initially measured at cost, being the fair value at the acquisition date for intangible assets acquired in a business combination. Expenditure on an intangible asset is recognised as an expense in the period when it is incurred unless it forms part of the cost of the asset that meets the recognition criteria or the item is acquired in a business combination and cannot be recognised as an intangible asset, in which case it forms part of goodwill at the acquisition date.
The useful life of intangible assets is assessed to determine whether it is finite or indefinite. Intangible assets with a finite useful life are amortised. Amortisation is charged to profit or loss so as to write off the cost of intangible assets less any estimated residual value, over the estimated useful lives. The amortisation method applied, the residual value and the useful life are reviewed, and adjusted if appropriate, at the end of each reporting period.
Intangibles are derecognised when no future economic benefits are expected from their use or upon disposal. Gains or losses arising from derecognition represent the difference between the net disposal proceeds, if any, and the carrying amount, and are included in profit or loss within administrative expenses in the period of derecognition.
(i) Support services licence
After initial recognition, support services licence is carried at cost less any accumulated amortisation and any accumulated impairment losses. Support services licence is written off to profit or loss by equal instalments over the term of the support services agreement with the subsidiaries, being twenty years.
(ii) Computer software
In determining the classification of an asset that incorporates both intangible and tangible elements, judgement is used in assessing which element is more significant. Computer software which is an integral part of the related hardware is classified as property, plant and equipment and accounted for in accordance with the Group’s accounting policy on property, plant and equipment. Where the software is not an integral part of the related hardware, this is classified as an intangible asset and carried at cost less any accumulated amortisation and any accumulated impairment losses. Computer software classified as an intangible asset is amortised on a straight-line basis over five years.
(iii) Acquired rights
Acquired rights are classified as intangible assets. After initial recognition, acquired rights are carried at cost less any accumulated amortisation and any accumulated impairment losses. Acquired rights are amortised on a straight-line basis over twenty years. During the year, the Group revised its amortisation policy.
(iv) Franchise fees
After initial recognition, franchise fees are carried at cost less any accumulated amortisation and any accumulated impairment losses. Franchise fees are written off to profit or loss by equal instalments over the term of the franchise agreement.
Financial instruments
(i) Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group and the Holding Company become a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
(ii) Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:
In the periods presented the Group and the Holding Company does not have any financial assets categorised as FVTPL.
The classification is determined by both:
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, investment income or other financial items, except for impairment of trade receivables which is presented within administrative expenses.
(iii) Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s and Holding Company’s cash and cash equivalents, loans and receivables, trade and most other receivables and other financial assets fall into this category of financial instruments.
Financial assets at fair value through other comprehensive income (FVOCI)
The Group and the Holding Company account for financial assets at FVOCI if the assets meet the following conditions:
Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset. The Group’s and Holding Company’s local and foreign listed debt and equity instruments fall into this category of financial instruments.
(iv) Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of the requirements include loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.
The Group and the Holding Company consider a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.
Receivables
The Group makes use of a simplified approach in accounting for loans and receivables and trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.
The Group and the Holding Company assesses impairment of loans, trade receivables and other receivables on a collective basis as they possess shared credit risk characteristics. As at the end of the reporting period, the Group’s and Holding Company’s receivables have been assessed for impairment and are not significantly impaired to disclose within these financial statements.
(v) Classification and measurement of financial liabilities
The Group’s and Holding Company’s financial liabilities include debt securities in issue, bank borrowings, trade and other payables, lease liabilities, derivative financial instruments and other financial liabilities.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group and the Holding Company designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income.
(vi) Derivative financial instruments
Derivative financial instruments are accounted for at FVTPL unless they are designated as effective hedging instruments. During the year under review and during the prior year, the Group did not designate any of its derivative financial instruments in a hedging relationship for accounting purposes. After initial recognition, derivative financial instruments are measured at their fair value. Gains and losses arising from a change in fair value are recognised in profit or loss in the period in which they arise.
Inventories
Inventories are stated at the lower of cost and net realisable value. The Group considers the nature and use of the inventory when calculating the cost of inventories.
Cost is calculated using the weighted average method and comprises expenditure incurred in acquiring the inventories and other costs incurred in bringing inventories to their present location and condition. Net realisable value represents the estimated selling price in the ordinary course of business less the costs to be incurred in marketing, selling and distribution.
Provisions, contingent assets and contingent liabilities
Provisions are recognised when the Group and Holding Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the directors’ best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Provisions are not recognised for future operating losses.
Any reimbursement that the Group and the Holding Company are virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are disclosed as contingent liabilities unless the outflow of resources is remote.
Impairment testing of goodwill, other intangible assets, property, plant and equipment and long term prepayments
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of a related business combination and represent the lowest level within the Group at which management monitors goodwill.
Cash-generating units to which goodwill has been allocated (determined by the Group’s management as equivalent to its operating segments) are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s (or cash-generating unit’s) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount.
Impairment losses are recognised immediately in profit or loss.
In the case of other assets tested for impairment, an impairment loss recognised in a prior year is reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.
An impairment loss recognised for goodwill is not reversed in a subsequent period. Impairment reversals are recognised immediately in profit or loss.
Revenue recognition
To determine whether to recognise revenue, the Group follows a 5-step process:
The Holding Company often enters into transactions involving a range of services. In all cases, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected on behalf of third parties, VAT and trade discounts.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised goods or services to its customers. The following specific criteria must also be met:
Customer loyalty programme
The Group’s subsidiaries operate a customer loyalty incentive programme. For each one Euro or one Romanian Lei spent, customers obtain ten loyalty points which they can redeem to receive discounts or free items on future purchases. Loyalty points are considered to be a separate performance obligation as they provide customers with a material right they would not have received otherwise. Unused points expire if not used within six months.
The Group allocates the transaction price between the material right and other performance obligations identified in a contract on a relative stand-alone selling price basis. The amount allocated to the mat erial right is initially recorded as a contract liability and is later recognised in revenue when the points are redeemed by the customer. The Group’s experience is that a portion of the loyalty points will expire without being used (‘breakage’). The Group recognises revenue from expected breakage in proportion to the points redeemed and trues-up this estimate when points expire. The Group has assessed it is highly improbable a significant reversal of revenue will arise if actual experience differs from expectations and therefore no further revenue constraint is needed.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or as incurred.
Borrowing costs
Borrowing costs include the costs incurred in obtaining external financing. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised from the time that expenditure for these assets and borrowing costs are being incurred and activities that are necessary to prepare these assets for their intended use or sale are in progress. Borrowing costs are capitalised until such time as the assets are substantially ready for their intended use or sale . Borrowing costs are suspended during extended periods in which active development is interrupted. All other borrowing costs are recognised as an expense in profit or loss in the period in which they are incurred.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership to the lessee.
The Group and the Holding Company consider whether a contract is, or contains a lease at the inception of the c ontract. A lease is defined as a contract, or part of a contract, that coveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition the Group and the Holding Company assesses whether the contract meets three key evaluations which are whether:
At lease commencement date, the Group and the Holding Company recognises a right-of-use asset and a lease liability on the statement of financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group and the Holding Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).
The Group and the Holding Company depreciate the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use of asset or the end of the lease term. The Group and the Holding Company also assess the right-of-use asset for impairment when such indicators exist.
At lease commencement date, the Group and the Holding Company measure the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s and Holding Company’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.
The Group and the Holding Company have elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, the Group and the Holding Company have opted to disclose right-of-use assets and lease liabilities as separate financial statement line items.
Taxation
Current and deferred tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly to equity, in which case the current or deferred tax is also dealt with in other comprehensive income or equity.
Current tax is based on the taxable result for the period. The taxable result for the period differs from the result as reported in profit or loss because it excludes items which are non-assessable or disallowed and it further excludes items that are taxable or deductible in other periods. It is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets, including deferred tax assets for the carry forward of unused tax losses, are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither accounting profit nor taxable profit.
Deferred tax liabilities are not recognised for taxable temporary differences arising on investments in subsidiaries where the Holding Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences arising on investments in subsidiaries where it is probable that taxable profit will be available against which the temporary difference can be utilised and it is probable that the temporary difference will reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be utilised.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period.
Current tax assets and liabilities are offset when the Group and the Holding Company has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset when the Group and the Holding Company have a legally enforceable right to set off its current tax assets and liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Employee benefits
The Group and the Holding Company contribute towards the state pension in accordance with local legislation. The only obligation of the Group and the Holding Company is to make the required contributions. Costs are expensed in the period in which they are incurred. Short-term employee benefits, including holiday entitlement, are current liabilities, measured at the undiscounted amount the Group and the Holding Company expect to pay as a result of the unused entitlement.
Foreign currency translation
The financial statements of the Holding Company and the consolidated financial statements of the Group are presented in its functional currency, the Euro, being the currency of the primary economic environment in which the Holding Company operates. In preparing the financial statements of each individual group entity, transactions in currency other than the respective entities’ functional currency are recognised at the rate of exchange prevailing at the date of transaction.
Transactions denominated in currencies other than the functional currency are translated at the exchange rates ruling on the date of transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are re-translated to the functional currency at the exchange rate ruling at year-end. Exchange differences arising on the settlement and on the re-translation of monetary items are dealt with in profit or loss. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured at fair value are re-translated using the exchange rate ruling on the date the fair value was measured.
Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured in terms of historical cost are not re-translated. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the re-translation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.
Foreign exchange gains and losses are included within operating profit, except in the case of significant exchange differences arising on investing or financing activities, which are classified within investment income, investment losses or finance costs as appropriate.
For the purpose of presenting consolidated financial statements, income and expenses of the Group’s foreign operations are translated to Euro at the average exchange rates. Assets and liabilities of the Group’s foreign operations are translated to Euro at the exchange rate ruling at the date of the statement of financial position. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into Euro at the closing rate. Exchange differences are recognised in other comprehensive income and accumulated in a separate component of equity. Such differences are reclassified from equity to profit or loss in the period in which the foreign operation is disposed of.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s and Holding Company’s cash management are included as a component of cash and cash equivalents for the purposes of the statement of cash flows and are presented in current liabilities in the statement of financial position.
Prepayments
Long term prepayments represent guarantee deposits made by the Group in order to secure the lease on rented premises on which the McDonald’s restaurants are situated. Once the lease on the rented premises is terminated, the guarantee deposit is released, and it is no longer recognised within long term prepayments in the statement of financial position. Long term prepayment for the Holding Company mainly represents a guarantee deposit made for the provision of a leased aircraft (refer to note 19 and note 25).
Equity, reserves and dividend payments
Share capital represents the nominal (par) value of shares that have been issued. Other components of equity include the following:
Retained earnings includes all current and prior period retained profits. All transactions with owners of the parent are recorded separately within equity.
Dividends to holders of equity instruments are recognised as liabilities in the period in which they are declared.
Dividends to holders of equity instruments, or of the equity component of a financial instrument issued by the Holding Company, are recognised directly in equity. Dividends relating to a financial liability, or to a component that is a financial liability, are recognised as an expense in profit or loss and are presented in the statement of profit or loss and other comprehensive income with finance costs.
3. Significant management judgement in applying accounting policies and estimation uncertainty
Significant management judgements
Other than as disclosed below, in the process of applying the Group’s accounting policies, management has made no judgements which can significantly affect the amounts recognised in the financial statements and, at the end of the reporting period, there were no key assumptions concerning the future, or any other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Impairment of financial assets and goodwill
The Group and the Holding Company review property, plant and equipment, intangible assets, right-of-use assets and loans and receivables to evaluate whether events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Holding Company reviews intangible assets, right-of-use assets, investments in subsidiaries and loans and receivables to evaluate whether events or changes in circumstances indicate that the carrying amounts may not be recoverable. At the year-end there was no objective evidence of impairment in this respect.
In addition, the Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. Determining whether the carrying amounts of these assets can be realised requires an estimation of the value in use of the subsidiaries (or operations). The value in use calculation requires the directors to estimate the future cash flows expected to arise from the subsidiary (or operation) and a suitable discount rate in order to calculate present value.
Goodwill arising on a business combination is allocated, to the subsidiary or operation that is expected to benefit from that business combination.
Reconciliation of reported goodwill is presented below:
The carrying amount of goodwill as at 31 December 2025 amounting to Eur24,685,675 (2024 - Eur24,888,095) is allocated Eur16,591,999 (2024 - Eur16,591,999 ) to the Malta operations and Eur8,093,676 (2024 - Eur8,296,096) to the Romania operations. Since goodwill for Romania operations is denominated in Romanian Lei, movement in foreign exchange differences impacted the carrying amount of the goodwill by Eur(202,420) (2024 – Eur834 ).
The recoverable amounts of the Malta and Romania operations are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the operations. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market. The directors expect the carrying amount of goodwill to be recoverable and there is no impairment in value of the goodwill.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry forwards can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.
Determining the lease term of contracts with renewal and termination options – Group and the Holding Company as lessee
The Group and the Holding Company determine the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Group and the Holding Company have lease contracts that include extension and termination options. The Group and the Holding Company apply judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group and the Holding Company reassess the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.
Estimation uncertainty
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT equipment.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date.
Leases - Estimating the incremental borrowing rate
The Group and Holding Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the lessor company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the lessor company ‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Group and Holding Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the Group’s stand-alone credit rating).
4. New or revised Standards or Interpretations
Standards, amendments and Interpretations to existing Standards that have been adopted by the Group and the Holding Company
Some accounting pronouncements which have become effective from 1 January 2025 and have therefore been adopted do not have a significant impact on the Group’s and the Holding Company’s financial results or position. Accordingly, the Group and the Holding Company have made no changes to its accounting policies in 2025.
Other Standards and amendments that are effective for the first time in 2025 and could be applicable to the Group and the Holding Company are:
These amendments do not have a significant impact on these financial statements and therefore no additional disclosures have been made.
Standards, amendments and Interpretations to existing Standards that are not yet effective and have not been adopted early by the Group and the Holding Company
At the date of authorisation of these financial statements, several new, but not yet effective Standards, amendments to existing Standards and Interpretations have been published by the IASB or IFRIC. None of these Standards, amendments to existing Standards have been adopted early by the Group and the Holding Company and no Interpretations have been issued that are applicable and need to be taken into consideration by the Group and the Holding Company.
Other Standards and amendments that are not yet effective and have not been adopted early by the Group include:
These Standards and amendments are not expected to have a significant impact on the financial statements in the period of initial application and therefore no disclosures have been made. Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 ‘Presentation of Financial Statements’. The adoption of IFRS 18 ‘Presentation and Disclosure in financial statements’, effective for periods commencing on or after 1 January 2027, is expected to have a material impact on the presentation of the financial Statements, and therefore relevant disclosures are included below.
Although IFRS 18 includes many of the requirements of IAS 1, it introduces new requirements to better structure financial statements and to provide more detailed and useful information to investors, including:
IFRS 18 will be applied retrospectively with specific transitional provisions. The Group and Holding Company are currently working to identify all of the impacts that IFRS 18 will have on the primary financial statements and notes to the financial statements.
5. Segment information
The Group operates one business activity which is the operation of the McDonald’s restaurant business which activities are licensed under the terms of the franchise agreements awarded for each geographical location. The main line of activities are reported according to the geographical location. Each of these operating segments is managed separately as each of these lines requires local resources. All inter segment transfers for management services are carried out on a cost basis.
The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision maker.
Revenue reported below represents revenue generated from external customers. Revenue earned by the Holding Company amounting to Eur1,156,550 (2024 - Eur1,138,002) relates to consultancy, professional and support fees charged to subsidiaries. There were no inter-segment sales in both years presented. The Group's reportable segments under IFRS 8 Operating Segments are direct sales attributable to each country where it operates as a McDonald’s development licensee.
Measurement of operating segment profit or loss, assets and liabilities
Segment profit represents the profit earned by each segment after allocation of central administration costs. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
The unallocated amounts in the intangible assets line include the support services licence amounting to Eur1,219,679 (2024 – Eur1,829,555) which relates to the Baltic market as disclosed in note 13. It is not possible to split this amount between the operating segments of Latvia, Lithuania and Estonia as this was acquired originally for the market as a whole.
The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 2.
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities to consolidated totals are reported below:
Profit or loss before tax
Assets
Liabilities
The Group's revenue and results from continuing operations from external customers and information about its assets and liabilities by reportable segment are detailed below.
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Segment report
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6. Investment income
7. Finance costs
8. Profit before tax
A list of expenses by nature making up the cost of sales, selling expenses and administrative expenses of the Group and the Holding Company is set out below.
Operating profit/(loss) is stated after charging/(crediting) the following:
The analysis of the amounts that are payable to the auditors and that are required to be disclosed are as follows:
Group
Total remuneration payable to the parent company’s auditors in respect of the audit of the financial statements and the undertakings included in the consolidated financial statements amounted to Eur68,000 (2024 – Eur67,210) and the remuneration payable to the other auditors in respect of the audits of the undertakings included in the consolidated financial statements amounted t o Eur262,804 (2024 – Eur275,538). Other fees payable to the parent company’s auditors for tax services amounted to Eur2,157 (2024 – Eur1,650).
Holding Company
Total remuneration payable to the parent company’s auditors for the audit of the Holding Company and the Group’s financial statements amounted to Eur42,000 (2024 – Eur42,700). Other fees payable to the parent company’s auditors for tax services amounted to Eur1,357 (2024 – Eur850).
9. Key management personnel compensation
10. Staff costs and employee information
The above staff costs are exclusive of the directors’ emoluments.
The average number of persons employed during the year by the Group and the Holding Company excluding executive directors, was made up as follows:
11. Income tax expense/(credit)
Tax applying the statutory domestic income tax rate and the income tax expense for the year are reconciled as follows:
The tax rate used for the 2025 and 2024 reconciliations is the corporate tax rate of 35% payable by corporate entities in Malta on taxable profits under tax law in Malta.
12. Dividends
Group and Holding Company
In respect of the
current year, a net interim dividend of Eur
Furthermore, dividends amounting to Eur60,694,868 (Eur180.24c per ordinary share) (2024 – Eur64,315,754 (Eur190.99c per ordinary share ) were paid during the year by the direct subsidiaries to the Holding Company.
13. Intangible assets
Group
Holding Company
The amortisation expense on intangible assets has been included in the line item ‘Administrative expenses’ in the statement of profit or loss and other comprehensive income.
The acquired rights and franchise fees in relation to the Group with a carrying amount of Eur1,733,558 (2024 – Eur1,784,013) are amortised over the term of the franchise agreements in place with McDonald’s Corporation to operate the McDonald’s brand in all markets. Generally, amortisation period is twenty years.
Computer software for the Group with a carrying amount of Eur1,110,045 (2024 – Eur992,416 ) mainly relates to a new ERP system invested into by the Romania segment to improve the business operations and obtain efficiencies in reporting. The amortisation period is over five years.
The support services licence owned by the Group and the Holding Company with a carrying amount of Eur1,219,679 (2024 – Eur1,829,555) will be fully amortised within three years, and relates to the licence paid to McDonald’s Corporation to operate the McDonald’s brand in the Baltic countries.
14. Property, plant and equipment
No interest has been capitalised by the Group during 2025 and 2024. The Group’s property, plant and equipment with a carrying amount of Eur18.8m (2024 – Eur56m ) are held as security in connection with bank borrowings.
Revaluation on property, plant and equipment
At 31 December 2025, the group performed revaluation assessments of all its land and buildings. Romania reported a revaluation gain on land and buildings of Eur11,282,301 which was recognised in other comprehensive income.
Impairment losses on property, plant and equipment
The impairment losses on property, plant and equipment recognised within administrative expenses in profit or loss during 2025 amounted to Eur620,352 (2024 - Eur425,742). In addition, certain property, plant and equipment in Romania which were previously impaired, have been re-utilised during 2025. As a result, an impairment amount of Eur696,475 (2024 - Eur352,622) was reversed and included within administrative expenses.
Holding Company
15. Right-of-use assets
Group
Holding Company
The amortisation on right-of-use assets is included within cost of sales and administrative expenses.
The Group and the Holding Company have elected to disclose right-of-use assets separately in these financial statements. The information pertaining to the gross carrying amount, amortisation recognised during the year and other movements in right-of-use assets is included in the above table. Information pertaining to lease liabilities and their corresponding maturities are disclosed separately in note 25. Information about the accounting policy for the measurement and recognition of leases is disclosed in note 2.
The weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 was 3.93%. Additions to right-of-use assets during the current reporting period have been recognised using a rate between 4.50% and 5.90% (2024 - 2.58% and 5.16%). The incremental borrowing rate will be re-assessed every time a new lease is entered into by the Group and Holding Company and the corresponding right-of-use asset recognised. New leases are assessed on a case-by-case basis.
16. Deferred taxation
Deferred tax assets have been recognised for all unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilised. The majority of the deferred tax asset arising on unutilised tax losses reverses when dividends are declared from the subsidiaries. The aggregate amount of temporary differences associated with investments in subsidiaries for which deferred tax liabilities have not been recognised amounts to Eur7,752,958 (2024 – Eur9,411,390 ).
Holding Company
17. Non-financial assets
Investments in subsidiaries
Details of the share capital, reserves and profit for the year for the Holding Company’s direct subsidiaries are as follows:
Details of the holding company’s subsidiaries at 31 December 2025 and 2024 are as follows:
18. Financial assets
(a) Financial assets at fair value through other comprehensive income
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Group financial assets
Holding Company
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The carrying amount of financial assets amounting to Eur112,710 (2024 – Eur985,696 ) represents investments amounting to Eur Nil (2024 – Eur643,200), in 4% - 5.5% local-listed corporate bonds and investments amounting to Eur112,710 (2024 - Eur342,496) in local-listed equity instruments. Decrease in fair value recognised through other comprehensive income as at 31 December 2025 amounted to Eur34,463 (2024 – Eur4,842 ).
The Group and Holding Company hold a portfolio of foreign-listed instruments which at the end of the reporting period amounted to Eur20,316,990 (2024 - Eur18,250,481 ) and Eur19,222,320 (2024 – Eur17,132,951 ) respectively. This represents investments of Eur5,567,177 (2024 - Eur4,448,220) in 0% - 8.5% ( 2024 - 0% - 7.875%) foreign-listed bonds for the Group and Holding Company and Eur14,749,813 (2024 - Eur13,802,261) for the Group and Eur13,655,143 (2024 - Eur12,684,731) for the Holding Company in foreign-listed equity instruments.
During the year, various disposals of foreign-listed instruments held on portfolio amounting to Eur32,042,488 (2024 - Eur19,583,140 ) were utilised to acquire foreign-listed financial instruments amounting to Eur32,512,301 (2024 – Eur20,459,176 ). At the end of the reporting period, liquidity balance amounted to Eur82,582 (2024 - Eur(10,222)). Investment income earned on portfolio amounted to Eur524,194 (2024 - Eur908,655 ) and fees charged amount to Eur56,745 (2024 - Eur85,170).
As at 31 December 2025, the Group recognised an increase in fair value through other comprehensive income of Eur967,317 (2024 – Eur477,532 ). Exchange differences arising on translation of foreign investments also recognised through other comprehensive income amounted to Eur(190,781) (2024 – Eur179,208).
As at 31 December 2025, the Holding Company recognised an increase in fair value through other comprehensive income of Eur962,839 (2024 – Eur516,357). Exchange differences arising on translation of foreign investments also recognised through other comprehensive income amounted to Eur(163,443) (2024 – Eur179,114).
Both the Group and the Holding Company recognised reversal of fair value through other comprehensive income on disposal of investments amounted to Eur458,449 (2024 – Eur494,240), out of which Eur(100,877) (2024 - Eur 507,410) was transferred to retained earnings.
(b) Other financial assets
In 2024, derivative financial instruments amounting to Eur116,009 comprised of interest rate swap whereby a subsidiary of the Group (Premier Restaurants Romania SRL) entered into a contract to swap the floating rate on bank borrowings (note 24) to a fixed rate. The interest rate swap was stated at fair value and classified as financial assets at FVTPL. The amount of Eur116,009 was classified with non-current assets. The interest rate swap matured on 03 July 2025. The notional principal amount of the outstanding interest rate swap at the end of the 31 December 2024 amounted to Eur3,040,751 and the fixed interest rate amounted to 2.55% with the floating rate being three-month ROBOR and settlement on a quarterly basis. The subsidiary settled the difference between the fixed and floating interest rates on a net basis.
(c) Loans and receivables
Loans to subsidiaries - Holding Company
Loans to subsidiaries amounting to Eur3,225,936 (2024 – Eur2,092,005) are interest free and repayable on demand. Eur225,936 (2024 – Eur92,005) are expected to be settled within 12 months from the end of the reporting period. All the loans to subsidiaries are unsecured.
The increase of Eur20,487,955 (2024 – Eur22,146,042) includes dividends receivable (net of tax) from subsidiaries of Eur16,487,497 (2024 – Eur18,591,107 ). During 2025, dividend receivable from subsidiaries amounting to Eur60,694,868 (2024 – Eur64,315,754) (note 6), out of which Eur52,214,822 (net of tax) (2024 - Eur62,700,369 (net of tax)) were settled during the year.
In 2025, the Holding Company set off short term loan balances due to subsidiaries of Eur7,941,584 against receivables from the same subsidiaries.
Loans to ultimate parent
Group and Holding Company
All loans to ultimate parent are unsecured. Loans amounting to Eur18,345,630 (2024 – Eur18,345,630) bear interest at the rate of 4.5% per annum, whereas receivables amounting to Eur70,116 (2024 – Eur69,924 ) are interest free. Loans and receivables amounting to Eur18,415,746 (2024 – Eur69,924 are expected to be settled within 12 months from the end of the reporting period, whilst EurNIL (2024 – Eur18,345,630) are repayable after more than 12 months. During 2025, the increase of Eur38,325,567 includes short term loan advances of Eur37,500,000 to ultimate parent that were converted into dividends by the end of the reporting period .
19. Prepayments
These relate mainly to guarantee deposits made by the Holding Company and the Group’s subsidiaries. As at the end of the reporting period, the Group long term prepayments amount to Eur2,647,942 ( 2024 – Eu r2,579,753 ) after having recorded such prepayments within a twelve month period of Eur334,968 (2024 – Eur328,718) as current assets. The Holding Company long term prepayments amount to Eur820,732 (2024 – Eur810,232 ), none of which has been recorded within a twelve month period.
20. Inventories
The amount of inventories recognised as an expense during the year amounted to Eur259,614,108 (2024 – Eur229,088,183 ).
21. Trade and other receivables
No interest is charged on trade and other receivables. The Group’s amounts due from related parties and the Holding Company’s amounts due from subsidiaries are unsecured, interest-free and are repayable on demand.
22. Trade and other payables
No interest is charged on trade and other payables. The carrying amount of trade and other payables is considered a reasonable approximation of fair value.
23. Other financial liabilities
Other financial liabilities are repayable as follows:
The Group’s amounts due to ultimate parent and to other related parties are unsecured, interest free and repayable on demand.
The Holding Company’s amounts due to subsidiaries amounting to Eur3,250,000 (2024 - Eur9,610,058 ) bear interest at the rate of 4.5% per annum and are expected to be settled within twelve months. The remaining balance of amounts owed to subsidiaries amounting to Eur704,002 (2024– Eur1,789,930) are interest free and repayable on demand. All the amounts owed to subsidiaries are unsecured.
24. Bank borrowings
Bank borrowings are repayable as follows:
As at 31 December 2025, the Group has been granted bank facilities in Romania amounting to Eur28,695,263 (2024 – Eur28,469,056) and in Greece amounting to Eur7,412,500 (2024 – Eur9,059,740). The Holding Company has also been granted a bank overdraft facility with a limit of Eur9,850,000 ( 2024 - Eur2,000,000 ) , out of which Eur3,702,618 ( 2024 - Eur1,843,671 ) were utilised by the end of the reporting period.
Bank borrowings - Romania
The facility has been granted by BRD-SG to Premier Restaurants Romania SRL in tranches. During the year, the loan refinanced in 2023 has been fully repaid. As at 31 December 2024, the refinanced portion of the loan balance amounted to Eur3,059,883 and bore an interest rate of 3-month Euribor +1.85% per annum and the remaining loan balance of Eur3,040,751 bore an interest rate of 3-month ROBOR +1.4% per annum. Facility term of this tranche remained unchanged at seven years.
In March 2023 and in December 2024, another two tranches from the same facility were drawdown for an amount of Eur12,500,000 respectively. As at the end of the reporting period, the loan balance amounted to Eur17,105,264 (2024 - Eur22,368,422 ) . The loan bears interest of 3-month Euribor +1.50% per annum (2024 - 3-month Euribor +1.70% per annum) and has a term of six years.
In July 2025, another tranche from the same facility was drawdown for an amount of Eur11,590,000 . As at the end of the reporting period, the loan balance amounted to Eur11,590,000. The loan bears interest of 3-month Euribor +1.50% per annum and has a term of six years.
The loan facility is secured by a pledge over the entity’s immovable and movable property.
Bank borrowings - Greece
In 2024, Premier Capital Hellas S.A. has been granted a loan facility for the financing of working capital and capital expenditure requirements with a balance of Eur9,833,360 bearing an interest rate of 3 month Euribor +3.87% . The loan balance as at the end of the reporting period amounted to Eur7,412,500 (2024 - Eur9,059,740) . The loan is secured by a letter of comfort issued by the subsidiary.
Other bank borrowings
During the year, Premier Capital Hellas S.A. utilised an overdraft facility with a limit of Eur4,000,000 and bearing an interest rate of 3.84% per annum.
Premier Restaurants Malta Limited, a subsidiary of the Group, has an unutilised overdraft facility with a limit of Eur400,000 and bearing interest at 250 basis point over the bank’s base rate, presently 2.35% per annum.
The Holding Company utilised an overdraft facility with a limit of Eur9,850,000 and bearing an interest rate of 2.5% over bank base rate presently standing at 2.35% .
25. Lease liabilities
The Group and the Holding Company have leases for its buildings and motor vehicles. With the exception of short-term leases and leases of low value assets, each lease is included in the statement of financial position as a right-of-use asset and a lease liability. Variable lease payments which do not depend on an index or a rate (such as lease payments based on a percentage of company sales) are excluded from the initial measurement of the lease liability and asset. The Group and Holding Company classifies its right-of-use assets in a consistent manner to its property, plant and equipment (see note 15).
Each lease generally imposes a restriction that, unless there is a contractual right for the Group and the Holding Company to sublet the asset to another party, the right-of-use asset can only be used by the Group and the Holding Company. The majority of the lease agreements entitle the Group’s subsidiaries to have the right of first refusal when such leases come up for renewal. None of the lease agreements gives rights to the Group’s subsidiaries’ to any purchase or escalation options, however restricting the same subsidiaries to further lease the properties to third parties. For leases over office buildings the Group and the Holding Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Group and the Holding Company must insure items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts.
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2025 were as follows:
Group
Holding Company
Lease payments not recognised as a liability
The Group and the Holding Company have elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred.
The expense relating to payments not included in the measurement of the lease liability is as follows:
Variable lease payments expensed on the basis that they are not recognised as a lease liability comprise rentals of stores in each market whereby the Group is committed to pay monthly payments to lessors based on the revenues of each particular store. Such variable lease payments are not permitted to be recognised as a right-of-use asset and lease liability and are therefore expensed in the period they are incurred.
In 2017, the Holding Company entered into a lease agreement for the provision of an aircraft for a fixed number of annual flights. As per the lease arrangement, the Holding Company has no control over the leased aircraft and hence any lease payments do not give rise to a lease liability and an underlying right of use asset. Such lease payments are recognised within administrative expenses (refer to note 32).
Total cash outflow for leases for the year ended 31 December 2025 by the Group was Eur18,263,074 (2024 - Eur18,579,835 ) and for the Holding Company Eur76,708 (2024 - Eur72,818 ).
26. Debt securities in issue
In November 2016, the Holding Company issued 650,000 3.75% unsecured bonds of a nominal value of Eur100 per bond. The bonds are redeemable at their nominal value on 23 November 2026. The bonds are classified as current liabilities.
Interest on the bonds is due and payable annually on 23 November of each year.
The bonds are listed on the Official List of the Malta Stock Exchange. The carrying amount of the 3.75% bonds is net of direct issue costs of Eur85,853 (2024 – Eur179,512 ) which are being amortised over the life of the bonds. The market value of debt securities on the last trading day before the statement of financial position date was Eur64,031,500 (2024 - Eur64,350,000 ).
27. Share capital
Save for the selection of directors in terms of Clause 55 of the Articles of Association of the Holding Company, ordinary shares in the Holding Company, irrespective of the class to which they belong, shall have equal rights as regards dividends and in all other respects each shareholder shall be entitled to one vote in general meetings for each of such shares held.
28. Other reserves
Group
The legal reserve represents reserves created by the subsidiaries in Estonia, Lithuania, Greece and Romania pursuant to the legal requirements in these jurisdictions.
The revaluation reserve was created from an increase in revaluation of property, plant and equipment. In 2016, the land which was acquired on acquisition of the Romania operating segment was revalued and resulted in an increase in revaluation of Eur44,568 . In 2019, the Group performed a revaluation assessment on the Group’s property, plant and equipment. This gave rise to an increase in the revaluation of land and buildings situated in Romania of Eur6,007,738 of which Eur5,406,964 was allocated to the Group and Eur600,774 was allocated to non-controlling interest. In 2020, the Group acquired the non-controlling interest which resulted in reversals in equity of previously allocated reserves to the non-controlling interest amounting to Eur8,955,498 – this included the reversal of Eur600,774 allocated to revaluation reserve and movement in other reserve of Eur9,556,272 . In 2022, the Group performed another revaluation assessment of its property, plant and equipment which gave rise to an increase in the revaluation of the land and buildings in Romania of Eur10,804,506 . During 2025, the Group performed another revaluation assessment of its property, plant and equipment which gave rise to an increase in the revaluation of the land and buildings in Romania of Eur9,397,529 .
The other reserve represents a cash capital contribution made by the parent company to one of its subsidiaries attributable to non-controlling interests amounting to Eur370,825 , a loss offset reserve of Eur212,351 , and the effect of acquisition of part of a non-controlling interests amounting to Eur1,360,079 . In 2015, the Group gained full control in the subsidiary Premier Restaurants Malta Limited resulting in a movement in the other reserve of Eur455,878 .
Holding Company
The other reserve represents a loss offset reserve amounting to Eur212,351 for the purpose of offsetting any losses that may be incurred by the Holding Company from time to time and was created by a reduction of share capital in 2010. Included in other reserve is the adjustment on merger by acquisition of Premier Capital B.V. to the Holding Company (refer to note 17(b)).
29. Cash and cash equivalents
Cash and cash equivalents included in the statement of cash flows comprise the following amounts in the statement of financial position:
Cash at bank earns interest at floating rates based on bank deposit rates. The interest rate on the cash at bank in 2025 was 0% - 2.50% (2024 – 0% - 5.25% ).
30. Significant non-cash transactions
During 2025 , the Holding Company set off short term loan balances due to subsidiaries of Eur7,941,584 against receivables from same subsidiaries (refer to note 18(c)).
31. Related party disclosures
Premier Capital p.l.c. is the parent company of the undertakings highlighted in note 17(a).
The directors consider the ultimate controlling party to be Carmelo ( sive) Melo Hili, who is the indirect owner of more than 50% of the issued share capital of Hili Ventures Limited.
During the year, the Group and the Holding Company entered into transactions with related parties, as set out below.
Group
Holding Company
No expense has been recognised during the year arising from doubtful debts in respect of amounts due by related parties.
The amounts due from/to related parties at year-end are disclosed in notes 12, 18, 21 and 23. Other related party transactions are disclosed in note 28 and 30. Other than as disclosed in the respective notes, no guarantees have been given or received. The terms and conditions in respect of the related party balances do not specify the nature of the consideration to be provided in settlement.
Other related parties consist of related parties other than parent, entities with joint control or significant influence over the Holding Company, subsidiaries, associates, joint ventures in which the Holding Company is a venture and key management personnel of the Holding Company or its parent.
32. Operating leases
Expenses included in the above relate to agreements that do not meet the definition of a lease under IFRS 16.
In 2017, the Holding Company entered into an operating lease for the provision of an aircraft for a fixed number of annual flight hours. Lease was renewed in 2023. This is included in the minimum lease payments in the above disclosure.
At the end of the reporting period, the Group and the Holding Company had outstanding commitments under non-cancellable operating leases, which fall due as follows:
33. Commitments
34. Contingent liabilities
Certain subsidiaries of the Group have guaranteed the amount of Eur10,000,000 (2024 – Eur10,630,982 ) in favour of related companies in connection with bank facilities of the respective related company.
35. Fair value of financial assets and financial liabilities
At 31 December 2025 and 2024 the carrying amounts of financial assets and financial liabilities classified with current assets and current liabilities respectively approximated their fair values due to the short- term maturities of these assets and liabilities.
The fair values of non-current financial assets and non-current financial liabilities that are not measured at fair value, other than the shares in subsidiary companies that are carried at cost, and the debt securities in issue (where fair value is disclosed in note 26), are not materially different from their carrying amounts due to the fact that the interest rates are considered to represent market rates at the year end.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3.
Group
Holding Company
The fair values of financial assets with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices.
The fair value of the derivative financial instruments is established by using a valuation technique. Valuation techniques comprise discounted cash flow analysis. The valuation technique is consistent with generally accepted economic methodologies for pricing financial instruments. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using appropriate rates at end of the reporting period.
The following table provides an analysis of financial instruments that are not measured subsequent to initial recognition at fair value, other than those with carrying amounts that are reasonable approximations of fair value and other than shares in subsidiary companies, grouped into Levels 1 to 3.
Group
The fair values of the financial assets and liabilities included in level 2 and level 3 categories above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the market interest rate at year end and the credit risk of counterparties.
Holding Company
36. Financial risk management
The exposures to risk and the way risks arise, together with the Group’s objectives, policies and processes for managing and measuring these risks are disclosed in more detail below.
The objectives, policies and processes for managing financial risks and the methods used to measure such risks are subject to continual improvement and development. Where applicable, any significant changes in the Group’s exposure to financial risks or the manner in which the Group manages and measures these risks are disclosed below.
Where possible, the Group aims to reduce and control risk concentrations. Concentrations of financial risk arise when financial instruments with similar characteristics are influenced in the same way by changes in economic or other factors. The amount of the risk exposure associated with financial instruments sharing similar characteristics is disclosed in more detail in the notes to the financial statements.
Credit risk
Financial assets which potentially subject the Group to concentrations of credit risk, consist principally of trade receivables, loans and receivables, debt securities held, financial assets at fair value through other comprehensive income and cash at bank. Trade receivables and loan and receivables are presented net of an allowance for doubtful debts. An allowance for doubtful debts is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. Cash at bank are placed with reliable financial institutions with a credit rating of A+ - BBB+ at year end (2024 – AA- - BBB+).
Credit risk with respect to trade receivables is limited due to the nature of the Group’s operations. Loans and receivables comprise amounts due from related parties. The Group’s and the Holding Company’s concentration to credit risk arising from these receivables are considered limited as there were no indications that these counterparties are unable to meet their obligations. Management considers these to be of good credit quality. Management does not consider loans and receivables to have deteriorated in credit quality and the effect of management’s estimate of the 12-month credit loss has been determined to be insignificant to the results of the Group and Holding Company.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained. Any guarantees are disclosed in note 34.
Quoted investments are acquired after assessing the quality of the related investments.
Currency risk
Foreign currency transactions arise when the Group buys or sells goods or services whose price is denominated in foreign currency, borrows or lends funds when the amounts payable or receivable are denominated in a foreign currency or acquires or disposes of assets, or incurs or settles liabilities, denominated in foreign currency.
The risk arising from foreign currency transactions is managed by regular monitoring of the relevant exchange rates and management’s reaction to material movements thereto.
The functional currency of all the subsidiaries, except the Romanian entities, was the Euro both in the current year and in the prior year. Furthermore, the translation of the Romania entity, which has the Romanian Lei as its functional currency is recognised in the Group’s other comprehensive income in accordance with the Group’s accounting policies.
Interest rate risk
The Group has taken out bank borrowings and debt securities to finance its operations as disclosed in notes 24 and 26. The interest rates thereon and the terms of such borrowings are disclosed accordingly. The effective interest rate on loans and receivables, other financial liabilities, bank borrowings, debt securities in issue and cash at bank are disclosed in notes 18, 23, 24, 26 and 29 respectively.
The Group is exposed to cash flow interest rate risk on borrowings and debt instruments carrying a floating interest rate and to fair value interest rate risk on borrowings and debt instruments carrying a fixed interest rate to the extent that these are measured at fair value. Investments in equity instruments are not exposed to interest rate risk.
Management monitors the movement in interest rates and, where possible, reacts to material movements in such rates by adjusting its selling prices or by restructuring its financing structure. The Group entered into interest rate swaps to hedge its exposure arising from floating interest rates on certain bank borrowings.
The carrying amounts of the Group’s financial instruments carrying a rate of interest at the reporting date are disclosed in the notes to the financial statements.
Sensitivity analysis
The Group has used a sensitivity analysis technique that measures the change in cash flows of the Group’s bank borrowings, net of cash at bank and on hand, and derivative financial instruments at the end of the reporting period for hypothetical changes in the relevant market risk variables. The sensitivity due to changes in the relevant risk variables is set out below.
The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual results in the future may differ materially from those projected results due to the inherent uncertainty of global financial markets. The sensitivity analysis is for illustrative purposes only, as in practice market rates rarely change in isolation and are likely to be interdependent.
The estimated change in cash flows for changes in market interest rates are based on an instantaneous increase or decrease of 50 basis points at the end of the reporting period, with all other variables remaining constant.
The sensitivity of the relevant risk variables is as follows:
The sensitivity on profit or loss in respect of market interest rates for the Group is mainly attributable to cash and cash equivalents, bank borrowings and derivative financial instruments. The sensitivity on profit or loss in respect of market interest rates for the Holding Company is attributable only to cash and cash equivalents.
Liquidity risk
The Group and the Holding Company monitor and manage their risk to a shortage of funds by maintaining sufficient cash, by matching the maturity of both their financial assets and financial liabilities and by monitoring the availability of raising funds to meet financial obligations.
Funds are transferred within the Group as and when the need arises. Management monitors liquidity risk by means of cash flow forecasts on the basis of expected cash flows over a twelve-month period, which is adjusted monthly and monitored on a weekly basis, to ensure that any additional financing requirements are addressed in a timely manner.
The Group and the Holding Company are exposed to liquidity risk in relation to meeting the future obligations associated with their financial liabilities, which comprise principally trade and other payables, other financial liabilities, lease liabilities and interest-bearing borrowings (refer to notes 22, 23, 24, 25 and 26). Prudent liquidity risk management includes maintaining sufficient cash and committed credit lines to ensure the availability of an adequate amount of funding to meet the Holding Company’s and Group’s obligations.
At the end of the reporting period, the Group reported a net current liability position of Eur101,803,333 ( 2024 – Eur45,715,770). In 2019, the Group first time adopted IFRS16 Leases. The Standard required the Group to recognise leases on the statement of financial position which will reflect the right-of-use asset for a period of time and the associated liability for payments. Right-of-use assets and non-current lease liabilities did not impact the net current position of the Group. However, the current lease liabilities negatively impacted the net current position of the Group by E ur13,686,019 (2024 – E ur 12,475,782 ). In 2023, the Group first-time adopted Customer Loyalty Program provisions in line with IFRS 15 Revenue Recognition . This also impacted current accrual provisions by Eur2,577,787 (2024 - Eur2,344,962). In 2025, the net current liability position of the group has further increased due to the reclassification of the debt securities in issue amounting to Eur64,914,147 to current liabilities. Debt securities in issue are redeemable on 23 November 2026 (Note 26).
The Group continued to finance capital expenditure from working capital. In 2025, the Group has invested a total of Eur33,430,760 (2024 – Eur39,733,462 ) in property, plant and equipment.
As detailed in note 24, the Group continued to leverage by means of bank loans which at the end of the reporting period amounted to Eur 36,107,763 (2024 – Eur37,528,796 ). These include new financing granted during the year to Romania operations of Eur11,590,000 (2024 – Eur12,000,000 ). The Holding Company also utilised an overdraft facility amounting to Eur3,702,618 ( 2024 - Eur 1,843,671).
The Holding Company has a portfolio of foreign investments with a carrying amount of Eur19,304,902 (2024 - Eur17,195,882 ) . The intention of the Group is to maximise return on headroom until the need to deploy on capital or recurring expenditure.
The directors have reviewed cash flow projections that have been prepared for the next 12 months. The Group budgets and cash flow forecasts assume that the Group continues to operate within its current credit limits afforded by third party creditors and also a strategy to continue to invest in capital expenditure as far as possible from working capital for at least the next 12 months. Based on continued operating profitability, the directors are confident that the Group will have no difficulty to continue to meet its commitments as and when they fall due.
The following maturity analysis for financial liabilities shows the remaining contractual maturities using the contractual undiscounted cash flows on the basis of the earliest date on which the Group can be required to pay. The analysis includes both interest and principal cash flows.
Group
Holding Company
The table below details changes in the Group and the Holding Company’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Statement of Cash Flows as cash flows from financing activities.
Group
Holding Company
Derivative financial instruments
The Group does not use derivative financial instruments for speculative purposes.
The Group uses interest rate swaps to convert a proportion of its floating rate debt to fixed rates.
During the year under review and during the prior year, the Holding Company did not designate any of its derivative financial instruments in a hedging relationship for accounting purposes.
37. Capital risk management
The Holding Company’s objectives when managing capital are to safeguard its ability to continue as a going concern and to maximise the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of items presented within equity in the statement of financial position, bank borrowings and debt securities as disclosed in notes 24 and 26 and cash and cash equivalents as disclosed in note 29.
The Holding Company’s directors manage the capital structure and make adjustments to it, in light of changes in economic conditions. The capital structure is reviewed on an on-going basis. Based on recommendations of the directors, the Holding Company balances its overall capital structure through payments of dividends (subject to bank approval when required), new share issues as well as the issue of new debt or the redemption of existing debt.
The Group’s overall strategy remains unchanged from the prior year.
38. Events after reporting period
No adjusting or significant non-adjusting events have occurred between 31 December 2025 and the date of authorisation.
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Grant Thornton Malta Fort Business Centre, Level 2 Triq L-Intornjatur, Zone 1 Central Business District Birkirkara CBD1050 Malta T +356 20931000
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Independent auditor’s report
To the shareholders of Premier Capital p.l.c.
Report on the audit of the financial statements
Opinion We have audited the financial statements of Premier Capital p.l.c. (the “Company”) and of the Group of which it is the parent, which comprise the statements of financial position as at 31 December 2025, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and notes to the financial statements, including the material accounting policies and other explanatory information. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company and the Group as at 31 December 2025, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU), and have been properly prepared in accordance with the requirements of the Companies Act, Cap. 386 (the “Act”). Our opinion is consistent with our additional report to the audit committee.
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements of the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act, Cap. 281 that are relevant to our audit of the financial statements in Malta. 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. Key Audit Matters Key audit matters are those matters that, in our professional judgement, 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) that we identified. 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.
Impairment testing of goodwill in the consolidated financial statements
Key audit matter Management is required by International Accounting Standard (IAS) 36, Impairment of Assets, to carry out an annual assessment to establish whether the Group’s goodwill is carried at no more than its recoverable amount. On the basis of its assessment for the current year, management concluded that the carrying amount of the Group’s goodwill amounting to € 24.69 million, € 16.59 million of which is allocated to the operations in Malta and € 8.09 million allocated to the operations in Romania, was not impaired. We focused on this area because of the significance of the amount and because impairment testing involves complex and subjective judgements by the Directors about the future results of the relevant parts of the business. In addition, management’s assessment process is based on significant assumptions, specifically the determination of the discount rate and cash flows projections used in determining the value-in-use of the cash-generating units over which the goodwill was allocated. The assumptions used by management are generally affected by expected future market and economic conditions. How the key audit matter was addressed in our audit We evaluated the suitability and appropriateness of the impairment methodology applied by management and engaged our internal valuation specialist resources to assess the reliability of the directors’ forecasts and to challenge the methodology used and the underlying assumptions. We concluded that the parameters utilised were reasonable. We communicated with management and those charged with governance and noted that they were able to provide satisfactory responses to our questions. We also assessed the adequacy of the disclosures made in note 3 of the financial statements relating to goodwill including those regarding the key assumptions used in assessing its carrying amount. Those disclosures specifically explain that the directors have assessed the carrying amount of goodwill as at 31 December 2025 to be recoverable and that there is no impairment in the value of the goodwill. Revenue recognition in the consolidated financial statements
Key audit matter The Group recognises revenue from restaurant sales when services are rendered, that is, when food and beverage products purchased by customers have been delivered and accepted by the customers. We considered revenue recognition as key audit matter since it involves a significant volume of transactions, requires proper observation of cut-off procedures, and directly impacts the Group’s profitability. The Group’s disclosures on its revenue recognition policy is presented in note 2 to the financial statements. How the key audit matter was addressed in our audit Our audit procedures to address the risk of material misstatement relating to revenue recognition included, among others, testing the design and operating effectiveness of the Group’s internal controls over recognition of revenues; performing substantive analytical review procedures over revenues such as, but not limited to, yearly and monthly analyses of sales per product/brand and location, and sales mix composition based on our expectations and following up variances from our expectations; and, verifying that the underlying information used in the analyses are valid. Impairment testing of investment in subsidiaries recognised in the financial statements of the Company
Key audit matter The management is also required by IAS 36, Impairment of Assets, to carry out a review for any indication that the carrying amount of the investment in subsidiaries is not impaired. On the basis of its review for the current year, management concluded that the carrying amount of the investment in subsidiaries amounting to € 78.21 million, was not impaired. We considered impairment test of investment in subsidiaries as key audit matter because the amount is material to the Company’s financial statements. How the key audit matter was addressed in our audit We evaluated the suitability and appropriateness of the impairment methodology applied by management and engaged our internal valuation specialist resources to assess the reliability of the directors’ forecasts and to challenge the methodology used and the underlying assumptions. We concluded that the parameters utilised were reasonable. We communicated with management and those charged with governance and noted that they were able to provide satisfactory responses to our questions. We also assessed the adequacy of the disclosures made in note 17 of the financial statements relating to investments including those regarding the key assumptions used in assessing its carrying amount. Those disclosures specifically explain that the directors have assessed the carrying amount of investments as at 31 December 2025 to be recoverable and that there is no impairment in the value of the investments. Other information The directors are responsible for the other information. The other information comprises (i) the Directors, officer and other information, (ii) the Directors’ report, (iii) Statement of directors’ responsibilities and (iv) the Corporate governance statement which we obtained prior to the date of this auditor’s report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information, including the Directors’ report. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the Directors’ report, we also considered whether the Directors’ report includes the disclosures required by Article 177 of the Act.
Based on the work we have performed, in our opinion:
In addition, and in light of the knowledge and understanding of the Company and the Group and their environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Directors’ report and other information that we obtained prior to the date of this auditor’s report. We have nothing to report in this regard.
Responsibilities of the directors and those charged with governance for the financial statements The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with IFRS as adopted by the EU and are properly prepared in accordance with the provisions of the Act, 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 Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. The directors are responsible for overseeing the Company’s and the Group’s financial reporting process.
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 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. As part of an audit in accordance with the ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with the relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefit of such communication. Report on other legal and regulatory requirements Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6 We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF Directive 6”) on the Report and Consolidated Financial Statements of Premier Capital p.l.c. for the year ended 31 December 2025, entirely prepared in a single electronic reporting format. Responsibilities of the directors The directors are responsible for the preparation of the Report and Consolidated Financial Statements and the relevant mark-up requirements therein, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS. Our responsibilities Our responsibility is to obtain reasonable assurance about whether the Report and Consolidated Financial Statements and the relevant electronic tagging therein, complies in all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the requirements of ESEF Directive 6. Our procedures included:
Opinion In our opinion, the Report and Consolidated Financial Statements for the year ended 31 December 2025 has been prepared, in all material respects, in accordance with the requirements of the ESEF RTS. Report on Corporate governance statement The Capital Markets Rules issued by the Malta Financial Services Authority (MFSA) require the directors to prepare and include in their Annual Report a Corporate governance statement providing an explanation of the extent to which they have adopted the Code of Principles of Good Corporate Governance and the effective measures that they have taken to ensure compliance throughout the accounting period with those Principles. The Capital Markets Rules also require us, as the auditor of the Company, to include a report on the Statement of Compliance prepared by the directors. We read the Corporate governance statement and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements included in the Annual Report. Our responsibilities do not extend to considering whether this statement is consistent with any other information included in the Annual Report. We are not required to, and we do not, consider whether the Board’s statements on internal control included in the Corporate governance statement cover all risks and controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control procedures. In our opinion, the Corporate governance statement has been properly prepared in accordance with the requirements of the Capital Markets Rules. Other matters on which we are required to report by exception We also have responsibilities
We have nothing to report to you in respect of these responsibilities.
Auditor tenure We were first appointed as auditors of the Company and the Group on 9 October 2018 and therefore represents an engagement appointment of eight years. The principal on the audit resulting in this independent auditor’s report is Sharon Causon.
Sharon Causon (Principal) for and on behalf of GRANT THORNTON Certified Public Accountants
Fort Business Centre Triq L-Intornjatur, Zone 1 Central Business District Birkirkara CBD 1050 Malta
23 April 2026
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