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Registration Number: C89462
SP FINANCE P.L.C.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 st DECEMBER 2025
SP FINANCE P.L.C.
CONTENTS
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PAGE
Report of the directors
1 to 5
Statement of compliance with the principles of good corporate governance
6 to 9
Statement of profit or loss and comprehensive income
10
Statement of financial position
11-12
Statement of changes in equity
13
Statement of cashflows
14
Notes to the financial statements
15 to 51
Independent auditors’ report
SP FINANCE P.L.C.
REPORT OF THE DIRECTORS
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1
Directors:-
Mr. Joseph Casha
Mrs. Josephine Casha
Dr. Alex Perici Calascione – Non-executive director
Dr. Reuben Debono – Non-executive director
Mr. Mark Anthony Grech – Non-executive director
Secretary:-
Dr. Andrea Micallef
Bankers:-
HSBC Bank Malta p.l.c.
Business Bank Centre
Mill Street,
Qormi
Bank of Valletta p.l.c.
1st Floor, Msida Branch
212/215 Marina Street
Pieta
Registered Office:-
89,
The Strand,
Sliema, Malta.
The Directors hereby present their annual report together with the audited financial statements of SP Finance p.l.c. (the “Company”) for the year ended on 31 December 2025.
The Directors also present their annual report together with the audited financial statements of the SP Finance p.l.c. Group (the “Group”) which comprises the Company and its fully owned subsidiaries, namely SP Investments Limited (Reg. No. C-89468), Med Asia Branding Ltd. (formerly Pebbles St Julians Limited) (Reg. No. C-89612), Pebbles Resort Limited (Reg. No. C-89613), Sea Pebbles Limited (Reg. No. C-6138) and Med Asia Operations Limited (Reg. No. C-103605) for the year ended on 31 December 2025.
Principal Activities
The Company’s principal activity is to act as the parent and investment holding company of the Group.
The Group’s principal activities consist in the ownership and operation of the Pebbles Boutique Aparthotel in Sliema and the operation of the Pebbles Resort hotel in St. Paul’s Bay. Since 1 April 2023 the Group, through its subsidiary Med Asia Operations Limited operates a number of catering and entertainment establishments namely the MedAsia Fusion Lounge in Sliema, the MedAsia Playa in Sliema, The MedAsia Golden Sands in Golden Bay, the Noodle Box in Sliema and all the bar and restaurant establishments located in the Pebbles Resort in St. Paul’s Bay.
The Group, through its subsidiary Med Asia Branding Limited, also holds intellectual property rights.
Bond Issue
In terms of the Prospectus dated 8 April 2019 the Company had offered for subscription an amount of €12 million 4% Secured Bonds 2029 of a nominal value of €100 per Bond issued at par. The Bonds were fully subscribed and admitted to the Official List of the Malta Stock Exchange p.l.c. with effect from 3 May 2019. Sea Pebbles Limited acted as guarantor of this bond issue (the “Guarantor”).
In accordance with the Prospectus, the proceeds from the bond issue were utilized by the Group to acquire properties connected with its current hotel operations and planned expansion projects, to refurbish and upgrade the San Pawl Hotel (now Pebbles Resort) and to repay an outstanding bank financing facility.
SP FINANCE P.L.C.
REPORT OF THE DIRECTORS
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2
Review of Business
The Group registered a profit before tax of €527,416 (2024: Profit of €763,709) after taking into consideration an impairment of property, plant and equipment in Med Asia Operations Limited amounting to €337,672.
The Group’s revenue in 2025 amounted to €10,320,399 (2024: €9,872,283). The increase in revenue is principally due to an 18% improvement in the revenue achieved by Pebbles Resort Limited (€5,448,928 in 2025 compared to €4,609,375 in 2024). This increase was partly offset by a 4% decrease in revenue of Med Asia Operations Limited (€5,584,711 in 2025 compared to €5,814,034 in 2024).
At the end of 2025 on the basis of an independent architect’s valuation, supported by a directors’ assessment of the discounted cashflows, the directors have decided to revalue the immovable property in Sliema, owned by Sea Pebbles Limited, to €42,000,000. The effect of this revaluation was an increase in the value of the Group’s Non-Current Assets of €11,338,552, an increase in the Revaluation Reserve of €9,400,092 and an increase in the Deferred Tax liability of €1,938,460.
The Company registered a profit before tax of €3,373 (2024: Profit of €38,987).
Financial Position
As at 31 December 2025 the Group’s total asset base amounted to €55,399,400 (2024: €44,778,235). The Group’s current assets amounted to €2,971,379 (2024: €4,896,514) while current liabilities amounted to €8,062,345 (2024: €8,144,235). The Group’s non-current liabilities amounted to €18,551,918 (2024: €17,517,026), mostly consisting of bond borrowings amounting to €12,000,000.
Business Update
During 2025 construction works on the site formerly occupied by the Pebbles Boutique Aparthotel in Sliema continued, and by the end of the year construction works were almost completed and finishing works were due to start. The Group expects that the hotel will re-open in the last quarter of 2026.
The Pebbles Resort in St. Paul’s Bay, which during the summer months operates as a music hotel under the ‘Bora Bora Ibiza Malta’ franchise continued to perform very well. Its revenue increased from €4,609,375 in 2024 to €5,448,928 in 2025 (+18%). The profit before tax of €640,627 in 2025 is lower than the profit before tax of 2024 of €1,246,412, since the latter includes a one-off reversal of a prior year impairment in the carrying value of the right-of-use asset and property, plant and equipment of €1,026,316.
The financial results of Med Asia Operations Limited, which operates the Group’s various catering and entertainment establishments, were below than those projected. Revenue fell by 4% from €5,814,034 in 2024 to €5,584,711 in 2025. The loss in revenue of the company is mainly attributable to the poor performance of its MedAsia Fusion Lounge outlet, which being situated beneath the construction site of the Sliema hotel, was negatively affected, resulting in a decrease in revenue for this outlet of 25.5% compared to the previous year. The other catering outlets performed slightly better than projected on the whole, partly offsetting the negative effects of the reduced turnover at MedAsia Fusion. The company realized a loss before tax of €200,105 in 2025 compared to a loss before tax of €97,837 in 2024. This deterioration in profitability is principally attributable to the loss in turnover as described earlier. The loss before tax in 2025 includes an impairment of property, plant and equipment of the company amounting to €337,672. The reason for this impairment is the closing down in April 2026 of the MedAsia Fusion Lounge outlet for refurbishment during which the existing property, plant and equipment situated within will be completely replaced.
Med Asia Branding Limited, which holds the intellectual property rights relating to the MedAsia brand, had similar turnover to the previous year (€288,213 in 2025 compared to €290,702 in 2024). The company made a profit before tax of €274,476 in 2025 compared to a loss before tax of €89,280 in 2024, however the latter included a one-off impairment loss of €370,000.
SP FINANCE P.L.C.
REPORT OF THE DIRECTORS
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3
Key Risks – General
The Group’s business activities consist of the provision of tourist accommodation and the operation of catering and entertainment establishments. Such hospitality operations are subject to external factors, many of which are common to the hospitality industry, and beyond the Group’s control, including: (i) general market and economic conditions in the countries from which tourists originate; (ii) increased risk of recession resulting from the effects of global rise in fuel prices and instability due to conflict in Iran, as well as the prospect of flight cancellations due to disruptions in the supply of fuel for airlines (iii) susceptibility to local competition; (iv) impact of geo-political instability due to ongoing armed conflicts in Eastern Europe and the Middle East; (v) outbreaks of pandemics that may restrict international travel and (vi) increases in operating costs.
While negative trends in any of these areas, if they materialize, would unavoidably impact on the Group’s operations and business, it is considered that the Group’s decades-long presence and experience operating in this sector renders it sufficiently resilient to overcome any challenges it may face.
Key Risks – Specific
As stated above, the Group has embarked on a multi-million-euro project to transform the now demolished Pebbles Boutique Aparthotel in Sliema into a much larger hotel which is expected to be completed by the third quarter of 2026. The new hotel, when operational, is expected to generate significantly higher revenues and profitability compared to the hotel which operated on the same site until December 2023.
The principal risks which have been identified with this project are:
•Cost overruns. The directors consider this to be a low to medium risk since most works contracts are in place and that the remaining construction works as well as the finishing works will be carried out mostly by related companies outside the Group.
•Delay in completion date. The directors consider that a significant delay in the completion date is a low to medium risk since most construction and finishing works are mainly being carried out by related companies outside the Group and therefore within the operational control of the ultimate shareholders.
•Change in market conditions prevalent when the hotel reopens. This is considered as a low risk by the directors in view of the current robustness of the Maltese tourism industry, the hotel’s prime location and the excellent customer reviews it has always received.
•Project financing. This project is being currently financed by the Group’s cash generation and by related companies outside the Group. In addition, following the issuance in 2025 of a sanction letter by a local financial institution with which the Group has a long-standing relationship, covering the project’s completion costs, and upon the provision of the required security as stipulated therein, the Group also obtained financing through a bank loan of €8.3 million.
Statement pursuant to Capital Markets Rule 5.62
Rule 5.62 of the Capital Markets Rules requires the directors to make a statement that the business is a going concern with supporting assumptions or qualifications as necessary.
In preparing this statement the directors considered the following factors:
In general, Malta’s tourism sector in 2025 and the first few months of 2026 has continued to show signs of robustness and steady growth. Industry experts and government sources are projecting that tourist arrivals in 2026 will surpass the record numbers achieved in 2025. As a Group that operates in the hospitality industry (tourist accommodation and catering and entertainment establishments) this augurs well that in the foreseeable future the Group will be operating in a robust and flourishing tourism industry.
SP FINANCE P.L.C.
REPORT OF THE DIRECTORS
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4
More specifically, the Group’s financial position continued improving in 2025 compared to 2024 and prior years, and for the second consecutive year it managed to record a profit before tax notwithstanding that one of the two hotels it operates was closed throughout the year. The investment made in the music hotel concept under which the Pebbles Resort operated during the summer months since 2022 is bearing fruit, enabling the company to provide a unique experience that distinguishes it from other hotels, thus securing higher occupancy levels at better rates compared to competitor hotels in the surrounding area.
The directors also considered realistic the financial projections presented by management, which indicate that the Group is likely to generate sufficient financial resources through its operations to permit it to continue in operational existence for the foreseeable future.
Therefore, in terms of Capital Markets Rule 5.62, the Directors hereby state that these financial statements have been prepared on the going concern basis.
Loans between subsidiary companies
The proceeds from the bond issue of the 3 May 2019 were invested as €12,000,000 4.1% Cumulative Preference shares in its subsidiary SP Investments Limited. In turn, these proceeds were invested by SP Investments Limited in its subsidiaries, which are the companies operating the Group’s hotels, partly as Ordinary share capital and partly as loans.
As per section B5 of the Summary Note forming part of the Prospectus of the above-mentioned bond issue, the loans invested by SP Investments Limited in its subsidiaries were interest-free.
As from 1 January 2021, it was deemed beneficial to the Group that SP Investments Limited start charging interest on the loans to its subsidiaries at the rate of 8% per annum. Following a share reduction of €2,500,000 by Sea Pebbles Limited which came into effect on the 30 December 2022, and the conversion of the €2,500,000 to a loan from SP Investments Limited to its subsidiary Sea Pebbles Limited, the interest rate charged by SP Investments Limited to Sea Pebbles Limited was reduced to 6.5% per annum starting from 1 January 2023. The Group and the Company results are not negatively impacted by these changes.
Results, Dividends and Reserves
The results for the year are set in the Statement of Profit and Loss and Other Comprehensive Income on page 10.
The Board does not propose the payment of a dividend.
The Group’s retained earnings as at 31 December 2025 amounted to negative €3,582,978 (2024: negative €3,851,049) while the Company’s retained earnings on the same date amounted to €200,527 (2024: €198,334).
Statement of Directors’ Responsibilities for the Financial Statements
The Companies Act (Chapter 386 of the Laws of Malta) requires the directors of SP Finance p.l.c. to prepare annual financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the profit or loss for the year in accordance with the requirements of International Financial Reporting Standards as adopted by the European Union.
In preparing such financial statements, the Directors are required to:
•Adopt the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business;
•Select suitable accounting policies and apply them consistently from one accounting year to another;
•Make judgements and estimates that are reasonable and prudent; and
•Account for income and charges relating to the accounting year on the accruals basis.
SP FINANCE P.L.C.
REPORT OF THE DIRECTORS
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5
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements have been properly prepared in accordance with the provisions of the Companies Act. The directors are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud, errors and other irregularities.
The financial statements of SP Finance p.l.c. and the Group for the year ended on 31 December 2025 are included in the Annual Report 2025, which is available on the Company’s website.
Statement of Responsibility pursuant to the Capital Markets Rule 5.68
The directors confirm that, to the best of their knowledge:
•The 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 the financial performance and the cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union; and
•The Annual Report includes a fair review of the development and performance of the business and the position of the Company and the Group, together with a description of the principal risks and uncertainties that the Company and the Group face.
Statement pursuant to Capital Markets Rule 5.70.1
Sea Pebbles Limited has entered into a contract with Sea Pebbles Construction Limited (C 103112), a company outside the Group whose directors are Mr. Joseph Casha and Mrs. Josephine Casha, for the construction and finishing works at the site of the former Pebbles Boutique Aparthotel in Sliema. During 2025 Sea Pebbles Construction Limited undertook construction works at this site.
Auditors
VCA Certified Public Accountants have intimated their willingness to continue in office. A resolution for their reappointment will be proposed at the Annual General Meeting.
Signed on behalf of the Board of Directors on 30 April 2026 by Mr. Joseph Casha (Director) and Mrs. Josephine Casha (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Financial Statements.
SP FINANCE P.L.C.
STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE
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6
Introduction
Pursuant to the Listing Rules as issued by the Listing Authority of the Malta Financial Services Authority, S.P. Finance p.l.c. (the ‘company’ or the ‘Issuer’) is hereby reporting on the extent of its adoption of the Code of Principles of Good Corporate Governance (the ‘Principles’) contained in Appendix 5.1 of the Listing Rules as well as the measures adopted to ensure compliance with these same Principles.
Since its inception, the company’s principal activity was to raise funds from the capital market to finance the operations of other group companies forming part of the SP Finance P.L.C. Group (the ‘Group’).
The Board of Directors acknowledges that the Code does not dictate or prescribe mandatory rules but recommends principles of good practice. Nonetheless, the Board strongly believes that the Principles are in the best interest of the shareholders and other stakeholders since they ensure that the Directors, and Management of the company adhere to internationally recognised high standards of Corporate Governance.
The company currently has a corporate decision-making and supervisory structure that is tailored to suit the company’s requirements and designed to ensure the existence of adequate checks and balances within the company, whilst retaining an element of flexibility, particularly in view of the size of the company and the nature of its business. The company adheres to the Principles, 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 Listing Rules 5.97.1 to 5.97.3; 5.97.6 and 5.97.8.
Roles and Responsibilities
The Board acknowledges its statutory mandate to conduct the administration and management of the Company. The Board, in fulfilling its mandate and discharging its duties assumes responsibility for:
1.the Company’s strategy and decisions with respect to the issue, servicing and redemption of its bonds;
2.monitoring that its operations are in conformity with its commitments towards bondholders, shareholders and all relevant laws and regulations; and
3.ensuring that the Company installs and operates effective internal control and management systems and that it communicates effectively with the market.
The Board of Directors
The Board of Directors of the company is responsible for the overall long-term direction of the company, in particular in being actively involved in overseeing the systems of control and financial reporting and that the company communicates effectively with the market. The Company has in place systems whereby the directors obtain timely information not only at meetings of the Board but at regular intervals or when the need arises.
Directors are appointed during the Company’s Annual General Meeting for periods of one year, at the end of which term they may stand again for re-election. The Articles of Association of the Company clearly set out the procedures to be followed in the appointment of directors.
Apart from setting the strategy and direction of the Company, the Board retains direct responsibility for approving and monitoring:
1.that the proceeds of the bonds are applied for the purposes for which they were sanctioned as specified in the prospectus of the bonds issued.
2.the proper utilization of the resources of the Company.
3.the annual report and financial statements, the relevant public announcements and the Company’s compliance with its continuing obligations under the Listing Rules.
SP FINANCE P.L.C.
STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE
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7
Complement of the Board
The Board of Directors meets regularly, with a minimum of four times annually, and is currently composed of five Members, three of which are completely independent from the company or any other related companies and therefore free of any significant business relationship, family or other relationships with the Issuer, its controlling shareholders or the management, that creates a conflict of interest such as to impair their judgement.
The activities of the Board are exercised in a manner designed to ensure that it can effectively supervise the operations of the Company and protect the interests of bondholders and the shareholders. During the current financial period, meetings of the Board were held as frequently as considered necessary.
The Board members are notified of forthcoming meetings by the Company secretary (Dr. Andrea Micallef) with the issue of an agenda and necessary supporting documentation which are then discussed during the Board meetings.
During the financial year under review, the Board met formally eight times and was always attended by more than 75% of the Officers of the Company.
Dr. Alex Perici Calascione, Mr. Mark Anthony Grech and Dr. Reuben Debono are the independent non-executive directors of the company.
Executive Directors
Josephine Casha
Joseph Casha
Independent, Non-Executive Directors
Dr. Alex Perici Calascione
Dr. Reuben Debono
Mr. Mark Anthony Grech
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 should a conflict of interest in decision making ever to arise, the current internal policy of the Company is such as to ensure that the particular Director refrains from participating in such decisions. The Board member concerned shall not take part in the assessment by the Board as to whether a conflict of interest exists. A Director shall not vote in respect of any contract, arrangement, transaction or proposal in respect of which he has a material interest.
Risk Management and Internal Control
The company’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 company’s system of internal controls in the following manner:
1.Reviewing the company’s strategy on an on-going basis as well as setting the appropriate business objectives in order to enhance value for all stakeholders;
2. Implementing an appropriate organisational structure for planning, executing, controlling and monitoring business operations in order to achieve company objectives;
3. Identifying and ensuring that significant risks are managed satisfactorily; and
4. Company policies are being observed.
SP FINANCE P.L.C.
STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE
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8
Audit Committee
The Board of Directors of the Company has established an Audit Committee in accordance with the requirements of the Listing Rules issued by the Listing Authority. The Audit Committee’s primary objective is to assist the Board in fulfilling its responsibilities relating to risk, control, and governance, as well as to review the financial reporting process and the process for monitoring compliance with applicable laws and regulations.
The Audit Committee is a sub-committee of the Board constituted to fulfil an overseeing role in connection with the quality and integrity of the Company’s financial statements. In performing its duties, the Audit Committee maintains effective working relationships with the Board of Directors, management, and the external auditors of the Company. The Committee also has the function of scrutinising and evaluating any proposed transaction to be entered into by the Company and a related party, to ensure that the execution of any such transaction is at arm’s length and on a commercial basis ultimately in the interest of the Company.
The Board has set formal Terms of Reference of the Audit Committee that establish its composition, role, and scope. The Board reserves the right to amend these Terms of Reference from time to time. The Terms of Reference of the Audit Committee are modelled on the principles set out in the Listing Rules 5.117 – 5.134A.
The Audit Committee assists the Board in fulfilling its supervisory and monitoring responsibility by reviewing the company financial statements and disclosures, monitoring the system of internal control established by management as well as the audit processes. The Audit Committee is a subcommittee of the Board and is directly responsible and accountable to the Board.
In terms of the Maltese Companies Act (Chap. 386) and the Malta Financial Services Authority Listing Rules, the financial statements of SP Finance plc are subject to annual audit by its external auditors. Moreover, the Audit Committee has direct access to the external auditors of the Company, who attend the meeting at which the Company’s financial statements are approved.
The Audit Committee, which meets regularly, with a minimum of four times annually, is currently composed of the following individuals:
Mr. Mark Anthony Grech (Chairman)
Dr. Alex Perici Calascione
Dr. Reuben Debono
This current complement addresses the requirement established by the Listing Rules that the Audit Committee is composed of non-executive directors, the majority of which being independent.
The Board considers Mr. Mark Anthony Grech to be competent in accounting and auditing matters in terms of the Listing Rules. Mr Mark Anthony Grech is considered as an independent director since he is free of any significant business, family or other relationship with the Company, its controlling shareholders or the management of either, that could create a conflict of interest such as to impair his judgement. 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 was formally set up on the 6 th November 2019. Communication with and between the Secretary, top level management and the Committee is ongoing and considerations that required the Committee’s attention were acted upon between meetings and decided by the Members (where necessary) through electronic circulation and correspondence.
Relations with the market
The market is kept up to date with all relevant information, and the company regularly publishes such information on its website to ensure consistent relations with the market.
SP FINANCE P.L.C.
STATEMENT OF COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE
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Committees
The directors believe that, due to the Company’s size and operation, the remuneration, evaluation and nominations committees that are suggested by the Code are not required and that the function of these can effectively be undertaken by the Board itself. However, the Board is tasked to review on an annual basis, the remuneration paid to the directors and to carry out an evaluation of their performance and that of the Audit Committee. The shareholders approve the remuneration paid to the directors at the annual general meeting of the Company.
Remuneration Statement
Pursuant to the Company’s Memorandum and Articles of Association, the maximum annual aggregate emoluments that may be paid to the directors is determined by the Company further to a General Meeting during which the proposed aggregate emoluments or an increase in the maximum limit of such aggregate emoluments shall be proposed. Furthermore, the remuneration of directors is a fixed amount per annum and does not include any variable component relating to profit sharing, share options or pension benefits. During the year under review, the directors received emoluments amounting in total to €29,000.
Conclusion
The Board considers that, to the extent otherwise disclosed herein, the Company was generally in compliance with the Principles throughout the period under review as befits a company of its size and nature.
Approved by the Board on Directors and Signed on its behalf on the 30 April 2026 by Mr. Joseph Casha (Director) and Mrs Josephine Casha (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Financial Statements.
SP FINANCE P.L.C.
STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
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10

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
Notes | € | € | € | €

Revenue | 4.2 | 10,320,399 | 9,872,283 | 642,000 | 642,000
Costs |  |  |  |  |
Operating expenses | 7 | (6,891,747) | (6,899,455) | (39,184) | (34,185)
Administrative expenses | 7 | (415,511) | (342,171) | (119,443) | (88,828)
Other operating income | 5 | 76,616 | 55,303 | - | -
Loss on disposal of PPE items | 10,11 | - | (246,267) | - | -
Adjusted EBITDA* |  | 3,089,757 | 2,439,693 | 483,373 | 518,987
Depreciation and amortisation | 10,15 | (1,657,720) | (1,455,984) | - | -
Finance costs | 6 | (566,949) | (616,316) | (480,000) | (480,000)
Reversal of Impairment of non-financial instruments | 10,15 | - | 1,026,316 | - | -
Impairment on items of PPE | 11 | (337,672) | - | - | -
Impairment of intangible assets | 14 | - | (630,000) | - | -
Profit before taxation |  | 527,416 | 763,709 | 3,373 | 38,987
Tax (expense)/ credit | 9 | (259,345) | 299,090 | (1,180) | (13,645)
Profit for the year |  | 268,071 | 1,062,799 | 2,193 | 25,342
comprehensive income |  |  |  |  |
Revaluation of Property, plant & equipment | 10,24 | 11,338,552 | - | - | -
Tax on revaluation | 9.1 | (1,938,460) | - | - | -
Revaluation of PPE, net of tax |  | 9,400,092 | - | - | -
Total comprehensive income |  | 9,668,163 | 1,062,799 | 2,193 | 25,342

*Adjusted EBITDA represents earnings before interest, taxation, depreciation and amortisation, impairment and reversal of impairment and revaluation of non-financial instruments.
SP FINANCE P.L.C.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
11
Group
Group
Company
Company
2025
2024
2025
2024
Assets
Notes
€
€
€
€

Non-current assets |  |  |  |  |
Property, Plant and equipment | 10 | 41,285,974 | 24,984,616 | - | -
PPE under development | 13 | 3,826,959 | 704,470 | - | -
Intangible assets | 14 | 3,620,104 | 3,620,104 | - | -
Right-of-use assets | 15 | 2,197,995 | 2,723,750 | - | -
Investment property | 11 | - | 5,959,912 | - | -
Investment in subsidiary | 16 | - | - | 19,097,783 | 19,097,783
Loans and receivables | 17 | - | - | 12,000,000 | 12,000,000
Deferred tax asset | 20 | 1,496,989 | 1,888,869 | - | -
|  | 52,428,021 | 39,881,721 | 31,097,783 | 31,097,783
Current assets |  |  |  |  |
Trade and other receivables | 19 | 2,687,751 | 4,585,511 | 956,621 | 997,058
Inventories | 18 | 97,017 | 111,017 | - | -
Cash at bank and in hand | 27 | 186,611 | 52,178 | 23,018 | 14,756
Current tax asset | 9.1 | - | 147,808 | - | -
|  | 2,971,379 | 4,896,514 | 979,639 | 1,011,814
Total Assets |  | 55,399,400 | 44,778,235 | 32,077,422 | 32,109,597

SP FINANCE P.L.C.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
12
Group
Group
Company
Company
2025
2024
2025
2024
Equity and liabilities
Notes
€
€
€
€

Equity |  |  |  |  |
Called up issued share capital | 23 | 250,000 | 250,000 | 250,000 | 250,000
Share premium | 23 | 17,750,000 | 17,750,000 | 17,750,000 | 17,750,000
Revaluation reserve | 24 | 27,138,025 | 14,799,920 | - | -
Fair value gain reserve | 25 | - | 2,938,013 | - | -
Other reserve | 26 | (12,769,910) | (12,769,910) | 1,098,983 | 1,098,983
Retained earnings |  | (3,582,978) | (3,851,049) | 200,527 | 198,334
Total equity |  | 28,785,137 | 19,116,974 | 19,299,510 | 19,297,317
Liabilities |  |  |  |  |
Non-current liabilities |  |  |  |  |
Borrowings | 22 | 12,130,727 | 12,037,046 | 12,000,000 | 12,000,000
Lease liability | 15 | 2,344,975 | 3,201,338 | - | -
Deferred tax liability | 20 | 4,076,216 | 2,278,642 | - | -
|  | 18,551,918 | 17,517,026 | 12,000,000 | 12,000,000
Current liabilities |  |  |  |  |
Trade and other payables | 21 | 5,833,722 | 5,315,732 | 764,267 | 796,980
Current income tax liability | 9 | 248,792 | 378,072 | 13,645 | 15,300
Borrowings | 22 | 964,000 | 1,503,146 | - | -
Lease liability | 15 | 1,015,831 | 947,285 | - | -
|  | 8,062,345 | 8,144,235 | 777,912 | 812,280
Total liabilities |  | 26,614,263 | 25,661,261 | 12,777,912 | 12,812,280
Total equity and liabilities |  | 55,399,400 | 44,778,235 | 32,077,422 | 32,109,597

The financial statements were approved and authorised for issue by the Board of Directors on 30 April 2026. The financial statements were signed on behalf of the Board of Directors by Mr. Joseph Casha (Director) and Mrs. Josephine Casha (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and Financial Statement.
SP FINANCE P.L.C.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
13
Group
Share Capital
€
Share premium
€
Revaluation reserve
€
Fair Value gain reserve
€
Other
reserve
€
Retained earnings
€
Total
€

Balance at 1 January 2024 | 250,000 | 17,750,000 | 14,799,920 | 2,938,013 | (12,916,911) | (4,913,848) | 17,907,174
Capitalisation Reserve – Note 27 | - | - | - | - | 147,001 | - | 147,001
Comprehensive income |  |  |  |  |  |  |
Profit for the year | - | - | - | - | - | 1,062,799 | 1,062,799
Balance at 31 December 2024 | 250,000 | 17,750,000 | 14,799,920 | 2,938,013 | (12,769,910) | (3,851,049) | 19,116,974

Profit for the year | - | - | - | - | - | 268,071 | 268,071
Comprehensive income |  |  |  |  |  |  |
Revaluation of PPE – Note 24 | - | - | 9,400,092 | - | - | - | 9,400,092
Total profit & other comprehensive income | - | - | 9,400,092 | - | - | 268,071 | 9,668,163
Reallocation of reserve | - | - | 2,938,013 | (2,938,013) | - | - | -
Balance at 31 December 2025 | 250,000 | 17,750,000 | 27,138,025 | - | (12,769,910) | (3,582,978) | 28,785,137

Company
Share
Capital
Share
Premium
Other
Reserve
Retained Earnings
Total
€
€
€
€
€
Balance at 31 December 2023
250,000
17,750,000
1,098,983
172,992
19,271,975
Comprehensive income
Profit for the year
-
-
-
25,342
25,342
Balance at 31 December 2024
250,000
17,750,000
1,098,983
198,334
19,297,317
Comprehensive income
Profit for the year
-
-
-
2,193
2,193
Balance at 31 December 2025
250,000
17,750,000
1,098,983
200,527
19,299,510
SP FINANCE P.L.C.
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
14

|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
Cashflow from operating activities | Notes | € | € | € | €

Profit before taxation |  | 527,416 | 763,709 | 3,373 | 38,897
Adjustments for: |  |  |  |  |
Depreciation and amortisation | 10,15 | 1,657,720 | 1,455,984 | - | -
Finance costs | 6 | 535,366 | 584,730 | 480,000 | 480,000
Reversal of impairment on PPE and ROU | 10 | - | (1,026,316) | - | -
Amortisation of bond issue costs | 6 | 31,582 | 31,582 | - | -
Dividend income | 4 | - | - | (492,000) | (492,000)
Impairment on goodwill and intangible | 14 | - | 630,000 | - | -
Impairment of PPE | 10 | 337,672 | 246,267 | - | -
Operating profit/(loss) before working capital changes |  | 3,089,756 | 2,685,956 | (8,627) | 26,897
Movement in receivables/related company balances | 19 | 567,221 | 132,856 | 40,437 | (399,272)
Movement in inventories | 18 | 14,000 | 5,867 | - | -
Movement in payables | 21 | 1,192,077 | 1,071,238 | (33,893) | 372,148
Cash generated from/(used in) operations |  | 4,863,054 | 3,895,917 | (2,083) | (227)
Income tax refund |  | 10,177 | - | (1,655) | -
Interest paid |  | (613,039) | (630,920) | (480,000) | (480,000)
Net cashflows generated from/(used in) operating activities |  | 4,260,192 | 3,264,997 | (483,738) | (480,227)
Cashflows from investing activities |  |  |  |  |
Payments to acquire property, plant and equipment | 10,13 | (3,414,360) | (358,197) | - | -
Net dividends received | 4 | - | - | 492,000 | 492,000
Net cashflows (used in)/generated from investing activities |  | (3,414,360) | (358,197) | 492,000 | 492,000
Cashflow from financing activities |  |  |  |  |
Receipts/ (Advances) to related party outside group |  | 1,002,643 | (1,422,961) | - | -
Repayment of bank borrowings | 22 | (169,657) | (641,463) | - | -
Loans advance from third parties | 22 | - | 40,568 | - | -
Repayment of third party loans |  | (173,901) | - | - | -
Lease liability payments | 15 | (1,236,995) | (1,032,890) | - | -
Net cash used in financing activities |  | (577,910) | (3,056,746) | - | -
Net movement in cash and cash equivalents |  | 267,922 | (149,946) | 8,262 | 11,773
Cash and cash equivalents at the beginning of the year |  | (878,640) | (728,694) | 14,756 | 2,983
Cash and cash equivalents at the end of the year | 27 | (610,718) | (878,640) | 23,018 | 14,756

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
15
1.General information
Information about the parent Company
SP Finance p.l.c. (the ‘Company’) is a public limited liability company which was incorporated in Malta on 19 November 2018. The Company’s registration number is C-89462 and the Company’s registered office is 89, the Strand, Sliema, Malta.
Information about the Group
The consolidated financial statements include the financial statements of the Company and its subsidiaries (together referred to as the ‘Group).
The Group’s subsidiaries as at 31 December 2025 and 2024 are shown below. For each subsidiary, the percentage of equity held corresponds to the percentage voting rights held by the Group.

Company | Registered address | Principal Activity | 2025 | 2024
|  |  | % Holding | % Holding
SP Investments Limited | 89, The Strand, Sliema | Holding Company | 100% | 100%
Sea Pebbles Limited | 89, The Strand, Sliema | Hospitality operations | 100% | 100%
Pebbles Resort Limited | 89, The Strand, Sliema | Hospitality operations | 100% | 100%
Med Asia Operations Ltd | 89, The Strand, Sliema | Catering operations | 100% | 100%
Med Asia Branding Ltd | 89, The Strand, Sliema | Holder of Intellectual property | 100% | 100%

Further information on the subsidiaries is disclosed in Note 16.
2.Basis of preparation
Reporting entity
SP Finance p.l.c. (the ‘Company’) is a public limited liability company which was incorporated in Malta on 19 November 2018. The Company’s registration number is C-89462 and the Company’s registered office is 89, the Strand, Sliema, Malta.
SP Finance p.l.c. and its subsidiaries’ (the ‘Group’) principal activities include the ownership, rental, development and operation of hotels, the operation of catering and entertainment establishments and the ownership of intellectual property rights.
The consolidated financial statements include the financial statements of the Company and its subsidiaries.
The financial statements of the Company and the consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and in accordance with the requirements of the Companies Act (Cap. 386).
These financial statements have been prepared under the historical cost convention basis as modified by the fair valuation of the land and buildings class of property, plant and equipment and investment property.
The functional currency of the Company is the Euro which is also the presentation currency of the Group.
Assessment of the appropriateness of the going concern assumption
The Group’s financial results for the year ended on 31 December 2025 show an improvement over the results obtained in the prior year when considering that the 2025 results include an impairment of PPE of €337,672, compared to an impairment of intangible assets of €630,000 and a reversal of impairment on non-financial instruments of €1,026,316 in 2024. Gross accommodation revenue of Pebbles Resort hotel was €5,448,928, which represents an 18% increase over the revenue figure of €4,621,366 achieved in 2024.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
16
2.Basis of preparation - continued
Income from the catering business dropped by 4% from €5,814,034 in 2024 to €5,584,711 in 2025, mainly due to poor performance of the MedAsia Fusion Lounge outlet in Sliema which was negatively impacted by the ongoing construction works on the same site.
With a view to determining the appropriateness of preparing the financial statements on a going concern basis, the directors requested management to prepare realistic yet prudent financial projections for 2026 and beyond, by considering the following relevant matters, among others:
•The loss of accommodation revenue from the Pebbles Boutique Aparthotel until late 2026 while it is being re-constructed into a much larger hotel.
•The capital expenditure that is being spent in connection with this project.
•The very encouraging revenue achieved by Pebbles Resort in the first quarter of 2026 and the solid bookings for the rest of the year, which augur well for improved results compared to the already excellent results achieved in 2025.
•The fact that bank financing was obtained to finance a significant portion of the construction and completion costs of the Sliema project.
The Directors are conscious that any financial projections presented to them include judgements and assumptions which at this stage remain subject to a material degree of underlying uncertainty, both in view of general risks as well as risks that are specific to the Group and the sectors in which it operates, as identified in more detail in the Directors Report.
Following a detailed evaluation of the judgments and assumptions taken into account in the preparation of these financial projections, these were considered to be realistic yet prudent and were thus adopted by the Board.
The directors concluded that the Group is likely to generate sufficient financial resources through its operations and external sources as to permit it to continue in operational existence for the foreseeable future.
Accordingly, based on the outcome of the financial projections in a prudent scenario as referred to above, the Directors consider the going concern assumption in the preparation of the Group’s financial statements as appropriate as at the date of authorisation for issue of the 2025 financial statements.
Standards, interpretations and amendments to published standards effective in 2025
In 2025, the Group adopted new standards, amendments and interpretations to existing standards that are mandatory for the Group’s accounting period beginning on 1 January 2025. The Group has applied the following amendments for the first time for its annual reporting period commencing from 1 January 2025:
•The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability – Amendments to IAS 21
The adoption of these revisions to the requirements of IFRSs as adopted by the EU did not result in substantial changes to the Group’s and the Company’s accounting policies.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
17
2.Basis of preparation - continued
Standards, interpretations and amendments to published standards that are not yet effective
Certain new accounting standards and amendments to accounting standards have been published that are not mandatory for this reporting period that commenced on 1 January 2025 and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and amendments is set out below.
•Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7
•Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7
•Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency
•Annual Improvements Volume 11
•IFRS 18 Presentation and Disclosure in Financial Statements
•IFRS 19 Subsidiaries without Public Accountability: Disclosures (including amendments)
Except for the Amendments to the Classification and Measurement of Financial Instruments, and the issuance of IFRS 18, the adoption of these revisions to the requirements of IFRSs as adopted by the EU is not expected to result in any changes to the Group’s and the Company’s accounting policies in the period of adoption.
The Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7 are effective for annual periods beginning on or after 1 January 2026, and they have been endorsed by the EU. Amongst others, the amendments introduce an accounting policy choice to derecognise financial liabilities that are settled through an electronic payment system before settlement date if certain conditions are met, and they also update the disclosures for equity instruments designated at fair value through other comprehensive income. The directors do not expect the accounting policy choice introduced by these amendments to significantly impact the Group and the Company, and they have determined that the other amendments to IFRS 9 and IFRS 7 will not impact the recognition and measurement of the Group’s and the Company’s financial instruments. The enhanced disclosures for equity instruments designated at fair value through other comprehensive income may lead to additional disclosures in the future, but will not impact the timing and amounts at which such assets are recognised and measured.
IFRS 18 will replace IAS 1 Presentation of financial statements. It introduces new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. IFRS 18 will not directly impact the recognition or measurement of items in the financial statements; it will however impact both the presentation of the primary statements, and the disclosures within the notes to the financial statements. Among other things, IFRS 18 introduces the requirement to present additional subtotals in the statement of profit or loss, and it modifies the requirements in relation to the statement of cash flows. It also introduces new disclosure requirements for management-defined performance measures (MPMs), and provides additional guidance on materiality and on aggregation and disaggregation. An assessment of the full impacts of IFRS 18’s adoption is being carried out, with the following impacts having been identified up to the date of authorising these financial statements:
•new subtotals will need to be presented for operating profit or loss, and for profit or loss before financing and income taxes;
•the Group’s share of results of associates, together with income and expenses on the Group’s and the Company’s cash and cash equivalents will be categorised as results from investing activities;
•finance costs will be categorised within the financing category of the statement of profit or loss;
•the statement of cash flows will need to commence from operating profit or loss, rather than from profit or loss before tax;
•interest payments will need to be re-categorised within the statement of cash flows as financing cash flows;
•the notes to the financial statements will need to incorporate additional disclosures, including reconciliations to IFRS-defined totals and explanations of the measure, in relation to the Adjusted EBITDA, which has been determined to meet the definition of an MPM.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
18
2.Basis of preparation - continued
IFRS 18 has been endorsed by the EU, and the Group will apply the new standard from its mandatory effective date of 1 January 2027. Retrospective application is required, and comparative information in the year of adoption will be restated to comply with IFRS 18. In the first year of application, the Group and the Company will also be required to disclose a line-by-line reconciliation of comparative figures between the amounts originally presented under IAS 1 and those re-presented under IFRS 18.
Fair valuation
The Group is required to analyse non-financial assets carried at fair value by level of the fair value hierarchy within which, the recurring fair value measurements are categorised in their entirety (Level 1, 2 or 3). The different levels of the fair value hierarchy have been defined as fair value measurements using:
-Quoted prices (unadjusted) in active markets for identical assets (Level 1);
-Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2); and
-Inputs for the asset that are not based on observable market data (that is, unobservable inputs) (Level 3).
The level within which an asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.
Fair value is based on active market prices, adjusted, if necessary, for difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discontinued cash flow projections. These valuations are reviewed periodically by the Group directors.
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as of the beginning of the reporting period. There were no transfers between different levels of the fair value hierarchy during the current and preceding financial years.
Presentation currency
These consolidated financial statements are presented in Euro, which is also the Company’s functional and presentation currency. All figures are rounded to the nearest €1.
Use of judgements and estimates
The preparation of financial statements requires the use of accounting estimates which, by definition, will likely differ from the actual results. Management also needs to exercise judgement in applying the group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to final outcomes deviating from estimates and assumptions made. Information about key judgements made in applying accounting policies, together with estimates made at the reporting date, that have the most significant effects on the amounts recognised in these consolidated financial statements is disclosed in the following notes:
-Note 10, land: techniques and assumptions made in measuring fair value, and
-Note 31, credit risk: estimates and assumptions made in measuring expected credit loss allowances on loans and advances.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
19
3.Material accounting policies
A summary of the more important accounting policies, which have been applied consistently, is set out below:
Basis of consolidation
Subsidiaries
The Group financial statements include the financial statements of the parent Company and all its subsidiaries. The results of the subsidiaries acquired or disposed of during the period are included in the Group statement of profit or loss and other comprehensive income from the date of their acquisition or up to date of their disposal.
In the Company’s financial statements, investments in subsidiaries are accounted for on the basis of the direct equity interest and are stated at cost less any accumulated impairment losses. Dividends from the investment are recognised in profit or loss.
Intangible assets
Goodwill
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
Goodwill is not amortised, but it is tested for impairment annually, or more frequent if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which
the goodwill arose. The units or group of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.
Trademark – Intellectual property
An acquired intangible asset is recognised only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. An intangible asset is initially measured at cost, comprising its purchase price and any direct attributable cost of preparing the asset for its intended use.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
20
3.Material accounting policies - continued
Property, plant & equipment
Property, plant and equipment is initially measured at cost.
Property, plant and equipment comprise 2 hotels namely – San Pawl Hotel and Sea Pebbles including the related building structure, facilities, furniture, fixtures, equipment, and other operational assets necessary for the hotel’s and entertainment’s operations. The Land under the San Pawl Hotel is leased from a third party. Details of the ROU asset and lease liability pertaining this asset is disclosed in Note 15.
Assets in the course of construction or development are carried at cost, less any identified impairment loss. Land and buildings that are not in the course of construction or development are subsequently stated at market value, based on valuations by external independent valuers, less depreciation; all classes of plant and equipment are subsequently measured at cost less depreciation. Cost includes directly attributable to the acquisition of the items, including professional fees and, for qualifying assets, eligible borrowing costs. Expenditure on repairs and maintenance of property, plant and equipment is recognised as an expense when incurred.
Depreciation commences when the depreciable assets are available for use and is charged to profit or loss so as to write off the cost or revalued amount, less any estimated residual value, over their estimated useful lives, using the straight-line method, on the following bases:

Freehold buildings | 2%
Electrical installations | 10%
Furniture, fixtures and fittings | 5%-10%
Equipment | 10%
Motor vehicles | 20%
Computer equipment | 10%
Catering equipment | 16.7%
Other fixed assets | 10%

Freehold land of the properties in Sliema is not depreciated as it is deemed to have an indefinite life. The depreciation method applied, the residual value and the useful life are reviewed, and adjusted if appropriate, at the end of each reporting period.
Revaluations of land and buildings are carried out at regular intervals, but at least every five years, unless the directors consider it appropriate to have an earlier revaluation, such that the carrying amount of property does not differ materially from that which would be determined using fair values at the end of the reporting period. Any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset
Investment property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property. Investment property comprises freehold and leasehold land and buildings, and land and buildings held for capital appreciation
Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at fair value at the end of the reporting period. Gains or losses arising from changes in the fair value of investment property are recognised in profit or loss in the period in which they arise.
The fair value of investment property reflects, among other factors, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the property.
Investment property was transferred to property, plant and equipment during the year as per change in use. Details of transfer are disclosed in note 10.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
21
3.Material accounting policies - continued
Investment property - continued
Subsequent expenditure is charged to the asset’s carrying amount only 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. All other repairs and maintenance costs are charged to the profit loss account during the financial period in which they are incurred.
Financial instruments
Financial assets other than interest in subsidiaries and other entities
The Group’s financial assets comprise trade and other receivables, amounts due from related parties and cash and cash equivalents. The Company’s financial assets comprise bonds proceeds advanced to its subsidiaries through investment in preference shares. The Group and the Company recognise a financial asset initially at fair value in its statement of financial position when it becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. All other investments in debt instruments are managed to collect the contractual cash flows and are accordingly measured at amortised cost.
-The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
-The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance, measured in accordance with the Group’s accounting policy ‘Impairment of financial assets’ further below.
Changes in the carrying amount of financial assets carried at amortised cost, as a result of foreign exchange gains or losses, impairment gains or losses and interest income are recognised in profit or loss. On derecognition, any difference between the carrying amount and the consideration received is recognised in profit or loss and is presented separately in the line item ‘Gains and losses arising from the derecognition of financial assets measured at amortised cost’.
Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 90 days and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. Details about the Group’s impairment policies and the calculation of the loss allowance are provided in policy ‘Impairment of financial assets’.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and at bank. Bank overdrafts that are repayable on demand and form an integral part of the company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows and are presented in current liabilities on the statement of financial position. Bank deposits that the directors do not consider a component of cash equivalents, are presented separately in the statement of financial position.
Impairment of financial assets
The Group’s and the Company’s assets are subject to an expected credit loss (“ECL”) model for the purposes of providing for credit losses. The general ECL model requires management to make complex judgments and estimates about the credit risk of counterparties and the expected future recoverability of financial assets. The model incorporates a forward-looking view of credit losses, using historical data, current conditions, and reasonable and supportable forecasts of future economic conditions. ECLs are measured on either a 12-month or lifetime basis depending on whether there has been a significant increase in credit risk since initial recognition.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
22
3.Material accounting policies - continued
Financial instruments - continued
Financial assets other than interest in subsidiaries and other entities - continued
Impairment on financial assets - continued
The assessment involves:
-Evaluating the financial health and repayment ability of counterparties
-Considering historical loss experience
-Incorporating macroeconomic indicators such as GDP growth, interest rates, and industry outlook
-Applying probability-weighted scenarios where appropriate
Where balances are with related parties, additional qualitative factors are considered, including:
-The related party’s financial position and liquidity
-Strategic or operational importance of the relationship
-Any indications of restructuring, dispute, or repayment delays
Financial liabilities
The Group and the Company recognise a financial liability when it becomes a party to the contractual provision of the instrument. The Group’s financial liabilities are classified as financial liabilities which are not at fair value through profit or loss. These financial liabilities are recognised initially at fair value, being the fair value of consideration received, net of transactions costs that are directly attributable to the acquisition or the issue of the financial liability. They are subsequently measured at amortised cost. The Group derecognises a financial liability from its statement of financial position when the obligation specified in the contract or arrangement is discharged, cancelled or expired.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method unless the effect of discounting is immaterial.
Borrowings are classified as current liabilities unless the companies within the Group have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
Subsequent to initial recognition, interest-bearing bank overdrafts are carried at face value in view of their short-term maturities.
Trade and other payables
Trade payables are classified within current liabilities unless payment is not due within 12 months from the reporting period. They are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest method.
Ordinary shares issued by the Company Ordinary shares issued by the Company are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
Revenue recognition
The Group earns revenue from operations within the catering and hospitality industry. Revenue is recognised in accordance with the policies set out below. Wherever the Group collects the transaction price in advance of providing the related service or good, the Group does not adjust the transaction price for a significant financing component, as the period between receipt of payment and transfer of services or goods is typically less than one year.
(a) Hospitality
The Group generates revenue from the provision of hotel accommodation (bed nights), food and beverage (“F&B”) services to guests. Accommodation and F&B services are considered distinct performance obligations, as they are separately identifiable and can be consumed independently by customers. Revenue from this income stream is recognised when control of the services is transferred to the customer:
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
23
3.Material accounting policies – continued
Revenue recognition – continued
(a) Hospitality - continued
-Accommodation revenue is recognised over time, on a straight-line basis over the period of the guest’s stay, as the customer simultaneously receives and consumes the benefits.
-F&B revenue is recognised at a point in time when the goods or services are delivered to the customer.
In practice, both accommodation and F&B revenue are typically recognised within the same period as the guest stay.
The transaction price reflects the consideration to which the Group expects to be entitled, net of discounts, rebates and value added tax. Payments are often received in advance of the stay. Amounts received in advance of the provision of services are recognised as contract liabilities and released to revenue when the related services are provided.
Costs incurred to obtain contracts with customers, including commissions payable to online travel agents and other intermediaries, are expensed as incurred. The Group applies the practical expedient in IFRS 15 permitting such costs to be recognised as an expense when incurred, as the amortisation period of the related asset would be one year or less.
(b) Catering
The Group, through its subsidiary, sells food and beverage products directly to customers through its own outlets. Revenue is recognized when control of the goods has been transferred, at the point where the customer purchases the goods at the outlet of the property. Customers do not have the right of return.
(c) Dividends received
Dividends’ income from investment is recognised when the shareholders’ right to receive payment has been established.
(d) Management services
The Company provides management and administrative services to its subsidiaries. These services are considered a single performance obligation satisfied over time, as the subsidiaries simultaneously receive and consume the benefits of the service provided. Revenue is recognised as one performance obligation over time during the contract term. Fees are typically charged on an agreed annual fee and invoiced in accordance with the contractual terms. Such services have been assessed to fall within scope of the IFRS 15 series guidance, such that they are recognised.
Leases
Where the Group is a lessee, with the exception of short-term leases and leases of low value assets, the Group recognises a right-of-use asset and a corresponding liability at the date at which a leased asset is available for use by the Group. Further details on the Group’s accounting policy, and a summary of its leasing arrangements as a lessee is described in Note 15.
Lease income from operating leases where the Group or the Company is a lessor is recognised in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on the same basis as lease income. The respective assets leased out under operating leases are included in investment property in the balance sheet.
Borrowings 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.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
24
3.Material accounting policies – continued
Taxation
Current and deferred tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the current and deferred tax is also dealt with in other comprehensive income or in equity, as appropriate.
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. However, deferred tax is not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.
The deferred tax liability in relation to investment property that is measured at fair value is determined assuming the property will be recovered entirely through sale.
Deferred tax in relation to the revaluation of land and buildings is charged or credited to other comprehensive income (to the extent that the revaluation is recognised in other comprehensive income). For buildings, deferred tax is recognised on the basis that the tax will be recovered through use (i.e. the corporate rate of tax in Malta), whilst land is expected to be recovered through sale. Deferred income tax on the difference between the actual depreciation on the property and the equivalent depreciation based on the historical cost of the property is realised through the income statement.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets, including deferred tax assets for unused tax losses and unused tax credits carried forward, are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences (or the unused tax losses and unused tax credits) can be utilised to the period when the asset is realised or the liability is settled based on the tax rates that have been enacted by the balance sheet date. Deferred tax assets and liabilities are offset when the Group’s Companies have a legally enforceable right to settle its current tax assets and liabilities on a net basis.
Related parties
Related parties are those persons or bodies of persons having relationships with the Company as defined in International Accounting Standard No. 24.
4.Segment information and revenue from contracts with customers
4.1.Segment information
This note discloses information regarding the Group’s reportable segments. The Company is not required to and does not present segment information. However, it presents the information on its revenue from contracts with customers in Note 4.2.
The standard requires a “management approach” under which segment information is presented on the same basis as that used for internal reporting purposes. The Group’s CODM, consisting of the board of directors and the chief executive officers and chief financial officer examine the Group’s performance namely from an industry/product perspective and has identified two reportable segments – hospitality and entertainment and other related operations.
The CODM assesses performance based on the measure of EBITDA (earnings before interest, tax, depreciation and amortisation) and revenue of the operating segments.
The Group is not required to report a measure of total assets and liabilities for each reportable segment since such amounts are not regularly provided to the CODM. Additionally, since all of the Group’s non-current assets are located in Malta, the geographical information that would have otherwise been required by IFRS 8, is not presented in these consolidated financial statements.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
25
4.Segment information and revenue from contracts with customers - continued
4.1 Segment information – continued

2025 | Hospitality Operations | Catering Operations | Intellectual Property | Unallocated | Total
| € | € | € | € | €
Revenue | 5,448,928 | 5,584,711 | 288,213 | - | 11,321,852
Less: inter-segment sales | - | (722,216) | (279,237) | - | (1,001,453)
| 5,448,928 | 4,862,495 | 8,976 | - | 10,320,399
Segment profit/ (loss) | 1,850,846 | 1,327,861 | 651 | (166,217) | 3,013,141
Other operating income | 32,933 | 43,683 | - | - | 76,616
Group Adjusted EBITDA | 1,883,779 | 1,371,544 | 651 | (166,217) | 3,089,757
Impairment on PPE | - | (337,672) | - | - | (337,672)
Depreciation and amortisation | (1,309,273) | (348,447) | - | - | (1,657,720)
Finance costs | (449,965) | (111,425) | (5,410) | (149) | (566,949)
Profit/(Loss) before tax | 124,541 | 574,000 | (4,759) | (166,366) | 527,416
Tax charge | (315,534) | 67,262 | (5,441) | (5,632) | (259,345)
Profit/(Loss) for the year | (190,993) | 641,262 | (10,200) | (171,998) | 268,071
Other comprehensive income |  |  |  |  |
Revaluation of PPE | 11,338,552 | - | - | - | 11,338,552
Deferred tax on revalued IP | (1,938,460) | - | - | - | (1,938,460)
Total Comprehensive income | 9,209,099 | 641,262 | (10,200) | (171,998) | 9,668,163
Segment assets non-current | 46,737,156 | 2,584,060 | 1,609,815 | 1,496,990 | 52,428,021
Segment assets current | 1,492,746 | 400,046 | - | 1,078,587 | 2,971,379
| 48,229,902 | 2,984,106 | 1,609,815 | 2,575,577 | 55,399,400
Segment liabilities non-current | 14,239,702 | 236,000 | - | 4,076,216 | 18,551,918
Segment liabilities current | 3,549,911 | 3,909,986 | 125,174 | 477,274 | 8,062,345
| 17,789,613 | 4,145,986 | 125,174 | 4,553,490 | 26,614,263

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
26
4.Segment information and revenue from contracts with customers - continued
4.1 Segment information - continued

2024 | Hospitality Operations | Catering Operations | Intellectual Property | Unallocated | Total
| € | € | € | € | €
Revenue | 4,621,366 | 5,814,034 | 290,702 | - | 10,726,102
Less: inter-segment sales |  | (563,117) | (290,702) |  | (853,819)
| 4,621,366 | 5,250,917 | - | - | 9,872,283
Segment profit/ (loss) | 790,213 | 1,978,921 | (8,317) | (130,160) | 2,630,657
Other operating income | 55,303 | - | - | - | 55,303
Loss on sale of fixed assets | (246,267) | - | - | - | (246,267)
Group EBITDA | 599,249 | 1,978,921 | (8,317) | (130,160) | 2,439,693
Depreciation and amortisation | (1,126,718) | (329,266) | - | - | (1,455,984)
Finance costs | (353,485) | (107,412) | (1,665) | (153,754) | (616,316)
Reversal of impairment of PPE | 1,026,316 | - | - | - | 1,026,316
Impairment of intangible | - | (260,000) | (370,000) | - | (630,000)
Profit/(Loss) before tax | 145,362 | 1,282,243 | (379,982) | (283,914) | 763,709
Tax charge | 455,759 | (126,277) | (8,349) | (22,043) | 299,090
Profit/(Loss) for the year | 601,121 | 1,155,966 | (388,331) | (305,957) | 1,062,799
Segment assets non-current | 35,099,745 | 3,178,751 | 1,603,225 | - | 39,881,721
Segment assets current | 1,303,473 | 3,524,055 | 52,267 | 16,719 | 4,896,514
| 36,403,218 | 6,702,806 | 1,655,492 | 16,719 | 44,778,235
Segment liabilities non-current | 4,995,236 | 521,790 | - | 12,000,000 | 17,517,026
Segment liabilities current | 4,096,296 | 3,544,140 | 77,868 | 425,931 | 8,144,235
| 9,091,532 | 4,065,930 | 77,868 | 12,425,931 | 25,661,261

4.2.Disaggregation of revenue from contracts with customers

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Hospitality segment | 5,448,928 | 4,058,249 | - | -
Catering segment | 4,862,495 | 5,814,034 | - | -
Royalty fees | 8,976 | - | - | -
Management services | - | - | 150,000 | 150,000
Dividends received from subsidiaries | - | - | 492,000 | 492,000
| 10,320,399 | 9,872,283 | 642,000 | 642,000

4.3.Liabilities related to contracts with customers
The Group has recognised the following liabilities relating to contracts with customers:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Contract liabilities |  |  |  |
Advance deposits – hospitality (Note 21) | 489,547 | 243,433 | - | -
Total contract liabilities | 489,547 | 243,433 | - | -

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
27
5.Other operating income

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Service charge | 32,933 | 55,303 | - | -
Rental income | 43,683 | - | - | -
| 76,616 | 55,303 | - | -

6.Finance costs

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Interest on overdraft | 39,258 | 43,776 | - | -
Interest on bank borrowings | 3,510 | 22,091 | - | -
Other interest | 90,271 | 85,053 | - | -
Bond interest | 133,810 | 133,810 | 480,000 | 480,000
Interest on lease liability | 268,518 | 300,004 | - | -
Bond issue costs | 31,582 | 31,582 | - | -
| 566,949 | 616,316 | 480,000 | 480,000

As part of the ongoing development of property, plant and equipment, borrowing costs amounting to €346,190 (2024: €346,190) have been capitalised during the financial year. The capitalised interest relates to qualifying assets under construction in accordance with IAS 23 Borrowing Costs. These costs have been included in the carrying amount of assets under development at the reporting date.
The Group does not have any general borrowings. All bond financing arrangements are specific borrowings directly attributable to the acquisition and development of identified hotel property and properties in inventory. Accordingly, borrowing costs eligible for capitalisation are determined based on the actual borrowing costs incurred on these specific facilities. As a result, the capitalisation rate applied corresponds directly to the effective interest rate (EIR) of the respective financing instruments, and therefore no separate weighted average capitalisation rate for general borrowings is applicable to the Group. The rate is disclosed in note 22.
7.Expenses by nature

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
F&B cost of sales | 3,590,287 | 3,494,865 | 984 | 985
Wages and salaries | 2,270,131 | 2,446,201 | 9,200 | 9,200
Directors’ remuneration | 151,902 | 146,357 | 29,000 | 24,000
Utility expenses | 351,674 | 379,529 | - | -
Repairs and maintenance | 485,883 | 408,557 | - | -
Other expenses | 457,381 | 366,117 | 119,443 | 88,828
| 7,307,258 | 7,241,626 | 158,627 | 123,013

Other expenses comprise of various expenditure items with the largest expense amounting to €181,901 in relation to bad debts written off (2024: €72,611 in relation to advertising and promotion) for the Group and €62,799 (2024: €40,002) relating to legal and professional fees for Company.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
28
7.Expenses by nature - continued
Fees paid to auditor
Profit before tax for the Group is stated after charging the following fees in relation to services provided by the external auditors of the Group.

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Total remuneration payable to the auditors for: |  |  |  |
Audit services | 66,778 | 66,753 | 25,150 | 25,150
| 66,778 | 66,753 | 25,150 | 25,150

8.Staff costs and employee information

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Wages and salaries (including directors) | 2,270,131 | 2,446,201 | 38,200 | 33,200
Social security costs | 151,902 | 146,357 | - | -
| 2,422,033 | 2,592,558 | 38,200 | 33,200

The average number of persons employed during the year, including directors, was made up as follows:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| Number | Number | Number | Number
Operations and administrations | 130 | 130 | - | -
Directors | 2 | 2 | 2 | 2
| 132 | 132 | 2 | 2

9.Tax (credit)/expense

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Profit & loss |  |  |  |
Deferred tax charge / (credit) | 250,994 | (399,629) | 1,180 | -
Current tax charge | 8,351 | 100,539 | - | 13,645
| 259,345 | (299,090) | 1,180 | 13,645
Comprehensive income |  |  |  |
Deferred tax on revalued PPE | 1,938,460 | - | - | -
| 2,197,805 | (299,090) | 1,180 | 13,645

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
29
9.Tax (credit)/ expense - continued
The tax expense and the tax charge using the statutory income tax rate of 35% are reconciled as follows:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Profit before taxation | 527,416 | 763,709 | 3,373 | 38,987
Tax charge at 35% | 184,596 | 267,298 | 1,180 | 13,645
Depreciation charges not deductible by way of capital allowances | (66,940) | (570,914) | - | -
Expenses disallowed for tax purposes | 9,909 | 6,626 | - | -
Additional allowable deductions | (2,100) | - | - | -
Income taxed at reduced rates | - | (2,100) | - | -
Tax charge/ (credit) | 259,345 | (299,090) | 1,180 | 13,645

9.1 Current tax liability
Group
Group
Company
Company
2025
2024
2025
2024
€
€
€
€

At 1 January | (230,264) | (129,725) | (15,300) | (1,655)
Charge for the year | (8,351) | (100,539) | - | (13,645)
Tax (refund)/payment | (10,177) | - | 1,655 | -
At 31 December | (248,792) | (230,264) | (13,645) | (15,300)
Represented in the balance sheet: |  |  |  |
Current tax asset | - | 147,808 | - | -
Current tax liability | (248,792) | (378,072) | (13,645) | (15,300)
| (248,792) | (230,264) | (13,645) | (15,300)

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________
30
10.Property, Plant & Equipment

Group |  |  | Motor |  | Electrical | Furniture, | Computer | Catering | Other fixed | Total
| Land & airspace | Buildings | Vehicles | Equipment | Installations | & Fittings | Equipment | Equipment | Assets |
| € | € | € | € | € | € | € | € | € | €
Cost/ Valuation |  |  |  |  |  |  |  |  |  |
As at 1 January 2024 | 20,874,577 | 3,646,303 | 16,400 | 1,619,647 | 954,053 | 2,437,637 | 36,174 | 463,699 | 212,449 | 30,260,939
Additions |  | - | - | 50,099 | 10,677 | 42,180 | 3,975 | - | - | 106,931
Reversal of impairment | - | 446,790 | - | - | - | - | - | - | - | 446,790
Transfer of PPE under dev | - | (110,420) | - | - | - | - | - | - | - | (110,420)
Disposals on demolition of buildings | - | (608,100) | - | - | - | - | - | - | - | (608,100)
As at 31 December 2024 | 20,874,577 | 3,374,573 | 16,400 | 1,669,746 | 964,730 | 2,479,817 | 40,149 | 463,699 | 212,449 | 30,096,140
Additions | - | 203,672 | - | 63,436 | - | 11,586 | - | 13,177 | - | 291,871
Revaluation | 11,338,552 | - | - | - | - | - | - | - | - | 11,338,552
Transfer from investment property (i) | 5,959,912 | - | - | - | - | - | - | - | - | 5,959,912
Impairment | - | (1,017) |  | (3,496) | (47,189) | (233,965) |  | (52,005) | - | (337,672)
As at 31 December 2025 | 38,173,041 | 3,577,228 | 16,400 | 1,729,686 | 917,541 | 2,257,438 | 40,149 | 424,871 | 212,449 | 47,348,803
Depreciation |  |  |  |  |  |  |  |  |  |
As at 1 January 2024 | - | 2,179,011 | 15,100 | 578,956 | 571,247 | 1,033,312 | 28,718 | 57,962 | 156,528 | 4,620,834
Charge for the year | - | 251,212 | 1,300 | 273,250 | 70,319 | 246,107 | 2,683 | 16,822 | 35,409 | 897,102
Released on disposal | - | (406,412) | - | - | - | - | - | - | - | (406,412)
As at 31 December 2024 | - | 2,023,811 | 16,400 | 852,206 | 641,566 | 1,279,419 | 31,401 | 74,784 | 191,937 | 5,111,524
Charge for the year | - | 297,686 | - | 147,129 | 155,320 | 251,451 | 1,916 | 79,478 | 18,325 | 951,305
As at 31 December 2025 | - | 2,321,497 | 16,400 | 999,335 | 796,886 | 1,530,870 | 33,317 | 154,262 | 210,262 | 6,062,829
Net Book Value |  |  |  |  |  |  |  |  |  |
As at 31 December 2025 | 38,173,041 | 1,255,731 | - | 730,351 | 120,655 | 726,568 | 6,832 | 270,609 | 2,187 | 41,285,974
As at 31 December 2024 | 20,874,577 | 1,350,762 | - | 817,540 | 323,164 | 1,200,398 | 8,748 | 388,915 | 20,512 | 24,984,616
As at 1 January 2024 | 20,874,577 | 1,467,292 | 1,300 | 1,040,691 | 382,806 | 1,404,325 | 7,456 | 405,737 | 55,921 | 25,640,105

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
31
10.Property, Plant & Equipment – continued
Note i – Transfer from investment property – During the current financial year, the Group reclassified a portion of land and buildings previously recognised within investment property (held for capital appreciation) to property, plant and equipment. This reclassification was effected following a change in the intended use of the asset, as the land is now being utilised in connection with the development of the Group’s hotel in Sliema, forming an integral part of the adjacent operational property. Accordingly, the transfer was accounted for in accordance with IAS 40 – Investment Property, whereby assets are transferred to owner-occupied property when there is a change in use evidenced by commencement of development for such purpose. The property was transferred at its carrying amount at the date of reclassification.
Use as collateral
Land and buildings held by the Group, with a carrying amount of €13.8m (2024: €13.8m) are pledged as security for non-current borrowings.
11.Investment property

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
At the beginning of the year | 5,959,912 | 6,004,491 | - | -
Transfer to PPE - Note 10 (i) | (5,959,912) | - | - | -
Disposal on demolition of buildings | - | (44,579) | - | -
At the end of the year | - | 5,959,912 | - | -

Lease arrangements
Lease arrangements were terminated in 2023, and the property is part of the ongoing construction in Sliema for a hotel and ancillary facilities.
12.Fair value of Land and Buildings
The Group’s non-financial assets carried at fair value comprise of land classified as property, plant and equipment. The Group is
required to analyse non-financial assets carried at fair value by level of the fair value hierarchy described in Note 2.
All the recurring property fair value measurements at 31 December 2025 and 2024, as applicable, use significant unobservable inputs and are accordingly categorised within Level 3 of the fair valuation hierarchy.
The Group uses the services of professional valuers to revalue the land and buildings and investment properties. The professional valuers take into account market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The highest and best use of a non-financial asset takes into account the use of the asset that is physically possible, legally permissible and financially feasible, as follows:
-A use that is physically possible, takes into account the physical characteristics of the asset that market participants would take into account when pricing the asset (e.g. the location or size of a property).
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
32
12.Fair value of Land and Buildings - continued
-A use that is legally permissible takes into account any legal restrictions on the use of the asset that market participants would take into account when pricing the asset (e.g. the zoning regulations applicable to a property).
-A use that is financially feasible takes into account whether a use of the asset that is physically possible and legally permissible generates adequate income or cash flows (taking into account the costs of converting the asset to that use) to produce an investment return that market participants would require from an investment in that asset put to that use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimising the use of unobservable inputs. As described in Note 2, the Group use valuation techniques that include inputs that are not always based on observable market data in order to estimate the fair value of land and building and investment properties. Note 16 provides detailed information regarding these valuation methods and the key assumptions used in performing such valuations.
12.1 Significant judgement and estimates
Determining the fair value of land and buildings involves significant estimates and assumptions, particularly when market-based evidence is not readily available, and the valuation relies on discounted cash flow (DCF) techniques. In such cases, the Group considers:
-Future cash flows expected to be derived from the continued use of the asset
-Estimated useful life and residual value of the asset
-Replacement cost or depreciated replacement cost (for non-income-generating assets)
-Market-based inputs, where available (e.g., comparable sales or rental yields)
-Discount rates reflecting current market assessments of the time value of money and asset-specific risks
Changes in assumptions, market conditions, or economic environment could result in significant adjustments to the carrying values of land and buildings. Independent professional valuers may be engaged to perform or assist with revaluations.
Management exercises judgment in selecting the appropriate valuation technique for each class of asset and in determining the frequency of revaluation. The selection of inputs - such as future price trends, production output, or usage assumptions – can significantly influence the valuation outcome. These estimates are reviewed regularly and revised as necessary.
The Group revalued its hotel property, which is currently undergoing construction, at the reporting date. The valuation was performed by an independent architect using the market comparison approach. In addition, the directors estimated the recoverable amount using a discounted cash flow model based on projected future cash flows expected to be generated by the property upon completion of the refurbishment.
The discounted cash flow model involves significant estimates and assumptions, including expected occupancy levels, average daily rates, operating margins, timing and cost to complete the refurbishment, and the discount rate applied.
Given the property is not yet operational and remains under construction, there is estimation uncertainty associated with the forecasted future cash flows. This uncertainty is understood primarily because the property is being constructed into a larger hotel with additional facilities, which differs from its previous use. As this represents a newly refurbished property with additional facilities, historical financial performance is not necessarily directly comparable, limiting the availability of relevant profit benchmarks. Management has assessed that the values derived from both the market comparison approach and the discounted cash flow model do not differ materially and has therefore used both valuation methods in determining the carrying amount at the reporting date.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
33
12.Fair value of Land and Buildings - continued
12.2 Property, plant and equipment
Valuation techniques
The Group’s land and buildings within property, plant and equipment consist of one hotel that is currently being developed which is owned and managed by the Group companies. The Group obtains independent valuations for its freehold land and buildings at least every five years.
At the end of each reporting period, the directors update their assessment of the fair value of each property, considering the most recent independent valuations. The directors determine a property’s value within a range of reasonable fair value estimates. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the directors consider information from a variety of sources.
The Group’s properties were valued by an independent architect using the market comparison method. In addition, the directors performed a valuation using a discounted cash flow model. Both valuation approaches resulted in consistent values, and no material differences were identified between the two methods.
When using the DCF technique, the significant unobservable inputs include:

Earnings before interest, tax, depreciation, and amortisation (EBITDA) | Based on projected income streams taking into consideration historical results and market expectations;
Growth rate | Based on management’s estimated average growth of the company’s EBITDA, mainly determined by projected growth in income streams;
Discount rate | Reflecting the current market assessment of the uncertainty in the amount and timing of projected cash flows. The discount rate reflects the estimated weighted average cost of capital that would be available to a Reasonably Efficient Operator (REO) for financing such an operation. The discount rate is based on an assumed debt to equity ratio; estimation of cost of equity is based on risk free interest rates adjusted for country risk and equity risk premium; estimation of cost of debt is based on risk free interest rates adjusted for country risk and assumed credit spread.

Valuation process
The Group ‘s property within property plant and equipment (land and buildings together with all other integral assets) were revalued on 31 December 2025 by an independent valuer using comparative method and by the Directors using DCF methodology.
Where management, through its assessment, concludes that the fair value of its properties differs materially from its carrying amount, and at least every 5 years, an independent valuation report prepared by third party qualified valuers, is performed. The report is based on information provided by the Group. The information provided to the valuers, together with the assumptions and the valuation models used by the valuers, are reviewed by the directors. This includes a review of the fair value movement over the period. The directors consider whether the valuation report is appropriate to revalue the Company’s property.
During the current financial year, the Group revalued its land and the revaluation surplus was recognised in the Revaluation Reserve (refer to Note 24), in line with the revaluation model under IAS 16.
The DCF methodology was based on projected future cash flows expected to be generated by the property, discounted at a rate that reflects current market assessments of the time value of money and the risks specific to the asset. The architect valuation was based on the market participant’s ability to generate economic benefits by selling the property to another market participant that would use the asset in its highest and best use.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
34
12.Fair value of Land and Buildings - continued
12.2 Property, plant and equipment - continued
Valuation process - continued
The revaluation resulted in an increase in the carrying amount of the property by €11,338,552, which has been recognised in other comprehensive income in the Group’s consolidated results, in accordance with the revaluation model under IAS 16 (for PPE). The Directors are of the opinion that the revalued amount represents a fair estimate of the property's value as at the reporting date.
Historical cost basis of properties
If the cost model had been used, the carrying amounts of the revalued properties classified as property, plant and equipment would be €8,245,569 (2024: €8,413,846). The revalued amounts include a revaluation surplus net of tax of €27,138,025 before tax (2024: €14,799,920), which is not available for distribution to the shareholders of SP Finance P.L.C.
12.3 Reversal of impairment in prior year
In the prior year, the Group performed a review of the carrying amounts of the right-of-use (ROU) assets (Note 15) and related items of property, plant and equipment that had been subject to impairment in prior reporting years. Following this review, the Directors determined that the circumstances that led to the original impairment no longer existed. As part of the impairment reversal assessment, the Directors carried out a discounted cash flow (DCF) analysis to estimate the recoverable amounts of the affected assets. The analysis reflected updated financial forecasts, improved operating performance, and management’s revised expectations regarding future cash flows and utilisation of the assets. Based on this analysis, the Group concluded that the recoverable amount of the ROU assets and related PPE exceeded their carrying value, resulting in the reversal of previously recognised impairment losses of €1,026,316 (€579,426 related to ROU asset and €446,790 relating to items of PPE). The reversal has been recognised in the income statement for the year ended 31 December 2024. The key assumptions used in the DCF model included a discount rate of 8.9% and forecast cash flows over a period of 5 years which is the period of the lease term.
12.4 Valuation inputs and relationships to fair value
The determination of the fair value of land and buildings and investment properties use future discounted cash flows (“DCF”) projections based on significant unobservable inputs (categorised within Level 3 of the fair value hierarchy). These inputs include:
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
35
12.Fair value of Land and Buildings - continued
12.5 Valuation inputs and relationships to fair value - continued
Information about fair value measurements using significant unobservable inputs (Level 3)

Group | Fair value at | Valuation technique | *Unobservable inputs | Relationship of unobservable inputs to fair value
| 31 Dec | 31 Dec |  |  |
| 2025 | 2024 |  |  |
Description | € | € |  |  |
Property, plant, and equipment |  |  |  |  |
Hotel properties – Sea Pebbles | 38,247,767 | 20,864,158 | Comparison Approach – sales price/ sqm | *€42k/sqm | The higher the sales price per square metre the higher the fair value
|  |  | DCF Method | WACC: 9.25% | The lower the WACC the higher the fair value
|  |  |  | Growth: 1.75% |
|  |  |  | EBITDA: €2.3m - €7m |
Investment properties |  |  |  |  |
Leased buildings | - | 5,959,512 | Comparison approach | Sales price per square metre | The higher the sales price per square metre the higher the fair value
|  |  |  | * €5,800 |

*These inputs represent the inputs used in the external valuation carried out as at 31 December 2025. This inputs reflects the value of land footprint and overlying airspace with the potential to build additional floors.
13.PPE under development

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
At 1 January | 704,470 | - | - | -
Transfer from PPE (Note 10) | - | 110,420 | - | -
Additions | 3,122,489 | 594,050 | - | -
At 31 December | 3,826,959 | 704,470 | - | -

In the prior financial year, one of the Group’s subsidiaries commenced the redevelopment of the Sliema hotel. The costs incurred in relation to this project are being classified under "PPE under development".
These costs primarily include construction, architectural and professional fees and finance costs as well as other directly attributable expenses necessary to bring the asset to its intended use.
Capitalisation of costs will continue until the asset is ready for its intended operational use, at which point the balance will be transferred to the relevant PPE category and depreciation will commence.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
36
14.Intangible assets

| Goodwill | Intellectual Property | Total
| € | € | €
Group |  |  |
At 1 January 2024 | 2,317,829 | 1,785,275 | 4,103,105
Impairment charge | (455,000) | (175,000) | (630,000)
Additions | 147,000 | - | 147,000
At 31 December 2024 | 2,009,829 | 1,610,275 | 3,620,104
At 31 December 2025 | 2,009,829 | 1,610,275 | 3,620,104

15.Leases
This note provides information for leases where the Group is a lessee. For leases where the Group is a lessor, see Note 11
to these financial statements.
15.1 Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:

| 2025 | 2024
| € | €
Group |  |
Right-of-use assets |  |
Land and buildings | 1,624,971 | 2,115,536
Equipment | 430,287 | 424,690
Furniture & fittings | 142,737 | 183,524
| 2,197,995 | 2,723,750
Lease liabilities |  |
Current | 1,015,831 | 947,285
Non-current | 2,344,975 | 3,201,338
| 3,360,806 | 4,148,623

15.2 Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:

| 2025 | 2024
| € | €
Depreciation charge of right-of-use assets |  |
Land and buildings | 490,565 | 353,754
Equipment | 175,068 | 158,195
Furniture & fittings | 40,782 | 46,932
| 706,415 | 558,881
Reversal of impairment | - | (579,426)
Interest expense (included in finance cost – Note 6) | 268,518 | 300,004

The total cash outflow for leases in 2025 was €1,219,319 (2024: €1,011,389). Additions to ROU asset for the current year amounted to €184,067 (2024: no additions).
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
37
15.Leases – continued
15.3 The Group’s leasing activities and how these are accounted for
The Group leases a building ins St. Paul’s Bay which it operates as a hotel. The Group’s rental contracts are for fixed periods of 5 to 10 years but may have extension options. Extension and termination options are included in the Group’s property leases. These are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. The extension and termination options held are exercisable only by the Group and not by the respective lessor.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease payments for the Group’s other leases are discounted at the Group entity’s incremental borrowing rate
To determine the incremental borrowing rate, the Group:
-Where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received; and
-Makes adjustments specific to the lease, e.g. term and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
The Group subsequently measures all its right-of-use assets using the cost model, depreciating them over the shorter of the asset's useful life and the lease term on a straight-line basis.
16.Investment in subsidiary

Company | Shares in subsidiary | Total
| € | €
At 1 January 2025 | 19,097,783 | 19,097,783
At 31 December 2025 | 19,097,783 | 19,097,783
At 31 December 2024 | 19,097,783 | 19,097,783

17.Loans and receivables

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Non-Current |  |  |  |
Redeemable preference shares | - | - | 12,000,000 | 12,000,000
| - | - | 12,000,000 | 12,000,000

This investment represents 100% holding of the 4.1% non-voting, cumulative redeemable preference shares. These preference shares are redeemable within a period of up to 30 years of their allotment. The subsidiary has the right to redeem all or part of the said preference shares on any date it chooses within the aforesaid thirty-year period with the mutual consent of the Company. Provided that the directors of each of the issuer and the subsidiary have undertaken that the redemption of any of the preference shares is to occur subject to the proceeds thereof being held by the Company.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
38
18.Inventories

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Food and beverage | 97,017 | 111,017 | - | -
| 97,017 | 111,017 | - | -

19.Trade and other receivables

|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | € | € | € | €
Current |  |  |  |  |
Trade receivables |  | 468,265 | 607,905 | - | -
Other receivables |  | 49,624 | 768,453 | - | -
VAT refundable |  | 311,470 | 21,858 | - | -
Amounts owed by subsidiary | Note i | - | - | 954,749 | 995,186
Amounts due by commonly controlled entities | Note ii | 1,816,715 | 3,150,582 | - | -
Prepayments and accrued income |  | 41,677 | 36,713 | 1,872 | 1,872
|  | 2,687,751 | 4,585,511 | 956,621 | 997,058

i.Amounts owed by subsidiary
Amounts owed by subsidiary are unsecured, interest free and repayable on demand.
The Group and the Company assess whether any loss allowance is required on its financial assets as set out in the accounting policies and Note 33.
ii.Amounts due by commonly controlled entities
Amounts due by commonly controlled entities are unsecured and interest free. The balance is repayable on demand
iii.Other receivables
In prior year these balances comprised of deposit on works carried out in relation to Sliema hotel.
20.Deferred taxation
Deferred taxes are calculated on all temporary differences under the liability method using a principal tax rate of 35% / 10% (2024: 35% / 10%). The movement in the deferred tax account is as follows:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
At the beginning of the year | (389,773) | (789,403) | - | -
Movement in unabsorbed tax losses and capital allowances | (14,894) | 450,048 | - | -
Movement in excess of capital allowances over depreciation | 86,185 | (570) | - | -
Movement in provisions | (37,589) | - | - | -
Movement on revaluation of PPE | (1,938,460) | - | - | -
Amortisation on bond issue costs amortisation | 4,073 | 11,053 | - | -
Movement in effect of leases | (288,769) | (60,901) | - | -
At the end of the year | (2,579,227) | (389,773) | - | -

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
39
20.Deferred taxation - continued

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Effect recognised in: |  |  |  |
Statement of comprehensive income | (1,938,460) | - | - | -
Statement of profit and loss | (250,994) | 399,629 | - | -
| (2,189,454) | 399,629 | - | -

The following amounts are shown in the balance sheet:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Deferred tax assets |  |  |  |
Unabsorbed tax losses and capital allowances | 1,030,223 | 1,045,117 | - | -
Effect of leases accounting under IFRS 16 | 413,964 | 702,733 | - | -
Effect of provisions | 2,372 | 39,961 | - | -
| 1,446,559 | 1,787,811 | - | -
Deferred tax liabilities |  |  |  |
Effect of excess of capital allowances over depreciation | 218,043 | 131,858 | - | -
Effect due to amortisation of bond issue costs | (43,829) | (47,902) | - | -
Effect due to revaluation of Land in PPE | (4,200,000) | (1,880,400) | - | -
Effect due to revaluation of Investment Property | - | (381,140) | - | -
| (2,579,227) | (389,773) | - | -

Presented in the balance sheet as follows:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Deferred tax asset | 1,496,989 | 1,888,869 | - | -
Deferred tax liability | (4,076,216) | (2,278,642) | - | -
| (2,579,227) | (389,773) | - | -

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
40
21.Trade and other payables

|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | € | € | € | €
Trade payables |  | 1,307,841 | 1,611,548 | 43,323 | 11,175
Other payables |  | 7,645 | - | - | -
Indirect taxes and social security | Note ii | 3,218,333 | 2,300,273 | 10,325 | 17,026
Amounts owed to commonly controlled entities | Note i | 30,020 | 378,992 | 343,295 | 409,461
Accruals |  | 729,364 | 751,590 | 367,324 | 359,318
Deferred income and advanced deposits |  | 489,547 | 243,433 | - | -
Amounts due to shareholders |  | 50,972 | 29,896 | - | -
|  | 5,833,722 | 5,315,732 | 764,267 | 796,980

i.Amounts due to commonly controlled entities and related entities
Amounts due to commonly controlled entities and related entities are unsecured, interest free and repayable on demand.
ii.Indirect taxes and social security
These balances represent statutory obligations payable to governmental authorities and are disaggregated into value-added tax (VAT), environmental contributions (ECO), and payroll-related taxes. The Group has classified these amounts within current liabilities in the 2025 financial statements, reflecting the obligations and conditions existing at the reporting date. Subsequent to year end, the Group entered into agreements in respect of the material balances included within this line item. Based on an assessment of the terms of these agreements and the underlying obligations at the reporting date, management determined that no additional amounts were required to be recognised or adjusted in the 2025 financial statements.
22.Borrowings

|  | Group | Group | Company | Company
|  | 2025 | 2024 | 2025 | 2024
|  | € | € | € | €
Falling due within a year |  |  |  |  |
Bank overdrafts | Note i | 797,329 | 930,818 | - | -
Bank borrowings | Note ii | - | 405,657 | - | -
Third party borrowings | Note iii | 166,671 | 166,671 | - | -
|  | 964,000 | 1,503,146 | - | -
Falling due after more than one year |  |  |  |  |
Bank borrowings | Note ii | 236,000 | - | - | -
Bonds | Note iv | 11,894,727 | 11,863,145 | 12,000,000 | 12,000,000
Third party borrowings | Note iii | - | 173,901 | - | -
|  | 12,130,727 | 12,037,046 | 12,000,000 | 12,000,000
Total borrowing |  | 13,094,727 | 13,540,192 | 12,000,000 | 12,000,000

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
41
22.Borrowings - continued
The debts securities are disclosed at the value of the proceeds less the net book amount of the transaction costs as follows:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Face value of bonds |  |  |  |
Bonds | 12,000,000 | 12,000,000 | 12,000,000 | 12,000,000
Issue costs | (315,822) | (315,822) | - | -
Accumulated amortisation | 210,549 | 178,965 | - | -
Net book amount | (105,273) | (136,857) | - | -
Amortised cost | 11,894,727 | 11,863,143 | 12,000,000 | 12,000,000

(i)The Group’s bank overdraft facilities as at 31 st December 2025 amounted to €1,000,000 (2024: €1,000,000). The Company does not have a facility. The Group’s overdrafts are secured by general hypothecs and special hypothecs over the Group’s assets, guarantees over related party assets and by pledges over various insurance policies.
(ii)The Group’s bank loan facilities are secured by general hypothecs and special hypothecs over the Group’s assets, guarantees over related party assets and by a guarantee provided by Malta Development Bank (MDB).
(iii)The third-party loan relates to capital expenditure which is being repaid in quarterly instalments of €100,000. This loan is unsecured and interest-free.
(iv)By virtue of the Prospectus dated 8 April 2019, SP Finance p.l.c. issued for subscription by the general public 120,000 secured bonds having a nominal value of €100 each for an aggregate principal amount of €12,000,000. These bonds have been issued at par.
The bonds are subject to a fixed interest rate of 4% per annum payable on the 3 May of each year up to redemption date. All bonds, unless previously purchased and cancelled, will be redeemed on 3 May 2029.
The bonds are subject to the terms and conditions in the prospectus and are listed on the Malta Stock Exchange. The quoted market price as at 31 st December 2025 for the 4% secured Bonds was €97 (2024: €98). The directors are of the opinion that this price represents the fair value of these liabilities; as at balance sheet date, the fair value of the bonds therefore amounts to €11,641,200 (2024: €11,760,000). The fair value calculation is classified within Level 3 of IFRS 13’s fair value hierarchy.

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
Interest rate exposure: | € | € | € | €
At floating rates | 1,033,329 | 1,336,475 | - | -
At fixed rates | 11,894,727 | 11,863,145 | 12,000,000 | 12,000,000
Interest free | 166,671 | 340,572 | - | -
Total borrowings | 13,094,727 | 13,540,192 | 12,000,000 | 12,000,000

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
42
22.Borrowings - continued

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
Weighted average effective interest rates | % | % | % | %
At the balance sheet date: |  |  |  |
Bank overdrafts | 5.85 | 5.85 | - | -
Bank loans | 3.10 | 3.10 | - | -
Related parties/ Bond | 4.00 | 4.00 | 4.00 | 4.00

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
Maturity of long-term borrowings | € | € | € | €
Between 2 and 5 years | 11,894,727 | 173,901 | 12,000,000 | -
Over 5 years | 236,000 | 11,863,145 | - | 12,000,000
| 12,130,727 | 12,037,046 | 12,000,000 | 12,000,000

Collateral granted in favour of the security trustee
Security for the fulfilment of the Company’s obligations in term of the bond issue is to grant in favour of the security trustee for the benefit of the bond holders, a first ranking special hypothec over the security property for the sum of €12,000,000 and interest thereon and charges in connection therewith, to be constituted by the Guarantor in favour of the security trustee for the benefit of the beneficiaries by virtue of the Security Trust Deed dated 24 April 2019.
Compliance with loan covenants
The Group does not have any financial covenants of its bank loans during the period.
23.Share capital and share premium

Details of share capital for Company as at 31 December 2025 | Issues shares | Share Premium
| € | €
Authorised, issued and fully paid up |  |
250,000 Ordinary shares of €1 each 100% paid up | 250,000 | -
Shares issues at premium on capital re-organisation | - | 17,750,000
| 250,000 | 17,750,000

Details of share capital for Company as at 31 December 2024 | Issues shares | Share Premium
| € | €
Authorised, issued and fully paid up |  |
250,000 Ordinary shares of €1 each 100% paid up | 250,000 | -
Shares issues at premium on capital re-organisation | - | 17,750,000
| 250,000 | 17,750,000

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
43
24.Revaluation reserve
The Group and the Company recognise fair value movements, net of any applicable deferred tax, arising on the revaluation of property plant and equipment and on remeasurement of financial assets at fair value through other comprehensive income in the revaluation reserve. The revaluation reserve is a non-distributable reserve.
The below table analyses the movements in the reserve:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
At the beginning of the year | 14,799,920 | 14,799,920 | - | -
Revaluation of PPE, net of deferred tax – Note 10 | 9,400,092 | - | - | -
Transfer from fair value reserve | 2,938,013 | - | - | -
At the end of the year | 27,138,025 | 14,799,920 | - | -

25.Fair value gain reserve
During the current financial year, following the reclassification of a portion of land from investment property to property, plant and equipment, the Group transferred the cumulative fair value gains previously recognised in equity within the fair value reserve to the revaluation reserve. This transfer was effected to reflect the change in the nature and use of the underlying asset, which is now classified as owner-occupied property. The reclassification of the reserve has been accounted for within equity and does not impact profit or loss for the year.

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
At the beginning of the year | 2,938,013 | 2,938,013 | - | -
Reallocation to revaluation reserve | (2,938,013) | - | - | -
At the end of the year | - | 2,938,013 | - | -

26.Other reserves

| Capital Redemption Reserve | Capitalisation Reserve | Total
| € | € | €
Group |  |  |
At 1 January 2025 | 17,531,725 | (4,761,815) | 12,769,910
At 31 December 2025 | 17,531,725 | (4,761,815) | 12,769,910
At 31 December 2024 | 17,531,725 | (4,761,815) | 12,769,910

Capitalisation Reserve
Total
€
€
Company
At 1 January 20245
1,098,983
1,098,983
At 31 December 2025
1,098,983
1,098,983
At 31 December 2024
1,098,983
1,098,983
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
44
26.Other reserves - continued
Capital Redemption Reserve
Reserve created upon reorganisation of Group.
Capitalisation Reserve
This amount represents contribution by related parties outside the Group.
On 1 April 2023, the Group’s subsidiaries acquired the ‘Med Asia’ brand and the Catering business from a related party outside the Group. By virtue of signed agreement between the subsidiary and the related party outside the group, it was agreed that €4.9m of the amounts payable created upon acquisition of the brand and the various catering businesses will be payable at the discretion of the Group.
27.Cash and cash equivalents

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Cash at bank and in hand | 186,611 | 52,178 | 23,018 | 14,756
Overdraft | (797,329) | (930,818) | - | -
At the end of the year | (610,718) | (878,640) | 23,018 | 14,756

The balances of cash and cash equivalents are available for use by the Group and the Company in their entirety.
28.Related party transactions
During the course of the year the Group and the Company entered into transactions with related parties. These transactions have been carried at arm's length. The related party transactions in question were:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Revenue |  |  |  |
Subsidiaries |  |  |  |
Service charge | - | - | 150,000 | 150,000
Dividends received | - | - | 492,000 | 492,000
Commonly controlled entities |  |  |  |
Royalties | 8,976 | - | - | -
Other operating income |  |  |  |
Commonly controlled entities |  |  |  |
Service fee | 30,533 | 28,728 | - | -
Other operating expenses |  |  |  |
Commonly controlled entities |  |  |  |
Direct costs | 226,629 | - | - | -
Non-current assets |  |  |  |
Property, plant and equipment |  |  |  |
Construction works | 2,721,500 | 200,000 | - | -

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
45
28.Related party transactions - continued
Key management personnel include the board of directors. Key management compensation, consisting of directors’ remuneration, has been disclosed in Note 8 to the financial statements.
29.Commitments

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Contracted but not provided for | 5,688,786 | 2,673,000 | - | -

Financing
The contracted commitment is with a related party outside the Group. The value of works carried out will be financed through a bank loan of €8.3 million, sanctioned during FY2025 and obtained in FY2026.
30.Contingent liabilities
The Group and Company had no contingent liabilities as at 31 December 2025. In financial year 2024 the Group provided general and special hypothecs over the Group’s immovable property to the amounting to €1,390,000.
31.Financial risk management
The Group’s activities potentially expose it to a variety of financial risks on its financial assets and financial liabilities. The key components of financial risks to the Group are: market risk (namely, cash flow interest rate risk and fair value interest rate risk), credit risk and liquidity risk. The Group’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
Market risk
Market risk is the risk that changes in market prices, such as interest rates, and quoted prices, will affect the Group’s income or financial position. The objective of the Group’s market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
Cash flow and fair value interest rate risk
The Group’s interest rate risk arises on its interest-bearing borrowings and debt investments. Borrowings issued at variable rates, comprising bank borrowings, expose the Group to cash flow interest rate risk. The Group’s bank borrowings are subject to an interest rate that varies according to revisions made to the Bank’s Base Rate and three-month Euribor. The directors monitor the level of floating rate borrowings as a measure of cash flow risk taken on.
The Group has adopted a cautious risk policy with regards to interest rate fluctuation through the issue of a €12,000,000 ten-year bond incurring interest of 4%. Debt securities issued at fixed rates expose the Group to fair value interest rate risk.
A shift in interest rates on borrowings at variable rates will however have an impact on profit or loss or other comprehensive income. The directors consider the potential impact on the Group’s profit or loss of a defined interest rate shift of 1.5%, that is reasonably possible, at the end of the reporting period keeping all other variables constant, to amount to +/- €15,500 (2024: +/- €20,047). The impact of a reasonably possible shift in interest rates is not expected to impact the fair value materially and therefore the directors believe that the potential impact of such a shift on other comprehensive income is immaterial.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
46
31.Financial risk management - continued
Credit risk exposure from financial assets
Credit risk arises from cash and cash equivalents, deposits with banks and credit risk exposures to customers, including outstanding receivables and committed transactions. The carrying amount of the financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Carrying amounts |  |  |  |
Loans and receivables | - | - | 12,000,000 | 12,000,000
Amounts due by commonly controlled entity | 1,816,715 | 3,150,582 | - | -
Trade and other receivables | 929,226 | 1,434,929 | 956,621 | 997,058
Cash at bank and in hand | 186,611 | 52,178 | 23,018 | 14,756
| 2,932,552 | 4,637,689 | 12,979,639 | 13,011,814

The Group has no concentration of credit risk that could materially impact on the sustainability of its operations. However, in common with similar business concerns, the failure of specific large customers could have a material impact on the Group’s results.
Amounts owed by related undertakings that do not form part of the Group are unsecured; therefore, the failure of the related undertakings could have an impact on the Group’s results.
The Group and the Company monitor intra-group credit exposures at individual entity level on a regular basis and ensure timely performance of these assets in the context of its overall liquidity management. The loss allowances for these financial assets are based on assumptions about risk of default and expected loss rates. The Company’s management uses judgement in making these assumptions, based on the counterparty’s past history, existing market conditions, as well as forward-looking estimates at the end of each reporting period. No counterparty making up the above balances has experienced a significant increase in credit risk since origination.
As at 31 December 2025 and 2024, the majority of loans with related parties were on terms that allowed the Group to request repayment of the balance as at reporting date (i.e. repayable on demand). In such cases, when assessing the ECL, the directors base their assessment on the assumption that the loan is demanded at the reporting date.
Where the counterparties’ financial position suggests that it does not have sufficient liquid assets at balance sheet date to repay the loan if this is demanded, the probability of default is deemed to be 100%. Given that most of the related party relationships of such balances are between entities under common control, the directors assess the loss given default of the balance by analysing recovery strategies that the Group would allow, taking cognisance of such related party relationship. These recovery strategies typically include a projection of the net cash flows emanating from allowing the counterparty to operate, incorporating multiple forward-looking scenarios that take into account all reasonable and supportable information available to the Group.
After making this analysis, the directors concluded that the resulting loss-given-default rates are low, such that when applied to the exposure to calculate the IFRS 9 ECL allowance, the resulting impairment allowance to be recognised in the statement of profit and loss for the year was deemed to be immaterial.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
47
31.Financial risk management - continued
Loans advanced to subsidiaries
The Company’s main exposures are a loan to the Company’s subsidiary, representing the advance of the bonds raised by the Company invested as redeemable preference shares. The Company’s management monitor intra-group credit exposures on a regular basis and ensure timely performance of these assets in the context of its overall liquidity management. The loss allowances for these financial assets are based on assumptions about risk of default and expected loss rates. The Company’s management uses judgement in making these assumptions, based on the counterparty’s past history, existing market conditions, as well as forward-looking estimates at the end of each reporting period.
The Directors assessed recoverability of these balances by leveraging on cash flow projections prepared by the respective counterparties. The cash flow projections, which stretch over the term of the loan, consider whether the counterparty could meet its obligations under different, forward-looking scenarios.
After taking into account the results of their assessment, together with the fact that the counterparty has met its obligations as and when due, the resultant impairment charge required was deemed immaterial, and accordingly is not recognised in these financial statements.
Trade receivables and accrued income
The Group assesses the credit quality of its customers taking into account financial position, past experience and other factors. Standard credit terms are in place for individual clients, however, wherever possible, new corporate customers are analysed individually for creditworthiness before the Group’s standard payment and service delivery terms and conditions are offered.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and accrued income. To measure the expected credit losses, trade receivables and accrued income have been grouped based on shared credit risk characteristics and the days past due. The Group has concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the accrued income since they have substantially the same characteristics.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before 31 December 2025 and 31 December 2024 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
Based on the assessment carried out in accordance with the above methodology, the identified expected credit loss allowance on trade receivables and accrued income was deemed immaterial. The movement in loss allowances as at 31 December 2025 and 2024 is also deemed immaterial by management. On this basis, the information pertaining to loss rates and loss allowances in the Group’s provisions matrix, which would have otherwise been required by IFRS 7, is not presented as at 31 December 2025 and 2024.
Separately from the above methodology, the Group has also identified that a provision of €181,901 was required as at 31 December 2025 (2024: €60,229) with respect to counterparties which have been placed into liquidation or are in a difficult economic situation. The assessment on these individual counterparties did not have an impact on the identified loss rates and expected credit losses identified on the rest of the Group’s trade receivables and accrued income.
Trade receivables and accrued income are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than 1 year past due.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
48
31.Financial risk management - continued
Cash at bank and deposits
The Group’s companies bank only with local financial institutions with high quality standing or rating.
The Group’s cash, including both that classified as cash and cash equivalents, is placed with reputable financial institutions, such that management does not expect any institution to fail to meet repayments of amounts held in the name of the companies within the Group. There was no increase in credit risk since origination of these balances and a 12 month ECL approach was applied. While cash and cash equivalents and deposits are also subject to the impairment requirements of IFRS 9, the identified impairment loss was insignificant.
Amounts owed by commonly controlled entities
The Group’s other financial assets at amortised cost which are subject to IFRS 9’s general impairment model comprise of loan advanced to a related undertaking outside the Group.
The Group monitors intra-group credit exposures at individual entity level on a regular basis and ensure timely performance of these assets in the context of its overall liquidity management. The loss allowances for these financial assets are based on assumptions about risk of default and expected loss rates. The Company’s management uses judgement in making these assumptions, based on the counterparty’s past history, existing market conditions, as well as forward-looking estimates at the end of each reporting period.
Liquidity risk
The Group is exposed to liquidity risk in relation to meeting future obligations associated with its financial liabilities, which comprise principally trade and other payables and interest-bearing borrowings disclosed in Note 22. Prudent liquidity risk management includes maintaining sufficient cash and committed credit lines to ensure the availability of an adequate amount of funding to meeting the Group’s obligations.
The directors monitor liquidity risk by means of cash flow forecasts on the basis of expected cash flows over a twelve-month period, in order to ensure that adequate funding is in place in order for the Group to be in a position to meet its commitments as and when they will fall due. In response to the possible future liquidity constraints, the Directors and the Group’s senior management undertook a number of measures. The impact of these measures on the consolidated financial statements include:
-The very encouraging revenue achieved by Pebbles Resort in the first quarter of 2026 and the solid bookings for the rest of the year, which augur well for improved results compared to the already excellent results achieved in 2025.
-The fact that bank financing was obtained to finance a significant portion of the construction and completion costs of the Sliema project.
Accordingly, based on the outcome of the cash flow projections in a prudent scenario as referred to, the Directors consider the going concern assumption in the preparation of the Group’s financial statements as appropriate as at the date of authorisation for issue of the 2025 financial statements.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
49
31.Financial risk management - continued
Liquidity risk - continued
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

| Group | Group | Company | Company
| 2025 | 2024 | 2025 | 2024
| € | € | € | €
Within one year |  |  |  |
Trade and other payables | 5,833,721 | 5,315,732 | 764,267 | 424,922
Bank overdraft | 797,329 | 930,818 | - | -
Bank borrowings | - | 515,281 | - | -
Third party borrowings | 166,671 | 166,671 | - | -
Bonds | 480,000 | 480,000 | 480,000 | 480,000
Lease liability | 1,202,986 | 1,184,486 | - | -
| 8,480,707 | 8,592,988 | 1,244,267 | 904,922
Between 2 – 5 years |  |  |  |
Third party borrowings | - | 173,901 | - | -
Bonds | 13,440,000 | 1,920,000 | 1,920,000 | 1,920,000
Lease liabilities | 2,547,552 | 3,590,267 | - | -
| 15,987,552 | 5,684,168 | 1,920,000 | 1,920,000
Over 5 years |  |  |  |
Bank borrowings | 236,000 | - | - | -
Bonds | - | 12,000,000 | 12,000,000 | 12,000,000
Lease liabilities | - | 15,600 | - | -
| 236,000 | 12,015,600 | 12,000,000 | 12,000,000
Total | 24,704,259 | 26,292,756 | 15,164,267 | 14,824,922

The amount of trade and other payables, for both the Group and the Company, classified as repayable within one year in the table above, are contractually repayable on demand.
Financial instruments not measured at fair value
At 31 December 2025 and 31 December 2024, the carrying amounts of payables, receivables and short-term borrowings approximated their fair values due to the short-term maturities of these assets and liabilities. The fair values of long-term borrowings, together with the related fair value disclosures, are presented in Note 22.
SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
50
32.Capital management
The Group’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or adjust the amount of dividends paid to shareholders.
The Group monitors its capital structure on the basis of the following gearing ratio:
-net debt (borrowings as presented in Note 22 after deducting cash and bank balances, presented in Note 27) and equity of the Group (comprising issued capital, reserves and retained earnings as presented in the Statement of Changes in Equity).
The Group monitors the capital structure on a monthly basis by monitoring the balances of assets and liabilities.
33.Cash flow information
Reconciliation of liabilities arising from financing activities
The table below details changes in the 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 | As at 31 December 2024 | Cashflows | Other Liability Related Changes | As at 31 December 2025
| € | € | € | €
Bank borrowings | 405,657 | (169,657) | - | 235,999
Third party loans | 340,572 | (173,901) | - | 166,671
Bonds | 11,863,145 | - | 31,582 | 11,894,727
Lease liability (note) | 4,148,623 | (1,236,995) | 449,178 | 3,360,806
| 16,757,997 | (1,580,553) | 480,760 | 15,658,203

Group | As at 31 December 2023 | Cashflows | Other Liability Related Changes | As at 31 December 2024
| € | € | € | €
Bank borrowings | 1,047,119 | (641,463) | - | 405,657
Third party loans | 300,004 | 40,568 | - | 340,572
Bonds | 11,831,563 | - | 31,582 | 11,863,145
Lease liability | 4,881,509 | (1,032,890) | 300,004 | 4,148,623
| 18,060,195 | (1,633,785) | 331,586 | 16,757,997

SP FINANCE P.L.C.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
_____________________________________________________________________________________________
______________________________________________________________________________________________________
51
33.Cash flow information - continued
Company
As at 31 December 2024
Cashflows
Other Liability Related Changes
As at 31 December 2025
€
€
€
€
Bonds
12,000,000
-
-
12,000,000
12,000,000
-
-
12,000,000
Company
As at 31 December 2023
Cashflows
Other Liability Related Changes
As at 31 December 2024
€
€
€
€
Bonds
12,000,000
-
-
12,000,000
12,000,000
-
-
12,000,000
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
______________________________________________________________________________________________________
______________________________________________________________________________________________________
Report on the Audit of the Financial Statements
Opinion
We have audited the consolidated and stand-alone parent company financial statements of SP Finance p.l.c. set out on pages 10 to 51 which comprise the consolidated and parent company statement of financial position as at 31 December 2025, and the consolidated and parent company statement of profit and loss and comprehensive income, changes in equity and cashflow for the year then ended including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and the Company as at 31 December 2025, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU and have been prepared in accordance with the requirements of the Companies Act (Cap. 386), enacted in Malta.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and the Parent Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in accordance with the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) in Malta, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.
No prohibited non-audit services referred to in Article 18A(1) of the Accountancy Profession Act(Cap. 281) of the Laws of Malta were provided by us to the Group and the Company and we remain independent of the Group and the Company as described in the Basis for opinion section of our report. No other services besides statutory audit services and services disclosed in the annual report and in the financial statements, were provided by us to the Group and the Company and its controlled undertakings.
Our Audit Approach
Overview
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
______________________________________________________________________________________________________
______________________________________________________________________________________________________
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. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Going concern assessment
Management is required to assess the Group’s ability to continue as a going concern for a period of at least twelve months from the date of approval of the financial statements. This involves making assumptions regarding future cash flows, the timing of the recoverability of receivables, the availability of funding, and agreements with privileged creditors.
Given the significant judgment involved and the potential impact on the basis of preparation of the financial statements, we considered going concern to be a key audit matter.
At the reporting date, the Group had net current liabilities of €5.1 million which include obligations to privileged creditors of €3.5 million. The Group had amounts receivable from related parties outside the group of €1.8 million and was reliant on securing external financing of €8.3 million to complete the Sliema project. These factors, when considered collectively, gave rise to underlying uncertainty as to the likelihood of the Group’s ability to continue as a going concern and meet its obligations as they fall due, and we therefore, considered going concern to be a key audit matter.
The directors prepared cash flow forecasts covering the period through to December 2027. Subsequent to the reporting date but prior to the authorisation of these financial statements, the Group finalised and executed a loan agreement with Bank of Valletta p.l.c. amounting to €8.3 million and commenced drawdowns under the facility. In addition, management rectified previously outstanding balances covered by agreement with privileged creditors, bringing these into alignment with agreed repayment terms. The amount receivable from the related party is expected to be recovered in the short term, as the financial position of the related party is anticipated to improve upon the earnings generated from the construction works performed for the SP Finance p.l.c. group in relation to the Sliema project.
Our audit procedures in relation to the going concern assessment included, amongst others:
-Obtaining and evaluating management’s cash flow forecasts covering the going concern assessment period and assessing the key assumptions, particularly those relating to the timing and collection of receivables from related parties and the projected costs and funding requirements for the Sliema project;
-Reviewing the sanction letter obtained with Bank of Valletta p.l.c. and reviewing the loan contract;
-Assessing the completeness of obligations to privileged creditors and the terms of repayment;
-Assessing the recoverability of related party receivables;
-Assessing cash liquidity for the interest on the bond issued which is due in May 2026.
-Considering subsequent events and post-year-end performance, including the Group’s ability to generate operating cash flows and meet short-term liabilities;
-Evaluating the adequacy and appropriateness of the disclosures in the financial statements relating to going concern.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
______________________________________________________________________________________________________
______________________________________________________________________________________________________
Fair valuation of property, plant and equipment
The Group’s Property, plant and equipment account for 75% of total assets as at 31 December 2025. Land is measured at fair value. During the current financial year the Group accounted for an increase in fair value of land of €11.3 million.
Due to the significance of this balance and the estimation uncertainty involved in the fair valuation of the property, we have considered the fair valuation of land classified as property, plant and equipment as a key audit matter.
The Group’s property comprises 2 hotels; one owned which is currently being constructed to a larger hotel and one leased from third parties and operated by the Group. The valuation of the Group’s property portfolio is inherently subjective due to, among other factors, the individual nature of each property, its location and the expected future returns.
In order to determine the fair value as at as at 31 December 2025, management have carried out an assessment, using a professional valuer, and supported by an internal DCF valuation, for its owned properties classified within property, plant and equipment and PPE under development amounting to €42 million. The valuation reports by the third-party valuer as at 31 December 2025 are computed using the comparison market approach and Level 3 inputs of the fair valuation hierarchy.
Our audit procedures on the valuation of property, plant and equipment included, amongst others:
-Considering the objectivity, independence, competence and capabilities of the external valuer.
-Reviewing the methodologies used by the external valuer and by the directors to estimate the fair value.
-Considered the appropriateness of the fair value estimated by the external valuer based on our knowledge of the industry.
-Assessing the key inputs in the calculations of the DCF presented such as revenue growth and discount rate, by reference to management’s forecasts and market data.
-Assessing the adequacy and appropriateness of the related disclosures in the financial statements in accordance with the applicable financial reporting framework.
Fair valuation of intangible assets
The Group’s intangible assets, comprising goodwill and intellectual property, are material to the consolidated financial statements, representing 6.5% of total assets and amounting to €3.6 million as at 31 December 2025.
The assessment of the carrying value of these assets involves significant management judgment and estimation, particularly in respect of the identification of cash-generating units (CGUs), the preparation of future cash flow forecasts, the selection of appropriate EBITDA multiples, and the determination of useful economic lives.
Furthermore, the Group recognised an impairment of intangible assets in the prior financial year (FY 2024), which heightens the level of estimation uncertainty and highlights the sensitivity of the valuation to changes in underlying assumptions.
Given the inherent subjectivity involved in forecasting future cash flows, and the susceptibility of valuations to variations in key assumptions, we identified the valuation and impairment assessment of intangible assets as a key audit matter.
Management performed an annual impairment assessment of intangible assets as at 31 December 2025. The recoverable amounts of the relevant cash-generating units (CGUs) using a fair value less costs of disposal approach, primarily based on EBITDA multiples.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
______________________________________________________________________________________________________
______________________________________________________________________________________________________
The valuation models incorporate key assumptions, including maintainable EBITDA, the selection of appropriate EBITDA multiples derived from comparable companies and transactions. Maintainable EBITDA was determined based on historical performance and approved budgets, with consideration given to expected future trading conditions.
Our procedures in relation to the valuation of intangible assets included, amongst others:
-Understanding and evaluating management’s process for identifying CGUs and performing impairment assessments;
-Testing the mathematical accuracy of the discounted cash flow models used by management;
-Challenging the determination of maintainable EBITDA, including assessing adjustments made to historical earnings and comparing these to approved budgets and historical trends;
-Assessing the appropriateness of the EBITDA multiples used by benchmarking them against external market data, including comparable companies and recent transactions within the industry;
-Assessing the adequacy and appropriateness of the related disclosures in the financial statements in accordance with the applicable financial reporting framework.
Recoverability of Parent Company investment in its Subsidiary Company
The principal activity of the Company, SP Finance p.l.c. is to raise financial resources from the capital market to finance the capital projects of the companies forming part of SP Group. These debt securities are guaranteed by the subsidiary, Sea Pebbles Limited, and further secured by a grant in favour of the security trustee for the benefit of the bond holders, a first ranking special hypothec over the security property for the sum of €12 million.
The funds received from the debt securities in issue have been invested in €12 million cumulative redeemable preference shares in SP Investments Limited. The recoverability of the financial asset at amortised cost and the debt servicing thereon is dependent on the generation of profits from the operating subsidiaries of SP Investments Limited. Investment in preference shares as at 31 December 2025 amounted to €12 million.
The eventual redemption of this investment of €12 million will be used to repay the principal amount of the bond, which is why we have given additional attention to this area and therefore assessed it as key audit matter. On an annual basis the Company is principally dependent on the receipt of dividend payments from this financial asset to maintain its debt financing.
The Group’s subsidiaries operate in Hospitality and Catering business. The directors have assessed the recoverability of the Company’s investment in its subsidiary companies. The assessment was based on the estimated operating results of the subsidiaries, including the new operations of the Sliema hotel which is expected to be completed and operational in the last quarter of 2026.
The financial asset at amortised cost is subject to impairment testing in accordance with the expected credit loss model in terms of IFRS 9.
Our audit procedures on the recoverability of parent company investment in subsidiary included, amongst others:
-Agreeing the terms of its financial asset to supporting documentation.
-Assessing the financial situation of Sea Pebbles Ltd “the Guarantor” and the Group subsidiaries. In doing this, we made reference to the latest audited financial statements, cash flow projections, forecasts and other prospective information made available to us.
-Performing additional audit work on the assumptions, conditions and relevant risk assessments used by the directors.
-Reviewing the forecasted financial position of the Group for the possibility of refinancing in the longer term.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
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-Assessing the fair value of the properties owned by the Group with specific emphasis on the properties held by virtue of the Security Trust Deed dated 24 April 2019.
Other Information
The directors are responsible for the other information. The other information comprises the directors’ report and the Statement of Compliance with the Principles of Good Corporate Governance. Except for our opinions on the directors’ report in accordance with the Companies Act (Cap.386) and on the Corporate Governance Statement of Compliance in accordance with the Capital Markets Rules issued by the Maltese Financial Services Authority, our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the 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 Maltese Companies Act (Cap. 386). Based on the work we have performed, in our opinion:
-the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-the directors’ report has been prepared in accordance with the Maltese Companies Act (Cap.386).
In addition, in light of the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the directors’ 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 the financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or has no realistic alternative but to do so.
The directors have delegated the responsibility for overseeing the Group’s and the Company’s financial reporting process to the Audit Committee.
Auditor’s Responsibilities for the Audit Committee
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.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
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As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
-Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
-Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
-Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s and the Company’s ability to continue as a going concern.
-Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the directors 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 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 the Audit Committee, we determine those matters that were of most significance in the audit of the financial statements of the current year 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 benefits 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 Market 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 Annual Financial Report of SP Finance p.l.c. for the year ended 31 December 2025, entirely prepared in a single electronic reporting format.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
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Responsibilities of the directors
The directors are responsible for the preparation of the annual financial report, including the 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 annual financial report including the consolidated financial statements and the relevant electronic tagging therein comply 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:
Obtaining an understanding of the entity’s financial reporting process, including the preparation of the annual financial report, in accordance with the requirements of the ESEF RTS.
Obtaining the annual financial report and performing validations to determine whether the annual financial report has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.
Examining the information in the annual financial report to determine whether all the required tagging therein have been applied and whether, in all material respects, they are in accordance with the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the annual financial report 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 of Compliance
The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare and include in their Annual Report a Statement of Compliance 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 the auditor to include a report on the Statement of Compliance prepared by the directors.
We read the Statement of Compliance 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 Statement of Compliance 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 Statement of Compliance set out on pages 6 to 9 has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF
SP FINANCE P.L.C.
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We also have responsibilities:
•Under the Maltese Companies Act (Cap. 386) we are required to report to you if, in our opinion:
-We have not received all the information and explanations we require for our audit.
-Adequate accounting records have not been kept, or that returns adequate for our audit have not been received from branches not visited by us.
-The financial statements are not in agreement with the accounting records and returns.
•Under the Capital Markets Rules to review the statement made by the directors that the business is a going concern together with supporting assumptions or qualifications as necessary.
We have nothing to report to you in respect of these responsibilities.
Other matter – use of this report
Our report, including the opinions, has been prepared for and only for the Parent Company’s shareholders as a body in accordance with Article 179 of the Maltese Companies Act (Cap. 386) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior written consent.
Appointment
We were first appointed as auditors of the Group and the Company for the financial period ended 31 December 2019. Our appointment has been renewed by shareholders resolution representing a total period of uninterrupted appointment of 7 years.
This copy of the audit report has been signed by:
MICHAEL CURMI
for and on behalf of
VCA CERTIFIED PUBLIC ACCOUNTANTS
30 April 2026