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Registered number: 08511795









OPEN HOUSE LONDON LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
OPEN HOUSE LONDON LIMITED
 
 
COMPANY INFORMATION


Directors
Mr B A Hirst 
Mr A Wishart 
Mr A R West 




Registered number
08511795



Registered office
101 New Cavendish Street
1st Floor South

London

England

W1W 6XH




Independent auditors
Harris & Trotter LLP

101 New Cavendsih street

1st Floor South

London

W1W 6XH





 
OPEN HOUSE LONDON LIMITED
 

CONTENTS



Page
Strategic Report
1
Directors' Report
2 - 3
Independent Auditors' Report
4 - 7
Statement of Comprehensive Income
8
Statement of Financial Position
9
Statement of Changes in Equity
10
Statement of Cash Flows
11 - 12
Analysis of Net Debt
13
Notes to the Financial Statements
14 - 30

 
OPEN HOUSE LONDON LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The Directors present their Strategic Report for the Company for the year ended 31st December 2022.

Business review
 
The Company continued to be impacted by COVID-19 during the period however it was also the period where the cost of living crisis started to bite, which put the business and Hospitality sector under further pressure. Omicron impacted the end of they year, with working from home remaining a significant challenge to our venues throughout 2022 and as a result we under performed our expectations of a rebound in performance after lock downs.
The company operated 3 sites during the period with sales being at the expected level but with significant pressure elsewhere on the profit and loss, and the impact of train strikes starting in June 2022 was particularly damaging considering the location of our sites. 
Trade levels in 2022 continued to increase on the previous year, with turnover of £12.0m, a 79% increase on 2021 where sales were £6.7m. EBITDA for the period worsened from a loss of £0.16m in 2021 to a loss of £1.7m in the current period. Gross margins were in line with management expectations for the period.

Principal risks and uncertainties
 
The company's Directors remain confident that they can meet the external challenges affecting the hospitality industry through their continuing total commitment to delivering an exceptional and consistent market leading customer experience, evidenced by high-quality food and drink, outstanding service and competitive pricing. Open House is a leader in the relaxed pub and restaurant sector and strives to offer customers a memorable experience on each visit. 
Rising inflation across all input areas represents an increased risk for the business, albeit one that will impact the entire UK hospitality sector in the same way so it is unlikely to impact the company uniquely. This risk is managed by regular cost and supplier reviews, menu updates and improved operational efficiencies.

Financial key performance indicators
 
The key indicators that continue to be used by the Directors to measure the company's performance are the cost of direct purchases for food and beverages, together with site wage costs, both indicators calculated as a percentage of turnover and in comparison to prior years. The Directors are pleased to report that both indicators are in line with forecasts, when adjusted for closure periods. 

Other key performance indicators
 
The Company monitors a number of other non-financial key performance indicators including mystery diners results, customer reviews and staff retention, all of which were in line with expectations for the period.  


This report was approved by the board and signed on its behalf.



___________________________
Mr A Wishart
Director

Date: 4 October 2023
Page 1

 
OPEN HOUSE LONDON LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the year ended 31 December 2022.

Directors

The directors who served during the year were:

Mr R H M Clegg (resigned 2 February 2023)
Mr B A Hirst 
Mr J A C Thomas (resigned 23 May 2023)
Mr A Wishart 
Mr A R West 

Principal activity

The principal activities of the company during the year were ownership and management of restaurants and licensed premises.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Page 2

 
OPEN HOUSE LONDON LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

This report was approved by the board and signed on its behalf.
 





................................................
Mr A Wishart
Director

Date: 4 October 2023
Page 3

 
OPEN HOUSE LONDON LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPEN HOUSE LONDON LIMITED
 

Opinion


We have audited the financial statements of Open House London Limited (the 'Company') for the year ended 31 December 2022, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Material uncertainty related to going concern


We draw attention to note 2.2 in the financial statements, which indicates that a new refinancing agreement with the bank containing revised financial covenants was entered into by the Company. As at the date of signing these accounts and as stated in note 2.2, it is unclear whether these covenants will be met going forward which indicates that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.


In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 4

 
OPEN HOUSE LONDON LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPEN HOUSE LONDON LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's 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 Company or to cease operations, or have no realistic alternative but to do so.


Page 5

 
OPEN HOUSE LONDON LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPEN HOUSE LONDON LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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 (UK) 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.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non- compliance with laws and regulations, our procedures included the following:
• We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the industry in which it operates. We determined that the following laws and regulations were most significant: FRS 102 and the Companies Act 2006.
• We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making enquiries of management.
• We challenged assumptions and judgments made by management in its significant accounting estimates.
We did not identify any key audit matters relating to irregularities, including fraud.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
Page 6

 
OPEN HOUSE LONDON LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPEN HOUSE LONDON LIMITED (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





N J Newman (Senior Statutory Auditor)
  
for and on behalf of
Harris & Trotter LLP
 
101 New Cavendsih street
1st Floor South
London
W1W 6XH

4 October 2023
Page 7

 
OPEN HOUSE LONDON LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
£
£

  

Turnover
 4 
11,998,844
6,713,001

Cost of sales
  
(10,075,660)
(4,875,085)

Gross profit
  
1,923,184
1,837,916

Administrative expenses
  
(5,196,850)
(3,029,228)

Other operating income
  
18,546
500,713

Operating loss
 6 
(3,255,120)
(690,599)

Interest receivable and similar income
  
1,576
-

Interest payable and similar expenses
  
(273,112)
(123,807)

Loss before tax
  
(3,526,656)
(814,406)

Tax on loss
  
-
(710,639)

Loss for the financial year
  
(3,526,656)
(1,525,045)

There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2022 (2021:£NIL).

The notes on pages 14 to 30 form part of these financial statements.
Page 8

 
OPEN HOUSE LONDON LIMITED
REGISTERED NUMBER: 08511795

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Tangible assets
 13 
5,666,290
5,768,505

  
5,666,290
5,768,505

Current assets
  

Stocks
 14 
248,975
254,280

Debtors
 15 
3,015,217
2,917,091

Cash at bank and in hand
 16 
1,233
1,181

  
3,265,425
3,172,552

Creditors: amounts falling due within one year
 17 
(6,507,944)
(3,574,238)

Net current liabilities
  
 
 
(3,242,519)
 
 
(401,686)

Total assets less current liabilities
  
2,423,771
5,366,819

Creditors: amounts falling due after more than one year
 18 
(6,813,742)
(6,230,134)

  

Net liabilities
  
(4,389,971)
(863,315)


Capital and reserves
  

Called up share capital 
 22 
5,074,000
5,074,000

Share premium account
 23 
2,976,000
2,976,000

Profit and loss account
 23 
(12,439,971)
(8,913,315)

  
(4,389,971)
(863,315)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 4 October 2023.




___________________________
Mr A Wishart
Director

The notes on pages 14 to 30 form part of these financial statements.
Page 9

 
OPEN HOUSE LONDON LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 January 2021
5,074,000
2,976,000
(7,388,270)
661,730



Loss for the year
-
-
(1,525,045)
(1,525,045)



At 1 January 2022
5,074,000
2,976,000
(8,913,315)
(863,315)



Loss for the year
-
-
(3,526,656)
(3,526,656)


At 31 December 2022
5,074,000
2,976,000
(12,439,971)
(4,389,971)


The notes on pages 14 to 30 form part of these financial statements.
Page 10

 
OPEN HOUSE LONDON LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
£
£

Cash flows from operating activities

Loss for the financial year
(3,526,656)
(1,525,045)

Adjustments for:

Depreciation of tangible assets
612,684
532,193

Government grants
(18,546)
(500,712)

Interest paid
273,113
123,807

Interest received
(1,576)
-

Taxation charge
-
710,639

Decrease in stocks
5,305
17,144

(Increase) in debtors
(151,488)
(674,311)

Increase in creditors
3,210,268
88,455

Impairment of assets
937,687
-

Net cash generated from operating activities

1,340,791
(1,227,830)


Cash flows from investing activities

Purchase of tangible fixed assets
(1,448,156)
(3,031,772)

Government grants received
18,546
500,712

Interest received
1,576
-

Net cash from investing activities

(1,428,034)
(2,531,060)

Cash flows from financing activities

Repayment of loans
(225,822)
(380,634)

Interest paid
(273,113)
(123,808)

Net cash used in financing activities
(498,935)
(504,442)

Net (decrease) in cash and cash equivalents
(586,178)
(4,263,332)

Cash and cash equivalents at beginning of year
(465,162)
3,798,170

Cash and cash equivalents at the end of year
(1,051,340)
(465,162)


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,233
1,181

Bank overdrafts
(1,052,573)
(466,343)

(1,051,340)
(465,162)


Page 11

 
OPEN HOUSE LONDON LIMITED
 
The notes on pages 14 to 30 form part of these financial statements.

Page 12

 
OPEN HOUSE LONDON LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2022




At 1 January 2022
Cash flows
At 31 December 2022
£

£

£

Cash at bank and in hand

1,181

51

1,232

Bank overdrafts

(466,343)

(586,230)

(1,052,573)

Debt due after 1 year

(6,223,538)

316,955

(5,906,583)

Debt due within 1 year

(1,041,011)

(750,265)

(1,791,276)


(7,729,711)
(1,019,489)
(8,749,200)

The notes on pages 14 to 30 form part of these financial statements.
Page 13

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Open House London Limited is a private company, limited by shares incorporated in England and Wales. The address of the registered office and the registered number is given on the company information page of these financial statements. The functional and presentational currency is pounds sterling.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on the going concern basis. The directors are of the opinion that the use of the going concern basis is appropriate as they are satisfied that profitability will return in the future. The directors consider that the company can operate viably and meet its obligations as they fall due for a period of at least 12 months from the date of this report. 
Potential sources of uncertainty noted by the directors include the ability to avoid future breaches of financial covenants over the company's bank loans. In March 2023, the company entered into a refinancing agreement with the bank containing updated covenant positions imposed on the company’s loan facilities. The directors fully expect that the bank will grant any further concessions as required with respect to the bank loans, should these covenants be breached. Accordingly, the directors have continued to prepare the financial statements on the going concern basis.

Page 14

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 15

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.4
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
Over the life of the lease
Plant and machinery
-
3 - 10 years straight line
Motor vehicles
-
4 years straight line
Fixtures and fittings
-
3 - 4 years straight line
Computer equipment
-
3 years straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.5

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.6

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.7

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 16

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.8

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.9

Financial instruments

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 
2.10

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.11

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.12

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Page 17

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.13

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.14

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.15

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.16

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.17

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.18

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

Page 18

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.19

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

There are no judgements or estimates when applying the accounting policies that have a significant effect on the amounts recognised in the financial statements that are not readily apparent from other sources.


4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
£
£

Dry sales
4,448,155
2,493,079

Wet sales
6,341,585
3,391,672

Management services
395,065
334,118

Other sales
814,040
494,131

11,998,845
6,713,000


All turnover arose within the United Kingdom.

Page 19

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Other operating income

2022
2021
£
£

Government grants receivable
18,546
500,712

18,546
500,712



6.


Operating loss

The operating loss is stated after charging:

2022
2021
£
£

Exchange differences
2,913
37

Other operating lease rentals
35,574
54,884


7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2022
2021
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
35,000
32,250
Page 20

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Employees

Staff costs, including directors' remuneration, were as follows:


2022
2021
£
£

Wages and salaries
5,545,216
3,230,899

Social security costs
268,851
148,568

Cost of defined contribution scheme
58,665
40,471

5,872,732
3,419,938


Remuneration to key management personnel totalled £305,087 (2021- £358,870).

The average monthly number of employees, including the directors, during the year was as follows:


        2022
        2021
            No.
            No.







Front of House
127
91



Kitchen
65
43



Head office
31
30

223
164


9.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
305,087
358,870

305,087
358,870


The highest paid director received remuneration of £83,333 (2021 - £104,034).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2021 - £3,098).

Page 21

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Interest receivable

2022
2021
£
£


Bank and other interest receivable
  
1,576
-

  
1,576
-


11.


Interest payable and similar expenses

2022
2021
£
£


Bank interest payable
220,670
73,526

Other loan interest payable
52,443
50,281

273,113
123,807


12.


Taxation


2022
2021
£
£



Total current tax
-
-


Origination and reversal of timing differences
-
710,639

Total deferred tax
-
710,639


Tax on loss
-
710,639
Page 22

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is the same as (2021 - the same as) the standard rate of corporation tax in the UK of 19% (2021 - 19%) as set out below:

2022
2021
£
£


Loss on ordinary activities before tax
(3,526,657)
(814,407)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(670,065)
(154,738)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
183,819
319

Capital allowances for year in excess of depreciation
10,894
33,778

Other timing differences leading to an increase (decrease) in taxation
-
710,639

Accrued and notional interest not deductible for tax purposes
9,810
8,588

Non-trade loan relationship deficits
41,782
14,935

Unrelieved tax losses carried forward
423,760
97,118

Total tax charge for the year
-
710,639


Factors that may affect future tax charges

There are tax losses available to offset against future trading profits.

Page 23

 


 
OPEN HOUSE LONDON LIMITED


 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022


13.


Tangible fixed assets






Long-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£
£



Cost or valuation


At 1 January 2022
5,565,887
2,291,370
1,200
2,722,575
59,179
10,640,211


Additions
1,002,685
222,386
-
217,085
6,000
1,448,156



At 31 December 2022

6,568,572
2,513,756
1,200
2,939,660
65,179
12,088,367



Depreciation


At 1 January 2022
800,920
1,414,780
1,200
2,599,638
55,169
4,871,707


Charge for the year on owned assets
207,606
274,819
-
124,248
6,010
612,683


Impairment charge
768,023
169,664
-
-
-
937,687



At 31 December 2022

1,776,549
1,859,263
1,200
2,723,886
61,179
6,422,077



Net book value



At 31 December 2022
4,792,023
654,493
-
215,774
4,000
5,666,290



At 31 December 2021
4,764,967
876,591
-
122,937
4,010
5,768,505

 

Page 24

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

           13.Tangible fixed assets (continued)

An impairment review was performed by the Director's taking into account the information disclosed in note 25 of the financial statements. This resulted in an impairment charge of £937,687 being recognised during the financial year. 





The net book value of land and buildings may be further analysed as follows:


2022
2021
£
£

Long leasehold
4,792,024
4,764,966

4,792,024
4,764,966



14.


Stocks

2022
2021
£
£

Dry and other stock
58,551
52,806

Wet stock
190,424
201,474

248,975
254,280



15.


Debtors

2022
2021
£
£

Due after more than one year

Other debtors
708,502
634,666

708,502
634,666

Due within one year

Trade debtors
355,049
696,242

Other debtors
530,157
151,615

Prepayments and accrued income
264,852
277,911

Restricted Cash
850,000
850,000

Deferred taxation
306,657
306,657

3,015,217
2,917,091


Page 25

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
1,233
1,181

Less: bank overdrafts
(1,052,573)
(466,343)

(1,051,340)
(465,162)



17.


Creditors: Amounts falling due within one year

2022
2021
£
£

Bank overdrafts
1,052,573
466,343

Bank loans
951,557
1,041,011

Trade creditors
1,566,348
752,555

Other taxation and social security
1,148,839
347,019

Other creditors
794,215
181,073

Accruals and deferred income
994,412
786,237

6,507,944
3,574,238



18.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Bank loans
2,553,156
2,689,524

Other creditors
4,260,586
3,540,610

6,813,742
6,230,134


The bank loan has been secured over the assets of the Company and by a personal guarantee of a director. The interest on the loan is LIBOR linked and takes preference over other loans outstanding with the Company until it is fully satisfied in November 2026.
The bank also holds a charge over cash funds of £850,000 held in a nominated account as security for the liabilities due to the bank. 

Page 26

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

19.


Loans


Analysis of the maturity of loans is given below:


2022
2021
£
£

Amounts falling due within one year

Bank loans
951,557
1,041,011


951,557
1,041,011

Amounts falling due 1-2 years

Bank loans
1,270,610
1,048,218


1,270,610
1,048,218

Amounts falling due 2-5 years

Bank loans
1,282,547
1,641,305


1,282,547
1,641,305


3,504,714
3,730,534


Page 27

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

20.


Financial instruments

2022
2021
£
£

Financial assets


Financial assets measured at fair value through profit or loss
1,233
1,181

Financial assets that are debt instruments measured at amortised cost
1,593,708
1,429,159

1,594,941
1,430,340


Financial liabilities


Financial assets that are debt instruments measured at amortised cost
(11,140,585)
(9,457,350)


Financial assets measured at fair value through profit or loss comprise cash and cash equivalents.

Financial assets that are debt instruments measured at amortised cost comprise trade and other debtors.

Financial liabilities measured at amortised cost comprise trade creditors, other creditors and bank loans.


21.


Deferred taxation




2022


£






At beginning of year
306,657



At end of year
306,657

The deferred tax asset is made up as follows:

2022
2021
£
£


Losses brought forward
306,657
306,657

306,657
306,657

Page 28

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

22.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



74,000 (2021 -74,000 ) A Ordinary shares of £1.00 each
74,000
74,000
2,500,000 (2021 - 2,500,000) C Ordinary shares of £1.00 each
2,500,000
2,500,000
2,500,000 (2021 - 2,500,000) D Ordinary shares of £1.00 each
2,500,000
2,500,000

5,074,000

5,074,000



23.


Reserves

Share premium account

Share premium represents the cumulative excess paid on share capital.

Other reserves

Capital Contribution Reserve: This represents moneys paid to the company by shareholders who have elected to not create a loan or to take shares.

Profit and loss account

The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.


24.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £58,665 (2021 - £40,471). Contributions payable to the fund at the balance sheet date amounted to £30,851 (2021 - £24,581).

Page 29

 
OPEN HOUSE LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

25.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
1,030,554
1,077,922

Later than 1 year and not later than 5 years
2,860,000
4,891,020

Later than 5 years
12,148,485
15,446,106

16,039,039
21,415,048

On 28th July 2023, the Company renegotiated the terms of one of its property leases which resulted in the surrendering and regrant of its existing lease


26.


Related party transactions

At the year end, and included within other creditors payable in more than one year is a loan from a director, totaling £3,434,986 (2021 - £3,409,568). The interest charge for the year accrued on this balance totaled £582,236 (2021 - £531,955).
At the year end, the company owed £825,601 (2021 - £128,912) to other related parties, which are under the common control of one or more directors. This amount is included within other creditors due in more than one year.
During the year the company invoiced sales of £164,421 (2021 - £90,665) to an other related party which is under the common control of one of the directors. At the year end the company was owed £78,987 (2021 - £96,254). This balance was included within trade debtors.
During the year, the company recharged costs of £22,552 (2021 - £9,414) to an other related party which is under the common control of one or more directors. At the year end, the company was owed £3,611 (2021 - £11,297). This balance is included within trade debtors.  
An other related party, under the common control of one or more directors, recharged costs of £1,112,790 (2021 - £9,715) to the company for building refurbishment, repairs and other miscellaneous costs. At the year end the company was owed £648,918 (2021 - Cr £9,304). This balance is included within trade debtors and other debtors. During the year, the Company recharged costs to this related party of £6,142 (2021: £129,498).
 
During the year the company invoiced sales of £208,091 (2021 -
 £253,203) in respect of management services to an other related party which is under the common control of one or more directors. At the year end the company was owed £nil (2021: £303,843). 


27.


Controlling party

The ultimate controlling party is Mr B Hirst by virtue of the voting rights assigned to his shareholding.

 
Page 30