Shoryu Stratford Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit B, Premier Park Road, Park Royal, Middlesex, United Kingdom, NW10 7NZ.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared on a going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the group's and therefore the company's ability to continue as a going concern.
The company has a strong overall balance sheet at the year end with net current assets of £363,520 (2021: £351,747 and an overall net assets position of £415,153 (2021: £421,933 ) and has made a net loss of £6,780 (2021: net profit £96,664 ).
Included in the amounts falling due within one year is £ 86,711 (2021: £120,530 debt owed to connected party with a common director and shareholder which is a key broker for the company. Post year end, this amount has been been paid off. The directors are confident they are able to repay the trade debt and in future if cashflow is tight with support available from the group companies.
The company reported on their management accounts for the period to July 2023 draft EBITDA loss of £9,768 and a net loss before tax of £33,171. Whilst the group has been impacted by the slower return rate of workers returning to their city offices, Brexit and general economic downturn in the post pandemic recovery, the directors are confident of sustainable growth in the medium to long term.
In common with other similar businesses in the hospitality sector, challenging trading environment presented by unforeseen post pandemic events such as the energy crisis, interest rate crisis, change in city working patterns, warmer than usual temperatures etc. have significant impact on footfall and customer spend levels, which in turn has an impact on the overall group results. Whilst it is difficult to predict the longevity and future such occurrences, the directors have implemented measures for the business to mitigate their impact, adopt and sustain profitability and growth in the medium to long term.
The group has prepared cash flow forecast until December 2024, under the current economic conditions and based on the key assumption that the restaurants will remain open for the foreseeable future. The forecasts incorporate profit improvement measures including controlling energy costs and securing favourable fixed prices, general cost efficiencies, and marketing campaigns to drive footfall.
In 2021, the parent company secured a 5 year CBILS (£1,000,000) and RLS (£750,000) bank loans under the government recovery loan schemes during the pandemic disruption period. At the year ended 31 December 2022, a covenant breach was noted off for the RLS bank loan which resulted in the loan being reclassified to creditors due within one year. Post year end, the bank had issued a letter of comfort for the year ended 31 December 2022. The comfort letter stated that the bank does not intend to take any immediate action as a result of any actual or potential breaches and that the bank currently expects but does not guarantee, to continue to provide the facility to the parent company as per the facility agreement.
In the event the restaurants were to severely disrupted in the future, the UK economy falls into a deep recession, all of the financial support measures as noted were not agreed, then the group would need to seek financial support from the shareholders'. The unexpected disruptions may result in further loan covenant breaches and potential call back of the RLS loan and or changes to the loan terms and financial support available to the group.
The directors are confident regarding the company’s and group's long-term prospects and profitability. It is however difficult to assess the impact of any other unexpected disruptions which may also result in further loan covenant breaches and potential changes to the loan terms and financial support available to the group.
Given the associated uncertainty above and therefore within the forecast, a material uncertainty exists that may cast a significant doubt on the group's and the company's ability to continue as a going concern
Given the associated uncertainty within the group's forecast, a material uncertainty exists that may cast a significant doubt on the group's and therefore the company's ability to continue as a going concern.
The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
As indicated in note 1.2 it is the directors' assessment that the company continues to be a going concern however a material uncertainty does exist as a result of the impact of the future operations due to the post pandemic macro-economic factors.
Accordingly, the assets and liabilities have been valued on the basis that the company will continue in business.
If this presumption is proven to be mistaken, the carrying value of assets and liabilities would need to be reappraised to reflect the impact of cessation
The directors’ have determined whether there are indicators of impairment of the company’s intercompany debtor balances.
Factors taken into consideration in reaching such a decision include economic viability and expected future financial performance of the company's cash generating unit (CGU). Where there are indicators of impairment, the company estimates the value of the CGU using discounted cash flows to calculate the CGU's value in use. Due to the repercussions of the post pandemic events there is significant uncertainty in estimating the company’s future cash flows and a change in the outcome of this estimation could have an impact on impairment and adjustment required. There have been no material indicators of impairments identified during the current financial year.
The average monthly number of persons (including directors) employed by the company during the year was:
Included within the net book value of land and buildings above is £Nil (2021: Nil) in respect of short leasehold improvements on land and buildings.
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
The company was party to a multilateral cross guarantee and debenture dated 3 June 2015 given by subsidiary companies of Shoryu Holdings Limited to secure group borrowings.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
In addition, the company had certain operating lease commitments to pay additional amounts based on performance.
The company's parent and ultimate parent is Shoryu Holdings Limited, incorporated in United Kingdom.
The parent of the largest group in which these financial statements are consolidated is Shoryu Holdings Limited, a company incorporated in England and Wales. A copy of the consolidated financial statements can be obtained from companies house using the company's registration number 08251749 or its registered office Unit B, Premier Park, Premier Park Road, London, United Kingdom, NW10 7NZ .