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Registered number: 04648681










FIRMDALE HOLDINGS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2023

 
FIRMDALE HOLDINGS LIMITED
 
 
COMPANY INFORMATION


Directors
T J R Kemp 
C M Aberle 
C K B Brotchie 
J P Gray 
R C Perlhagen 




Company secretary
M T Soden



Registered number
04648681



Registered office
18 Thurloe Place

London

SW7 2SP




Independent auditors
MHA
Statutory Auditor

6th Floor

2 London Wall Place

London

EC2Y 5AU





 
FIRMDALE HOLDINGS LIMITED
 

CONTENTS



Page
Group strategic report
1 - 5
Directors' report
6 - 9
Independent auditors' report
10 - 13
Consolidated statement of comprehensive income
14
Consolidated statement of financial position
15 - 16
Company statement of financial position
17
Consolidated statement of changes in equity
18 - 20
Company statement of changes in equity
21 - 22
Consolidated statement of cash flows
23 - 24
Consolidated analysis of net debt
25
Notes to the financial statements
26 - 52


 
FIRMDALE HOLDINGS LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2023

Introduction
 
The directors have pleasure in presenting their report and the financial statements of the Group for the year ended 31 January 2023.

Principal activities and business review
 
The principal activity of the Group is that of luxury hotel developer and operator in central London and New York. The properties it owns and operates in London are the Covent Garden Hotel, the Charlotte Street Hotel, the Soho Hotel, the Haymarket Hotel, the Ham Yard Hotel in the West End, the Number 16 Hotel in South Kensington, the Dorset Square Hotel in Marylebone and the Knightsbridge Hotel in Knightsbridge. In New York it owns and operates the Crosby Street Hotel and the Whitby Hotel in the downtown SoHo and Midtown districts of Manhattan respectively. 
The principal activity of the company for the current and prior period is a holding company. 
The company was very pleased to have received the Queen’s Award for Enterprise 2018 in recognition of its outstanding achievements in International Trade. This is the fourth time the company has received the award. 
Other accolades awarded prior to Covid closures included the 2018 Catey Hotel of the Year – Group award for the Ham Yard Hotel and the European Hotel Investment Conference Hall of Fame award for the Group. In 2019 the Charlotte Street restaurant and bar won the OpenTable Diner’s Choice Award. The Whitby Hotel in New York has received great critical acclaim since opening in 2017 including a Tatler “New York Knockout” Award and a Sleeper Magazine award for Best Suite.
Revenue Performance
Trading in London during 2021/22 was tremendously difficult as Government directives mandated complete closure of the hotels through to May 2021. Ham Yard had a soft reopening on 17 May, but the remaining travel restrictions in place through to early July significantly constrained demand such that Number 16 Hotel was the only other property open by the end of June. The Covent Garden, Charlotte Street and Soho hotels had a phased opening during July, with Haymarket, Knightsbridge and Dorset Square phased in during late August to mid September. Trading demand recovered strongly during the autumn of 2021 although staff shortages across the industry, and indeed the economy as a whole, necessitated managing demand carefully. 
Against that background, 2022/23 was characterised by a tremendously strong recovery as international travel was re-established, and by March 2022 revenues were already outperforming pre Covid levels. The upward trend continued throughout the year. 
As a result, total 2022/23 revenues for the eight hotels operated by the Group in London were a new record of £116.4m, a 2.3 fold increase on the Covid restrictions impacted prior year, and a 5.2% increase over pre Covid 2019/20.  
In New York there were no mandated full closures during the prior financial year, although international travel restrictions remained in place for the early months. By May 2021, occupancies were already reaching some 65% with strong room rates, and during the autumn occupancies were reaching over 80% at average room rates in excess of $1,300 as both international and domestic travel ramped up with each successive month. 
For financial year 2022/23 the two New York hotels produced combined total revenues of £71.6m, a 67.3% increase on prior year and 22.1% ahead of pre Covid 2019/20. The Crosby Street Hotel remains one of the highest yielding hotels in Manhattan.  
Group Turnover was £192.6m, almost double the prior year £96.6m, and comfortably a new record being 13.4% ahead of the £169.8m achieved in pre-Covid 2019/20.

Page 1

 
FIRMDALE HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Principal risks and uncertainties
 
The principal financial risks faced by the Group, and the Group's objectives and policies in relation to those risks, are as follows;
Cash flow risk
The finance department closely manages the Group's cashflow. Detailed cashflow forecasts are regularly prepared with the objective of alerting the directors to potential future risks. It is the Group's policy to ensure that forecast funding requirements can be met with available committed facilities.
Credit risk
Credit risk is the financial exposure generated by the potential default of third parties in fulfilling their obligations. Credit risk arises for the Group if it is unable to recover sums due from clients and is mitigated by setting maximum levels of credit tolerance for more significant clients. For Firmdale this risk is very small as the value of Trade Debtors was less than 0.4% of Net Assets.
Currency risk
The Group faces currency risk on translation of its overseas net assets and earnings.
Interest rate risk
The Group has fixed its interest payment obligations on borrowings of £120m from Standard Life Investments Ltd at 4.233%, and £120m plus £17.5m from Hermes Investment Management Ltd at 3.0% and 5.5% respectively. These represents two thirds of total Group borrowings. The balance of £130m from Wells Fargo includes £122m with the benefit of an interest rate cap giving protection should LIBOR exceed 3.5%. As a result, just 2.1% of year end Group borrowings were exposed to a floating interest rate.   

Page 2

 
FIRMDALE HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Financial key performance indicators
 
Earnings before interest, tax and depreciation showed a profit of £39.3m (2021/22 – £26.0m).
Combined average room rate across the eight London properties was £568 (2021/22 - £492) an increase of 15.4% year on year. This compares to £410 in pre Covid 2019/20.
Combined average occupancy across the eight London properties was 72% (2021/22 - 44%) a 28% increase year on year. This compares to 87% in pre Covid 2019/20.
The resultant average rooms yield (RevPAR) growth across the eight London properties was thereby 89% compared to 2021/22, and 13.6% ahead of pre Covid 2019/20. 
In New York, the Crosby Street Hotel average room rate increased by 13.8% to US$1,269 at an occupancy of 80.6%, a 40.4% RevPAR growth on prior year. The Whitby Hotel average room rate increased by 17.6% to $1,266 at an occupancy of 76.3%, a 53.4% RevPAR growth over prior year. RevPAR compared to pre Covid 2019/20 was 23.0% and 30.8% higher at the two hotels respectively.
Food & Beverage revenues in London increased 73.5% over prior year, but remained 9.5% below pre-Covid 2019/20. In New York Food & Beverage Revenues increased by 65.8% over prior year, a 15.0% increase over pre Covid.
Income from Private Events contributed 9.7% (2021/22 – 11.2%) of total revenues in London and 11.4% (2021/22 – 9.0%) in New York.
Conversion of Group Hotel Revenues to Gross Operating Profit rose from prior year 41.4% to 45.0%.

Page 3

 
FIRMDALE HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Going concern

The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis. 
The outbreak of the global Covid-19 pandemic in early 2020 had a very significant impact on the operations of the Group in common with the majority of businesses worldwide, and the hospitality sector in particular. Following the elimination of all material UK restrictions with effect from 19 July 2021, and the gradual restoration of international travel thereafter, trading demand recovered quickly and since March 2022 both Revenues and Earnings have exceeded those achieved in pre-Covid 2019, a significant milestone in recovery. The continuing growth led to record profitability for the Group in the financial year to January 2023. Furthermore, rising interest rates have not had a significant impact on the Group given that 67% of group debt is fixed and a further 31% has the benefit of an interest rate cap should LIBOR exceed 3.5%. 
The trading results for the first six months of the new financial year are slightly ahead of budget and the outlook for the remainder of the year and beyond remains positive. The lenders remained very supportive during the Covid period and the relationships remain strong with comfortable delivery of financial covenant hurdles now firmly re-established. 
The Board will continue to monitor developments closely and adjust their forecasting assumptions as required, but have a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts.
Despite net current liabilities of £87,214 thousand at 31 January 2023, the directors consider the Group to remain a going concern. The net current liabilities position is driven by a bank loan of £130,181 thousand due for repayment to Wells Fargo within one year of the reporting date. Discussions are advanced the bank for an extension to this repayment date and the directors anticipate a positive outcome. The Group post year end continues to trade well and hold sufficient cash reserves to meet its liabilities as they fall due. The directors therefore consider the going concern basis to remain appropriate. 

Directors' statement of compliance with duty to promote the success of the Group
 
The directors consider the successful running of the Group in terms of achieving its long-term growth strategy which centres around building a sustainable, profitable business which has brand reputation at its heart. The success of the Group centres around positive and effective dealings with all the stakeholders of the Group and the directors were mindful of the long-term consequences of key commercial decisions made during the year, and determined that these were in the interest of the Group's employees, suppliers, customers and other stakeholders, as they were all aligned to the Group's growth strategy.
The Group's success depends on the Group maintaining a reputation for high standards of business conduct with customers and other stakeholders, whether in relation to specific community issues or with regard to environmental issues such as minimising the production of waste.
The principal decisions made by the directors, confirm that throughout the year they have acted in the way that they consider, in good faith, to be most likely to promote the success of the company for the benefit of its members as a whole.

Page 4

 
FIRMDALE HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023


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



T J R Kemp
Director

Date: 10 October 2023

Page 5

 
FIRMDALE HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2023

The directors present their report and the financial statements for the year ended 31 January 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

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


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

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Principal activity

The principal activity of the Company is a holding company. 
The principal activity of the Group is that of a luxury hotel developer, manager and operator in Central London and New York. 

Results and dividends

The profit for the year, after taxation and minority interests, amounted to £12,641 thousand (2022 - loss £11,452 thousand).

The directors do not recommend the payment of a dividend (2022 - £Nil).

Directors

The directors who served during the year were:

T J R Kemp 
C M Aberle 
C K B Brotchie 
J P Gray 
R C Perlhagen 

Page 6

 
FIRMDALE HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Future developments

The Group continues to seek further hotel opportunities in both London and New York. 
In London a long leasehold interest in three adjacent buildings in the Bloomsbury area was acquired in April 2022. This will be converted to a first class hotel as part of our Town House collection. In addition, the freehold tenure of the Covent Garden Hotel was acquired in February 2023 having previously been occupied under a long term lease.
In New York, development of a third hotel located close to the World Trade Centre complex is well advanced and is expected to open in February 2024.

Financial instruments

The company has established a risk and financial management framework whose primary objectives are to protect the company from events that hinder the achievement of the company's performance objectives.
The objectives aim to limit undue counterparty exposure, ensure sufficient working capital exists and monitor the management of risk at a business unit level. 
Further detail in respect to the company's exposure to risks such as cash flow and liquidity risk has been provided in the strategic report on pages 1 - 4. 

Engagement with employees

The Group recognises that its employees are fundamental to the success of their service driven business. It is therefore committed to maximising workforce potential by supporting the learning and development needs of each individual member of staff. Good communication with employees is also considered essential. As a matter of principle the Group actively promotes from within wherever possible and provides competitive rates of pay and benefits.

Engagement with suppliers, customers and others

The Group consciously looks for suppliers who echo its ethos, be it in environmental awareness or social consideration. The Group’s purchasing philosophy is to meet the demands and expectations of a global clientele by sourcing from quality, local and diverse suppliers. This is implemented by forming long term partnerships with suppliers, working closely in partnership with them. 
The Group's supplier relationships are based on lawful, efficient and fair practices. We expect our suppliers to demonstrate they treat workers fairly and provide a safe and healthy work environment, way beyond the basic statutory regulations concerning forced labour or human trafficking. 
Customer relations are paramount in the company’s belief system. The company actively encourage customer comments and feedback and every form of correspondence, both positive and negative, is answered by a senior manager. A rigorous Mystery Guest programme is run across the Group with stringent guidelines on what service standards to test and what guests should expect. This has proven successful in highlighting areas that require improvement or indeed that are working well. Every employee of the company is encouraged to see service and experiences through the eyes of the customer. As a result of our long term pursuit of service excellence, more than 50% of the company’s business continues to be generated from returning guests.

Page 7

 
FIRMDALE HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Greenhouse gas emissions, energy consumption and energy efficiency action

The Group takes very seriously its responsibilities to improve its energy efficiency and reduce its carbon footprint. Firmdale Hotels meets the requirements of CEMARSTM certification having measured its greenhouse gas emissions in compliance with the requirements of ISO 14064-1:2006 and is committed to managing and reducing its emissions in respect of the operational activities of its organisation, which has been closely monitored since 2008. We have already made significant reductions in the level of energy consumed.
GHG emissions and energy use for period 01 February 2022 to 31 January 2023:


Annual Quantity of gross emissions by unit turnover/revenue (tCO2e/£M) in the year
37.56 tC02e

Annual Quantity of gross Scope 1, Scope 2 & Scope 3 emissions tCO2e in the year
4,778.79 tC02e

Annual Quantity of energy consumed
24,348,697 KWH

The following inventory has been prepared in accordance with the requirements of the measure-step of the Toitu carbon marks, which is based on the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) and ISO 14064-1:2006 Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals. Where relevant, the inventory is aligned with industry or sector best practice for emissions measurement and reporting.



Current reporting year 1 February 2022 to 31 January 2023

Energy consumption used to calculate emissions (kWh)


24,348,697

- Gas (kWh)


14,576,879

- Electricity (kWh)


9,771,818

- Transport fuels (kWh)


N/A

Emissions from combustion of gas tCO2e (Scope 1)


2,660.86

Emissions from combustion of fuel for transport purposes tCO2e (Scope 1)


N/A

Emissions from business travel in rental cars or employee-owned vehicles where company is responsible for purchasing of the fuel tCO2e (Scope 3)


N/A

Emissions from purchased electricity tCO2e (Scope 2, location-based)


1,889.67

Total gross emissions tCO2e based on the above


4,550.54




Room Intensity ratios: By actual usage/by nights available

1 February 2020 - 31 January 2021: Room intensity 6.817 tCO2e

55.879 tCO2e

0.153 tCO2e

1 February 2021 - 31 January 2022: Room intensity 7.165 tCO2e

16.322 tCO2e

0.045 tCO2e

1 February 2022 - 31 January 2023: Room intensity 9.615 tCO2e

13.373 tCO2e

0.037 tCO2e





The above information was prepared in accordance with ISO14064 Part 1 2018 and Carbon Reduce and verified to ISO14064 Part 1 2018 and Carbon Reduce.

Page 8

 
FIRMDALE HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

Disabled employees

The company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the company's policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training, career development and promotion to disabled employees wherever appropriate.

Qualifying third party indemnity provisions

Third party qualifying directors' and officers’ insurance has been maintained throughout the financial year and to the date of this report, which extends to all subsidiaries within the wider group under Firmdale Holdings Limited.

Matters covered in the Group strategic report

As permitted by paragraph 1A of schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008, certain matters which are required to be disclosed in the directors' report have been omitted as they are included in the strategic report on pages 1 - 4.

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 and the Group'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 and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

MHA MacIntyre Hudson were appointed auditors during the year.
Following a rebranding exercise on 15 May 2023 the trading name of the company's independent auditor changed from MHA MacIntyre Hudson to MHA. A resolution to reappoint MHA as independent auditor will be proposed at the next Annual General Meeting.

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





T J R Kemp
Director

Date: 10 October 2023

Page 9

 
FIRMDALE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOLDINGS LIMITED
 

Opinion


We have audited the financial statements of Firmdale Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 January 2023, which comprise the Group Statement of comprehensive income, the Group and Company Statements of financial position, the Group Statement of cash flows, the Group and Company 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 Group's and of the parent Company's affairs as at 31 January 2023 and of the Group's profit 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 Group 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.


Conclusions relating to going concern


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.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


Page 10

 
FIRMDALE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOLDINGS 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 Report.  Our 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 Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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.


Page 11

 
FIRMDALE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOLDINGS LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 6, 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 Group's and the parent 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 or the parent Company or to cease operations, or have no realistic alternative but to do so.


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 Group 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:
enquiry of management, those charged with governance and Group legal advisors around actual and potential litigation and claims;

performing audit work over the risk and management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;

reviewing minutes of meetings of those charged with governance; and

reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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 12

 
FIRMDALE HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOLDINGS 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.





Rajeev Shaunak FCA (Senior Statutory Auditor)
  
for and on behalf of
MHA
 
Statutory Auditor
  
London, United Kingdom

19 October 2023
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
Page 13

 
FIRMDALE HOLDINGS LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2023

As restated
2023
2022
Note
£000
£000

Turnover
 4 
192,581
96,590

Cost of sales
  
(89,502)
(57,710)

Gross profit
  
103,079
38,880

Administrative expenses
  
(75,457)
(53,025)

Other operating income
 5 
283
9,708

Fair value movements
  
(11,965)
11,097

Operating profit
 6 
15,940
6,660

Interest receivable and similar income
 10 
3
19

Interest payable and similar expenses
 11 
(18,424)
(15,804)

Loss before taxation
  
(2,481)
(9,125)

Tax on loss
 12 
15,840
(2,322)

Profit/(loss) for the financial year
  
13,359
(11,447)

Unrealised surplus on revaluation of leasehold property
  
130,414
179,262

Unrealised surplus on revaluation of freehold property
  
1,580
-

Currency translation differences
  
11,068
2,185

Deficit on revaluation of assets in the course of construction
  
-
(2,007)

Deferred tax charge on revalued assets under the course of construction
  
-
(567)

Deferred tax charge on revalued leasehold property
  
(8,184)
(62,986)

Total comprehensive income for the year
  
148,237
104,440

Profit/(loss) for the year attributable to:
  

Non-controlling interests
  
718
5

Owners of the parent Company
  
12,641
(11,452)

  
13,359
(11,447)

Total comprehensive income for the year attributable to:
  

Non-controlling interest
  
718
(651)

Owners of the parent Company
  
147,519
105,091

  
148,237
104,440

The notes on pages 26 to 52 form part of these financial statements.

Page 14

 
FIRMDALE HOLDINGS LIMITED
REGISTERED NUMBER: 04648681

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2023

As restated
2023
2022
Note
£000
£000

Fixed assets
  

Tangible assets
 13 
1,116,458
982,812

Investment property
 14 
43,575
27,805

  
1,160,033
1,010,617

Current assets
  

Stocks
 16 
2,793
1,774

Debtors: amounts falling due within one year
 17 
20,147
9,882

Cash at bank and in hand
 18 
44,758
52,819

  
67,698
64,475

Creditors: amounts falling due within one year
 20 
(154,912)
(42,070)

Net current (liabilities)/assets
  
 
 
(87,214)
 
 
22,405

Total assets less current liabilities
  
1,072,819
1,033,022

Creditors: amounts falling due after more than one year
 21 
(298,379)
(398,042)

Provisions for liabilities
  

Deferred taxation
 23 
(141,630)
(150,407)

Net assets
  
632,810
484,573


Capital and reserves
  

Called up share capital 
 24 
1,977
1,977

Share premium account
 25 
54,262
54,262

Revaluation reserve
 25 
617,210
508,411

Profit and loss account
 25 
(44,555)
(83,275)

Equity attributable to owners of the parent Company
  
628,894
481,375

Non-controlling interests
  
3,916
3,198

  
632,810
484,573


Page 15

 
FIRMDALE HOLDINGS LIMITED
REGISTERED NUMBER: 04648681
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 JANUARY 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




T J R Kemp
Director

Date: 10 October 2023

The notes on pages 26 to 52 form part of these financial statements.

Page 16

 
FIRMDALE HOLDINGS LIMITED
REGISTERED NUMBER: 04648681

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2023

2023
2022
Note
£000
£000

Fixed assets
  

Investments
 15 
14,977
14,977

  
14,977
14,977

Current assets
  

Debtors: amounts falling due within one year
 17 
54,299
39,225

  
54,299
39,225

Creditors: amounts falling due within one year
 20 
(2)
(2)

Net current assets
  
 
 
54,297
 
 
39,223

Total assets less current liabilities
  
69,274
54,200

  

  

Net assets
  
69,274
54,200


Capital and reserves
  

Called up share capital 
 24 
1,978
1,977

Share premium account
 25 
49,670
49,670

Profit and loss account brought forward
  
2,552
1,138

Profit/(loss) for the year
  
15,074
(111)

Other changes in the profit and loss account

  

-
1,525

Profit and loss account carried forward
  
17,626
2,553

  
69,274
54,200


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 





T J R Kemp
Director

Date: 10 October 2023

The notes on pages 26 to 52 form part of these financial statements.

Page 17

 

 
FIRMDALE HOLDINGS LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023



Called up share capital
Share premium account
Revaluation reserve
Profit and loss account
Equity attributable to owners of parent Company
Non-controlling interests
Total equity


£000
£000
£000
£000
£000
£000
£000


At 1 February 2022 (as previously stated)
1,977
54,262
497,148
(72,012)
481,375
3,198
484,573


Prior year adjustment - correction of error (see Note 26)
-
-
11,263
(11,263)
-
-
-


At 1 February 2022 (as restated)
1,977
54,262
508,411
(83,275)
481,375
3,198
484,573



Comprehensive income for the year


Profit for the year

-
-
-
12,641
12,641
718
13,359


Currency translation differences
-
-
-
11,068
11,068
-
11,068


Unrealised surplus on revaluation of freehold property
-
-
1,580
-
1,580
-
1,580


Unrealised surplus on revaluation of leasehold property
-
-
130,414
-
130,414
-
130,414


Deferred tax charged on revalued leasehold property
-
-
(8,184)
-
(8,184)
-
(8,184)



Other comprehensive income for the year
-
-
123,810
11,068
134,878
-
134,878



Total comprehensive income for the year
-
-
123,810
23,709
147,519
718
148,237


Transfer to/from profit and loss account
-
-
(15,011)
15,011
-
-
-



At 31 January 2023
1,977
54,262
617,210
(44,555)
628,894
3,916
632,810



The notes on pages 26 to 52 form part of these financial statements.
Page 18

 

 
FIRMDALE HOLDINGS LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022



Called up share capital
Share premium account
Revaluation reserve
Profit and loss account
Equity attributable to owners of parent Company
Non-controlling interests
Total equity


£000
£000
£000
£000
£000
£000
£000


At 1 February 2021 (as previously stated)
1,648
4,592
393,260
(74,758)
324,742
3,849
328,591


Prior year adjustment - correction of error (see Note 26)
-
-
3,472
(2,799)
673
-
673


At 1 February 2021 (as restated)
1,648
4,592
396,732
(77,557)
325,415
3,849
329,264



Comprehensive income for the year


Loss for the year

-
-
-
(11,452)
(11,452)
5
(11,447)


Currency translation differences
-
-
-
2,185
2,185
-
2,185


Surplus on revaluation of leasehold property
-
-
179,262
-
179,262
-
179,262


Deficit on revaluation of assets in the course of construction
-
-
(2,007)
-
(2,007)
(656)
(2,663)


Deferred tax charge on revalued leasehold property
-
-
(62,986)
-
(62,986)
-
(62,986)


Deferred tax charge on revalued assets under the course of construction
-
-
(567)
-
(567)
-
(567)



Other comprehensive income for the year
-
-
113,702
2,185
115,887
(656)
115,231



Total comprehensive income for the year
-
-
113,702
(9,267)
104,435
(651)
103,784



Contributions by and distributions to owners


Shares issued during the year
329
49,670
-
-
49,999
-
49,999


Transfer to/from profit and loss account
-
-
(2,023)
2,024
1
-
1
Page 19

 

 
FIRMDALE HOLDINGS LIMITED


 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2022



Dividends waived
-
-
-
1,525
1,525
-
1,525



Total transactions with owners
329
49,670
(2,023)
3,549
51,525
-
51,525



At 31 January 2022
1,977
54,262
508,411
(83,275)
481,375
3,198
484,573



The notes on pages 26 to 52 form part of these financial statements.

Page 20

 
FIRMDALE HOLDINGS LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023


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

£000
£000
£000
£000

At 1 February 2022
1,978
49,670
2,552
54,200


Comprehensive income for the year

Profit for the year
-
-
15,074
15,074


At 31 January 2023
1,978
49,670
17,626
69,274


The notes on pages 26 to 52 form part of these financial statements.

Page 21

 
FIRMDALE HOLDINGS LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022


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

£000
£000
£000
£000

At 1 February 2021
1,648
49,670
1,138
52,456


Comprehensive income for the year

Loss for the year

-
-
(111)
(111)


Contributions by and distributions to owners

Shares issued during the year
330
-
-
330

Dividends waived
-
-
1,525
1,525


Total transactions with owners
330
-
1,525
1,855


At 31 January 2022
1,978
49,670
2,552
54,200


The notes on pages 26 to 52 form part of these financial statements.

Page 22

 
FIRMDALE HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2023

As restated
2023
2022
£000
£000

Cash flows from operating activities

Profit/(loss) for the financial year
13,359
(11,447)

Adjustments for:

Depreciation of tangible assets
23,335
19,319

Loss/(profit) on disposal of tangible assets
53
(78)

Interest paid
18,424
15,805

Interest received
(3)
-

Taxation charge
(15,840)
2,322

(Increase) in stocks
(1,019)
(201)

(Increase) in debtors
(10,357)
(2,898)

Increase/(decrease) in creditors
7,080
(5,166)

Net fair value losses/(gains) recognised in the profit and loss account
11,965
(11,097)

Forgiveness of US loans recognised in other income
(283)
(2,815)

Foreign exchange
732
5,882

Net cash generated from operating activities

47,446
9,626

Cash flows from investing activities

Purchase of tangible fixed assets
(53,517)
(20,359)

Sale of tangible fixed assets
21,947
78

Sale of investment properties
-
1,340

Interest received
3
-

Net cash from investing activities

(31,567)
(18,941)
Page 23

 
FIRMDALE HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023

As restated

2023
2022

£000
£000



Cash flows from financing activities

New secured loans
20,209
16,272

(Repayment)/receipt of other new loans
(3,213)
2,974

Repayment of other loans
(22,565)
(173)

Interest paid
(18,424)
(14,399)

Dividends paid to non-controlling interests
-
2

Loan financing costs incurred
-
(216)

Proceeds from issue of convertible loan
-
50,000

Net cash used in financing activities
(23,993)
54,460

Net (decrease)/increase in cash and cash equivalents
(8,114)
45,145

Cash and cash equivalents at beginning of year
52,787
7,642

Cash and cash equivalents at the end of year
44,673
52,787


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
44,758
52,819

Bank overdrafts
(85)
(32)

44,673
52,787


The notes on pages 26 to 52 form part of these financial statements.

Page 24

 
FIRMDALE HOLDINGS LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 JANUARY 2023






At 1 February 2022 (restated)
Cash flows
Exchange rate movements
Other non-cash changes
At 31 January 2023
£000

£000

£000

£000

£000

Cash at bank and in hand

52,819

(8,061)

-

-

44,758

Bank overdrafts

(32)

(53)

-

-

(85)

Debt due after 1 year

(360,166)

2,356

(9,500)

110,320

(256,990)

Debt due within 1 year

(20,713)

3,213

-

(111,880)

(129,380)


(328,092)
(2,545)
(9,500)
(1,560)
(341,697)

The notes on pages 26 to 52 form part of these financial statements.

Page 25

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

1.


General information

Firmdale Holdings Limited is a private company, limited by shares, incorporated in England and Wales under the Companies Act. The company's registered office is 18 Thurloe Place, London, SW7 2SP.
The principal activity of the Company is a holding company. 
The principal activity of the Group is that of a luxury hotel developer, manager and operator in Central London and New York. 

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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The Company has taken advantage of the disclosure exemption in respect of the requirement of Section 7 Statement of Cash Flows, as allowed to a qualifing entity as permitted by FRS 102 "The Financial Reporting Statndard applicable in the UK and Republic of Ireland" and has not presented its own cash flow statement in these financial statements. The information is included in the consolidated cash flows statement of Firmdale Holdings Limited.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 26

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.3

Going concern

The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis. 
The outbreak of the global Covid-19 pandemic in early 2020 had a very significant impact on the operations of the group in common with the majority of businesses worldwide, and the hospitality sector in particular. Following the elimination of all material UK restrictions with effect from 19 July 2021, and the gradual restoration of international travel thereafter, trading demand recovered quickly and since March 2022 both Revenues and Earnings have exceeded those achieved in pre-Covid 2019, a significant milestone in recovery. The continuing growth led to record profitability for the Group in the financial year to January 2023. Furthermore, rising interest rates have not had a significant impact on the Group given that 67% of group debt is fixed and a further 31% has the benefit of an interest rate cap should LIBOR exceed 3.5%. 
The trading results for the first six months of the new financial year are slightly ahead of budget and the outlook for the remainder of the year and beyond remains positive. The lenders remained very supportive during the Covid period and the relationships remain strong with comfortable delivery of financial covenant hurdles now firmly re-established. 
The Board will continue to monitor developments closely and adjust their forecasting assumptions as required, but have a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts.
Despite net current liabilities of £87,214 thousand at 31 January 2023, the directors consider the Group to remain a going concern. The net current liabilities position is driven by a bank loan of £130,181 thousand due for repayment to Wells Fargo within one year of the reporting date. Discussions are advanced the bank for an extension to this repayment date and the directors anticipate a positive outcome. The Group post year end continues to trade well and hold sufficient cash reserves to meet its liabilities as they fall due. The directors therefore consider the going concern basis to remain appropriate. 

  
2.4

Revenue

Revenue represents amounts receivable for accommodation, food and beverage sales and ancillary hotel services provided in the normal course of business.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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.
Deposits which have been received at the reporting date for which services have not yet been provided are included in accruals and deferred income within creditors.

Page 27

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.5

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.

 
2.6

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.

The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives Assets in the course of construction are not depreciated until available for use.

Depreciation is provided on the following basis:

Freehold property
-
50 years straight line
Long-term leasehold property
-
Over the lease term
Motor vehicles
-
20% and 33% per annum on cost
Fixtures and fittings
-
15% and 20% per annum on cost

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.

Land is not depreciated.

 
2.7

Revaluation of tangible fixed assets

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

Page 28

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

  
2.8

Impairment of non-financial assets

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 identifiability 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.

 
2.9

Operating leases: the Group as lessee

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

 
2.10

Operating leases: the Group as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

 
2.11

Investment property

Investment property is carried at fair value determined annually by the directors with support from external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

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.

 
2.14

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 29

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.15

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 Consolidated 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 Group's cash management.

 
2.16

Financial instruments

The Group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an 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.

Page 30

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.17

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.

 
2.18

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP, rounded to the nearest £1,000.

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.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.19

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.

Page 31

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.20

Government grants

Grants are accounted for 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 Consolidated statement of comprehensive income in the same period as the related expenditure.

 
2.21

Interest income

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

 
2.22

Borrowing costs

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

 
2.23

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 and the Group operate and generate 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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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.

Page 32

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

2.Accounting policies (continued)

 
2.24

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group 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 Group 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.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The following judgements (including the key areas of estimation uncertainty) have had the most significant effect on amounts recognised in the financial statements:
Revaluation of tangible fixed assets
The long term leasehold and freehold property is held under the revaluation model based on the directors' conclusions, having consulted and reviewed the previous valuations completed by independent valuation specialists. These valuers hold recognised and relevant professional qualifications. The valuations are based on discounted cash flow models which include judgements surrounding future performance and market factors.
Fair value of investment properties
Freehold investment property is held at fair value based on the directors' conclusions, having consulted and reviewed the previous valuations completed by independent valuation specialists. These valuers hold recognised and relevant professional qualifications. The valuations are based on discounted cash flow models which include judgements surrounding future performance and market factors. 
Premium on property portfolio
On consolidation, a premium is added to the property hotel portfolio, representing synergies and the additional value of the 'Firmdale' brand. The directors acknowledge the estimation uncertainty with such a premium and as such have consulted independent valuation specialists in both the UK and New York to support conclusions reached. 

Page 33

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

4.


Turnover

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


2023
2022
£000
£000

Rooms and apartments
129,630
72,052

Food and beverage
56,253
20,904

Other
5,168
1,946

Kit Kemp Residential
1,516
1,688

Management fees from third parties
14
-

192,581
96,590


Analysis of turnover by country of destination:

2023
2022
£000
£000

United Kingdom
120,937
53,753

Rest of the World
71,644
42,837

192,581
96,590



5.


Other operating income

2023
2022
£000
£000

Other operating income
-
4,962

Government grants receivable
-
1,674

Sundry income
283
3,072

283
9,708


Page 34

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

6.


Operating profit

The operating profit is stated after charging:

As restated
2023
2022
£000
£000

Depreciation
23,335
19,319

Exchange differences
(1,706)
78

Other operating lease rentals
11,202
15,090


7.


Auditors' remuneration

2023
2022
£000
£000

Fees payable to the Company's auditors: for the audit of the consolidated and parent Company's financial statements
65
11

Fees payable to the Company's auditors: in respect of:

The auditing of accounts of associates of the Company
124
127

Taxation compliance services
41
36

All non-audit services not included above
20
17

Page 35

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

8.


Employees

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


Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000


Wages and salaries
45,017
37,644
-
-

Social security costs
3,594
3,277
-
-

Cost of defined contribution scheme
591
439
-
-

49,202
41,360
-
-


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


        2023
        2022
            No.
            No.







Hotels and restaurants
1,344
1,092



Administration
127
123



Sales and marketing
19
16



Laundry
68
58

1,558
1,289

The Company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL). The directors were remunerated through other entities within the Group. 

9.


Directors' remuneration

2023
2022
£000
£000

Directors' emoluments
560
483

Group contributions to defined contribution pension schemes
30
30


During the year retirement benefits were accruing to 1 director (2022 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £516 thousand (2022 - £441 thousand).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022 - £NIL).

Page 36

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

10.


Interest receivable

2023
2022
£000
£000


Other interest receivable
3
19


11.


Interest payable and similar expenses

2023
2022
£000
£000


Bank loan interest payable
18,424
15,804


12.


Taxation


2023
2022
£000
£000

Corporation tax


Current tax on profits for the year
564
(2)

Adjustments in respect of previous periods
(2)
-


Total current tax
562
(2)

Deferred tax


Origination and reversal of timing differences
(10,274)
(16,121)

Adjustments in respect of prior periods
(6,128)
72

Effect of tax rate change on opening balance
-
18,373

Total deferred tax
(16,402)
2,324


Total tax (credit)/charge on loss for the year
(15,840)
2,322
Page 37

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£000
£000


Loss on ordinary activities before tax
(2,481)
(9,124)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
(471)
(1,734)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
4,121
3,152

Capital allowances for year in excess of depreciation
-
779

Prior year adjustments
-
72

Deferred tax not recognised
-
776

Change in tax rate on opening deferred tax balance
-
(2,973)

Adjustments to tax charge in respect of prior periods
(6,045)
-

Losses utilised/(carried forward)
(8,481)
2,268

Other timing differences
-
(704)

Deferred tax recognised at a higher rate
(1,848)
-

Revaluation of loss on investment
(802)
-

Deferred tax on investment no longer recognised
(3,138)
-

Difference in overseas tax rate
753
686

Corporate interest restriction allocated
175
-

Super deduction expenditure adjustment
(104)
-

Total tax (credit)/charge on loss for the year
(15,840)
2,322


Factors that may affect future tax charges

The standard rate of corporation tax in the UK has increased on a sliding scale based on profits from 19%
to 25%, effective from 1 April 2023.

Page 38

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

13.


Tangible fixed assets

Group






Other freehold & leasehold property
Freehold & leasehold hotels
Motor vehicles
Fixtures and fittings
In the course of construction
Total

£000
£000
£000
£000
£000
£000



Cost or valuation


At 1 February 2022
6,400
898,931
277
33,521
87,175
1,026,304


Additions
-
8,962
36
1,862
42,657
53,517


Disposals
-
-
-
-
(22,000)
(22,000)


Transfers between classes
4,375
-
-
-
(31,302)
(26,927)


Revaluations
(1,100)
111,500
-
-
-
110,400


Exchange adjustments
-
16,232
-
-
3,318
19,550



At 31 January 2023

9,675
1,035,625
313
35,383
79,848
1,160,844



Depreciation


At 1 February 2022
-
12,226
270
30,426
570
43,492


Charge for the year on owned assets
122
21,876
21
1,316
-
23,335


On revalued assets
(122)
(27,262)
-
-
-
(27,384)


Exchange adjustments
-
4,943
-
-
-
4,943



At 31 January 2023

-
11,783
291
31,742
570
44,386



Net book value



At 31 January 2023
9,675
1,023,842
22
3,641
79,278
1,116,458



At 31 January 2022
6,400
886,705
7
3,095
86,605
982,812

Page 39

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

           13.Tangible fixed assets (continued)

The freehold and leasehold hotels were valued by the directors, with support of Cushman & Wakefield, Chartered Surveyors, an independent valuer with a recognised and relevant professional qualification and with recent experience in the location and category of the property being valued. A formal valuation was carried out at the previous reporting date, 31 January 2022 and since then an assessment has been carried out by the directors with guidance from Cushman & Wakefield as at 31 January 2023, on the basis of fair value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors.





If the freehold and leasehold hotels had not been included at valuation they would have been included under the historical cost convention as follows:

As restated
2023
2022
£000
£000

Group


Cost
598,155
561,239

Accumulated depreciation
(114,368)
(99,806)

Net book value
483,787
461,433

If the other freehold and leasehold property had not been included at valuation they would have been included under the historical cost convention as follows:

2023
2022
£000
£000

Group


Cost
9,237
6,700

Accumulated depreciation
(592)
(473)

Net book value
8,645
6,227

Page 40

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

14.


Investment property

Group


Freehold investment property

£000



Valuation


At 1 February 2022
27,805


Surplus on revaluation
(11,157)


Transfers between classes
26,927



At 31 January 2023
43,575

During the year ended 31 January 2023, the construction of 9-11 Richmond Buildings was completed and costs incurred to completion of the project were transferred from property under construction to freehold investment property.
On consolidation, a transfer between freehold investment property and other freehold property of £4,374,850 (2022: £Nil) has been made, representing the apportioned value of two units in a warehouse leased from one group entity to another. 
The 2023 valuations were made by the directors, with the support of Cushman & Wakefield, Chartered Surveyors, on an open market value for existing use basis. Cushman & Wakefield are an independent valuer with a recognised and relevant professional qualification and with recent experience in the location and category of the property being valued. An assessment of the valuation has been carried out by the directors with guidance from Cushman & Wakefield as at 31 January 2023, on the basis of fair value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors.






Page 41

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

15.


Fixed asset investments

Company





Investments in subsidiary companies

£000



Cost or valuation


At 1 February 2022
14,977



At 31 January 2023
14,977





Direct subsidiary undertakings


The following were direct subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Firmdale Hotels PLC
18 Thurloe Place, London, SW7 2SP
Hotelier
Ordinary
100%
Firmdale West End Ltd
18 Thurloe Place, London, SW7 2SP
Investment holding
Ordinary
100%
HY Hotels Ltd
18 Thurloe Place, London, SW7 2SP
Investment holding
Ordinary
100%
Number Sixteen Hotel Ltd
18 Thurloe Place, London, SW7 2SP
Hotelier
Ordinary
100%
Mandela Way Ltd
18 Thurloe Place, London, SW7 2SP
Property holding
Ordinary
79.7%
Palace Laundry Ltd
18 Thurloe Place, London, SW7 2SP
Laundry
Ordinary
100%
Firmdale Holdings (USA) Inc.
79 Crosby Street, New York, NY 10012, USA.
Investment holding
Ordinary
100%
Almondbox Property Ltd
18 Thurloe Place, London, SW7 2SP
Property holding
Ordinary
 100%
Innovation Centre Ltd
18 Thurloe Place, London, SW7 2SP
Warehouse letting
Ordinary
100%
Bedford Place Hotel Ltd
18 Thurloe Place, London, SW7 2SP
Property holding
Ordinary
100%
Covent Garden Hotel (Freehold) Ltd (formerly Universal Sheds Ltd)
18 Thurloe Place, London, SW7 2SP
Property holding
Ordinary
100%

Page 42

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
Direct subsidiary undertakings (continued)

The aggregate of the share capital and reserves as at 31 January 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£000
£000

Firmdale Hotels PLC
155,113
8,763

Firmdale West End Ltd
-
-

HY Hotels Ltd
-
-

Number Sixteen Hotel Ltd
1,819
(1,554)

Mandela Way Ltd
4,185
3,534

Palace Laundry Ltd
(3,566)
(1,430)

Firmdale Holdings (USA) Inc.
14,542
24,312

Almondbox Property Ltd
(10,829)
(9,238)

Innovation Centre Ltd
431
(1,114)

Bedford Place Hotel Ltd
(263)
(263)

Covent Garden Hotel (Freehold) Ltd (formerly Universal Sheds Ltd)
(50)
(50)

Page 43

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

Indirect subsidiary undertakings


The following were indirect subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Firmdale Property Investments Ltd
18 Thurloe Place, London, SW7 2SP
Hotelier
Ordinary
100%
Soho Hotel Ltd
18 Thurloe Place, London, SW7 2SP
Hotelier
Ordinary
100%
Ham Yard Investment Ltd
18 Thurloe Place, London, SW7 2SP
Hotelier
Ordinary
100%
21 Golden Square Ltd
18 Thurloe Place, London, SW7 2SP
Property holding
Ordinary
100%
Crosby Street Hotel Mezz LLC
79 Crosby Street, New York, NY 10012, USA.
Hotelier
Ordinary
100%
Crosby Street Hotel LLC
79 Crosby Street, New York, NY 10012, USA.
Hotelier
Ordinary
100%
56th Street Hotel Mezz LLC
79 Crosby Street, New York, NY 10012, USA.
Hotelier
Ordinary
100%
56th Street Hotel LLC
79 Crosby Street, New York, NY 10012, USA.
Hotelier
Ordinary
100%
Warren Street Hotel Mezz LLC
79 Crosby Street, New York, NY 10012, USA.
Hotelier
Ordinary
100%
Warren Street Hotel LLC
79 Crosby Street, New York, NY 10012, USA.
Hotelier
Ordinary
100%

The aggregate of the share capital and reserves as at 31 January 2023 and the profit or loss for the year ended on that date for the indirect subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£000
£000

Firmdale Property Investments Ltd
33,519
2,419

Soho Hotel Ltd
733
3,044

Ham Yard Investment Ltd
121,416
3,147

21 Golden Square Ltd
1,230
(327)

Crosby Street Hotel Mezz LLC
-
-

Crosby Street Hotel LLC
16,820
7,356

56th Street Hotel Mezz LLC
-
-

56th Street Hotel LLC
(28,253)
6,147

Warren Street Hotel Mezz LLC
-
-

Warren Street Hotel LLC
(42,219)
(516)

Page 44

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

16.


Stocks

Group
Group
2023
2022
£000
£000

Raw materials and consumables
496
398

Work in progress (goods to be sold)
120
66

Finished goods and goods for resale
2,177
1,310

2,793
1,774


The difference between purchase price or production cost of stocks and their replacement cost is not material.


17.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000


Trade debtors
2,181
1,679
-
-

Amounts owed by group undertakings
2
76
54,299
39,210

Amounts owed by joint ventures and associated undertakings
-
15
-
15

Other debtors
10,170
3,066
-
-

Prepayments and accrued income
7,794
5,046
-
-

20,147
9,882
54,299
39,225



18.


Cash and cash equivalents

Group
Group
2023
2022
£000
£000

Cash at bank and in hand
44,758
52,819

Less: bank overdrafts
(85)
(32)

44,673
52,787


Included in cash and cash equivalents is restricted cash of £4,138,281 (2022: £16,164,426).

Page 45

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

19.


Financial instruments

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Financial assets

Financial assets measured at amortised cost
57,111
57,597
54,299
39,223


Financial liabilities

Financial liabilities measured at amortised cost
(450,257)
(437,447)
(2)
(2)


Financial assets measured at amortised cost comprise cash, trade debtors, other debtors, amounts owed by group undertakings and amounts owed by related parties. 


Financial liabilities measured at amortised cost comprise bank loans, bank overdrafts, accruals, trade creditors, other creditors, amounts owed to group undertakings and other loans. 


20.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Bank overdrafts
85
32
-
-

Bank loans
130,181
17,500
-
-

Deferred financing fees charges/other loans
(801)
3,213
-
-

Trade creditors
4,387
6,418
-
-

Amounts owed to group undertakings
-
-
2
2

Corporation tax
562
4
-
-

Other taxation and social security
3,782
2,219
-
-

Other creditors
8,170
2,108
-
-

Accruals and deferred income
8,546
10,576
-
-

154,912
42,070
2
2


Bank overdrafts are secured by:
- legal charges over the freehold and leasehold properties of the Group;
- fixed and floating charges over the book debts and other assets of the Group;
- investment in the wholly owned subsidiary, Firmdale Holdings (USA) Inc;
- investment in the wholly owned subsidiary, Soho Hotel Limited, and;
- investment in the wholly owned subsidiary, Firmdale Property Investments Limited.
Amounts owed to group undertakings are unsecured, interest free and repayable on demand. 

Page 46

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

21.


Creditors: Amounts falling due after more than one year

Group
Group
2023
2022
£000
£000

Bank loans
257,499
360,273

Deferred financing charges
(509)
(107)

Deferred rent
41,389
37,876

298,379
398,042





22.


Loans


Analysis of the maturity of loans is given below:


Group
Group
2023
2022
£000
£000

Amounts falling due within one year

Bank loans
130,181
17,500

Deferred finance charges/other loans
(801)
3,213

Amounts falling due 1-2 years

Bank loans
257,499
128,183

Deferred finance charges
(509)
-

Amounts falling due 2-5 years

Bank loans
-
232,091

Deferred finance charges
-
(107)


-
231,984

386,370
380,880


Page 47

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
 
22.Loans (continued)

Included within bank loans are facilities with four providers; Hermes Real Estate Senior Debt Fund S.a.r.l, Wells Fargo and Standard Life Investment Limited.
Included within loans falling due within one year are facilities with Wells Fargo bank which are denominated in US Dollars. These facilities were refinanced on 27 November 2019 with interest accruing from this date at a margin of 3% above US LIBOR. The facility is repayable in full on 27 November 2023 with the option for three one-year extensions. The total amount outstanding at year end was £130.2m (2022 - £99.4m), net of deferred financing costs of £0.8m (2022 - £1.0m).
Included within loans due within one to two years are facilities provided by Standard Life Investment Limited, with interest fixed at 4.223% per annum. Interest only is paid until termination of the loan on 26 November 2024, when the capital amount is to be repaid in full. The total amount outstanding as at the year end was £119.9m (2022 - £119.8m), net of deferred financing costs of £0.1m (2022: £0.2m). 
On 14 November 2017, the company entered into a £120m non-amortising loan with Hermes Real Estate Senior Debt Fund S.à.r.l. The term of the loan is seven years to 19 November 2024 when the capital amount is to be repaid in full. Interest is charged at a fixed rate of 3.0%. 
An addítional non-amortising loan of £17.5m from Hermes Real Estate Senior Debt Fund S.à.r.l. was secured on 26th August 2020 with a term of two years to 28 August 2022. Interest is charged at a fixed rate of 5.5%. The option to extend this loan was undertaken so that this is now coterminous with the £120m loan noted above. The total amount outstanding as at the year end was £137.1m (2022 - £136.7m), net of deferred financing costs of £0.4m (2022: £0.8m). 
During the year, a £13.5m loan that was held with Phonenix CRE S.a.r.l was fully repaid. In the previous year, the loan was fully drawn, bearing interest at a margin of 6.50% over SONIA.
In August 2022, the loan that was held with Investec Bank plc with a headroom of up to £13m (2022: £9m) was fully repaid, ahead of the repayment date of June 2023. When in use, this bore interest at LIBOR plus 4.95%. An exit fee of £162,500 was expensed to the profit and loss account on repayment.


23.


Deferred taxation


Group



2023
2022


£000

£000






At beginning of year
(150,406)
(83,988)


Credited/(charged) to profit or loss
16,402
(2,324)


Credited/(charged) to other comprehensive income
(8,184)
(63,696)


Exchange adjustments
558
(399)



At end of year
(141,630)
(150,407)

Page 48

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
 
23.Deferred taxation (continued)

Group
Group
2023
2022
£000
£000

Accelerated capital allowances
(3,851)
(12,039)

Tax losses carried forward
28,661
25,293

Temporary difference on revaluation of freehold and leasehold property
(166,502)
(164,046)

Short term timing difference
62
-

Chargeable gains
-
386

(141,630)
(150,406)


24.


Share capital

2023
2022
£000
£000
Allotted, called up and fully paid



1,977,275 (2022 - 1,977,275) Ordinary shares of £1.00 each
1,977
1,977

The ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not cover any rights of redemption.



25.


Reserves

Share premium account

This reserve records the amount above the nominal value received for shares issued, less transaction costs.

Revaluation reserve

This reserve records the amount above the historic cost of tangible fixed assets. The amount of depreciation provided on book value which represents a surplus on valuation is transferred as a reserves movement to retained earnings.

Profit and loss account

This reserve records all historical profits and losses recognised by the Group, net of any due taxed and dividends declared.

Page 49

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

26.


Prior year adjustment

The Group has restated the previously issued 2022 consolidated financial statements for the following reasons:
a) Correction of transfers/activity between the Revaluation reserve and Profit and loss account for movements in relation to the revaluation of freehold and leasehold property. 
b) Correction of deferred tax movements associated with the above.
c) Correction of depreciation charge recognised in relation to the US properties on consolidation under the revaluation model in the prior year.
The adjustments resulted in an increase in previously reported administrative expenses of £8,670,000 and a decrease in previously reported fair value movement gains of £165,000 for the year ended 31 January 2022. Reserves overall as at 31 January 2022 did not change but a reclassification transfer of £11,263,000 between the Revaluation reserve and Profit and loss account was required, representing £8,596,000 of additional revaluation required in relation to a depreciation correction adjustment and the remainder corrects the position between the reserves based on a historical review of movements. The residual £673,000 adjustment to opening reserves at 1 February 2021 represents deferred tax movements arising on revaluations not previously accounted for through other comprehensive income.
The following table sets out the previously reported and adjusted amounts of selected items within the Consolidated Statement of Financial Position as of 31 January 2022 and within the Consolidated Statement of Comprehensive Income for the year then ended:

Equity as at 1 February 2021
Revaluation reserve as at 31 January 2022
Profit and loss account as at 31 January 2022
Loss for the year ended 31 January 2022
£000
£000
£000
£000
Group
As previously stated

328,591

497,148

(72,012)
 
(2,612)
 
Prior year adjustment - correction of error

673

11,263

(11,263)
 
(8,835)
 

The above adjustments have no impact on the Company. 


27.


Contingent assets and liabilities

The Company participates in a group VAT registration and is jointly and severally liable for a VAT liability of £2.6m (2022 - £1.1m), which has not been provided for in the Company's accounts.

Page 50

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

28.


Capital commitments




At 31 January 2023 the Group had capital commitments as follows:


Group
Group
2023
2022
£000
£000

Contracted for but not provided in these financial statements
17,469,733
42,517,428

At 31 January 2023 the Company had no capital commitments (2022: £Nil). 


29.


Pension commitments

The Group operates a defined contribution scheme for certain employees. The assets of the scheme are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to the funds and amounted to £583,000 (2022 - £438,000). Contributions totalling £132,000 (2022 - £93,000) were payable to the fund at the reporting date.


30.


Commitments under operating leases

At 31 January 2023 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
£000
£000

Not later than 1 year
16,136
14,738

Later than 1 year and not later than 5 years
63,685
63,928

Later than 5 years
911,651
1,278,525

991,472
1,357,191

At 31 January 2023 the Group had future minimum rentals receivable under non-cancellable operating leases as follows:

Group
Group
2023
2022
£000
£000

Not later than 1 year
1,578
1,003

Later than 1 year and not later than 5 years
3,254
1,149

4,832
2,152

Page 51

 
FIRMDALE HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023

30.Commitments under operating leases (continued)

The Group holds two office properties and one residential property as investment properties as disclosed in note 14. The offices are occupied under non-cancellable leases and have remaining terms of between one and four years. The residential property is freehold tenure and is let to third parties.
The Company had no commitments under non-cancellable operating leases at the reporting date (31 January 2022: £Nil). 


31.


Related party transactions

The Company has taken advantage of the exemption available under paragraph 33.1A of the Financial Reporting Standard 102 not to disclose transaction with other wholly owned members of the Group.
At the reporting date, Mr T J R Kemp, a director and shareholder of Firmdale Holdings Limited, owed £793,000 to the Group (2022 - owed £35,405 by the Group). The maximum amount owing to the Group during the year was £793,000 (2022 - £496,631). The loan was interest free and fully repaid post year end. 
All directors and certain senior employees who have authority and responsibility for planning, directing and controlling the activities of the Group are considered to be key management personnel. The total aggregate compensation paid to the key management personnel (including directors' remuneration as disclosed in note 9) by the Group was £2,665,000 (2022 - £2,152,000).
During the year, the Group received fees at a market rate of £14,000 (2022 - £Nil) from Mr T J R Kemp in respect of administration and management of a property on his behalf. 


32.



The ultimate controlling party are the Trustees of Kemp Family Foundation, the majority shareholder in the Group's parent entity.

 
Page 52