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Registered number: 07188860










RED LION LEISURE LTD










FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

 
RED LION LEISURE LTD
REGISTERED NUMBER: 07188860

STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022

2022
2021
£
£

Fixed assets
  

Intangible assets
 4 
92,517
106,136

Tangible assets
 5 
8,313,989
8,640,791

  
8,406,506
8,746,927

Current assets
  

Stocks
  
20,747
15,686

Debtors: amounts falling due within one year
 6 
2,000,749
1,890,145

Bank and cash balances
  
69,604
90,300

  
2,091,100
1,996,131

Creditors: amounts falling due within one year
 7 
(6,446,747)
(793,520)

Net current (liabilities)/assets
  
 
 
(4,355,647)
 
 
1,202,611

Total assets less current liabilities
  
4,050,859
9,949,538

Creditors: amounts falling due after more than one year
 8 
(773,603)
(6,647,797)

Provisions for liabilities
  

Deferred tax
  
(480,714)
(564,630)

  
 
 
(480,714)
 
 
(564,630)

Net assets
  
2,796,542
2,737,111


Capital and reserves
  

Called up share capital 
  
100
100

Revaluation reserve
  
2,545,922
2,657,621

Profit and loss account
  
250,520
79,390

  
2,796,542
2,737,111


Page 1

 
RED LION LEISURE LTD
REGISTERED NUMBER: 07188860
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 SEPTEMBER 2022

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 26 October 2023.




S L Gregorios-Pippas
Director

The notes on pages 3 to 11 form part of these financial statements.

Page 2

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

1.


General information

Red Lion Leisure Limited is a private Company, limited by shares, registered in England and Wales. The registered office is 10 Queen Street, London, EC4R 1AG. The trading address is Station Road East, Whittlesford, CB22 4NL.
The principal activity of the company is that of a hotelier. 

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 Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The following principal accounting policies have been applied:

 
2.2

Going concern

In preparing these financial statements, the Directors have considered the appropriateness of the going concern basis. In forming their view, the Directors have concluded a detailed review of the trading prospects of the Company for the 12 months from the date of the signing of the financial statements.
Furthermore, Metro bank have issued credit approved Heads of Terms of £6.750m to refinance the existing loans. Based on the current projections, the Directors are confident that the company will have sufficient headroom to meet their covenants over the next 12 months.
The Directors recognise the challenges in particular around labour supply and costs and have commenced an extensive programme of reviewing all costs in order to maintain targeted margins.  Shareholders have raised £1m in cash to meet the obligations of the loan, expansion of the business and continue to support the business ensuring EBITDA growth.

 
2.3

Revenue

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

Hotel accommodation
Revenue from a contract to provide services such as accommodation is recognised in the period in which the stay takes place. Monies paid in advance by guests is held within deferred income and is released upon the service being delivered. 
Food & beverage
Revenue recognised from food & beverage is recognised at the point of sale. 

Page 3

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

 
2.4

Government grants

Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.5

Interest income

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

 
2.6

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.

 
2.7

Borrowing costs

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

 
2.8

Pensions

Defined contribution pension plan

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

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

Page 4

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

 
2.9

Current and deferred taxation

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

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

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

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

 
2.10

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Licence Fee
-
20
years

 
2.11

Tangible fixed assets

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

Page 5

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)


2.11
Tangible fixed assets (continued)

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

Depreciation is provided on the following basis:

Hotel Buildings - core
-
50 years straight line
Hotel Buildings - surface finishes and services
-
20 years straight line
Plant and machinery
-
25% reducing balance
Fixtures and fittings
-
25% reducing balance

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

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

 
2.12

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.

 
2.13

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.

 
2.14

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.

 
2.15

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.

Page 6

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

 
2.16

Financial instruments

The Company 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.

 
2.17

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Employees

The average monthly number of employees, including directors, during the year was 24 (2021 - 21).


4.


Intangible assets




Licence Fees

£



Cost


At 1 October 2021
272,380



At 30 September 2022

272,380



Amortisation


At 1 October 2021
166,244


Charge for the year on owned assets
13,619



At 30 September 2022

179,863



Net book value



At 30 September 2022
92,517



At 30 September 2021
106,136



Page 7

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

5.


Tangible fixed assets





Freehold property
Plant and machinery
Total

£
£
£



Cost or valuation


At 1 October 2021
10,257,892
998,139
11,256,031


Additions
-
2,960
2,960


Disposals
-
(18,340)
(18,340)



At 30 September 2022

10,257,892
982,759
11,240,651



Depreciation


At 1 October 2021
1,742,217
873,023
2,615,240


Charge for the year on owned assets
284,941
30,608
315,549


Disposals
-
(4,127)
(4,127)



At 30 September 2022

2,027,158
899,504
2,926,662



Net book value



At 30 September 2022
8,230,734
83,255
8,313,989



At 30 September 2021
8,515,675
125,116
8,640,791


6.


Debtors

2022
2021
£
£


Trade debtors
2,193
8,349

Amounts owed by group undertakings
1,724,366
1,571,265

Other debtors
257,895
154,593

Prepayments and accrued income
16,295
155,938

2,000,749
1,890,145


Amounts owed by group undertakings are interest free and repayable on demand. 

Page 8

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

7.


Creditors: Amounts falling due within one year

2022
2021
£
£

Bank overdrafts
46,055
47,327

Bank loans
5,962,876
361,846

Trade creditors
68,427
70,728

Corporation tax
64,413
70,340

Other taxation and social security
86,056
27,644

Other creditors
132,932
99,760

Accruals and deferred income
85,988
115,875

6,446,747
793,520



8.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Bank loans
672,064
6,529,136

Other creditors
101,539
118,661

773,603
6,647,797


Page 9

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

9.


Loans


Analysis of the maturity of loans is given below:


2022
2021
£
£

Amounts falling due within one year

Bank loans
5,962,876
361,846


5,962,876
361,846

Amounts falling due 1-2 years

Bank loans
340,555
5,896,073


340,555
5,896,073

Amounts falling due 2-5 years

Bank loans
331,509
633,063


331,509
633,063


6,634,940
6,890,982



10.


Loans (continued)

In June 2018, the company took out a loan from Metro for the value of £6,450,000. The term of the new loan is five years from the first drawdown date and interest is payable at Base rate plus 3% per annum. Repayments are due monthly, including both the capital and interest element. The balance as at 30 September 2022 stood at £5,843,974. Additional loan drawn down with Metro for the value of £250,000 with a term of 5 years commencing 1 Jaurary 2020 incurring interest at Base rate plus 3% per annum. The balance at 30 September 2022 stood at £238,452. 
In May 2020, the company took out a loan under the Coronavirus Business Interuption Loan ("CBILS") with a total facility of £700,000. The facility has a term of 6 years from the date of drawdown. There was no capital or interest repayments for the first 12 months following the drawdown date after which capital and interest payments will commence with interest being charged at Base rate plus 3.5% per annum. The balance as at 30 September 2022 stood at £552,514.
Metro Bank plc have a legal charge on the freehold property being land and buildings known as the Red Lion Hotel and Holiday Inn Express, Station Road, Whittlesford Bridge, Cambridge, CB22 4NL. The land registered at HM Land Registry with title number CB353316 and CB107585 by way of fixed charge, floating charge and negative pledge, and any part or parts of it and including all rights attached or appurtenant to it and all building fixtures, fittings, plant and machinery from time to time situated on it.

Page 10

 
RED LION LEISURE LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022

10.


Related party transactions

The Company has taken advantage of exemptions from disclosing transactions with related companies under the provisions of Section 33 of Financial Reporting Standard 102.
As at 30 September 2022, included within other creditors is a balance of £3,530 (30 September 2021: £9,022 due from) due to A Gregorios-Pippas, a director of the company.
As at 30 September 2022, included within other debtors is a balance of £109,365 (30 September 2021: £62,969) due from M Gregorios-Pippas, a director of the company.
As at 30 September 2022, included within other creditors is a balance of £16,300 (30 September 2021: £6,955) owed to P Gregorios-Pippas, a director of the company.
As at 30 September 2022, included within other debtors is a balance of £82,756 (30 September 2021: £38,291) due from S Gregorios-Pippas, a director of the company. 
 


11.


Post balance sheet events

A new loan was provided by Metro Bank to account for growth and restucturing and will be renegotiated once the restructuring has occured.


12.


Controlling party

The Company is under the immediate control and ultimate control of the director Ms S L Gregorios-Pippas. The parent company is Xenia Leisure Group Limited.


13.


Auditors' information

The auditors' report on the financial statements for the year ended 30 September 2022 was unqualified.

The audit report was signed on 26 October 2023 by Emma Bernardez (Senior Statutory Auditor) on behalf of Haysmacintyre LLP.

Page 11