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Proximity Data Centres Limited

Registered number: 11665082
Annual report and consolidated
 financial statements
For the year ended 28 February 2023

 
PROXIMITY DATA CENTRES LIMITED
 
 
COMPANY INFORMATION


Directors
J B Craig 
R M S Milne 
R J L Weir 
J R Hall 




Registered number
11665082



Registered office
Proximity House Unit 2
Chester Gates

Chester

CH1 6LT




Independent auditors
Haines Watts (Berkhamsted) Limited
Chartered Accountants & Statutory Auditor

Milton House

Gatehouse Road

Buckinghamshire

Aylesbury

HP19 8EA





 
PROXIMITY DATA CENTRES LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 4
Directors' Report
 
5 - 6
Independent Auditors' Report
 
7 - 10
Consolidated Statement of Comprehensive Income
 
11
Consolidated Statement of Financial Position
 
12
Company Statement of Financial Position
 
13 - 14
Consolidated Statement of Changes in Equity
 
15
Company Statement of Changes in Equity
 
16
Consolidated statement of cash flows
 
17 - 18
Notes to the Financial Statements
 
19 - 41


 
PROXIMITY DATA CENTRES LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023

Introduction
 
The directors present their Strategic Report for the financial year ended 28 February 2023.
Proximity Data Centres Limited (the “Company”) is wholly owed by Edge Data Centres Holdings Limited (“Holdings”). Holdings, in turn, is wholly owned by the five Directors of Holdings, with four of these Directors taking an active executive role in the running of the Company. The principal activity of Holdings is to own and support the Company and the principal activity of the Company is the provision of colocation data centre services through its portfolio of regional edge data centres throughout the UK.
The Company is the group parent company for the Proximity Data Centres Group (the “Group), a dynamic and fast growing group of data centre operating companies across the UK. During the year, the Group added two new facilities in Bristol and Milton Keynes, expanding the portfolio to ten data centres. Of the two additions, one was an equity acquisition of an established data centre and IT services provider, Nuco Technologies Limited, based in Milton Keynes, whilst the other was an asset acquisition of a substantial data centre in Bristol.
The Directors see additional growth coming from acquiring new sites in the UK, and the modernisation and building out of our existing portfolio of data centres, enabling a continued acceleration of new sales into the portfolio. 
During the year the Group was impacted by the rapid and unstable market for power. This created instability in our prospective customer base and slowed down a number of new customer opportunities. With the gradual stabilising of the energy market over the first half of 2023, the expectation is that there will be an improved picture of customer confidence returning to the market.
The first half of the financial year also saw the tail end of the Covid-19 restrictions in the UK, with slower than anticipated customer activity and progress on opportunities. Overall, however, the Group had a 100% record in keeping all our sites active and at full running capability 24x7, for which the operational employees, in particular, must be congratulated.  The Group depends on dedicated employees working to keep the facilities in good working order and in an “always-on” state. 
Despite the challenges of Covid-19 and the erratic and unstable energy market, overall, FY23 saw a 64% increase in revenues, partially driven by a sharp increase in energy revenues, as well as costs.

- 1 -

 
PROXIMITY DATA CENTRES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023

Business review
 
Revenue








2023
2022
% Increase

£000
£000





Operational
15,003
9,636
56%
Power related
4,511
2,257
100%
Total revenues
19,514
11,893
64%

The Group retains its twin growth strategies of expanding the portfolio and growing sales revenues within each data centre.
In addition to the energy challenges experienced during the year, the Group’s growth success presented another challenge in the form of an increased interest cost. Recognising this early, the Group has been undertaking an extensive review of its financing from early 2022, resulting in a re-financing exercise initiated in May 2022. This re-financing exercise was targeted at reducing interest charges whilst maintaining growth, through a re-balancing of debt and equity. At the date of this report, the re-financing exercise is nearly complete, and is dealt with in more detail in the Summary section, below.
The Group traded within its existing financial facilities during the year, and plans to continue to do so in the coming year, with the added comfort of new financing arrangements, dealt with in the Summary section, below.

Principal risks and uncertainties
 
During the year, the Group saw an expansion of its customer base, spreading risk across a larger revenue profile. Due to the strong covenant of many of our larger customers, business failure and bad debt are not perceived to be substantial risks for the Group.
The residual impacts of Covid-19 are not perceived as a substantial risk to the business, however the unstable and volatile energy market, allied to the effects of Brexit on the UK economy, does pose a challenge for management to address. The steps already highlighted to ensure short and medium term stability for our customers should ameliorate the challenge, and the Group’s continued growth and new financing structure should further strengthen the Group’s position with regard to the general UK economic environment.

- 2 -

 
PROXIMITY DATA CENTRES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023

Financial key performance indicators
 
Power Cost Risk
As set out above, energy provision and cost remain a key area of instability in the UK. The Group has adopted a policy of fixing our energy supply contracts with suppliers for a fixed term of 12 months at each site to provide customer stability and surety of charges. In the medium term, the Group anticipates energy prices will continue to fall slowly, although this is based on the current international energy supply market not experiencing any shocks or instability in the coming months. In the longer term, we believe that the market will continue to see price stabilisation which will be at lower than current price levels, but not back to pre-2022 levels. The Group continues to look at alternative power supply options, and will see the completion of our first solar farm roof installation at our Milton Keynes site during October 2023. Currently, these initiatives will not replace the need for grid-based power supply contracts, but will assist in overall power cost management in the future.
Credit Risk
The Group has now established good credit ratings across all credit agencies and perceives the risk to any operations from the denial of credit as being negligible. The customer base is made up of established clients with a good covenant strength and with the majority of our charges being billed in advance, bad debt is kept to a minimum.
Liquidity and Cash flow 
The Group finances its operations through operationally generated cash as well as loans from our long term banking facility provider, for acquisitions and capital projects. Detailed cash flow forecasting coupled with good cash collection rates enable the Group to operate with the investor covenants.
 

2023
2022
Operating profit (%)
22.1
16.6

The business has 5 key cost drivers. Power, employment costs, property rates, maintenance support & security costs and financing interest. Annual reviews of all Group supplier contracts are undertaken to ensure that the best value service is being provided, with the Commercial Team being expanded during the year to assist in this process. Power contracts are the largest, and currently the most variable, cost driver in the business. The Group engages the services of an energy broker to access the best long term rates for power, whilst ensuring that the Group continue to use only certified renewable energy in all our sites. 
Professionally qualified and experienced employees are responsible for cash flow and debt collection which is monitored and reported on by data centre and customer.

Summary
 
The Group has seen another exciting year of growth and development. FY24 will see us continue this strategy of growth, assisted by a new and enhanced financing structure. 
On 25th August 2023, the board of Directors of Holdings accepted an offer from nLighten UK Limited for the acquisition of 100% of the equity of Holdings. This acquisition is due to complete on 1st September 2023 and will see the Group with access to substantial new funding for growth from the nLighten BV Group, as well as becoming part of a pan-European regional edge data centre group. The Group’s existing and original funder (the Intermediate Capital Group) will continue to invest in the Group, through its existing debt facility. The combined resources of ICG and ISquared, channelled through nLighten, will underpin and enable the Group’s growth plans for the coming years. 

- 3 -

 
PROXIMITY DATA CENTRES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023


This report was approved by the board on 31 August 2023 and signed on its behalf.



J B Craig
Director

- 4 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023

The directors present their report and the financial statements for the year ended 28 February 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 judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.

Results and dividends

The loss for the year, after taxation, amounted to £1,739,373 (2022 - loss £2,133,282).

During the year dividends amounting to £Nil were declared (2022 - £Nil).

Directors

The directors who served during the year were:

J B Craig 
R M S Milne 
R J L Weir 
J R Hall 

Going concern
These financial statements have been prepare on a going concern basis as the Directors have not identified any material uncertainties or events that may cast doubt about the ability of the Group to continue as a going concern. Further, the Directors will continue to finance the Group's working capital through loans through the Parent Company, as and when required.

- 5 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023

Economic impact of global events

UK businesses are currently facing many uncertainties such as the consequences of Brexit, Covid 19, environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working. 
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment. 
The Group continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.

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

On 25 August 2023, the Board of Directors of Edge Data Centres Holdings Limited (which is the parent of the Company) accepted an offer for 100% of the equity of Edge Data Centres Holdings Limited. The new owner, as of 1st September 2023, when the equity sale and acquisition is due to complete, is nLighten UK Limited, a wholly owned subsidiary of nLighten BV, a Dutch registered company.

Auditors

The auditorsHaines Watts (Berkhamsted) Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 31 August 2023 and signed on its behalf.
 





J B Craig
Director

- 6 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROXIMITY DATA CENTRES LIMITED
 

Opinion

We have audited the financial statements of Proximity Data Centres Limited (the ‘Parent Company’) and its subsidiaries (the 'Group') for the year ended 28 February 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial Positions, the Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cashflows and notes to the financial statements, including a summary of significant accounting policies. 
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 Parent Company’s affairs as at 28 February 2023 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’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 and 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.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s 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.
- 7 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROXIMITY DATA CENTRES LIMITED
 

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.

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

Matters on which we are required to report by exception

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

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

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

- 8 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROXIMITY DATA CENTRES LIMITED
 

Responsibilities of Directors

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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 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 intend either to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• Identifying and assessing the controls management has in place to prevent and detect fraud;
• Understanding how those charged with governance considered and addressed the potential for override of  controls or other inappropriate influence over the financial reporting process;
• Challenging assumptions and judgments made by management in its significant accounting estimates and  judgments.
• Identifying and testing journal entries, in particular journal entries posted with unusual account     combinations; and
• Assessing the extent of compliance with the relevant laws and regulations.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusions.

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 auditor’s report.

 
- 9 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROXIMITY DATA CENTRES LIMITED
 

Use of the audit report

This report is made solely to the Parent Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's 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 Parent Company and the Parent Company's members as a body for our audit work, for this report, or for the opinions we have formed.

Bianca Permal (FCA) (Senior Statutory Auditor)
 

  
for and on behalf of

Haines Watts (Berkhamsted) Limited
Chartered Accountants and Statutory Auditor 
Milton House
Gatehouse Road
Buckinghamshire
Aylesbury
HP19 8EA

31 August 2023
- 10 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2023

2023
2022
Note
£
£

  

Turnover
 4 
19,514,743
11,893,174

Cost of sales
  
(11,580,329)
(6,577,230)

Gross profit
  
7,934,414
5,315,944

Administrative expenses
  
(3,626,999)
(3,340,166)

Operating profit
 5 
4,307,415
1,975,778

Interest receivable and similar income
 8 
-
225

Interest payable and similar expenses
 9 
(5,972,149)
(3,429,452)

Loss before tax
  
(1,664,734)
(1,453,449)

Tax on loss
 10 
(74,639)
(679,833)

Loss for the financial year
  
(1,739,373)
(2,133,282)

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 19 to 41 form part of these financial statements.

- 11 -

 
PROXIMITY DATA CENTRES LIMITED
REGISTERED NUMBER: 11665082

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 28 FEBRUARY 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 11 
9,761,297
4,987,895

Tangible assets
 12 
73,748,627
53,747,158

  
83,509,924
58,735,053

Current assets
  

Debtors: amounts falling due after more than one year
 14 
-
76,694

Debtors: amounts falling due within one year
 14 
6,880,611
3,872,783

Cash at bank and in hand
 15 
1,788,106
3,323,895

  
8,668,717
7,273,372

Creditors: amounts falling due within one year
 16 
(9,187,271)
(6,708,286)

Net current (liabilities)/assets
  
 
 
(518,554)
 
 
565,086

Total assets less current liabilities
  
82,991,370
59,300,139

Creditors: amounts falling due after more than one year
 17 
(83,015,000)
(58,535,000)

Provisions for liabilities
  

Deferred tax
 19 
(1,905,637)
(955,033)

Net liabilities
  
(1,929,267)
(189,894)


Capital and reserves
  

Called up share capital 
 20 
200
200

Revaluation reserve
 21 
3,139,984
3,139,984

Profit and loss account
 21 
(5,069,451)
(3,330,078)

  
(1,929,267)
(189,894)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 August 2023.


J B Craig
Director

The notes on pages 19 to 41 form part of these financial statements.

- 12 -

 
PROXIMITY DATA CENTRES LIMITED
REGISTERED NUMBER: 11665082

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 28 FEBRUARY 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 12 
7,674
9,926

Investments
 13 
15,206,168
15,206,068

  
15,213,842
15,215,994

Current assets
  

Debtors: amounts falling due after more than one year
 14 
62,918,610
39,938,613

Debtors: amounts falling due within one year
 14 
18,187,965
9,359,615

Cash at bank and in hand
 15 
1,317,087
2,779,420

  
82,423,662
52,077,648

Creditors: amounts falling due within one year
 16 
(14,203,597)
(8,372,967)

Net current assets
  
 
 
68,220,065
 
 
43,704,681

Total assets less current liabilities
  
83,433,907
58,920,675

  

Creditors: amounts falling due after more than one year
 17 
(83,015,000)
(58,535,000)

Provisions for liabilities
  

Deferred taxation
 19 
(1,841)
(1,841)

  
 
 
(1,841)
 
 
(1,841)

Net assets
  
417,066
383,834


Capital and reserves
  

Called up share capital 
 20 
200
200

Profit and loss account
 21 
416,866
383,634

  
417,066
383,834


- 13 -

 
PROXIMITY DATA CENTRES LIMITED
REGISTERED NUMBER: 11665082
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 28 FEBRUARY 2023

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 profit after tax of the Parent Company for the year was £33,232 (2022: £417,850).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 August 2023.

J B Craig
Director

The notes on pages 19 to 41 form part of these financial statements.

- 14 -

 
PROXIMITY DATA CENTRES LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£


At 1 March 2021
200
3,139,984
(1,196,796)
1,943,388


Comprehensive income for the year

Loss for the year
-
-
(2,133,282)
(2,133,282)
Total comprehensive income for the year
-
-
(2,133,282)
(2,133,282)



At 1 March 2022
200
3,139,984
(3,330,078)
(189,894)


Comprehensive income for the year

Loss for the year
-
-
(1,739,373)
(1,739,373)
Total comprehensive income for the year
-
-
(1,739,373)
(1,739,373)


At 28 February 2023
200
3,139,984
(5,069,451)
(1,929,267)


The notes on pages 19 to 41 form part of these financial statements.

- 15 -

 
PROXIMITY DATA CENTRES LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 March 2021
200
(34,216)
(34,016)


Comprehensive income for the year

Profit for the year
-
417,850
417,850
Total comprehensive income for the year
-
417,850
417,850



At 1 March 2022
200
383,634
383,834


Comprehensive income for the year

Profit for the year
-
33,232
33,232
Total comprehensive income for the year
-
33,232
33,232


At 28 February 2023
200
416,866
417,066


The notes on pages 19 to 41 form part of these financial statements.

- 16 -

 
PROXIMITY DATA CENTRES LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(1,739,373)
(2,133,282)

Adjustments for:

Amortisation of intangible assets
1,074,010
1,465,818

Depreciation of tangible assets
312,510
138,997

Loss on disposal of tangible assets
(823,484)
-

Interest paid
5,972,149
3,429,452

Interest received
-
(225)

Taxation charge
327,938
679,833

(Increase) in debtors
(102,447)
(1,826,272)

Increase in creditors
25,173,568
27,111,055

Increase in amounts owed to groups
703,087
346,111

Corporation tax received/(paid)
84,127
(241,661)

Net cash generated from operating activities

30,982,085
28,969,826


Cash flows from investing activities

Purchase of tangible fixed assets
(15,072,427)
(25,231,571)

Sale of tangible fixed assets
849,932
-

Purchase consideration
(12,323,230)
-

Interest received
-
225

Net cash from investing activities

(26,545,725)
(25,231,346)
- 17 -

 
PROXIMITY DATA CENTRES LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023


2023
2022

£
£



Cash flows from financing activities

Interest paid
(5,972,149)
(3,429,452)

Net cash used in financing activities
(5,972,149)
(3,429,452)

Net (decrease)/increase in cash and cash equivalents
(1,535,789)
309,028

Cash and cash equivalents at beginning of year
3,323,895
3,014,867

Cash and cash equivalents at the end of year
1,788,106
3,323,895


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,788,106
3,323,895

1,788,106
3,323,895


The notes on pages 19 to 41 form part of these financial statements.

- 18 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

1.


General information

Proximity Data Centres Limited ("the Group") is a private limited Company, limited by shares and incorporated in England and Wales, registered number 11665082. The address of the registered office is Proximity House Unit 2, Chester Gates, Dunkirk, Chester, England, CH1 6LT.
The principal activity of the Group is computer facilities management activities. The Group rent server space to the market through data centres that varies in sizes from site to site. Each individual data centre is held in a subsidiary company of the Group. The actual servers are owned by the customers and not by the Group, however, the storage equipment is owned by the Group.

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 judgment 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.

Parent Company disclosure exemptions

In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
No statement of cash flows has been presented for the parent Company;
Disclosures in respect of the parent Company's financial instruments have not been presented as equivalent disclosures have been provided in respect of the Company as a whole; and
No disclosures have been given for the aggregate remuneration of the key management personnel of the parent Company as their remuneration is included in the totals for the Company as a whole.

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.

 
- 19 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)


2.2
Basis of consolidation (continued)

In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102. 

 
2.3

Going concern

These financial statements have been prepared on a going concern basis as the Directors have not identified any material uncertainties or events that may cast doubt about the ability of the Group to continue as a going concern. Further, the Directors will continue to finance the Group's working capital through loans through the Parent Company, as and when required.

 
2.4

Revenue

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. The following criteria must also be met before revenue is recognised:

Rendering of services

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

 
2.5

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.

- 20 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)

 
2.8

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.

 
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 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.

- 21 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)

 
2.10

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the consolidated statement of comprehensive income over its useful economic life.

Other 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:

Goodwill
-
10 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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the following basis.

Depreciation is provided on the following basis:

Freehold property
-
2% straight line (see note 3)
Plant & machinery
-
10% straight line
Office equipment
-
20% straight line
Computer equipment
-
33% straight line
Assets under construction
-
no depreciation until assets are in use

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

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

- 22 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)

 
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.

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.

 
2.15

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.

 
2.16

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.

- 23 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)

 
2.17

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.

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.

- 24 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Critical judgments in applying the Company's accounting policies
The critical judgments that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the statutory financial statements are discussed below.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
(i) Determining useful economic lives of tangible fixed assets
The Company depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on variety of factors, including technological innovation, product life cycles and maintenance programmes.
The judgment is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the Company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices.
The directors have estimated the residual value of Freehold property and concluded the residual value is greater than the cost of the Freehold property, therefore no depreciation has been charged.
(ii) Recoverability of debtors
The Company establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability, the directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of individual or groups of customers.


4.


Turnover

The whole of the turnover is attributable to the principal activity of the Group.

All turnover arose within the United Kingdom.

- 25 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation
312,510
138,996

Amortisation
1,074,010
1,465,818


6.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements.

106,720
64,275


7.


Employees

Staff costs were as follows:


Group
2023
Group
2022
£
£


Wages and salaries
2,228,827
2,133,149

Social security costs
257,920
221,339

Cost of defined contribution scheme
263,286
322,377

2,750,033
2,676,865


.



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



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Staff
47
39
10
9

- 26 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

8.


Interest receivable

2023
2022
£
£


Other interest receivable
-
225

-
225


9.


Interest payable and similar expenses

2023
2022
£
£


Other loan interest payable
5,972,149
3,429,452

5,972,149
3,429,452


10.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
-
59,546


-
59,546


Total current tax
-
59,546

Deferred tax


Origination and reversal of timing differences
74,639
620,287

Total deferred tax
74,639
620,287


Taxation on profit on ordinary activities
74,639
679,833
- 27 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

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

2023
2022
£
£


Loss on ordinary activities before tax
(1,664,734)
(1,453,449)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
(316,299)
(276,155)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
204,061
278,505

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
285,796
2,651

Fixed asset differences
(207,297)
(15,848)

Adjustments to tax charge in respect of prior periods
-
59,546

Remeasurement of deferred tax for changes in tax rates
174,954
142,682

Adjustments to tax charge in respect of previous periods - deferred tax
-
89,494

Deferred tax asset not recognised
(98,967)
416,270

Capital gains
30,528
-

Other differences leading to an increase (decrease) in the tax charge
1,863
(17,312)

Total tax charge for the year
74,639
679,833


Factors that may affect future tax charges

The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.

- 28 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

11.


Intangible assets

Group





Goodwill

£



Cost


At 1 March 2022
7,329,114


Additions
5,847,412



At 28 February 2023

13,176,526



Amortisation


At 1 March 2022
2,341,219


Charge for the year on owned assets
1,074,010



At 28 February 2023

3,415,229



Net book value



At 28 February 2023
9,761,297



At 28 February 2022
4,987,895

Goodwill additions in the year relate to the acquisition of Nuco Technologies Limited. See Note 23 for further information in relation to this acquisition.



- 29 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

12.


Tangible fixed assets

Group






Freehold property
Plant & machinery
Fixtures & fittings
Office equipment
Computer equipment
Assets under construction

£
£
£
£
£
£



Cost


At 1 March 2022 (as previously stated)
51,427,913
1,663,504
-
1,474
16,423
1,047,216


Prior Year Adjustment
(200,000)
-
-
-
-
-


At 1 March 2022 (as restated)
51,227,913
1,663,504
-
1,474
16,423
1,047,216


Additions
14,806,433
248,054
-
947
16,993
-


Acquisition of subsidiary
4,501,667
2,541
495,793
-
271,551
-


Disposals
(30,000)
-
-
-
-
-


Transfers between classes
1,047,216
-
-
-
-
(1,047,216)



At 28 February 2023

71,553,229
1,914,099
495,793
2,421
304,967
-



Depreciation


At 1 March 2022
-
202,483
-
392
6,497
-


Charge for the year
-
239,466
-
294
72,750
-



At 28 February 2023

-
441,949
-
686
79,247
-



Net book value



At 28 February 2023
71,553,229
1,472,150
495,793
1,735
225,720
-



At 28 February 2022 (as restated)
51,227,913
1,461,021
-
1,082
9,926
1,047,216
- 30 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

           12.Tangible fixed assets (continued)


Total

£



Cost


At 1 March 2022 (as previously stated)
54,156,530


Prior Year Adjustment
(200,000)


At 1 March 2022 (as restated)
53,956,530


Additions
15,072,427


Acquisition of subsidiary
5,271,552


Disposals
(30,000)


Transfers between classes
-



At 28 February 2023

74,270,509



Depreciation


At 1 March 2022
209,372


Charge for the year
312,510



At 28 February 2023

521,882



Net book value



At 28 February 2023
73,748,627



At 28 February 2022 (as restated)
53,747,158



- 31 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

Company






Computer equipment

£

Cost 


At 1 March 2022
16,423


Additions
3,513



At 28 February 2023

19,936



Depreciation


At 1 March 2022
6,497


Charge for the year
5,765



At 28 February 2023

12,262



Net book value



At 28 February 2023
7,674



At 28 February 2022
9,926






- 32 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

13.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost 


At 1 March 2022
15,206,068


Additions
100



At 28 February 2023
15,206,168






Net book value



At 28 February 2023
15,206,168

- 33 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Proximity Data Centres (Bridgend) Limited
Ordinary A
100%
Proximity Data Centres (Wakefield) Limited
Ordinary A
100%
Proximity Data Centres (Nottingham) Limited
Ordinary A
100%
Technical Real Estate Normanton Limited
Ordinary A
100%
Proximity Data Centres (Liverpool) Limited
Ordinary A
100%
Proximity Data Centres (Chester) Limited
Ordinary A
100%
Proximity Data Centres (MK) Limited
Ordinary A
100%
Proximity Data Centres Operations Limited
Ordinary A
100%
Proximity Data Centres (Swindon) Limited
Ordinary A
100%
Proximity Data Centres (Birmingham) Limited
Ordinary A
100%
Sentrum (Rugby) Limited
Ordinary A
100%
Proximity Data Centres (Bristol) Limited
Ordinary A
100%
Nuco Technologies Limited
Ordinary A
100%

The registered office of all subsidiaries excluding Sentrum (Rugby) Limited is Proximity House, Unit 2, Chester Gates, Chester, England, CH1 6LT.
The registered office of Sentrum (Rugby) Limited is PO BOX 145, Level 6, 10a Prospect Hill, Douglas, Isle Of Man, IM99 1FY.  

- 34 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

14.


Debtors

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

Due after more than one year

Amounts owed by group undertakings
-
76,694
62,918,610
39,938,613


Group

Group
As restated
Company

Company
 
2023
2022
2023
2022
£
£
£
£

Due within one year

Trade debtors
4,337,165
2,511,121
1,064,883
680,659

Amounts owed by group undertakings
-
-
16,824,542
8,384,327

Other debtors
1,548,120
350,972
35,491
117,965

Prepayments and accrued income
995,326
1,010,690
263,049
176,664

6,880,611
3,872,783
18,187,965
9,359,615


Amounts owed by group companies are unsecured and interest free.


15.


Cash and cash equivalents

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

Cash at bank and in hand
1,788,106
3,323,895
1,317,087
2,779,420

1,788,106
3,323,895
1,317,087
2,779,420


- 35 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

16.


Creditors: Amounts falling due within one year

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

Trade creditors
659,637
780,772
42,513
464,781

Amounts owed to group undertakings
1,488,644
862,251
12,891,766
7,200,508

Corporation tax
84,127
-
-
-

Other taxation and social security
998,652
496,335
412,426
91,122

Other creditors
1,090,808
484,541
704,672
482,706

Accruals and deferred income
4,865,403
4,084,387
152,220
133,850

9,187,271
6,708,286
14,203,597
8,372,967


During the year items classified as Other creditors were reclassified as Accruals and deferred income. This treatment was applied retrospectively, as such, amount totalling £942,971 in the comparative figure that was recorded in Other creditors was reclassified as Accruals and deferred income. 

Amounts owed to group companies are unsecured and interest free. 


17.


Creditors: Amounts falling due after more than one year

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

Bank loans
3,500,000
3,500,000
3,500,000
3,500,000

Other creditors
79,515,000
55,035,000
79,515,000
55,035,000

83,015,000
58,535,000
83,015,000
58,535,000


On 9 March 2020, ICG - Longbow Investment No. 5 S.A.R.L created a fixed and floating charge over the undertaking of all property and assets present and future of Proximity Data Centres Limited.


- 36 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

18.


Loans


Analysis of the maturity of loans is given below:


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


Amounts falling due 1-2 years

Bank loans
3,500,000
3,500,000
3,500,000
3,500,000

Other creditors
79,515,000
55,035,000
79,515,000
55,035,000



83,015,000
58,535,000
83,015,000
58,535,000



19.


Deferred taxation


Group



2023
2022


£

£






At beginning of year
(955,033)
(334,746)


Charged to profit or loss
(74,639)
(620,287)


Arising on business combinations
(875,965)
-



At end of year
(1,905,637)
(955,033)

- 37 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
 
19.Deferred taxation (continued)

Company


2023
2022


£

£






At beginning of year
(1,841)
11,564


Charged to profit or loss
-
(13,405)



At end of year
(1,841)
(1,841)

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

Accelerated capital allowances
(1,906,296)
(958,192)
-
-

Short term timing difference
659
3,159
(1,841)
(1,841)

(1,905,637)
(955,033)
(1,841)
(1,841)


20.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



200 (2022 - 200) Ordinary shares of £1.00 each
200
200



21.


Reserves

Revaluation reserve

This reserve records the gains and losses recognised on revaluation.

Profit & loss account

This reserve represents cumulative profits and losses less dividends declared.

- 38 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
22.


Analysis of net debt





At 1 March 2022
Cash flows
New loans
At 28 February 2023
£

£

£

£

Cash at bank and in hand

3,323,895

(1,535,789)

-

1,788,106

Debt due after 1 year

(58,535,000)

-

(24,480,000)

(83,015,000)


(55,211,105)
(1,535,789)
(24,480,000)
(81,226,894)


23.
 

Business combinations

On 12 August 2022, Proximity Data Centres (MK) Limited wholly acquired Nuco Technologies Limited. An analysis of the acqusition is as follows:

Acquisition of Nuco Technologies Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value adjustments
Fair value
£
£
£

Fixed Assets

Tangible
3,310,696
1,960,856
5,271,552

3,310,696
1,960,856
5,271,552

Current Assets

Debtors
2,905,381
-
2,905,381

Cash at bank and in hand
735,620
-
735,620

Total Assets
6,951,697
1,960,856
8,912,553

Creditors

Due within one year
(745,150)
-
(745,150)

Deferred taxation
(327,940)
(548,025)
(875,965)

Total Identifiable net assets
5,878,607
1,412,831
7,291,438


Goodwill
5,847,412

Total purchase consideration
13,138,850

- 39 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

23.Business combinations (continued)

Consideration

£


Cash
13,138,850

Cash outflow on acquisition

£


Purchase consideration settled in cash, as above
13,138,850

13,138,850

Less: Cash and cash equivalents acquired
(735,620)

Net cash outflow on acquisition
12,403,230

The goodwill arising on acquisition is attributable to Proximity Data Centres Limited 

The results of Nuco Technologies Limited since acquisition are as follows:

Current period since acquisition
£

Turnover
1,964,486

Profit for the period since acquisition
224,974


24.


Prior year adjustment

Included in the fixed asset costs in 2022 was a sum of £200,000 treated as acquisition costs, that was actually a refundable deposit which should have been included in other debtors. There is no impact upon reserves, only a reclassification of this item in the statement of financial position. These funds have since been returned to the Company after the reporting date.


25.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £260,765 (2022: £322,377). Contributions totalling £32,563 (2022: £25,726) were payable to the fund at the Statement of Financial Position date and are included in creditors.

- 40 -

 
PROXIMITY DATA CENTRES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

26.


Related party transactions

The Company has taken advantage of the exemption conferred by FRS102 paragraph 33.1A and has not disclosed transactions and outstanding balances with its fellow subsidiary undertakings on the basis that all the relevant companies are directly or indirectly wholly owned by Edge Data Centres Holdings Limited.
The Company had balances due to Edge Data Centres Holdings Limited that were unsecured and interest free amounting to £1,488,649 (2022: £785,557). 


27.


Post balance sheet events

On 25 August 2023, the Board of Directors of Edge Data Centres Holdings Limited (which is the parent of the Company) accepted an offer for 100% of the equity of Edge Data Centres Holdings Limited. The new owner, as of 1st September 2023, when the equity sale and acquisition is due to complete, is nLighten UK Limited, a wholly owned subsidiary of nLighten BV, a Dutch registered company.


28.


Controlling party

As at the year end, the immediate and ultimate parent company is Edge Data Centres Holdings Limited, a company registered in England and Wales under company number 12406453 and is the largest group into which the results of this Group are consolidated.
In the opinion of the directors there is no single controlling party.
Please see Note 27 for details of the ultimate controlling party at the date of approval of these financial statements. 

 
- 41 -