Registered number: 11236436
GROSVENOR PUBS TRADING LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE PERIOD ENDED 26 DECEMBER 2021
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GROSVENOR PUBS TRADING LIMITED
REGISTERED NUMBER: 11236436
STATEMENT OF FINANCIAL POSITION
AS AT 26 DECEMBER 2021
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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GROSVENOR PUBS TRADING LIMITED
REGISTERED NUMBER: 11236436
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 26 DECEMBER 2021
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 by:
The notes on pages 3 to 15 form part of these financial statements.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is The Wool Barn, Peper Harow, Godalming, Surrey, England, GU8 6BQ. The Company's principal place of businesses consist of it's trading sites at The Cricketers on The Green, The Green, Pirbright, Surrey GU24 0JT and The Kings Arms, 5-6 High Street, Egham, Surrey TW20 9EA.
2.Accounting policies
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Basis of preparation of financial statements
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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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
At the balance sheet date the Company had net current liabilities of £4,246,937. Included within creditors due in less than one year are amounts owed to group undertakings totalling £3,960,679. The directors have confirmed that repayment of amounts owed will not be required until the Company has the resources to do so.
Also included in creditors due in less than year are amounts totalling £3,244,426 borrowed under a loan facility agreement with KH V Lending 302 Limited, a company whose ultimate parent entity is Kitty Hawk Capital Partners V LP, a limited partnership registered in Jersey, and which has a controlling interest in Red Lion Holdings LLP, the Company's ultimate parent undertaking. The directors have received confirmation that such amounts will not be required until the Company has the resources to do so.
The directors have prepared cash flow forecasts for the group covering a period extending beyond 12 months from the date of approval of these financial statements that demonstrate the sufficient availability of funds to continue on in business and meeting its liabilities as they fall due. For these reasons, the directors believe it is appropriate to prepare the financial statements on a going concern basis.
Revenue is the fair value of goods and services sold to third parties as party of the Company's trading activities, after deducting sales based taxes, coupons and staff discounts.
The majority of revenue comprises food, beverages and accommodation sold in the Company's establishments. This revenue is recognised at the point of sale to the customer.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.Accounting policies (continued)
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 straight-line method.
Depreciation is provided on the following basis:
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.
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 weighted average 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.
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.
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Cash and cash equivalents
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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.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.Accounting policies (continued)
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Financial instruments (continued)
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Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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.
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.
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.
Government grants are accounted under the accruals model as permitted by FRS 102. Grants received in the year are revenue based grants under the Coronavirus Job Retention Scheme (CJRS) and grants receivable from local government. They have been recognised as Other Income in the Statement of Comprehensive Income in the same period as the related expenditure.
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the period 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.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
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Revaluation of tangible fixed assets
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Individual freehold 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.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results ultimately may differ from those estimates. The directors consider the valuation of fixed assets to be a critical estimate and judgement applicable to the financial statements.
Tangible Fixed Assets - useful economic lives
The estimated useful economic lives of tangible fixed assets are based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted retrospectively. Due to the significance of tangible fixed asset investment to the company, variations between actual and estimated useful economic lives could impact operating results both positively and negatively, although historically few changes to estimated useful economic lives have been required.
Adoption of revaluation policy in respect of freehold properties
Management have adopted a policy of revaluation in respect of freehold and leasehold properties as they consider that such a policy enables the accounts to present more relevant information to users of the accounts. In accordance with FRS 102.10.10A, the adoption of the revaluation basis for these assets has been accounted for prospectively.
Management have utilised professional valuation in the estimates of the fair value of revalued assets for the purpose of revaluing the Company's site. While management consider the valuations to be prepared on an appropriate and reasonable basis, the valuation of trading sites remains an area of inherent estimation uncertainty for the carrying value of tangible fixed assets.
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The average monthly number of employees, including directors, during the period was 62 (2020 - 46).
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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Fixtures, fittings and equipment
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At 1 January 2021 (as previously stated)
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At 1 January 2021 (as restated)
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At 1 January 2021 (as previously stated)
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At 1 January 2021 (as restated)
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Charge for the period on owned assets
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At 31 December 2020 (as restated)
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The freehold properties have been valued as fully equipped operational sites on the basis of their trading potential as at 31 December 2021 by CBRE at £7,400,000, and incorporated into the financial statements at £6,720,650 to allow for the estimated value of those assets held as fixtures, fittings and equipment included within the valuation.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
5.Tangible fixed assets (continued)
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If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:
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Amounts owed by group undertakings
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Prepayments and accrued income
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Other loans totalling £1,163,679 at the balance sheet date are secured by fixed and floating charge over the assets of the company.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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Charged to other comprehensive income
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The deferred taxation balance is made up as follows:
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Revalued tangible fixed assets
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
The Company has undertaken a number of prior period adjustments in the period as follows:
Recognition of impact of fire in August 2020
In August 2020, the Company suffered significant fire damage at one of its sites. While subsequently the company has refurbished and reopened this site, no adjustments were recognised in the prior year accounts for those assets that were destroyed during the fire.
The directors have undertaken a review of the assets held and have estimated that the net book value of fixed assets destroyed totalled £570,812 and have recognised this by way of a prior period adjustment, and, given its size and nature, this amount has been recognised as an exceptional administrative expense in the Statement of Comprehensive Income. In addition, depreciation charged in respect of these assets totalling £50,762 has been credited in the previous year to administrative expenses.
This prior period adjustment has reduced brought forward cost and accumulated depreciation of fixed assets by £520,050 as set out in Note 6 to the financial statements. It has also increased the operating loss and loss before tax and net liabilities and reduced the profit and loss account brought forward as at 1 January 2021 by the same amount.
The company incurred fire related costs totalling £290,474 and received proceeds from its insurers totalling £200,000 in the prior year. For consistency with the presentation of these proceeds and costs in the current year, the prior year net cost has been disclosed as an exceptional item of £90,474 as set out in Note 6. This change in presentation has not impacted the previously reported operating or net loss for the year.
Recognition of loan funding provided by KH V Lending 302 Limited
Up to 16 March 2021, the Company was under effective 50% ownership by the Red Lion Holdings LLP group. At the previous balance sheet date, amounts borrowed by the Company from KH V Lending 302 Limited totalling £1,784,730, a company whose ultimate parent entity is Kitty Hawk Capital Partners V LP, a limited partnership registered in Jersey, and which has a controlling interest in Red Lion Holdings LLP, were recognised as amounts due from group undertakings were not recognised in the accounts.
Interest payable in respect of the loan facility provided was being accrued and at 31 December 2020 totalled £122,282. As interest on the loan is repayable on demand, amounts previously presented within accruals and deferred income have been restated within other loans due in less than one year.
As this omission of the loan capital and presentation of related accrued interest are considered to be material errors, these have been corrected by way of prior period adjustment. The following adjustments have been made:
- Other loans included in creditors due in less than one year has increased by £1,907,012
- Amounts owed by group undertakings have reduced by £1,632,000 and amounts due from group undertakings have increased by £147,730
- Accruals and deferred income reduced by £122,282
- Administrative expenses increased by £5,000 which increased the operating loss and loss before tax and net liabilities and reduced the profit and loss account brought forward reported in the previous period by the same amount.
Presentation of government grants receivable
FRS 102 requires government grants to be recognised in income in accordance with the period in which the relates costs are incurred. In the previous period, income from government grants totalling £134,020 was netted off in error against wages and salaries expenses included within administrative expenses in the Statement of Comprehensive Income. Therefore this has been corrected by restating government grants receivable in the period as other income of £134,020 and increasing prior period administrative
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
10.Prior year adjustment (continued)
expenses by the same amount. This change in presentation has had no impact on the operating or net result for the current or comparative period, nor the profit and loss account brought forward at 1 January 2021.
The company is party to a cross-guarantee and fixed and floating charge in respect of liabilities entered into by the Company's immediate parent undertaking.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £12,372 (2020: £19,225). Contributions totalling £54 (2020: £1,280) were payable to the fund at the reporting date and are included in creditors.
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Related party transactions
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KH V Lending 302 Limited
KH V Lending 302 Limited is a company whose ultimate parent entity is Kitty Hawk Capital Partners V LP, a limited partnership registered in Jersey, and which has a controlling interest in Red Lion Holdings LLP, the smallest and largest undertaking which produces consolidated accounts that include the Company.
The Company has borrowed amounts under a loan facility agreement with KH V Lending 302 Limited for amounts totalling £2,857,230 (2020 as restated: £1,784,730). Under the terms of the loan facility, amounts lent accrue interest at 10% per annum. Total interest expense recognised in the year totals £264,914 (2020 as restated: £122,282) and the amount owed to KH V Lending 302 Limited at the balance sheet, including interest, totals £3,244,426 (2020 as restated: £1,907,012). Amounts advanced under the loan facility agreement and accrued interest are repayable on demand and included in other loans within creditors due within one year.
Taste Food Solutions Limited ("TFSL")
TFSL is a private limited company controlled by the directors of the Company. During the year the Company incurred charges from TFSL totalling £401,347. At the balance sheet date the Company owed a balance of £30,000 to TFSL.
Bridging Trading LLP
Bridging Trading LLP is an limited liability partnership registered in England and Wales, controlled by Downing LLP. Downing LLP had an effective 50% interest in the Company via its shareholding in Grosvenor Pubs Limited, the immediate parent undertaking up to 16 March 2021. On 16 March 2021, the Company entered into a loan facility agreement of £1,100,000 with Bridging Trading LLP. The loan attracts interest at 8% per annum and had a term of two years.
The company has taken advantage of the exemption available under FRS 102 not to disclose transactions with wholly owned group members.
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GROSVENOR PUBS TRADING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2021
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Post balance sheet events
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On 29 December 2022, the amounts included within other loans due in more than one year in Note 10 above were settled and the related charges and cross-guarantees set out in Notes 10 and 13 were satisfied. On the same date, the group entered into further funding arrangements under which the company became party to a fixed and floating charge over its assets in respect of group borrowings.
The Company’s immediate parent is Red Lion Holdings 3 Limited and the the ultimate parent entity is Red Lion Holdings LLP, a limited liability partnership incorporated in England and Wales. The registered office address of Red Lion Holdings LLP is The Wool Barn, Peper Harow, Godalming, Surrey, GU8 6BQ. The smallest and largest group of which the Company is a member and for which group accounts are prepared is Red Lion Holdings LLP. Copies of these accounts are available from Companies House.
It is the opinion of the directors that there is no single controlling party of the company.
The auditor's report on the financial statements for the period ended 26 December 2021 was unqualified.
The audit report was signed on 10 November 2023 by Emma Bernardez (Senior Statutory Auditor) on behalf of Haysmacintyre LLP.
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