Registered number:
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
CONTENTS
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URBAN PUBS & BARS LIMITED
COMPANY INFORMATION
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URBAN PUBS & BARS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 APRIL 2023
The Directors present their strategic report and financial statements for the 52 weeks ended 30 April 2023.
The previous financial year had been a transformational period for the Urban Pubs and Bars Group with new investment into the Group provided through funds under management by Davidson Kempner and Global Mutual Properties Limited to sit alongside the original investments made by the co-founders. Further follow-on funds were quickly invested, acquiring 15 new sites, bringing the Group to 32 sites by the end of the previous financial year.
The period under review has therefore been a period of transition and consolidation for the Urban Pubs and Bars business. Significant capital investment has been made during the year to refurbish a number of the sites acquired in the previous financial year alongside capital to acquire five new sites including two Salt Yard restaurants and three traditional pubs as well as a significant investment to relocate the Bat and Ball site at the Westfield Shopping centre in Stratford. The Urban Pubs and Bars London Group has more than doubled in size in the last twenty-four months to 37 sites and inclusive of 3 sites operated through a sister portfolio company the business now operates 40 sites in total from its Head Office in Marylebone above the Lord Wargrave public house. The company operates 17 of these sites as at the balance sheet date. The management team has been strengthened with the recruitment of Chris Hill as Managing Director who has been introduced into the business to lead the next stage of its exciting development. The Company has invested £2.1m in fixed asset additions principally through the acquisition and refurbishment of new sites. The investment in the Group’s refurbishment programme and in new sites has been done alongside a programme to improve and strengthen site level management and the food and drinks offers and the Group is now also beginning to enjoy the commercial benefits of having a significantly larger portfolio of sites. With this repositioning work largely complete we are excited at the growth potential of the business. Since Covid-19 was first identified in early 2020 the previous two financial years have been characterised with Government financial support. However, with the Government under significant pressure to improve the public finances post-pandemic, business support has been significantly reduced and the only tangible support that remains for the hospitality industry is business rates relief. Whilst this relief is welcome, for a business of our scale the financial benefit is negligible, and in no way makes up for the detrimental impact to the hospitality industry that other economic factors are causing. As we learn to live with Covid businesses are now having to face issues of spiralling energy costs, levels of inflation not experienced for more than a decade, retail staff shortages in part due to Brexit, almost double-digit percentage increases in the national living wage and a record level of industrial action that has been hugely disruptive to trade – particularly in the City and Central London. Despite these unprecedented levels of external distractions and disruption we remain confident that the business is well placed to ride the storm. During the period the Company generated underlying operating profit of £1.0m on turnover of £23.2m, with turnover increasing by +6.1% compared to the previous financial year. The Company continues to be well supported by its banking partner Barclays. At the balance sheet date, the existing £9.75m RCF loan was £7.25m drawn. On 28th June 2023, shortly after the balance sheet date, the Group refinanced its bank loan facilities. To better support the ambitious growth plans for the business we entered into a new three year £6m term loan on terms similar to the existing RCF loan. Initially the funds from the term loan have been used to repay the existing £9.75m RCF loan, which was simultaneously refinanced also for a three-year period (on materially the same terms as previous), resulting in a drawn balance of £1.25m. This means that the Company has £8.5m available headroom through its banking facilities combined with cash balances that amounted to £4.0m at the balance sheet date to finance future growth activity.
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URBAN PUBS & BARS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
Current trading
After 34 weeks of the new financial year, sales in the Urban Pubs and Bars Group have increased by +18.5%. This has been achieved through underlying life for like sales growth combined with impact from annualising the sales from the five new sites opened in 2022/23 and from opening a further three new sites in the year to date – The Junction in Angel, The Railway in Putney and The Victory at Waterloo station, our first site at a railway station. Having been disrupted by industrial action in one of the critical trading weeks in the previous financial year, Christmas 2023 has been a success, with underlying like for like sales growth of +19.1%. This has contributed to year to date EBITDA being +4% ahead of budget with a year-on-year improvement in operating margin of approximately 1% with the burden of high inflation and energy costs slowly dissipating. Under these circumstances the Directors and Investors are pleased with the current performance and future prospects of the business. The Investors remain supportive and retain the ambition to further grow the portfolio of pubs. With the balance sheet remaining in a healthy position, the ability to draw on funds from bank loan facilities and from the Investors and with an active pipeline of sites that we continue to review we are well placed to continue to develop and grow the business further.
As discussed in the business review, economic conditions are unfavourable at present, presenting numerous challenges to the hospitality industry and Urban Pubs and Bars are not immune to those challenges. However, the Company remains highly profitable and well-funded. We are confident that we can continue to trade well during these challenging times and are hopeful that we will be able to capitalise on opportunities to expand the portfolio should good sites in London become available.
The Company operates its sites within London, and as such has the benefit of a large local customer base, in addition to an influx of tourists and visitors. Whilst travel restrictions from Covid-19 have been hugely disruptive we are now in a position of relative normality although the new normal contains an element of working from home. This has been unhelpful for our Central London sites but we are learning to adapt to new patterns of trade and ways of working. The business is prone to changes in demand and consumer tastes and we continue to see a polarisation towards premium products and offers. However, these risks are mitigated by having differentiated products and trading styles, together with varied locations within London and in general current trends lend themself well to our locations and style of site and offer. The Company has a low level of external debt, through a bank loan which carries a floating rate of interest, tied to the Bank of England base rate. Base rates have risen sharply recently having been at historic lows for a number of years and as a result we continue to monitor the impact (of rising interest rates) on our cashflows. But with the Group’s Net Debt Leverage well below 1x the board believes that we are well placed to manage the risk of further/future increases. The CFO has in place a short-term cash liquidity forecast in addition to a cash-flow plan which enables the company to monitor the liquidity risk to ensure that its future cash flows are sufficient to meet its demands.
The directors review a number of key performance indicators on a regular basis, these include sales and operating profit versus budget and prior year. The business holds regular meetings to review financial performance including at Board meetings, Senior Operating Team meetings and individual Operations Manager monthly review meetings with the Managing Director.
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URBAN PUBS & BARS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
Financial key performance indicators (continued)
2022/23 2021/22 Change % Turnover (Sales) £23.2m £21.8m +6.1% Operating profit (underlying*) £1.1m £2.9m (62%) Operating margin (underlying) 4.7% 13.4% *Underlying operating profit is calculated as operating profit adding back one-off adjustments and the impairment of tangible fixed assets. The business has an annual budgeting process that is supplemented by an annual 3-year business plan. The directors monitor the cash position of the business on a weekly basis in order to ensure compliance with banking covenants and that sufficient liquidity is in place to meet future financial obligations.
The Company utilises an external consultancy firm to undertake mystery diner visits to its premises, to assist with maintaining high customer facing operational standards.
A director of a company must act in the way s/he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
∙The likely consequences of any decision in the long-term;
∙The interests of the company’s employees;
∙The need to foster the company’s business relationships with suppliers, customers and other;
∙The impact of the company’s operations on the community and the environment;
∙The desirability of the company maintaining a reputation for high standards and business conduct, and;
∙The need to act as between members of the company.
The key decisions made by the directors to promote the success of the Company in the period under review relate to ensuring the trading recovery of the Company’s sites post Covid-19 pandemic, minimising any potential trading difficulties caused by the economic environment with regard to generationally high inflation and increasing interest rate costs and continuing the business development and integration of the new sites acquired into the Company during the previous financial year.
As the business grows, at pace, the directors continue to consider the impact on its existing employees, our suppliers and on our investors. We are actively working on creating best in class opening and training plans for new sites to ensure that all recruitment, training, communication and planning is done to the very best of our team’s abilities. The directors value regular open communication to all stakeholders of the business and all stakeholders have a touchpoint at regular intervals throughout the financial year with our senior leadership team. The Company is aware that its estate of pubs are a significant user of energy. We have begun to work closely with an energy consultant to learn about best practice in the sector with a commitment to improve our carbon footprint. We encourage our site management to actively engage with their local communities. We help to raise money for local charities and local causes and on a national basis we have raised money in our sites for Streetsmart over the Christmas period who raise awareness to help people out of homelessness. We regularly allow local community groups to hold meetings in our venues.
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URBAN PUBS & BARS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
Directors' statement of compliance with duty to promote the success of the Company (continued) The Board of Directors maintain a constant review of the Company’s cash resources to ensure the Company continues to trade in a solvent and appropriate manner and that it has the necessary financial resources to meet its growth expectations whilst servicing its debts as they fall due. Further, it has in place a structured planning process, such that the directors can review the financial consequences of their decisions and ensure that the future prospects of the Company are aligned for all its stakeholders. The Directors therefore believe that they have acted in good faith, and in a way that is most likely to promote the success of the Company, for the benefit of it’s members and stakeholders as a whole.
This report was approved by the board and signed on its behalf.
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URBAN PUBS & BARS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2023
The Directors present their report and the financial statements for the period ended 30 April 2023.
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company'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 Company 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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the period, after taxation, amounted to £280,772 (2022 - £2,316,264).
Dividends of £nil were declared during the period (2022: £nil).
The Directors who served during the period were:
On 28th June 2023 the Company, entered into revised banking arrangements with Barclays Bank Plc. An amortising term loan for £6.0m for a period of three years has been agreed and fully drawn. The loan has a capital repayment holiday for a period of 15 months and then amortises at £1.5m each year with a final lump sum to repay the loan in full on the expiry date. The loan is at a competitive margin plus libor and has two banking covenants, Net Leverage and Fixed Charge cover, which have been modelled and these forecasts provide adequate headroom. On the same date the £9.75m RCF loan has been amended on similar terms (to existing) with an expiry date of 6th June 2026.
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URBAN PUBS & BARS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
Future developments (continued)
The directors are pleased with the performance of the Company during the period and are actively seeking further sites to expand the business. After the balance sheet date the Company has added three new sites to its portfolio of pubs and has a strong pipeline of new/additional sites that are actively being negotiated with landlords and their agents.
The business has gone through a significant period of growth, and this has created the need to further review our organisational structure, operating processes and the way in which we communicate with our employees. During the period we have strengthened the Senior Leadership team by recruiting a Managing Director, Chris Hill, who has a wealth experience operating in similar roles in other leading Hospitality businesses. Under Chris’ leadership the business has refocussed its thinking about the way we develop our people, our systems and our processes.
We have been able to attract some new talent into both our sites and into head office with key measures of our success being the retention of employees and employee turnover which are now closely monitored on a regular basis. We continue to have structured performance related bonus schemes in place for site level management as well as all head office employees with all employees aligned in delivering site level EBITDA budgets. We have improved the structure of how we communicate with our employees during the period under review. We hold a senior weekly operating meeting directly followed by meetings hosted by our Operation Managers with their individual site management teams. On a monthly basis there is an Operating Board meeting followed by Area meetings with the General Managers of sites as well as Departmental meetings throughout the head office teams to discuss performance, develop business plans, to review the development and training plans for our site staff and to review sales and marketing plans. On a quarterly basis we also hold Company briefings to communicate key messages to key employees in the head office and site management teams. Urban Pubs & Bars is an equal opportunities employer. We are committed to equality of opportunity and to providing a service and following practices which are free from unfair and unlawful discrimination. We are committed to ensuring equal opportunities and fairness of treatment in the workplace for all employees and job applicants. Our aim is to provide a working environment in which people feel comfortable and where everyone is treated with respect and dignity. We will avoid unlawful discrimination in all aspects of employment including recruitment, promotion, opportunities for training, pay and benefits, discipline and selection for redundancy. Our employees are required to act in accordance with this policy and should treat everyone they meet in the course of their work with fairness, dignity and respect at all times. Acts of discrimination, harassment, bullying or victimisation against employees or customers are disciplinary offences and will be dealt with under the Company's disciplinary procedure. Discrimination, harassment, bullying or victimisation may constitute gross misconduct and could lead to dismissal without notice. The Company gives every consideration to applications for employment by disabled persons where the requirements of the job may be adequately filled by a disabled person. Where existing team members become disabled, it is the Company’s policy wherever practicable to provide continuing employment under similar terms and conditions and to provide training, career development and promotion wherever appropriate.
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URBAN PUBS & BARS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
As the business has rapidly grown from a start-up in 2014 to the established business of sites it is today it has been necessary to evolve the way that it engages with its suppliers and customers. Up until the rapid expansion in site numbers following the new investment in 2021 the co-founders were wholly responsible with building business relationships with the Company’s suppliers and providing the site Management with the guidance and training to engage with our customers.
More recently the Company has developed the head office infrastructure so that we have dedicated resource to continue to engage with suppliers and customers in a professional manner without being reliant on the Co-founders experience. We have recruited a number of incremental roles for this purpose including a Procurement Manager, a Recruitment manager, a Training Manager and a New Openings Manager. In addition to these Head Office roles, we regularly recruit a number of General Manager “Designates” into the business who become trained in the Urban Pubs way of operating, before taking on site management roles, and can be called upon to manage our sites on an interim basis should we require them to do so. This approach ensures that we continually focus on delivering best in class customer experiences to our guests. We also engage with a Mystery Guest scheme whereby a third-party supplier experiences the drinking and/or dining offer in each of our venues and reports back on these experiences. This becomes an invaluable internal tool reviewing and improving the day-to-day operations in our sites.
The Company’s entire portfolio of pubs is operated through commercial leases. The business relationship we have with our landlords is therefore crucial to the Company’s success. We largely deal with individual landlords and only have a small number of landlords that have multiple sites in our estate of pubs. Good relationships with the landlords of our properties are essential to ensure our properties are maintained to a high standard, offer a compelling environment to our guests and support the long-term growth strategy of the Company.
The Company is exempt from the requirements of carbon energy reporting due to its data being included within the disclosures of the Group's financial statements. For further details please refer to the financial statements of Urban Pubs and Bars London Limited for the 52 week period ending 30 April 2023, where the requirements are reported on for hte Group.
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URBAN PUBS & BARS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2023
On 28th June 2023 the Company, entered into revised banking arrangements with Barclays Bank Plc. An amortising term loan for £6.0m for a period of three years has been agreed and fully drawn. The loan has a capital repayment holiday for a period of 15 months and then amortises at £1.5m each year with a final lump sum to repay the loan in full on the expiry date. The loan is at a competitive margin plus libor and has two banking covenants, Net Leverage and Fixed Charge cover, which have been modelled and these forecasts provide adequate headroom. On the same date the £9.75m RCF loan has been amended on similar terms (to existing) with an expiry date of 6th June 2026.
The auditors, Haysmacintyre LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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URBAN PUBS & BARS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF URBAN PUBS & BARS LIMITED
We have audited the financial statements of Urban Pubs & Bars Limited (the 'Company') for the period ended 30 April 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 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.
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URBAN PUBS & BARS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF URBAN PUBS & BARS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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URBAN PUBS & BARS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF URBAN PUBS & BARS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud. Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations are Companies Act 2006, health & safety and food hygiene laws and Minimum Wage regulations and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:
∙inspecting correspondence with regulators and tax authorities;
∙consideration of known or suspected instances of non-compliance with laws and regulation and fraud through discussion with management, review of board minutes, and review of the Food Standards Agency website;
∙evaluating management's controls designed to prevent and detect irregularities;
∙identifying and testing journals, in particular journal entries posted with unusual account combinations, postings with high value transactions or rounded entries; and
∙challenging assumptions and judgements made by management in their critical accounting estimates particularly in respect of the recoverability of debtors and impairment of tangible fixed assets.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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URBAN PUBS & BARS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF URBAN PUBS & BARS LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditors
10 Queen Street Place
EC4R 1AG
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URBAN PUBS & BARS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
REGISTERED NUMBER: 08872447
STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 34 form part of these financial statements.
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URBAN PUBS & BARS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 APRIL 2023
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 1 MAY 2022
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
Urban Pubs & Bars Limited is a private company limited by shares. It was incorporated in the UK (registration number: 08872447). Its registered office is 42 Brendon Street, London, W1H 5HE.
The principal activity of the Company is that of a pub operator.
2.Accounting policies
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 management to exercise judgment in applying the Company's accounting policies (note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Urban Pubs & Bars London Limited as at 30 April 2023 and these financial statements may be obtained from Companies House.
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
2.Accounting policies (continued)
The business carries out regular forecasts including an annual budget process and a 3-year plan that is undertaken annually. The annual budget for the period ending 30 April 2025 and the annual 3-year plan for the period ending April 2027 is in the process of being created. Over the coming weeks these plans will be presented to and approved by the Urban Pubs and Bars London Limited ("the Group") Board of Directors.
In advance of the planning process being concluded the directors have reviewed cashflow forecasts covering the next 12 months which show a year-on-year increase in cash generated from operating activities through higher sales and improving operating margins. Based on these projections the Group has adequate underlying cash reserves from its existing estate to adequately fund its investment ambitions and meet its liabilities as they fall due over the next twelve months plus we have the additional headroom available to it through the existing bank facilities. The directors will ensure that the necessary Group cash resources will support the Company in the foreseeable future. The directors believe the going concern basis is reasonable when preparing the financial statements.
Revenue is measured at the fair value of the consideration received and is mainly derived from bar and kitchen sales, after deducting discounts and value added tax. It also includes certain services such as the provision of entertainment. Revenue is recognised at the point of sale.
Other operating income is derived from hotel accommodatiom, listing fee income, table tennis sales and management charges to related entities and is recognised at the point of sale.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the most appropriate 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.
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
2.Accounting policies (continued)
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the assel (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount, The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
2.Accounting policies (continued)
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
2.Accounting policies (continued)
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.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
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.
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
2.Accounting policies (continued)
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.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
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.
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
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
2.Accounting policies (continued)
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.
The preparation of the financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Key judgements made by management include: Onerous lease Provisions for onerous leases include estimates such as the length of the time a property may be empty for and the value of any make good costs at the end of the lease. Provisions are discounted to present value which requires the use of a discount rate. Provisions are reviewed regularly and adjusted as appropriate. Useful lives of tangible assets Depreciation and amortisation are provided in order to write down to estimated residual values the cost of each asset over its estimated useful economic life. These useful economic lives require the use of management judgement. These estimates are regularly reviewed. Impairment of tangible assets Each cash generating unit (CGU) is reviewed annually for indicators of impairment. In assessing whether an asset has been impaired, the carrying value of the CGU is compared to its recoverable amount. The recoverable amount is the higher of its fair value and its value in use. Where value in use is estimated, this is calculated using a discounted cash flow model, which includes assumptions around future performance and the use of an appropriate discount rate. Future projections are compared to actual performance on a regular basis to assess the accuracy of such projections. Recoverability of intercompany debtors Management evaluate intercompany debtors for impairment whenever circumstances indicate, in management’s judgement, that the carrying value may not be recoverable. An impairment review requires management to make subjective judgements concerning the future trading prospects and cash flows of the group companies under review. Where actual cash flows in subsequent years differs to those forecast as part of the management’s impairment review this may result in additional impairments or conversely reversals of existing impairments recognised in future years.
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
11.Taxation (continued)
There were no factors that may affect future tax charges.
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
19.Deferred taxation (continued)
The Company operates a defined contribution 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 £169,997 (2022: £220,307). Contributions totalling £55,444 (2022: £77,258) were payable to the fund at the reporting date and are included in creditors.
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
Profit and loss account
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
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URBAN PUBS & BARS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2023
At 30 April 2023, £80,000 (2022: £Nil) was owed from Barworks (Exmouth) Limited, a company with common directors and 100% owned by Urban Pubs and Bars 3 Limited.
At 30 April 2023, £58,000 (2022: £Nil) was owed from Barworks (Stamford St) Limited, a company with common directors and 100% owned by Urban Pubs and Bars 3 Limited. At 30 April 2023, £38,000 (2022: £Nil) was owed from Barworks (Leonard St) Limited, a company with common directors and 100% owned by Urban Pubs and Bars 3 Limited. At 30 April 2023, £52,000 (2022: £Nil) was owed from Barworks (Farringdon) Limited, a company with common directors and 100% owned by Urban Pubs and Bars 3 Limited. At 30 April 2023, £90,000 (2022: £Nil) was owed from Barworks (City Road) Limited, a company with common directors and 100% owned by Urban Pubs and Bars 3 Limited. At 30 April 2023, £1,058,064 (2022: £1,665,000) was owed from Bat & Ball Bars Limited, a company with common directors and 100% owned by Urban Pubs & Bars London Limited. The Directors of the Company are considered to be the only key management personnel. Aggregate remuneration for the period was £684,649 (2022: £412,319).
During a review of intercompany balances it was identified that in the prior year financial statements intercompany debtors were understated by £2,265,000, as a result of £2,275,000 intercompany creditors being netted off and £10,000 payments in relation to accruals being included within it. Therefore an adjustment as been made to the 2022 comparatives to correctly reclassify these items, resulting in an increase in intercompany debtors of £2,265,000, an increase in intercompany creditors of £2,275,000 and a decrease in accruals of £10,000 compared with amounts previously reported. This adjustment has no impact on the profit and loss for the period.
The immediate parent is Urban Pubs & Bars London Limited, a company incorporated in the UK. It owns 100% of the share capital of Urban Pubs & Bars Limited and prepares consolidated financial statements. Its registered office is 42 Brendon Street, London, W1H 5HE.
The directors believe there to be no one ultimate controlling party.
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