Company registration number 14354234 (England and Wales)
URBANBUBBLE HOLDINGS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2023
URBANBUBBLE HOLDINGS LTD
COMPANY INFORMATION
Directors
C Howard
M P Howard
Company number
14354234
Registered office
Sevendale House
7 Dale Street
Manchester
M1 1JA
Auditor
Sumer Auditco Limited
The Beehive
City Place
Gatwick
RH6 0PA
URBANBUBBLE HOLDINGS LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Company statement of cash flows
13
Notes to the financial statements
14 - 28
URBANBUBBLE HOLDINGS LTD
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 JUNE 2023
- 1 -

The directors present the strategic report for the period ended 30 June 2023.

Review of the business

urbanbubble experienced significant growth to June 2023, with revenues climbing along with EBITDA. The delivery of this result, in line with the forecast, promotes the strong planning and modelling that underpins our business.

 

We have an ambitious and progressive five-year business plan to June 2027 which will see the business grow revenues to £45m, and profits rise to 11% EBITDA in the same period. 2023, being our first year in this five year plan is an encouraging start to our journey.

 

Year-end 2024 sees revenues climb again to £25m, and EBITDA should be close to £2m (8%). Cash and balance sheet strengthening will be attained in YE 2024 providing a further leap forward for our business in terms of strong working capital and financial stability without the need for any capital investment to fuel growth.

 

The success of our business can be attributed to a number of factors. The first is the diligent planning of the business out of the pandemic of 2020/2021. The second is the strategic partnerships made in 2015 to 2019 with quality developers and institutional investors to operate their communities. Third is the significant upward pressure on rents in the UK due to the supply imbalance; organically increasing our revenues which are tied with rent. Finally, the passion, commitment and hard work of the now, 500 FTE that serve urbanbubble nationally caring for communities and residents.

 

urbanbubble is split into two key directorates; Residential and Build the Rent. Residential deals with leasehold management activity including traditional block management, residential lettings, maintenance and new scheme consultancy. The Built to Rent side of the business encompasses institutional management, including Build to Rent, Co-living Operations, Research, Insights and Consultancy and Single-Family Operations.

 

During the year the business has fully appointed the Executive Leadership Team and Senior Management Teams. Both Residential and Build to Rent have strong Senior Management Teams led by their respective Directors, who sit on the Executive Leadership Team. Building in strategic and management strength during 2023 was an important milestone to allow urbanbubble to manage future scale. urbanbubble’s FTE has increased to 385 employees employed nationally.

 

Revenue growth levels across both Residential and Build to Rent sit at circa. 35%. Build to Rent constitutes 60% of revenues, and Residential 40%. Both are expected to grow a further 30% for the next two years.

 

Both platforms have welcomed new communities and instructions into their portfolios. Build to Rent have launched seven new communities within the period, seeing urbanbubble expand to a large-scale national operator, managing schemes within England, Scotland and Wales. The largest Build to Rent scheme launched within 2023 was 1100 homes in Wandsworth.

 

urbanbubble currently have over 17,000 homes under management across circa. 83 schemes within both Build to Rent and Residential. A strong, confirmed pipeline of circa. 7,000 units up to 2027 further cements urbanbubble’s future growth plans.

On behalf of the board

M P Howard
Director
14 February 2024
URBANBUBBLE HOLDINGS LTD
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 JUNE 2023
- 2 -

The directors present their annual report and financial statements for the period ended 30 June 2023.

Principal activities

The principal activity of the company is that of a holding company.

Results and dividends

The results for the period are set out on page 7.

Ordinary dividends were paid amounting to £509,354. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

C Howard
M P Howard
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

URBANBUBBLE HOLDINGS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 3 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
M P Howard
Director
14 February 2024
URBANBUBBLE HOLDINGS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF URBANBUBBLE HOLDINGS LTD
- 4 -
Opinion

We have audited the financial statements of Urbanbubble Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 June 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including 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).

In our opinion the financial statements:

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 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. 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 our audit:

URBANBUBBLE HOLDINGS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF URBANBUBBLE HOLDINGS LTD
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the 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 an auditor's 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.

 

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the Directors (as required by auditing standards) and discussed with the Directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

 

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; laws related to Health and Safety and Employment, UK Companies Act and Tax Legislation.

 

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.

URBANBUBBLE HOLDINGS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF URBANBUBBLE HOLDINGS LTD
- 6 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance with all laws and regulations.

We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Other matters which we are required to address

The financial statements of the subsidiary, Urbanbubble Ltd, for the prior period were not audited, as an exemption from audit was claimed under s.382 of the Companies Act 2006.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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 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 company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Stuart Stead (Senior Statutory Auditor)
For and on behalf of Sumer Auditco Limited
14 February 2024
Statutory Auditor
The Beehive
City Place
Gatwick
RH6 0PA
URBANBUBBLE HOLDINGS LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2023
- 7 -
Period
ended
30 June
2023
Notes
£
Turnover
3
12,458,007
Cost of sales
(8,070,984)
Gross profit
4,387,023
Administrative expenses
(3,489,376)
Other operating expenses
(2,720)
Operating profit
4
894,927
Interest receivable and similar income
8
12,271
Interest payable and similar expenses
9
(30,027)
Profit before taxation
877,171
Tax on profit
10
601,573
Profit for the financial period
1,478,744
Profit for the financial period is all attributable to the owners of the parent company.
Total comprehensive income for the period is all attributable to the owners of the parent company.
URBANBUBBLE HOLDINGS LTD
GROUP BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 8 -
2023
Notes
£
£
Fixed assets
Negative goodwill
12
(840,323)
Tangible assets
13
112,456
Investments
14
50
(727,817)
Current assets
Debtors
16
4,897,762
Cash at bank and in hand
323,513
5,221,275
Creditors: amounts falling due within one year
17
(3,171,739)
Net current assets
2,049,536
Total assets less current liabilities
1,321,719
Creditors: amounts falling due after more than one year
18
(333,226)
Provisions for liabilities
Deferred tax liability
20
19,098
(19,098)
Net assets
969,395
Capital and reserves
Called up share capital
22
5
Profit and loss reserves
969,390
Total equity
969,395
The financial statements were approved by the board of directors and authorised for issue on 14 February 2024 and are signed on its behalf by:
14 February 2024
M P Howard
Director
Company registration number 14354234 (England and Wales)
URBANBUBBLE HOLDINGS LTD
COMPANY BALANCE SHEET
AS AT 30 JUNE 2023
30 June 2023
- 9 -
2023
Notes
£
£
Fixed assets
Investments
14
5
Capital and reserves
Called up share capital
22
5

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £509,354.

The financial statements were approved by the board of directors and authorised for issue on 14 February 2024 and are signed on its behalf by:
14 February 2024
M P Howard
Director
Company registration number 14354234 (England and Wales)
URBANBUBBLE HOLDINGS LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 13 September 2022
-
-
-
Period ended 30 June 2023:
Profit and total comprehensive income
-
1,478,744
1,478,744
Issue of share capital
22
5
-
5
Dividends
11
-
(509,354)
(509,354)
Balance at 30 June 2023
5
969,390
969,395
URBANBUBBLE HOLDINGS LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 13 September 2022
-
-
-
Period ended 30 June 2023:
Profit and total comprehensive income
-
509,354
509,354
Issue of share capital
22
5
-
5
Dividends
11
-
(509,354)
(509,354)
Balance at 30 June 2023
5
-
0
5
URBANBUBBLE HOLDINGS LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2023
- 12 -
2023
Notes
£
£
Cash flows from operating activities
Cash absorbed by operations
26
(405,295)
Interest paid
(30,027)
Income taxes paid
(80,324)
Net cash outflow from operating activities
(515,646)
Investing activities
Negative goodwill on acquisition of subsidiary
988,615
Purchase of tangible fixed assets
(137,986)
Proceeds from disposal of joint ventures
(50)
Interest received
12,271
Net cash generated from/(used in) investing activities
862,850
Financing activities
Proceeds from issue of shares
5
Repayment of bank loans
485,658
Dividends paid to equity shareholders
(509,354)
Net cash used in financing activities
(23,691)
Net increase in cash and cash equivalents
323,513
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
323,513
URBANBUBBLE HOLDINGS LTD
COMPANY STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2023
- 13 -
2023
£
£
Cash flows from operating activities
Investing activities
Proceeds from disposal of subsidiaries
(5)
Dividends received
509,354
Net cash generated from/(used in) investing activities
509,349
Financing activities
Proceeds from issue of shares
5
Dividends paid to equity shareholders
(509,354)
Net cash used in financing activities
(509,349)
Net increase in cash and cash equivalents
-
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
-
0
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2023
- 14 -
1
Accounting policies
Company information

Urbanbubble Holdings Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Sevendale House, 7 Dale Street, Manchester, M1 1JA.

 

The group consists of Urbanbubble Holdings Ltd and all of its subsidiaries.

1.1
Reporting period

The financial statements are presented for a period less than one year due to the company being incorporated on 13 September 2022.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Urbanbubble Holdings Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
Over the term of the lease
Fixtures and fittings
20% p.a. Straight line basis
Computers
25% p.a. Straight line basis
Motor vehicles
10% p.a. Straight line basis

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.10
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 17 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 18 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 19 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.17
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 20 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Turnover and other revenue
2023
£
Turnover analysed by class of business
Property management and consultancy
12,458,007
2023
£
Other revenue
Interest income
12,271
4
Operating profit
2023
£
Operating profit for the period is stated after charging/(crediting):
Research and development costs
82,650
Depreciation of owned tangible fixed assets
25,530
Amortisation of intangible assets
(148,292)
Operating lease charges
16,924
5
Auditor's remuneration
2023
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
-
Audit of the financial statements of the company's subsidiaries
11,260
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 21 -
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the period was:

Group
Company
2023
2023
Number
Number
387
2

Their aggregate remuneration comprised:

Group
Company
2023
2023
£
£
Wages and salaries
9,232,751
-
0
Social security costs
167,708
-
Pension costs
19,898
-
0
9,420,357
-
0
7
Directors' remuneration
2023
£
Remuneration for qualifying services
97,956
8
Interest receivable and similar income
2023
£
Interest income
Interest on bank deposits
2,852
Other interest income
9,419
Total income
12,271
2023
Investment income includes the following:
£
Interest on financial assets not measured at fair value through profit or loss
2,852
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 22 -
9
Interest payable and similar expenses
2023
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
29,962
Other finance costs:
Other interest
65
Total finance costs
30,027
10
Taxation
2023
£
Current tax
UK corporation tax on profits for the current period
(330,186)
Adjustments in respect of prior periods
(283,939)
Total current tax
(614,125)
Deferred tax
Origination and reversal of timing differences
12,552
Total tax credit
(601,573)

The actual (credit)/charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:

2023
£
Profit before taxation
877,171
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00%
175,434
Tax effect of expenses that are not deductible in determining taxable profit
50,664
Permanent capital allowances in excess of depreciation
(2,115)
Research and development tax credit
(834,589)
Remeasurement of deferred tax for changes in tax rates
7,476
Change in tax rate
1,557
Taxation credit
(601,573)
11
Dividends
2023
Recognised as distributions to equity holders:
£
Final paid
509,354
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 23 -
12
Intangible fixed assets
Group
Negative goodwill
£
Cost
At 13 September 2022
-
0
Additions - business combinations
(988,615)
At 30 June 2023
(988,615)
Amortisation and impairment
At 13 September 2022
-
0
Amortisation charged for the period
(148,292)
At 30 June 2023
(148,292)
Carrying amount
At 30 June 2023
(840,323)
The company had no intangible fixed assets at 30 June 2023.
13
Tangible fixed assets
Group
Leasehold improvements
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 13 September 2022
-
0
-
0
-
0
-
0
-
0
Additions
-
0
8,775
72,782
-
0
81,557
Business combinations
48,616
(226)
3,002
5,037
56,429
At 30 June 2023
48,616
8,549
75,784
5,037
137,986
Depreciation and impairment
At 13 September 2022
-
0
-
0
-
0
-
0
-
0
Depreciation charged in the period
12,550
670
9,903
2,407
25,530
At 30 June 2023
12,550
670
9,903
2,407
25,530
Carrying amount
At 30 June 2023
36,066
7,879
65,881
2,630
112,456
The company had no tangible fixed assets at 30 June 2023.
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 24 -
14
Fixed asset investments
Group
Company
2023
2023
Notes
£
£
Investments in subsidiaries
15
-
0
5
Investments in joint ventures
50
-
0
50
5
Movements in fixed asset investments
Group
Shares in joint ventures
£
Cost or valuation
At 13 September 2022
-
Additions
50
At 30 June 2023
50
Carrying amount
At 30 June 2023
50
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 13 September 2022
-
Additions
5
At 30 June 2023
5
Carrying amount
At 30 June 2023
5
15
Subsidiaries

Details of the company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Urbanbubble Ltd
England & Wales
Ordinary
100.00
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 25 -
16
Debtors
Group
Company
2023
2023
Amounts falling due within one year:
£
£
Trade debtors
2,838,437
-
0
Corporation tax recoverable
700,995
-
0
Other debtors
169,745
-
0
Prepayments and accrued income
1,188,585
-
0
4,897,762
-
17
Creditors: amounts falling due within one year
Group
Company
2023
2023
Notes
£
£
Bank loans
19
152,432
-
0
Trade creditors
787,681
-
0
Amounts owed to undertakings in which the group has a participating interest
50
-
0
Other taxation and social security
1,578,734
-
Other creditors
406,865
-
0
Accruals and deferred income
245,977
-
0
3,171,739
-
0
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2023
Notes
£
£
Bank loans and overdrafts
19
333,226
-
0
19
Loans and overdrafts
Group
Company
2023
2023
£
£
Bank loans
485,658
-
0
Payable within one year
152,432
-
0
Payable after one year
333,226
-
0

The bank loan is secured by a debenture dated 10 June 2020 under the Coronavirus Business Interruption Scheme "CBILS" and personal guarantee by the director.

URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 26 -
20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
2023
Group
£
Accelerated capital allowances
19,098
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the period:
£
£
Asset at 13 September 2022
-
-
Charge to profit or loss
19,098
-
Liability at 30 June 2023
19,098
-

The deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances that are expected to mature within the same period.

21
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
19,898

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

22
Share capital
Group and company
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
5
5
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 27 -
23
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2023
£
£
Within one year
161,136
-
Between two and five years
178,153
-
339,289
-
24
Related party transactions

Included in other creditors is an amount of £50 (2022: £50) due to Alliance City Living Limited. Recharges to Alliance City Living Limited totalled £927,887 (2022: £985,859). Included within trade debtors is an amount owed by Alliance City Living Limited of £134,105 (2022: £71,336). Urbanbubble Limited holds 50% of the share capital of this company.

25
Controlling party

The ultimate controlling party is M P Howard by virtue of his shareholding.

26
Cash absorbed by group operations
2023
£
Profit for the period after tax
1,478,744
Adjustments for:
Taxation credited
(601,573)
Finance costs
30,027
Investment income
(12,271)
Amortisation and impairment of intangible assets
(148,292)
Depreciation and impairment of tangible fixed assets
25,530
Movements in working capital:
Increase in debtors
(4,196,767)
Increase in creditors
3,019,307
Cash absorbed by operations
(405,295)
URBANBUBBLE HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 28 -
27
Cash absorbed by operations - company
2023
£
Profit for the period after tax
509,354
Adjustments for:
Investment income
(509,354)
Cash absorbed by operations
-
28
Analysis of changes in net debt - group
13 September 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
-
323,513
323,513
Borrowings excluding overdrafts
-
(485,658)
(485,658)
-
(162,145)
(162,145)
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