Fortress Operations Limited 10443180 false 2022-04-01 2023-03-31 2023-03-31 The principal activity of the company is a franchise operator of a group of McDonald's restaurants. Digita Accounts Production Advanced 6.30.9574.0 true true true Class 1 Class 2 Class 3 true true 10443180 2022-04-01 2023-03-31 10443180 2023-03-31 10443180 bus:OrdinaryShareClass1 2023-03-31 10443180 bus:OrdinaryShareClass2 2023-03-31 10443180 bus:PreferenceShareClass1 bus:CumulativeRedeemableShares 2023-03-31 10443180 core:AcceleratedTaxDepreciationDeferredTax 2023-03-31 10443180 core:TaxLossesCarry-forwardsDeferredTax 2023-03-31 10443180 core:RetainedEarningsAccumulatedLosses 2023-03-31 10443180 core:ShareCapital 2023-03-31 10443180 core:FinancialAssetsCostLessImpairment core:Non-currentFinancialInstruments 2023-03-31 10443180 core:CurrentFinancialInstruments 2023-03-31 10443180 core:CurrentFinancialInstruments 2 2023-03-31 10443180 core:CurrentFinancialInstruments core:WithinOneYear 2023-03-31 10443180 core:Non-currentFinancialInstruments 2023-03-31 10443180 core:Non-currentFinancialInstruments core:AfterOneYear 2023-03-31 10443180 core:Goodwill 2023-03-31 10443180 core:OtherResidualIntangibleAssets 2023-03-31 10443180 core:PatentsTrademarksLicencesConcessionsSimilar 2023-03-31 10443180 core:BetweenTwoFiveYears 2023-03-31 10443180 core:MoreThanFiveYears 2023-03-31 10443180 core:WithinOneYear 2023-03-31 10443180 core:MotorVehicles 2023-03-31 10443180 core:OfficeEquipment 2023-03-31 10443180 core:PlantMachinery 2023-03-31 10443180 core:DeferredTaxation 2023-03-31 10443180 1 2023-03-31 10443180 2 2023-03-31 10443180 bus:FRS102 2022-04-01 2023-03-31 10443180 bus:Audited 2022-04-01 2023-03-31 10443180 bus:FullAccounts 2022-04-01 2023-03-31 10443180 bus:RegisteredOffice 2022-04-01 2023-03-31 10443180 bus:Director1 2022-04-01 2023-03-31 10443180 bus:Director2 2022-04-01 2023-03-31 10443180 bus:OrdinaryShareClass1 2022-04-01 2023-03-31 10443180 bus:OrdinaryShareClass2 2022-04-01 2023-03-31 10443180 bus:PreferenceShareClass1 bus:CumulativeRedeemableShares 2022-04-01 2023-03-31 10443180 bus:Consolidated 2022-04-01 2023-03-31 10443180 bus:PrivateLimitedCompanyLtd 2022-04-01 2023-03-31 10443180 1 2022-04-01 2023-03-31 10443180 core:RetainedEarningsAccumulatedLosses 2022-04-01 2023-03-31 10443180 core:ShareCapital 2022-04-01 2023-03-31 10443180 core:Goodwill 2022-04-01 2023-03-31 10443180 core:IntangibleAssetsOtherThanGoodwill 2022-04-01 2023-03-31 10443180 core:LicencesFranchises 2022-04-01 2023-03-31 10443180 core:OtherResidualIntangibleAssets 2022-04-01 2023-03-31 10443180 core:PatentsTrademarksLicencesConcessionsSimilar 2022-04-01 2023-03-31 10443180 core:LandBuildingsUnderOperatingLeases 2022-04-01 2023-03-31 10443180 core:ReportableOperatingSegment1 2022-04-01 2023-03-31 10443180 core:ReportableOperatingSegment2 2022-04-01 2023-03-31 10443180 core:ReportableOperatingSegment3 2022-04-01 2023-03-31 10443180 core:MotorVehicles 2022-04-01 2023-03-31 10443180 core:OfficeEquipment 2022-04-01 2023-03-31 10443180 core:PlantMachinery 2022-04-01 2023-03-31 10443180 core:DeferredTaxation 2022-04-01 2023-03-31 10443180 core:UKTax 2022-04-01 2023-03-31 10443180 1 2022-04-01 2023-03-31 10443180 2 2022-04-01 2023-03-31 10443180 1 2022-04-01 2023-03-31 10443180 countries:England 2022-04-01 2023-03-31 10443180 2022-03-31 10443180 bus:PreferenceShareClass1 bus:CumulativeRedeemableShares 2022-03-31 10443180 core:RetainedEarningsAccumulatedLosses 2022-03-31 10443180 core:ShareCapital 2022-03-31 10443180 core:Goodwill 2022-03-31 10443180 core:OtherResidualIntangibleAssets 2022-03-31 10443180 core:PatentsTrademarksLicencesConcessionsSimilar 2022-03-31 10443180 core:MotorVehicles 2022-03-31 10443180 core:OfficeEquipment 2022-03-31 10443180 core:PlantMachinery 2022-03-31 10443180 core:DeferredTaxation 2022-03-31 10443180 2021-04-01 2022-03-31 10443180 2022-03-31 10443180 bus:OrdinaryShareClass1 2022-03-31 10443180 bus:OrdinaryShareClass2 2022-03-31 10443180 core:AcceleratedTaxDepreciationDeferredTax 2022-03-31 10443180 core:RetainedEarningsAccumulatedLosses 2022-03-31 10443180 core:ShareCapital 2022-03-31 10443180 core:FinancialAssetsCostLessImpairment core:Non-currentFinancialInstruments 2022-03-31 10443180 core:CurrentFinancialInstruments 2022-03-31 10443180 core:CurrentFinancialInstruments 2 2022-03-31 10443180 core:CurrentFinancialInstruments core:WithinOneYear 2022-03-31 10443180 core:Non-currentFinancialInstruments 2022-03-31 10443180 core:Non-currentFinancialInstruments core:AfterOneYear 2022-03-31 10443180 core:Goodwill 2022-03-31 10443180 core:OtherResidualIntangibleAssets 2022-03-31 10443180 core:PatentsTrademarksLicencesConcessionsSimilar 2022-03-31 10443180 core:BetweenTwoFiveYears 2022-03-31 10443180 core:MoreThanFiveYears 2022-03-31 10443180 core:WithinOneYear 2022-03-31 10443180 core:MotorVehicles 2022-03-31 10443180 core:OfficeEquipment 2022-03-31 10443180 core:PlantMachinery 2022-03-31 10443180 1 2022-03-31 10443180 2 2022-03-31 10443180 bus:OrdinaryShareClass1 2021-04-01 2022-03-31 10443180 bus:OrdinaryShareClass2 2021-04-01 2022-03-31 10443180 1 2021-04-01 2022-03-31 10443180 core:RetainedEarningsAccumulatedLosses 2021-04-01 2022-03-31 10443180 core:ShareCapital 2021-04-01 2022-03-31 10443180 core:LandBuildingsUnderOperatingLeases 2021-04-01 2022-03-31 10443180 core:UKTax 2021-04-01 2022-03-31 10443180 2021-03-31 10443180 core:RetainedEarningsAccumulatedLosses 2021-03-31 10443180 core:ShareCapital 2021-03-31 iso4217:GBP xbrli:pure xbrli:shares

Registration number: 10443180

Fortress Operations Limited

Annual Report and Financial Statements

for the Year Ended 31 March 2023

 

Fortress Operations Limited

Contents

Company Information

1

Strategic Report

2 to 6

Directors' Report

7 to 9

Statement of Directors' Responsibilities

10

Independent Auditor's Report

11 to 14

Profit and Loss Account

15

Balance Sheet

16

Statement of Changes in Equity

17

Statement of Cash Flows

18

Notes to the Financial Statements

19 to 30

 

Fortress Operations Limited

Company Information

Directors

R P Forte

S L Forte

Registered office

32 High Street
Wall Heath
Kingswinford
West Midlands
DY6 0HB

Solicitors

Talbots Law Ltd
Morgan House
25-27 Hagley Road
Stourbridge
West Midlands
DY8 1QH

Accountants

Munslows Accountants Ltd
32 High Street
Wall Heath
Kingswinford
West Midlands
DY6 0HB

Auditors

Manex Accountants Ltd
9 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RD

 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2023

The directors present their strategic report for the year ended 31 March 2023.

Principal activity

The principal activity of the company is a franchise operator of a group of McDonald's restaurants.

Fair review of the business

The results for the year and the financial position at the end of the year are shown in the annexed financial statements.

As an operator of a group of McDonald's restaurants the directors consider the company's key performance indicators to be turnover and gross profit. Turnover for the year increased by 4.3%, however, due to increases in both food and labour costs, gross profit for the year fell by 12.5% compared to the previous year. In common with many other similar businesses and industries, the war in Ukraine has had a significant impact on raw product costs and fuel and utility costs, along with other overheads, resulting in a loss before tax for the period of £2,871,855, compared to a profit of £8,202,128 in the previous year.

Sales through digital channels, including McDelivery, mobile apps and self-order kiosks have continued to increase during the year. However, food cost inflation during the year has been at a record high and in addition energy costs have continued to rise, which has affected the financial performance of the company.

The directors believe that the trading environment in which the company operates will continue to be challenging but remain optimistic regarding future trading and are committed to increasing both future turnover and profitability and to continuing the company’s reinvestment program. The company has continued to invest in the business and in the development and training of its employees, as well as continued investment in IT and store equipment.

 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2023

Principal risks and uncertainties

The company operates in a highly competitive market with high levels of price sensitivity. Consumer behaviour can impact the company's turnover and profitability. The company continually assesses these risks and mitigates them by adopting a policy of constantly reviewing its pricing strategy with ongoing market research.

The company remains exposed to periods of food cost inflation together with the variability of commodity prices, both of which impact on profitability and which have been significantly affected by the war in Ukraine. The company continually assesses any risks identified, with the aim of mitigating the threats these may have on the company's operations and profitability. The company's supply chain is closely overseen and supported by McDonald's, who endeavour to negotiate effectively on behalf of all franchisees to ensure better purchasing terms. This helps as much as possible to protect the company from risks associated with fluctuating food costs.

The company is also inherently exposed to pressures within the labour market and to wage cost inflation. The company mitigates this risk by a policy of adopting remuneration and benefits packages designed to be competitive within the market as well as ensuring full compliance with labour market regulations, with employment policies to allow fulfilling career opportunities for all employees.

The company’s operations demand a high level of compliance within a wide range of regulatory requirements, in particular –
- health and safety
- hygiene procedures
- employment laws
- licensing

The above, in common with various other areas, are monitored in detail by McDonald’s with assistance being given to all franchisees to help meet the various requirements.

By its very nature, the quick service restaurant market is extremely competitive, with large numbers of companies operating in the sector. In order to remain at the forefront of the industry, McDonald’s have developed dedicated teams whose focus is to ensure that they remain the leading brand in the market.



 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2023

Section 172(1) statement

The success of the Company is the driving factor behind all decisions made by the Director. Decision making processes are structured to enable the Director to evaluate the merit of proposed business activities and the likely consequences of decisions taken over the short, medium and long term. The director remains mindful that any strategic decisions taken can have long term implications for the business and its stakeholders, and these implications are carefully assessed. An example of this is in decisions taken relating to capital investment in terms of possible new store acquisitions and equipment upgrades.

Our people are key to our success. That is why we endeavour to create jobs and opportunities for all our people, regardless of gender, age, or life stage that enhance their work experience. Understanding how our people feel about McDonald’s is vital. The director takes active steps to ensure that the suggestions, views and interests of the workforce are incorporated and considered as part of any decision-making process, helping to ensure that our employees are given the right support to help achieve their potential. We have developed various employee communication channels such as OurLounge, MyStuff and the McDonald’s UK Intranet, which provide weekly operations updates, employee assistance programs and a means for employees to share ideas and feedback. We also conduct regular surveys into our employee’s job satisfaction and how they feel about their role in the company. We encourage and provide access to online learning and development, as well as providing our people with a mobile friendly platform to manage their own data, holidays, time off and access to view their wage slips.

Our customers are the reason for our existence and we therefore strive to provide high quality food with superior service in a clean and welcoming environment, all at an exceptional value. Long-term commitment to supply McDonald’s UK, has enabled our suppliers to grow with us and drive positive change within their own businesses.

The director carefully considers the impact of the business on communities and the environments in which the company operates. We arrange regular litter collections in the local area around our restaurants. Recycling units are installed around our restaurants and our paper cups are sent to specialist recycling centres in the UK. We endeavour to help our customers build communities, support charitable organisations, and use our size, scope and resources to help make local communities and the environment a better place.

In all our activities the director requires that employees and suppliers conduct business with the highest ethical and professional standards by adhering to our Standards of Business Conduct set by McDonald’s Corporation.

Engagement with employees

Our workforce is our most valuable asset and is one of the main reasons for the success of the company and brand. The company invests strongly in training, coaching, and skills acquisition. The personal development and improvement of our employees is a key aim of the Company’s strategy. We strive to be a responsible employer in our approach to the pay and benefits of employees and the health, safety and wellbeing of our employees is one of the primary considerations in the way we do business.

Engagement with suppliers, customers and other relationships

As a company we endeavour to build long-term commitments with our suppliers which has enabled them to grow with us and drive positive change within their own businesses. The company recognises that relationships with suppliers are important to its long-term success and is briefed on supplier feedback and issues on a regular basis.

We also endeavour to forge positive relationships with our customers by providing high quality food and an excellent service in a clean and welcoming environment at a competitive price.

 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2023

Non-financial and sustainability information

Environmental report

We have considered the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) when preparing this report. These recommendations encourage businesses to increase disclosure of climate-related information, with an emphasis on financial disclosure. Fortress Operations Limited supports these recommendations and are committed to disclosing the relevant information which can be found below.

Streamlined Energy and Carbon Reporting

In line with the government's streamlined energy and carbon reporting requirements we are required to report our organisation's carbon emissions for the financial year. As data is not available for the year ended 31st March 2023, we have reported instead for the period 1st January 2022 to 31st December 2022.

We have reported our emissions using the financial control boundary. Our methodology aligns with Defra's Environmental reporting guidelines (2019) and uses the governments greenhouse gas (GHG) reporting conversion factors (2022) to quantify emissions.

In conjunction with McDonald's, the company continually assess climate related risks and endeavour to seek ways to address these risks.

Strategy

McDonalds follow the reporting approach set out in the UK Government’s Environmental Reporting Guidance (2019 version) to ensure that reporting standards are robust and transparent.

For most of its major emissions sources primary data from AMR (Annual Meter Readings) meter readings, utility bills and expensed claims. Emissions data is collated centrally by Mitie Energy’s Sustainability team who have overall responsibility for ensuring the calculations and methodology are correct.

.

.

Risk management

Emissions are reported against accounting year covering the period 1st January to 31st December 2022.

.

.

Metrics and targets

Government’s Greenhouse gas reporting conversion factors for 2020 (for baseline year’s energy use), 2021 (for 2021-year’s energy use) and 2022 (for 2022-year's energy use).

McDonalds uses annual turnover (tCO2e/£) to normalise and compare its emissions over time. McDonalds also uses an average cheque per site for an intensity metric figure.

 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2023

Emissions and energy consumption

Summary of greenhouse gas emissions and energy consumption for the year ended 31 March 2023:

Emissions source

Unit

Year to
December 2022

Year to
December 2021

Baseline year to
December 2020

Direct Emissions from activities for which the company is responsible

tCO2e

80

42

82

Indirect Emissions from purchased electricity

tCO2e

3082

3123

2605

Fuel Consumed by personal vehicles used for business activities

tCO2e

35

32

29

Total emissions

tCO2e

3197

3197

2687

Annual Turnover £M

£m

127

118

81

Emissions per unit of turnover (tCO2e/£)

tCO2e/£m

25

27

33

Energy consumption -

Total energy consumed

kWh

16,494,759

15,046,157

11,730,262

         

Approved and authorised by the Board on 12 March 2024 and signed on its behalf by:
 

.........................................
R P Forte
Director

 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors of the company

The directors who held office during the year were as follows:

R P Forte

S L Forte

Financial instruments

Objectives and policies

The company’s principle financial instruments comprise bank balances, trade creditors and bank loans. The main purpose of these instruments is to finance the company’s operations and to ensure the smooth running of the company’s operations.

Due to the nature of the financial instruments used by the company there is no exposure to price risk.

In respect of bank balances, the liquidity risk is managed by maintaining a balance to ensure the continuity of trading, through the use of detailed cash flow analysis, forecasts and projections which are regularly updated. In addition, the company has access to overdraft facilities from its bankers which are repayable on demand, should the business require them.

In respect of bank loans, these are provided by financial institutions. The interest rate on these loans is variable, although usually the monthly repayments are fixed. The company manages the liquidity risk by ensuring that there are sufficient funds to meet the payments through the constant review and updating of cashflow forecasts. The interest rate is managed through regular reviews of current and expected future interest rates.

Trade creditor liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Price risk, credit risk, liquidity risk and cash flow risk

The main risks arising from the company’s financial instruments are interest risk and liquidity risk. The board reviews and agrees policies for managing each of these risks as summarised below –

Interest rate risk – the company’s exposure to market risk for changes in interest rates is limited to bank loans. Additional requirements for medium to long term debt are reviewed by the directors based on the company’s forecast requirements

Liquidity risk – the company’s objective is to maintain a balance between continuity of funding and flexibility, by the utilisation of cash and bank loans.


 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2023

Employment of disabled persons

The company operates an equal opportunities policy in all areas of recruitment and seeks to offer suitable work and training wherever practicable to persons with disabilities. The policy of the company is to ensure that disabled applicants are given full and fair consideration having regards to their particular aptitudes and abilities. Existing disabled employees are given equal access to appropriate training, career development and promotion opportunities within the company. In the event of employees becoming disabled while in the employment of the company, all reasonable means are explored to achieve retention in employment in the same or an alternative capacity.

Employee involvement

The company aims to promote a working environment free from harassment, victimisation, bullying and discrimination. The company regards all employees as members of a team, where opinions are valued, and everyone is regarded as equal in status and treated with fairness and respect.

The company's recruitment procedures are intended to ensure that employees are selected, promoted, and treated according to their ability and that everyone has an equal opportunity to receive training and development.

The company communicates regularly with all employees on matters relating to its performance, with employees encouraged to contribute to the decision-making process through regular staff meetings and quarterly surveys. In addition, there is a bulletin board in each restaurant where memoranda relating to company policy are displayed. There is also an online portal known as MyStuff, which contains news and information for McDonald's employees.

Future developments

Trading conditions are expected to remain competitive. The company does however anticipate continued expansion and increased revenues, both through increased turnover and profitability and by the acquisition of further restaurants.


The directors are constantly assessing potential risks to the business and the impact these may have on going concern. Although it is not possible to estimate with any certainty the overall impact these risks may have on the business, the directors are confident that the company is in a strong position to overcome any unforeseen issues that may arise.


The company is committed to continuing to invest in its restaurants to upgrade both their appearance and the equipment used within them, in order to improve both the customers and employees experience.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2023

Reappointment of auditors

The auditors Manex Accountants Ltd are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 12 March 2024 and signed on its behalf by:
 

.........................................
R P Forte
Director

 

Fortress Operations Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 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 and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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 enable them to ensure that the financial statements comply with the Companies Act 2006 and in accordance with FRS 102. 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.

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

Opinion

We have audited the financial statements of Fortress Operations Limited (the 'company') for the year ended 31 March 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:

give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its loss for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor 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 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 director's 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 original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 10], 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

We obtained an understanding of the legal and regulatory frameworks applicable to the company and the industry in which it operates. We determined that the following laws and regulations were most significant: The Companies Act 2006/FRS 102, Employment Law and Waste, Health and Safety. We enquired of management and those responsible for legal and compliance procedures to obtain an understanding of how the company is complying with those legal and regulatory frameworks and whether they had any knowledge of actual or suspected fraud. We corroborated the results of our enquiries through our discussions with the directors and management. We did not identify any matters relating to non-compliance with laws and regulations or matters in relation to fraud.

In assessing the potential risks of material misstatements, we obtained an understanding of the company’s operations, including its objectives and strategies to understand the expected financial statement disclosures and business risks that may result in risks of material misstatement;

In assessing the appropriateness of the collective competence and capabilities of the engagement team the engagement partner considered the engagement team’s :
 Understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation,
 The specialist skills required and
 Knowledge of the industry in which the client operates.

We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
 Assessing the design effectiveness of controls management has in place to prevent and detect fraud;
 Challenging assumptions and judgements made by management in its significant accounting estimates;
 Identifying and testing journal entries, in particular manual journal entries made at year end for financial statement preparation; and
 Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item.

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

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.

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

......................................
Clinton Meehan BSc FCA (Senior Statutory Auditor)
For and on behalf of Manex Accountants Ltd, Statutory Auditor

9 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RD

12 March 2024

 

Fortress Operations Limited

Profit and Loss Account for the Year Ended 31 March 2023

Note

2023
£

2022
£

Turnover

3

130,145,204

124,781,562

Cost of sales

 

(79,008,165)

(65,666,379)

Gross profit

 

51,137,039

59,115,183

Administrative expenses

 

(53,346,131)

(50,571,069)

Other operating income

4

9,312

65,758

Operating (loss)/profit

6

(2,199,780)

8,609,872

Interest payable and similar expenses

8

(469,757)

(407,744)

(Loss)/profit before tax

 

(2,669,537)

8,202,128

Tax on (loss)/profit

12

452,781

(1,889,747)

(Loss)/profit for the financial year

 

(2,216,756)

6,312,381

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

Fortress Operations Limited

(Registration number: 10443180)
Balance Sheet as at 31 March 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

13

15,283,335

16,181,676

Tangible assets

14

8,918,454

10,369,381

Other financial assets

15

37,500

37,500

 

24,239,289

26,588,557

Current assets

 

Stocks

16

663,683

536,125

Debtors

17

970,014

915,132

Cash at bank and in hand

18

4,774,720

8,123,317

 

6,408,417

9,574,574

Creditors: Amounts falling due within one year

19

(11,148,952)

(11,909,715)

Net current liabilities

 

(4,740,535)

(2,335,141)

Total assets less current liabilities

 

19,498,754

24,253,416

Creditors: Amounts falling due after more than one year

19

(12,483,876)

(14,116,507)

Provisions for liabilities

20

(714,491)

(1,167,272)

Net assets

 

6,300,387

8,969,637

Capital and reserves

 

Called up share capital

22

932

932

Retained earnings

6,299,455

8,968,705

Shareholders' funds

 

6,300,387

8,969,637

Approved and authorised by the Board on 12 March 2024 and signed on its behalf by:
 

.........................................
R P Forte
Director

 

Fortress Operations Limited

Statement of Changes in Equity for the Year Ended 31 March 2023

Share capital
£

Retained earnings
£

Total
£

At 1 April 2022

932

8,968,705

8,969,637

Loss for the year

-

(2,216,756)

(2,216,756)

Dividends

-

(452,494)

(452,494)

At 31 March 2023

932

6,299,455

6,300,387

Share capital
£

Retained earnings
£

Total
£

At 1 April 2021

932

3,098,810

3,099,742

Profit for the year

-

6,312,381

6,312,381

Dividends

-

(442,486)

(442,486)

At 31 March 2022

932

8,968,705

8,969,637

 

Fortress Operations Limited

Statement of Cash Flows for the Year Ended 31 March 2023

Note

2023
£

2022
£

Cash flows from operating activities

(Loss)/profit for the year

 

(2,216,756)

6,312,381

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

3,538,630

3,106,638

Loss on disposal of tangible assets

5

8,661

-

Finance costs

8

469,757

407,744

Income tax expense

12

(452,781)

1,889,747

 

1,347,511

11,716,510

Working capital adjustments

 

Increase in stocks

16

(127,558)

(155,487)

Decrease/(increase) in trade debtors

17

57,618

(77,011)

Increase/(decrease) in trade creditors

19

1,951,438

(1,736,010)

Cash generated from operations

 

3,229,009

9,748,002

Income taxes paid

12

(920,599)

(1,147,787)

Net cash flow from operating activities

 

2,308,410

8,600,215

Cash flows from investing activities

 

Acquisitions of tangible assets

(1,142,241)

(2,974,829)

Acquisition of intangible assets

13

(55,782)

(2,223,486)

Net cash flows from investing activities

 

(1,198,023)

(5,198,315)

Cash flows from financing activities

 

Interest paid

8

(469,757)

(407,744)

Proceeds from bank borrowing draw downs

 

(3,536,733)

(3,541,571)

Dividends paid

25

(452,494)

(442,486)

Net cash flows from financing activities

 

(4,458,984)

(4,391,801)

Net decrease in cash and cash equivalents

 

(3,348,597)

(989,901)

Cash and cash equivalents at 1 April

 

8,123,317

9,113,218

Cash and cash equivalents at 31 March

18

4,774,720

8,123,317

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

1

General information

The company is a private company limited by share capital, incorporated in England.

The address of its registered office is:
32 High Street
Wall Heath
Kingswinford
West Midlands
DY6 0HB

These financial statements were authorised for issue by the Board on 12 March 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Judgements

In the application of the company's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 of the revision and future periods if the revision affects both current and future periods.

The following are the critical judgements and key sources of estimation uncertainty that the directors have made in the process of applying the company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Income taxes

The company is subject to the corporation tax laws of the United Kingdom. These laws are complex and subject to different interpretations by taxpayers and tax authorities. When establishing corporation tax provisions, the directors make a number of judgments and interpretations about the application and interaction of these laws. Changes in these tax laws or in their interpretation could affect the company's effective tax rate and the results of operations in a given period

Revenue recognition

The whole of the turnover is attributable to the principle activity of the company wholly undertaken in the United Kingdom.

Government grants

Government grants are recognised in the financial statements when there is reasonable assurance that the company has complied with all applicable conditions and that the grants will be received. Under FRS 102 the company accounts for government grants using the accrual model. Under the accrual model government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grants are intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred, or for the purpose of giving immediate financial support to the entity with no future related costs, are recognised in income in the period in which it becomes receivable.

Tax

The tax expense for the period comprises deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant and equipment

between 3 and 7 years straight line

Computer equipment

between 3 and 4 years straight line

Franchise rights

Franchise rights are amortised over there useful life,which shall not exceed twenty years if a reliable estimate of the useful life cannot be made.

Intangible assets

Franchise rights arising on the acquisition of an entity represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Franchise rights are initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Franchise rights are held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.
Licences have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Franchise rights

20 years straight line

Licence fees

Straight line over the remaining life of the licence

Stamp duty

Straight line over the shorter of the remaining life of asset or 20 years

Investments

Investments in unlisted company shares, whose market value can be readily determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historical cost less impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

130,145,204

124,781,562

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
£

2022
£

Government grants

-

56,004

Miscellaneous other operating income

9,312

9,754

9,312

65,758

5

Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

2023
£

2022
£

Loss on disposal of tangible assets

(8,661)

-

6

Operating (loss)/profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

2,584,507

2,235,382

Amortisation expense

954,123

871,256

Operating lease expense - property

15,118,122

16,906,889

Loss on disposal of property, plant and equipment

8,661

-

Auditors remuneration

7,500

7,500

Government grants receivable

-

(56,004)

7

Government grants

Grants recognised in the financial statements relate to government grants in respect of the Coronavirus Job Retention Scheme and local council grants.

The amount of grants recognised in the financial statements was £Nil (2022 - £56,004).

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

8

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

465,668

407,744

Interest expense on other finance liabilities

4,089

-

469,757

407,744

9

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

35,989,905

31,430,351

Social security costs

1,903,114

1,684,168

Pension costs, defined contribution scheme

406,302

383,427

Other employee expense

174,205

206,195

38,473,526

33,704,141

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

3,056

2,946

Administration and support

100

103

3,156

3,049

10

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

19,992

19,992

11

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

7,500

7,500


 

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

12

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

-

1,308,099

Deferred taxation

Arising from origination and reversal of timing differences

(452,781)

581,648

Tax (receipt)/expense in the income statement

(452,781)

1,889,747

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 19% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

(Loss)/profit before tax

(2,669,537)

8,202,128

Corporation tax at standard rate

(507,212)

1,558,404

Effect of expense not deductible in determining taxable profit (tax loss)

188,202

169,175

Effect of tax losses

262,265

-

UK deferred tax credit relating to changes in tax rates or laws

(108,667)

-

Tax (decrease)/increase from effect of capital allowances and depreciation

(287,369)

162,168

Total tax (credit)/charge

(452,781)

1,889,747

Deferred tax

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Accelerated capital allowances

-

1,083,085

Tax losses carried forward

368,593

-

368,593

1,083,085

2022

Asset
£

Liability
£

Accelerated capital allowances

-

1,167,272

-

1,167,272

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

The corporation tax rate will increase from 19% to 25% from 1 April 2023 on profits in excess of £250,000. A small profits rate of 19% will apply to profits of £50,000 or less. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by marginal relief providing a gradual increase in the effective corporation tax rate.
The finance bill was introduced in March 2021 and substantively enacted in July 2021, subsequent to the receipt of royal ascent. As such, the deferred tax rate has been calculated at a rate of 25%, being the enacted rate at the balance sheet date.

13

Intangible assets

Franchise rights
£

Licence fee
 £

Stamp duty
 £

Total
£

Cost or valuation

At 1 April 2022

17,846,865

270,000

101,609

18,218,474

Additions acquired separately

-

30,000

25,782

55,782

At 31 March 2023

17,846,865

300,000

127,391

18,274,256

Amortisation

At 1 April 2022

1,961,324

44,396

31,078

2,036,798

Amortisation charge

918,306

14,875

20,942

954,123

At 31 March 2023

2,879,630

59,271

52,020

2,990,921

Carrying amount

At 31 March 2023

14,967,235

240,729

75,371

15,283,335

At 31 March 2022

15,885,541

225,604

70,531

16,181,676

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

14

Tangible assets

Plant and equipment
£

Computer equipment
£

Motor vehicles
 £

Total
£

Cost or valuation

At 1 April 2022

13,905,132

2,036,218

101,354

16,042,704

Additions

856,821

285,420

-

1,142,241

Disposals

(12,993)

-

-

(12,993)

At 31 March 2023

14,748,960

2,321,638

101,354

17,171,952

Depreciation

At 1 April 2022

5,113,544

531,759

28,020

5,673,323

Charge for the year

2,039,982

521,142

23,383

2,584,507

Eliminated on disposal

(4,332)

-

-

(4,332)

At 31 March 2023

7,149,194

1,052,901

51,403

8,253,498

Carrying amount

At 31 March 2023

7,599,766

1,268,737

49,951

8,918,454

At 31 March 2022

8,791,588

1,504,459

73,334

10,369,381

15

Other financial assets (current and non-current)

2023
£

2022
£

Non-current financial assets

Financial assets at cost less impairment

37,500

37,500

16

Stocks

2023
£

2022
£

Closing stocks of food, paper and non-products

663,683

536,125

17

Debtors

Current

Note

2023
£

2022
£

Trade debtors

 

447,195

541,151

Other debtors

 

1,333

-

Prepayments

 

408,986

373,981

Income tax asset

12

112,500

-

   

970,014

915,132

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

18

Cash and cash equivalents

2023
£

2022
£

Cash on hand

87,280

87,490

Cash at bank

4,687,440

8,035,827

4,774,720

8,123,317

19

Creditors

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

23

1,619,156

3,523,258

Trade creditors

 

3,842,980

4,437,320

Amounts due to related parties

496,568

496,568

Social security and other taxes

 

3,425,548

1,575,029

Outstanding defined contribution pension costs

 

54,444

27,187

Other payables

 

19,892

19,022

Accruals

 

1,690,364

1,023,232

Income tax liability

12

-

808,099

 

11,148,952

11,909,715

Due after one year

 

Loans and borrowings

23

12,483,876

14,116,507

20

Provisions for liabilities

Deferred tax
£

Total
£

At 1 April 2022

1,167,272

1,167,272

Increase (decrease) in existing provisions

(452,781)

(452,781)

At 31 March 2023

714,491

714,491

21

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £406,302 (2022 - £383,427).

Contributions totalling £54,444 (2022 - £27,187) were payable to the scheme at the end of the year and are included in creditors.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

22

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary A shares of £1 each

682

682

682

682

Ordinary B shares of £1 each

250

250

250

250

 

932

932

932

932

Redeemable preference shares

The Cumulative preference shares are redeemable at the option of the holder between 13 November 2024 and 7 November 2029. They are redeemable at £29,412 per share and carry rights to vote only on resolutions for the winding up of the company, to reduce the share capital of the company, to approve the terms of a buy-back agreement by the company or on resolutions that affect the rights attaching to the Preference shares. The shares are redeemable at the holders option and are therefore classed as a financial liability in accordance with FRS 102. On a winding up of the company the holders of the shares have a right to receive notices of the winding up resolution and to vote on that resolution. Winding up value for redeemable preference shares is £2,000,000.

23

Loans and borrowings

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

10,483,876

12,116,507

Redeemable preference shares

2,000,000

2,000,000

12,483,876

14,116,507

2023
£

2022
£

Current loans and borrowings

Bank borrowings

1,619,156

3,523,258

Bank borrowings

Flexible business loans are denominated in sterling with a nominal interest rate of 2.5%, and the final instalment is due on 30 September 2025. The carrying amount at year end is £Nil (2022 - £1,491,551).

The HSBC libor bank term loan is denominated in sterling with a nominal interest rate of 6.33%, and the final instalment is due on 6 April 2023. The carrying amount at year end is £11,169,643 (2022 - £14,148,214).

The loan accrues interest at a variable rate equivalent to SONIA plus 2.25%. The security pledged in respect of this borrowing consists entirely of a Letter of Comfort from McDonald's UK confirming acknowledgement and approval of the facility and the terms attached.
Repayments of principle together with interest are payable quarterly.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2023

24

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

4,701,948

4,959,972

Later than one year and not later than five years

18,807,792

19,839,888

Later than five years

53,368,297

61,327,709

76,878,037

86,127,569

The amount of non-cancellable operating lease payments recognised as an expense during the year was £15,118,122 (2022 - £16,906,889).

25

Dividends

Interim dividends paid

   

2023
£

 

2022
£

Interim dividend of £297.00 (2022 - £282.00) per each Ordinary A shares

 

202,494

 

192,486

Interim dividend of £1,000.00 per each Ordinary B shares

 

250,000

 

250,000

   

452,494

 

442,486

26

Analysis of changes in net debt

At 1 April 2022
£

Financing cash flows
£

At 31 March 2023
£

Cash and cash equivalents

Cash

8,123,317

(3,348,597)

4,774,720

Borrowings

Long term borrowings

(14,116,507)

1,632,631

(12,483,876)

Short term borrowings

(3,523,258)

1,904,102

(1,619,156)

Directors loan

(496,568)

-

(496,568)

(18,136,333)

3,536,733

(14,599,600)

 

(10,013,016)

188,136

(9,824,880)

27

Controlling party

The ultimate controlling party is R P Forte, being the director and majority shareholder.