Company Registration No. SC598864 (Scotland)
STRATHMORE LEISURE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
STRATHMORE LEISURE LIMITED
COMPANY INFORMATION
Director
C L Rickard
Company number
SC598864
Registered office
116 Strathmore House
East Kilbride
Scotland
G74 1LF
Auditor
Johnston Carmichael LLP
227 West George Street
Glasgow
G2 2ND
STRATHMORE LEISURE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 5
Director's responsibilities statement
6
Independent auditor's report
7 - 10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 34
STRATHMORE LEISURE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The director presents the strategic report for the year ended 31 December 2022.

Business review

2022 saw a continuation of increasing costs due to the War in Ukraine pushing energy costs upwards. Continued supply chain issues also saw significant inflationary pressures and by extension interest rate increases. However due to Strathmore Hotels historic strategy of only operating units within key tourist and conference locations the group was, and is, always placed well to recover swiftly from any forced restriction on trade. In turn, the group has always maintained prudence and risk aversion in terms of borrowing so low Loan to Value ("LTV") have always been maintained. This, coupled with shift away in 2014 in relying on fossil fuels as it’s primary energy source, means that, although the group has experienced significant increases in costs – the group is as well placed as any other to cope, and absorb, such increasing cost pressures.

Principal risks and uncertainties

Operating Climate

The director regards the group as having a strong and stable customer base. The majority of the customers are UK and European based. Guest demographic and strong location of the hotels maintains a demand that the directors believe assures the group’s core business. The principle risk in the medium term is the continuing economic climate.

 

Interest Rate risk

The group finances it operations through a mixture of retained profits and bank borrowings. It is the group’s policy to undertake borrowings on the basis of variable interest rate facilities. The performance of the group during the pandemic and its consequential lack of requirement of extra borrowing, government assistance (i.e CBILS loan etc) , coupled with its long term strategy of minimising (LTV), means the directors are confident that the overall resources of the group are sufficient to enable it absorb any potential adverse change in interest rate.

 

Energy Costs

The war in Ukraine, coupled with a sharp increase of post pandemic demand for Oil and Gas has resulted in record high prices of fossil fuel. In 2014 the directors decided to convert the hotels primary energy source from Gas to sustainable Biomass. This conversion has been extremely successful and has been operating well for several years. As a result, the directors are confident that the group is well placed to avoid extreme energy costs due to its lack of reliance on Gas. 2023 saw the completion of installation and certification of a new Biomass system at the Ben Wyvis Hotel in Strathpeffer, replacing the aging Oil Heating system that was in situ. This new system, in addition to being sustainable, will see a significant decrease in energy costs at the site.

Key performance indicators

An analysis of the group's key performance indicators are as follows:

 

 

2022

2021

 

£m

£m

Turnover

17.6

13.2

Gross profit

7.1

5.3

Operating profit

2.3

2.9

Profit before tax

1.8

2.5

Interest cover

4.5

7.3

Net assets

9.9

8.1

Bed Occupancy

62%

35%

Future developments

The director will continue with current management policies which have resulted in the group’s growth in current years.

STRATHMORE LEISURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Section 172 statement

 

The likely consequences of any decision in the long term

The director is fully committed to the long-term sustainability of the group. This is evidenced by recent hotel additions and the continuing refurbishment of the hotel portfolio. All strategic decisions are made with a long term focus in mind.

 

The interests of the group’s employees

The director recognises the role the employees play in delivering customer service to guests through not only customer-facing roles, but also in back-office administration and maintenance of the buildings and grounds.

 

The group are active in training and motivating our workforce to retain our employees and provide the level of service that we pride ourselves in.

 

The impact of the group’s operations on the community and the environment

The group are committed to supporting the communities in which they are based in and being environmentally responsible.

 

The importance of the group’s business relationships with suppliers, customers and others

The group aim to give a high level of service to our customers. Guest feedback is sought by way of satisfaction questionnaires and KPIs.

 

There are a number of key suppliers that maintain engagement with the individual hotels. The group work closely with our regular suppliers and maintain regular contact by phone and email.

The desirability of the group maintaining a reputation for high standards of business conduct

The director is determined to ensure that the business operates to the highest standards possible. The director reviews performance regularly to ensure that the business is able to meet these standards.

 

The need to act fairly between members of the group

The director and members work closely together to ensure that all relevant parties are consulted when determining a course of action for the business.

C L Rickard
Director
29 March 2024
STRATHMORE LEISURE LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The director presents his annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company is that of a holding company. The group's principal activity is that of owning and operating hotels.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The director does not recommend payment of a further dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

C L Rickard
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its director during the year. These provisions remain in force at the reporting date.

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.

Matters addressed in the Strategic report

The group has chosen in accordance with the Companies Act 2006, s. 414C(11) to set out in the group's Strategic Report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch 7 to be contained in the Directors' Report. It has done so in respect of future developments and financial risk management objectives and policies (as applicable).

Auditor

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

STRATHMORE LEISURE LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Energy and carbon report

The director recognises that the group has a responsibility to the environment and endeavours to be as environmentally friendly as possible in carrying out the group's business activities.

Scope 1 emissions are direct emissions from sources that are owned or controlled by the group (e.g. hotels). Scope 2 emissions are indirect emissions from sources that are not owned or controlled by the group (e.g. purchased electricity).

The environmental impact of our operations

We have taken steps to mitigate the impact of our operations on climate change where possible.

Energy Use and Greenhouse Gas Emission

Category

Results

Results

 

2022

2021

Purchased electricity consumption (kWh)

2,544,227

1,892,182

Gas consumption (kWh)

2,234,684

670,777

Biomass (kWh)

4,786,855

4,720,106

Oil (kWh)

409,299

324,809

Total Energy Consumption used to calculate emissions (kWh)

9,975,065

7,607,874

 

 

 

Emissions from combustion of gas (Scope 1) (tCO2kg)

430

123

Emissions from purchased electricity (Scope 2) (tCO2kg)

541

402

Emissions from Biomass (Scope 1) (tCO2kg)

72

71

Emissions from Oil (Scope 1)(tCO2kg)

110

87

Total Gross CO2kg based on above (tCO2kg)

1,153

683

 

 

 

Methodology

Our Scope 1 and Scope 2 energy use and greenhouse gas emissions data for 2022 has been produced by the director from information maintained by the group.

To calculate the footprint, data was collated from across the group and from our suppliers to identify the amount of energy used in our operations. The group uses the most robust and accurate data source available for each component of its energy use and carbon emission calculations. Assumptions and estimations are only used when strictly necessary by means of the most robust data and assumptions available.

Full data from both suppliers for energy, gas and gas oil supplies.

Our market-based data conversion factors are taken directly from each supplier’s Annual fuel mix disclosure statement as illustrated below.

Other conversion factors are taken from the UK Government’s conversion factors 2021.

Greenhouse gas (GHG) emissions are calculated in line with GHG Reporting Protocol – Corporate standard and reported in line with the UK Government’s Guidance on Streamlined Energy and Carbon Reporting and mandatory GHG reporting guidance.

STRATHMORE LEISURE LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
Statement of disclosure to auditor

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

C L Rickard
Director
29 March 2024
STRATHMORE LEISURE LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

STRATHMORE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STRATHMORE LEISURE LIMITED
- 7 -
Opinion

We have audited the financial statements of Strathmore Leisure Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise 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 responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 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 director 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 director is 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:

 

STRATHMORE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE LEISURE LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of our 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 and the director's 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 director

As explained more fully in the director's responsibilities statement set out on page 6, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

 

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

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 assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

STRATHMORE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE LEISURE LIMITED
- 9 -
Extent to which the audit is considered capable of detecting irregularities, including fraud (continued)

We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

 

We gained an understanding of how the group and the parent company are complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections, and relevant correspondence with regulatory bodies.

We assessed the susceptibility of the group’s and parent company’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

 

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

 

 

STRATHMORE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE LEISURE LIMITED
- 10 -

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.

Ryan Crilley (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
29 March 2024
Chartered Accountants
Statutory Auditor
227 West George Street
Glasgow
G2 2ND
STRATHMORE LEISURE LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
2022
2021
Notes
£
£
Turnover
3
17,613,576
13,223,007
Cost of sales
(10,471,883)
(7,933,385)
Gross profit
7,141,693
5,289,622
Administrative expenses
(4,847,557)
(3,207,210)
Other operating income
-
783,686
Operating profit
4
2,294,136
2,866,098
Interest payable and similar expenses
8
(504,580)
(391,053)
Profit before taxation
1,789,556
2,475,045
Tax on profit
9
18,979
(1,297,963)
Profit for the financial year
22
1,808,535
1,177,082
Profit for the financial year is attributable to:
- Owners of the parent company
1,716,122
1,165,124
- Non-controlling interests
92,413
11,958
1,808,535
1,177,082
Total comprehensive income for the year is attributable to:
- Owners of the parent company
1,716,122
1,165,124
- Non-controlling interests
92,413
11,958
1,808,535
1,177,082
STRATHMORE LEISURE LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 12 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
10
(1,129,392)
(2,258,782)
Tangible assets
11
31,870,783
32,223,566
30,741,391
29,964,784
Current assets
Stocks
14
676,622
599,241
Debtors
15
3,553,083
2,439,323
Cash at bank and in hand
19,649
61,174
4,249,354
3,099,738
Creditors: amounts falling due within one year
16
(5,369,975)
(15,857,469)
Net current liabilities
(1,120,621)
(12,757,731)
Total assets less current liabilities
29,620,770
17,207,053
Creditors: amounts falling due after more than one year
17
(15,515,010)
(4,745,973)
Provisions for liabilities
Deferred tax liability
19
4,225,507
4,389,362
(4,225,507)
(4,389,362)
Net assets
9,880,253
8,071,718
Capital and reserves
Called up share capital
21
2,383,139
2,383,139
Capital redemption reserve
22
600,000
380,000
Profit and loss reserves
22
4,404,259
2,908,137
Equity attributable to owners of the parent company
7,387,398
5,671,276
Non-controlling interests
2,492,855
2,400,442
9,880,253
8,071,718
The financial statements were approved and signed by the director and authorised for issue on 29 March 2024
29 March 2024
C L Rickard
Director
STRATHMORE LEISURE LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 13 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
12
10,741,916
10,741,916
Current assets
-
-
Creditors: amounts falling due within one year
16
(2,027,308)
(3,087,394)
Net current liabilities
(2,027,308)
(3,087,394)
Total assets less current liabilities
8,714,608
7,654,522
Creditors: amounts falling due after more than one year
17
(5,462,155)
(4,312,473)
Net assets
3,252,453
3,342,049
Capital and reserves
Called up share capital
21
2,383,139
2,383,139
Capital redemption reserve
22
600,000
380,000
Profit and loss reserves
22
269,314
578,910
Total equity
3,252,453
3,342,049

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £89,596 (2021 - £42,595 loss).

The financial statements were approved and signed by the director and authorised for issue on 29 March 2024
29 March 2024
C L Rickard
Director
Company Registration No. SC598864
STRATHMORE LEISURE LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2021
2,383,139
300,000
1,823,013
4,506,152
2,388,484
6,894,636
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
1,165,124
1,165,124
11,958
1,177,082
Redemption of shares
-
80,000
(80,000)
-
0
-
-
Balance at 31 December 2021
2,383,139
380,000
2,908,137
5,671,276
2,400,442
8,071,718
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
1,716,122
1,716,122
92,413
1,808,535
Redemption of shares
21
-
220,000
(220,000)
-
0
-
-
Balance at 31 December 2022
2,383,139
600,000
4,404,259
7,387,398
2,492,855
9,880,253
STRATHMORE LEISURE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
2,383,139
300,000
701,505
3,384,644
Year ended 31 December 2021:
Loss and total comprehensive expenditure for the year
-
-
(42,595)
(42,595)
Redemption of shares
-
80,000
(80,000)
-
Balance at 31 December 2021
2,383,139
380,000
578,910
3,342,049
Year ended 31 December 2022:
Loss and total comprehensive expenditure for the year
-
-
(89,596)
(89,596)
Redemption of shares
21
-
220,000
(220,000)
-
Balance at 31 December 2022
2,383,139
600,000
269,314
3,252,453
STRATHMORE LEISURE LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
1,545,503
2,764,097
Interest paid
(504,580)
(391,053)
Income taxes refunded
3,984
3,119
Net cash inflow from operating activities
1,044,907
2,376,163
Investing activities
Purchase of tangible fixed assets
(765,594)
(104,474)
Net cash used in investing activities
(765,594)
(104,474)
Financing activities
Repayment of preference shares
(220,000)
(80,000)
Proceeds of new bank loans
12,210,625
1,611,505
Repayment of bank loans
(13,116,748)
(1,652,993)
Net cash used in financing activities
(1,126,123)
(121,488)
Net (decrease)/increase in cash and cash equivalents
(846,810)
2,150,201
Cash and cash equivalents at beginning of year
(11,920)
(2,162,121)
Cash and cash equivalents at end of year
(858,730)
(11,920)
Relating to:
Cash at bank and in hand
19,649
61,174
Bank overdrafts included in creditors payable within one year
(878,379)
(73,094)
STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
1
Accounting policies
Company information

Strathmore Hotels Leisure Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 116 Strathmore House, East Kilbride, Scotland, G74 1LF.

 

The group consists of Strathmore Hotels Leisure Limited and all of its subsidiaries.

1.1
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, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below:

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements (where applicable):

 

1.2
Basis of consolidation

The consolidated financial statements incorporate those of Strathmore Leisure Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 31 December 2022. 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.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the Group and Parent Company have adequate funding facilities from external lenders and expect to have continued access to those facilities, allowing the Group and Parent Company to continue in operational existence and meet their financial liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements. The directors have prepared cash flow projections which allow them to form this judgement.

Based on the above factors the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable for the provision of accommodation and ancillary supplies, excluding discounts, rebates, value added tax and other sales taxes.

 

Room revenue is recognised at the point at which the rooms are occupied, whilst food and beverage sales are recognised at the point of sale.

1.5
Intangible fixed assets - goodwill

Negative goodwill represents the difference between amounts paid on the cost of a business combination and the fair value of the group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, negative goodwill is measured at cost less accumulated amortisation. Negative goodwill is amortised over 5 years, being the average period over which the group's non monetary assets are recovered.

1.6
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.

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:

Freehold property
Over 50 years
Leasehold properties
Over 20 years
Buildings enhancements
Over 5-25 years
Long term leasehold property
Over the shorter of the estimated useful life and the lease term
Fixtures and fittings
Over 4 years

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.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in the profit and loss account or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in the profit and loss account.

 

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.7
Fixed asset investments

In the parent company financial statements, investments in subsidiaries 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.

1.8
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.

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 the profit and loss account, 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 the profit and loss account, 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.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
1.11
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 certain 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.

Impairment of financial assets

Financial assets 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 the profit and loss account.

 

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 in the profit and loss account.

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.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 21 -
Basic financial liabilities

Basic financial liabilities, including certain 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.

Derecognition of financial liabilities

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

1.12
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.

1.13
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.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 22 -
1.14
Retirement benefits

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

1.15
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease asset are consumed.

1.16
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

Government grants are recognised in accordance with the accruals model. Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

 

Job retention scheme amounts are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in the profit and loss account.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is 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.

Critical judgements

The following judgements have had the most significant effect on amounts recognised in the financial statements.

Property valuations

Individual freehold and leasehold properties are carried at fair value at the balance sheet date. A full valuation is obtained on a regular basis, and in any year where it is likely that there has been a material change in value. In years where no valuation is performed an assessment of valuation is carried out by the directors in light of current market conditions.

 

The carrying value of tangible fixed assets carried at valuation is outlined at note 11.

Depreciation

The estimates and assumptions made to determine asset lives require judgements to be made as regards useful lives and residual values. The useful lives and residual values of the group's fixed assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets. Historically, changes in useful lives have not resulted in material changes to the group's depreciation charge.

 

The depreciation charge in the year is outlined at note 11.

Negative goodwill

Negative goodwill is written off over the period from which the group's non-monetary assets are recovered. As the non-monetary assets exceeded the amount of negative goodwill at the point of acquisition judgement is required in determining which of the non-monetary assets the negative goodwill should be matched against. The director has applied those assets with the shortest useful lives in arriving at an estimated average period of five years.

 

The carrying value of negative goodwill at the reporting date is outlined at note 10.

Carrying value of investments (company only)

The company holds an investment in subsidiary which is initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The directors reviews the investment on an annual basis for any indicators of impairment.

 

The carrying value of the company's investment at the reporting date is outlined at note 12.

3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Owning and operating hotels
17,613,576
13,223,007
STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Turnover and other revenue
(Continued)
- 24 -
2022
2021
£
£
Other significant revenue
Grants received
-
783,686

Grants received in the prior reporting period represent monies received from the UK Government's Coronavirus Job Retention Scheme.

4
Operating profit
2022
2021
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
-
(783,686)
Depreciation of owned tangible fixed assets
1,118,377
1,134,193
Amortisation of intangible assets
(1,129,390)
(1,129,390)
Operating lease charges
133,683
131,755
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,000
4,750
Audit of the financial statements of the company's subsidiaries
26,825
26,000
31,825
30,750
For other services
Taxation compliance services
7,500
7,500
6
Employees

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

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Hotels
366
279
-
-
Administration
11
9
1
1
Total
377
288
1
1
STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
6
Employees
(Continued)
- 25 -

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
6,562,340
5,044,480
-
0
-
0
Social security costs
451,911
347,692
-
-
Pension costs
129,689
99,350
-
0
-
0
7,143,940
5,491,522
-
0
-
0
7
Director's remuneration
2022
2021
£
£
Remuneration for qualifying services
85,000
85,000
Company pension contributions to defined contribution schemes
1,321
1,319
86,321
86,319

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 1).

8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
463,357
339,858
Other interest on financial liabilities
41,223
51,195
Total finance costs
504,580
391,053
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
164,105
351,795
Adjustments in respect of prior periods
(19,229)
(152,019)
Total current tax
144,876
199,776
STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Taxation
2022
2021
£
£
(Continued)
- 26 -
Deferred tax
Origination and reversal of timing differences
95,245
12,160
Changes in tax rates
-
0
1,086,027
Adjustment in respect of prior periods
(259,100)
-
0
Total deferred tax
(163,855)
1,098,187
Total tax (credit)/charge
(18,979)
1,297,963

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

2022
2021
£
£
Profit before taxation
1,789,556
2,475,045
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
340,016
470,259
Tax effect of expenses that are not deductible in determining taxable profit
(203,334)
(212,579)
Adjustments in respect of prior years
(19,229)
(152,019)
Other permanent differences
(82)
(19,531)
Deferred tax adjustments in respect of prior years
(259,100)
-
0
Fixed asset differences
99,549
113,646
Remeasurement of deferred tax for changes in rates
23,201
1,098,187
Taxation (credit)/charge
(18,979)
1,297,963

A change in the future UK Corporation tax rate to 25% with effect from 1 April 2023 was announced in the March 2021 budget and substantively enacted on 24 May 2021. This change will have a consequential effect on the group's future tax charge in the UK and as the 25% tax rate was substantively enacted prior to the reporting date, deferred tax expected to unwind after 1 April 2023 has been calculated at 25% as opposed to the current tax rate of 19%.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
10
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2022 and 31 December 2022
(5,684,851)
Amortisation and impairment
At 1 January 2022
(3,426,069)
Amortisation charged for the year
(1,129,390)
At 31 December 2022
(4,555,459)
Carrying amount
At 31 December 2022
(1,129,392)
At 31 December 2021
(2,258,782)
The company had no intangible fixed assets at 31 December 2022 or 31 December 2021.
11
Tangible fixed assets
Group
Freehold property
Leasehold properties
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2022
20,172,988
12,831,303
2,856,190
65,361
35,925,842
Additions
514,411
111,444
139,739
-
0
765,594
Revaluation
846,782
(846,782)
-
0
-
0
-
0
Transfers
5,954,074
(5,954,074)
-
0
-
0
-
0
At 31 December 2022
27,488,255
6,141,891
2,995,929
65,361
36,691,436
Depreciation and impairment
At 1 January 2022
1,793,542
1,000,005
843,368
65,361
3,702,276
Depreciation charged in the year
596,004
274,253
248,120
-
0
1,118,377
Transfers
467,367
(467,367)
-
0
-
0
-
0
At 31 December 2022
2,856,913
806,891
1,091,488
65,361
4,820,653
Carrying amount
At 31 December 2022
24,631,342
5,335,000
1,904,441
-
0
31,870,783
At 31 December 2021
18,379,446
11,831,298
2,012,822
-
0
32,223,566
The company had no tangible fixed assets at 31 December 2022 or 31 December 2021.
STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
11
Tangible fixed assets
(Continued)
- 28 -

Transfers during the year are in relation to properties which were previously held leasehold, but are now held freehold.

 

Included in freehold property is freehold land at a cost of £11,302,957 (2021 - £11,302,957).

As at 1 June 2021 the group's hotel properties and leasehold properties were valued by JLL, independent valuers and surveyors, on a fair value basis. The hotels were valued as fully equipped operational entities having regard to trading potential. Leasehold properties includes the Cairn Hotel valued on a leasehold interest basis. Valuations were undertaken in accordance with the RICS Appraisal and Valuation Manual. In assessing fair value of the group's hotels, multiples are applied to the maintainable operating profits for each hotel, with an adjustment made for capital expenditure. In making their fair value assessment at the reporting date, the directors have considered the June 2021 valuations and subsequent events and are satisfied that the carrying values stated above represent an appropriate fair value.

 

If the group's fixed assets carried at valuation were measured using an historic cost basis, the carrying amounts would have been:

2022
2021
£
£
Group
Cost
28,052,342
25,909,709
Accumulated depreciation
(6,047,093)
(5,300,801)
Carrying value
22,005,249
20,608,908
12
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
10,741,916
10,741,916
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 and 31 December 2022
10,741,916
Carrying amount
At 31 December 2022
10,741,916
At 31 December 2021
10,741,916
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
13
Subsidiaries
(Continued)
- 29 -
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Strathmore Hotels (Scotland) Limited
See below
Non-trading holding company
Ordinary
88.00
-
Strathmore Hotels Limited
See below
Owning and operating hotels
Ordinary
-
88.00
JLC Estates Limited
See below
Land development
Ordinary
100.00
-

The registered office of all subsidiary undertakings is 116 Strathmore House, East Kilbride, G74 1LF.

 

JLC Estates Limited has taken the exemption available under section 479A of the Companies Act 2006 not to have their individual financial statements audited.

14
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Land held for sale
387,870
387,870
-
-
Finished goods and goods for resale
288,752
211,371
-
0
-
0
676,622
599,241
-
-
15
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
330,681
231,322
-
0
-
0
Other debtors
2,595,444
1,758,428
-
0
-
0
Prepayments and accrued income
626,958
449,573
-
0
-
0
3,553,083
2,439,323
-
-

Included within other debtors is £393,062 (2021: £Nil) owed by connected companies.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
16
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
18
1,777,494
12,867,369
120,912
1,618,517
Trade creditors
1,617,339
897,116
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
1,659,230
1,221,711
Corporation tax payable
402,187
219,611
-
0
-
0
Other taxation and social security
895,777
1,270,978
-
-
Other creditors
392,546
280,487
192,260
192,260
Accruals and deferred income
284,632
321,908
54,906
54,906
5,369,975
15,857,469
2,027,308
3,087,394

Included within other creditors is £47,582 (2021: £47,582) owed to connected companies.

 

Details of security given for bank loans and overdrafts are included in note 18.

17
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
18
10,989,037
-
0
1,369,682
-
0
Other borrowings
18
4,525,973
4,745,973
4,092,473
4,312,473
15,515,010
4,745,973
5,462,155
4,312,473
18
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
11,888,152
12,794,275
1,490,594
1,618,517
Bank overdrafts
878,379
73,094
-
0
-
0
Preference shares
4,525,973
4,745,973
4,092,473
4,312,473
17,292,504
17,613,342
5,583,067
5,930,990
Payable within one year
1,777,494
12,867,369
120,912
1,618,517
Payable after one year
15,515,010
4,745,973
5,462,155
4,312,473

In September 2022, the group refinanced its bank borrowings to new £12.1m, 3 year facilities with interest payable at 2.7% above base rate. £2.9m of the loans are repayable in quarterly instalments, with the remaining £9.2m repayable at the maturity date.

 

The bank loans and overdrafts are secured by standard securities and debentures over the group's hotel properties, together with a bond and floating charge over the assets of the group.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
18
Loans and overdrafts
(Continued)
- 31 -

 

19
Deferred taxation

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

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
2,207,384
2,371,239
Capital gains
2,018,123
2,018,123
4,225,507
4,389,362
The company has no deferred tax assets or liabilities.
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 January 2022
4,389,362
-
Credit to profit or loss
(163,855)
-
Liability at 31 December 2022
4,225,507
-

 

20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
135,122
99,350

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.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 32 -
21
Share capital
Preference share capital is treated as debt.
Group and company
2022
2021
Ordinary share capital
£
£
Alloted, called up and fully paid
2,383,139 Ordinary shares of £1 each
2,383,139
2,383,139
2,383,139
2,383,139
Preference share capital
Alloted, called up and fully paid
1,467,915 (2021 - 1,467,915) A preference shares of £1 each
1,467,915
1,467,915
1,601,873 (2021 - 1,821,873) B preference shares of £1 each
1,601,873
1,821,873
1,022,685 (2021 - 1,022,685) C preference shares of £1 each
1,022,685
1,022,685
4,092,473
4,312,473

The A and B preference shares carry a fixed cumulative preferential dividend at the rate of 1.25% per annum which is payable within 14 days of the company's financial year end. If the company is not lawfully permitted to pay the dividend as a result of insufficient profits, the amount unpaid will be a debt due by the company and will accrue interest at the rate of 2.5% above the base lending rate of Royal Bank of Scotland PLC. The C preference shares, to the extent that they have not been redeemed, carry a right to a fixed cumulative preferential dividend from 31 August 2025 at the rate of 1.25% per annum which is payable within 14 days of the company's financial year end. If the company is not lawfully permitted to pay the dividend as a result of insufficient profits, the amount unpaid will be a debt due by the company and will accrue interest at the rate of 2.5% above the base lending rate of Royal Bank of Scotland PLC.

 

On a winding up or sale, the holders of A, B and C Preference shares have priority before all other classes of shares to receive repayment of capital plus any arrears of dividends.

 

The A and C Preference shares have redemption rights, some of which are dependent on various events as detailed in the company's Articles of Association. No redemption notice can be served on the company prior to the repayment of certain directors loan balances. B Preference shares have an annual redemption entitlement up to a maximum of £300,000 per B Preference Shareholder. They are automatically redeemed on the 7th anniversary of issue or on the occurrence of various events as detailed in the company's Articles of Association.

 

During 2022, £220,000 of shares were redeemed by B Preference Shareholders.

22
Reserves
Profit and loss reserves

The profit and loss account represents the accumulated profits and losses of the group less distributions made to shareholders.

 

Capital redemption reserve

The capital redemption reserve related to the preservation of fixed capital following the redemption of shares.

STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 33 -
23
Contingent liabilities

The company has provided guarantees in respect of bank borrowings of its subsidiary companies, Strathmore Hotels (Scotland) Limited and Strathmore Hotels Limited. The amount outstanding in respect of these guarantees at 31 December 2022 was £11,275,937 (2021 - £12,884,263).

24
Operating lease commitments
Lessee

At 31 December 2022 the group had a lease for the Cairn Hotel, Harrogate. The period remaining is 79 years and the total amount payable is £8,967,118 (2021 - £9,082,118). The repayment profile of the lease is a payment of £115,000 per annum.

25
Related party transactions

The company has taken advantage of the exemption in FRS 102 not to disclose transactions transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

Included within amounts owed to group undertakings within note 16 is £1,659,230 (2021 - £1,221,711) owed by the company to group undertakings which are not wholly owned.

Details of amounts owed from or to connected undertakings have also been outlined within notes 15 and 16 respectively.

26
Directors' transactions

The director had an interest free loan during the year. The loan is repayable on demand. The amounts repayable to the group at the balance sheet date was as follows:

Description
% Rate
Opening balance
Amounts advanced
Closing balance
£
£
£
C L Rickard - Loan
-
(135,684)
225,842
90,158
(135,684)
225,842
90,158
27
Controlling party
The ultimate controlling party is Chris Rickard by virtue of his 100% holding in the ordinary share capital of the company.
STRATHMORE LEISURE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 34 -
28
Cash generated from group operations
2022
2021
£
£
Profit for the year after tax
1,808,535
1,177,082
Adjustments for:
Taxation (credited)/charged
(18,979)
1,297,963
Finance costs
504,580
391,053
Amortisation and impairment of intangible assets
(1,129,390)
(1,129,390)
Depreciation and impairment of tangible fixed assets
1,118,377
1,134,193
Movements in working capital:
Increase in stocks
(77,381)
(422,488)
Increase in debtors
(1,080,044)
(26,190)
Increase in creditors
419,805
341,874
Cash generated from operations
1,545,503
2,764,097
29
Analysis of changes in net debt - group
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
61,174
(41,525)
19,649
Bank overdrafts
(73,094)
(805,285)
(878,379)
(11,920)
(846,810)
(858,730)
Borrowings excluding overdrafts
(17,540,248)
1,126,123
(16,414,125)
(17,552,168)
279,313
(17,272,855)
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