Company registration number 05307946 (England and Wales)
CP REGENTS PARK TWO LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CP REGENTS PARK TWO LTD
COMPANY INFORMATION
Directors
M A Gibbor
E Lewis
M Hennebry
Mrs I Gibbor
A J Schreier
C Dudley-Scales
Secretary
E Lewis
Company number
05307946
Registered office
CP House
Otterspool Way
Watford
Hertfordshire
WD25 8JJ
Auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor
16 Great Queen Street
Covent Garden
London
WC2B 5AH
CP REGENTS PARK TWO LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
CP REGENTS PARK TWO LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their strategic report for the year ended 31 December 2023. The principal activity of the company during the year was that of owning and operating a hotel.
The start of 2023 remained challenging for the hotel and UK hospitality sector. Whilst inbound travel recovered steadily, the prolonged Ukraine crisis continued to have a severe impact on overall costs, particularly around utilities and food. Although overall inflation decreased year on year, with the RPI rate being 5.2% at the end of 2023 vs.13.4% at end of 2022, inflation remains high which continue to put severe pressures on payroll costs. Cost inflation at the hotel was higher than the national average reflecting the announcement by the UK Government that the National Living Wage would increase by 9.6%, from £9.50 per hour to £10.42 per hour from April 2023.
Overall trading for 2023 was strong, with turnover increasing from £11.2m in 2022 to £14.8m in 2023. This was however offset but continued challenges around operational costs. Recruitment of skilled labour remained a particular challenge and whilst items such as food and utilities somewhat stabilised, input costs remained high.
In line with director’s expectations, the company managed to increase its operating profit before exceptional items from £0.6m in 2022 to £1.4m in 2023. For the financial year ended 31 December 2023 a loss before tax of £1.3m (2022: loss of £0.2m) has been reported, mainly due to a substantial increase in interest charged of £1.4m (2022: £0.9m). The company's bank loan facility ended in June 2023 and a new 3-year facility was successfully put in place which is repayable on 16 June 2026. Due to multiple increases in both the Bank of England Base Rate which impacted the price of commercially available SONIA interest rate SWAP’s and a higher interest rate margin this adversely impacted the interest charge to the profit and loss account. The prior year also benefited from a £0.6m fair value gain on interest rate swaps, as opposed to 2023, where the company incurred a fair value loss of £0.7m. A further provision of £0.2m (2022: £0.2m) has been made for the anticipated remediation costs expected to be incurred by the company on its leasehold property. An agreement for the remediation works has been signed and the work has commenced post year end.
As at 31 December 2023, the company had net liabilities of £0.5m (2022: net assets £0.8m), further details on the company's going concern assumptions are included in note 1.2. The company continues to be supported by its parent company however no further funding was required in 2023 (2022: £0.9m of support provided). The total current loan balance at year end decreased to £6.4m in 2023 (2022: £6.6m) which has a required repayment date of 31 December 2025.
Financial Key Performance Indicators
Overall occupancy levels at the hotel at 77% during 2023 showed a significant improvement over 2022 (55%) driven by sporting, concert and social events in Q2 and Q3 as well as stronger transient demand in Q1 and Q4. Whilst average rates continued to be strong in general, the company saw a slight decrease from £137 in 2022 to £133 in 2023, this is partly due to event driven business in the second half of 2022 which was not repeated in this financial year.
Financial Risk Management Objectives and Policies
Liquidity Risk
The company manages its cash and borrowing requirements to ensure that the company has sufficient liquid resources to meet the operating needs of its business.
Interest Rate Risk
The company successfully replaced its expiring bank loan facility with a new 3-year facility on 16 June 2023. The cost of borrowing increased substantially, not just due to the increase in the SONIA rate but also due to a significant increase in the bank’s margin. The company fixed the floating amount through an interest hedge agreement, which also came into effect for three years on the same date. The new hedge has been put in place to continue to mitigate and manage the volatility in the current interest rates.
CP REGENTS PARK TWO LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal Risks and Uncertainties |
The directors consider the following to be the principal operating risks and uncertainties facing the company:
Inflation
The rate of inflation in the UK remained high, with RPI of 5.3% recorded for 2023 (down from 13.4% in 2022), continuing to place pressures on wage demands as well as utilities but also keeping general day to day costs high, further adversely affecting overall profitability.
Geopolitical
The world is more unstable now than it has been for decades, and whilst business itself is not directly affected by the current wars in Israel and Ukraine, prolonged conflicts or an escalation will see continued disruptions and could severely affect oil prices, trade, economies, diplomatic relationships globally and travel.
Utilities
The company continued to mitigate its exposure to fluctuating fuel prices by taking advantage of fixed price contracts, where available and applicable.
Electricity:
The company benefited from a two-year agreement signed in 2021 and was therefore able to mitigate the substantial fluctuations seen in 2022. A new 1-year agreement was put in place from October 2023 onwards and given prices had “normalised” by then the overall yearly increase was marginal. Substantial risks remain around new agreements, given the current geopolitical landscape.
Gas:
A new 1-year agreement for gas was signed in May 2023 and as unit rates have reduced substantially compared to the same period the year before, a significant cost reduction of annualised cost was achieved. Substantial risks remain around new agreements, given the current geopolitical landscape.
Other Operating Risks and Uncertainties
The company operates in a competitive environment and mitigates those pressures through continual investment and focus on providing exceptionally high levels of customer service.
The directors monitor potential changes in regulations in respect to employee, environmental and health & safety matters and have robust internal control procedures to ensure that the company operates, at all times, in line with current legislation and regulations.
Outlook
The 2024 outlook is promising, and London and in turn the hotel will continue to benefit from the weaker pound and increasing numbers of incoming visitors. However, caution around inflationary headwinds across energy, food & beverage and particularly around payroll remain a critical factor, including recent announcements by the government that the national minimum wage will increase by a further 9.8%, to £11.44 per hour. The extension of the business rate reliefs for hospitality and retail business will mitigate some of these cost increases and early indications are that we will continue to benefit from strong demand from several key customers.
CP REGENTS PARK TWO LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
C Dudley-Scales
Director
18 July 2024
CP REGENTS PARK TWO LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activities of the company continued to be that of owning and operating a hotel.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M A Gibbor
E Lewis
M Hennebry
Mrs I Gibbor
A J Schreier
C Dudley-Scales
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Strategic report
As permitted by s414c(11) of the Companies Act 2006, the directors have elected to disclose information, required to be in the directors' report by Schedule 7 of the 'Large and Medium-sized Companies and Group (Accounts and Report) Regulations 2008', in the strategic report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
C Dudley-Scales
Director
18 July 2024
CP REGENTS PARK TWO LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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 then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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. 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.
CP REGENTS PARK TWO LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CP REGENTS PARK TWO LTD
- 6 -
Opinion
We have audited the financial statements of CP Regents Park Two Ltd (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 December 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the 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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CP REGENTS PARK TWO LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CP REGENTS PARK TWO LTD
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where in relation to which 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 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the company operates;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
CP REGENTS PARK TWO LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CP REGENTS PARK TWO LTD
- 8 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
reviewed the nominal ledger including testing journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC and relevant regulators.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Simon Mayston (Senior Statutory Auditor)
For and on behalf of Blick Rothenberg Audit LLP
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
London
WC2B 5AH
19 July 2024
CP REGENTS PARK TWO LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
14,824,098
11,199,241
Raw materials and consumables
(3,469,002)
(2,471,203)
Other operating income
4
83,787
80,766
Staff costs
6
(3,350,688)
(2,656,336)
Depreciation
7
(2,546,829)
(2,555,694)
Other external charges
(4,199,345)
(3,046,577)
Operating profit before exceptional items
7
1,342,021
550,197
Exceptional item - other operating charges
8
(157,760)
(170,180)
Operating profit after exceptional items
7
1,184,261
380,017
Interest receivable and similar income
9
2,399
554,933
Interest payable to group undertakings
10
(264,311)
(247,959)
Other interest payable and similar expenses
10
(2,215,533)
(871,117)
Loss before taxation
(1,293,184)
(184,126)
Tax on loss
11
304
Loss for the financial year
(1,293,184)
(183,822)
No items of the comprehensive income for either the year or the prior year other than the loss for the year. Accordingly, no statement of other comprehensive income has been presented.
CP REGENTS PARK TWO LTD
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
34,559,463
36,741,893
Current assets
Stocks
13
25,203
18,556
Debtors - falling due within one year
14
1,087,481
1,972,587
Restricted cash
502,301
Cash at bank and in hand
2,421,794
1,610,169
4,036,779
3,601,312
Creditors: amounts falling due within one year
15
(3,135,383)
(30,362,782)
Net current assets/(liabilities)
901,396
(26,761,470)
Total assets less current liabilities
35,460,859
9,980,423
Creditors: amounts falling due after more than one year
16
(33,261,864)
(6,646,004)
Provisions for liabilities
Provisions
18
(2,724,203)
(2,566,443)
(2,724,203)
(2,566,443)
Net (liabilities)/assets
(525,208)
767,976
Capital and reserves
Called up share capital
19
15,000,000
15,000,000
Profit and loss reserves
(15,525,208)
(14,232,024)
Total (deficit) shareholder's funds/equity
(525,208)
767,976
The notes on pages 12 to 25 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 18 July 2024 and are signed on its behalf by:
C Dudley-Scales
Director
Company Registration No. 05307946
CP REGENTS PARK TWO LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total equity
£
£
£
Balance at 1 January 2022
15,000,000
(14,048,202)
951,798
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(183,822)
(183,822)
Balance at 31 December 2022
15,000,000
(14,232,024)
767,976
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(1,293,184)
(1,293,184)
Balance at 31 December 2023
15,000,000
(15,525,208)
(525,208)
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
CP Regents Park Two Ltd is a private company limited by shares incorporated in England and Wales. The registered office is CP House, Otterspool Way, Watford, Hertfordshire, WD25 8JJ.
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company accounting policies (see note 2).
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This 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:
Section 3 'Financial Statement Presentation': Inclusion of statement of cash flow;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of CP Holdings Limited for the year ended 31 December 2023. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
1.2
Going concern
The company is financed through a three bank loan facility which is due to expire 16 June 2026. Management has produced cashflow forecasts to 31 December 2025 based on expected revenue and expenditure and making other relevant enquiries. It is currently forecasted that the covenant arrangements set in the new agreement will be met. Based on these forecasts, the support of its lenders and the fact that the company has received a letter of financial support from its parent undertaking, the directors have a reasonable expectation that the company will continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.true
1.3
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Rendering of services and goods
Revenue from hotel ownership comprises amounts earned in respect of services, facilities and goods supplied by the hotel. Revenue from the rendering of services (such as accommodation and use of facilities) is recognised when services are performed. Revenue from the sale of goods (such as food and beverage sales) is recognised at the time when the goods are delivered to the customers.
1.4
Tangible fixed assets
Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and the condition necessary for it to be capable of operating the manner intended by management.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line method.
Assets under construction are not depreciated until they are brought to the location and condition of their intended use.
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 land and property
4% Straight line
Long leasehold land and buildings
4-15% Straight line
Fixtures and fittings
20-25% Straight line
Motor vehicles
25% Straight line
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The assets’ residual values, useful lives and depreciation methods are reviewed and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting deadline.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within profit or loss.
1.5
Stocks
Stocks are consumable items valued at cost.
1.6
Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Restricted cash is amounts held on deposit and relates to a guarantee on the loan repayments.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.7
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include 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 for a similar debt instrument. Financial assets classified as receivable within one year are not amortised. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for objective indicators of impairment at each reporting end date. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date. The impairment loss is recognised in profit or loss.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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 for a similar debt instrument. Financial liabilities classified as payable within one year are not amortised. Financing transactions are those in which payment is deferred beyond normal payment terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged, expires or cancelled.
1.8
Share capital
Ordinary shares are classified as equity.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.9
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 company’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 when the company has 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.
1.10
Provisions
Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit and a reliable estimate can be made on the amount of the obligation.
Provisions are charged as an expense to profit and loss in the year that the company becomes aware of the obligation and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking the account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the balance sheet.
1.11
Retirement benefits
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.12
Foreign exchange
Functional and presentation currency
The company's functional and presentational currency is Sterling (£).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
1.13
Finance costs are charged to profit and loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument and amortised over the term of the debt.
1.14
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
1.15
Exceptional items are transactions that fall within the ordinary activities of the company but are presented separately due to their size or nature.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements have had the most significant effect on amounts recognised in the financial statements.
Provisions
Assessments as to whether or not to recognise provisions, the timing of any payment under those provisions, and of the amounts concerned, usually involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The directors believe that the provisions recorded are adequate based on currently available information. However, given the inherent uncertainties involved in assessing the likely final costs, the company could in the future incur additional costs that could have a material adverse effect on its results in any particular period.
Deferred tax assets
The company has tax losses carried forward. Assessments as to whether or not to recognise deferred tax assets involve forecasts of future taxable profits. These forecasts involve a series of complex judgements about future events and can rely heavily on estimates and assumptions. Actual outcomes could be different to the estimates and assumptions used in determining the forecasts.
3
Turnover and other revenue
The whole of turnover is attributable to the provision of hotel services.
All turnover arose within the United Kingdom.
4
Other operating income
2023
2022
£
£
Sundry income
83,787
80,766
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
35,000
34,800
For other services
All other non-audit services
6,546
11,300
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Hotel operating staff
88
81
Administrative staff
8
8
Total
96
89
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,924,437
2,327,413
Social security costs
297,251
230,231
Pension costs
129,000
98,692
3,350,688
2,656,336
7
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
2,546,829
2,555,694
Operating lease charges
34,810
20,840
8
Exceptional item - other operating charges
2023
2022
£
£
In respect of:
Remediation work (see note 18)
157,760
170,180
9
Interest receivable and similar income
2023
2022
£
£
Other interest income
2,399
1,166
Fair value gains on financial instuments - interest rate swaps
553,767
Total income
2,399
554,933
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
1,548,091
871,117
Interest payable to group undertakings
264,311
247,959
Fair value losses on financial instruments - interest rate swaps
667,442
2,479,844
1,119,076
11
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(304)
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the effective rate of tax as follows:
2023
2022
£
£
Loss before taxation
(1,293,184)
(184,126)
Expected tax credit based on the effective rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(303,898)
(34,984)
Adjustments in respect of prior years
(304)
Effect of change in corporation tax rate
29,440
44,731
Expenses disallowed for tax purposes and depreciation on assets ineligible for capital allowances
608,292
294,132
Fair value gain on interest rate contract
156,850
(105,216)
Unrecognised deferred tax
(490,684)
(186,379)
Super deduction expenditure adjustment
(12,284)
Taxation charge/(credit) for the year
-
(304)
Factors that may affect future tax charges
From 1 April 2023 the corporation tax rate increased to 25% for companies with profits of over £250,000.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Tangible fixed assets
Freehold land and property
Long leasehold land and buildings
Assets under construction
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
16,320,322
51,665,150
574,100
1,438,146
14,690
70,012,409
Additions
284,500
79,898
364,398
Transfers
324,682
(760,904)
436,222
At 31 December 2023
16,320,322
51,989,834
97,696
1,954,267
14,690
70,376,809
Depreciation
At 1 January 2023
3,615,793
28,305,096
-
1,334,937
14,689
33,270,515
Depreciation charged in the year
207,555
2,309,867
29,406
1
2,546,829
At 31 December 2023
3,823,348
30,614,963
-
1,364,343
14,690
35,817,346
Carrying amount
At 31 December 2023
12,496,974
21,374,871
97,696
589,924
-
34,559,465
At 31 December 2022
12,704,529
23,360,054
574,100
103,209
1
36,741,893
Section 106 agreement costs, in the sum of £462,804, have been capitalised in connection with a proposed redevelopment of part of the company's freehold property. Should the redevelopment not proceed these monies would be recovered from Westminster City Council.
Freehold and leasehold property with a net book value of £34,559,464 (2022: £36,741,893) are pledged as security for bank loans.
13
Stocks
2023
2022
£
£
Raw materials and consumables
25,203
18,556
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
792,952
1,073,498
Amounts owed by group undertakings
627
630
Financial instruments
649,255
Prepayments and accrued income
293,902
249,204
1,087,481
1,972,587
Amounts owed by group undertakings are interest free, have no fixed repayment date and are repayable on demand.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Debtors
(Continued)
- 22 -
2023
2022
Amounts falling due after more than one year:
£
£
-
-
Total debtors
1,087,481
1,972,587
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
300,000
28,246,278
Trade creditors
791,454
243,456
Amounts owed to group undertakings
304,365
178,411
Corporation tax
1,768
Other taxation and social security
512,171
475,058
Other creditors
102,699
151,991
Accruals and deferred income
1,124,694
1,065,820
3,135,383
30,362,782
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
Secured loans
The bank loan is secured by a fixed and floating charge over the assets of the company. The company entered into a new loan agreement on the 16 June 2023, which bears interest at 2.5% over SONIA (the floating amount fixed through an interest hedge agreement with a 4.5% cap rate and a 3% floor rate through to 16 June 2026. The loan is repayable in quarterly instalments of £75,000, with the final balance being due on the 16 June 2026.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
17
26,822,673
Amounts owed to group undertakings
17
6,421,004
6,646,004
Financial instruments
18,187
33,261,864
6,646,004
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Creditors: amounts falling due after more than one year
(Continued)
- 23 -
Amounts owed to group undertakings are unsecured, repayable on 31 December 2025 and bears interest at a rate of 4% per annum.
Secured loans
The bank loan is secured by a fixed and floating charge over the assets of the company. The company entered into a new loan agreement on the 16 of June 2023, which bears interest at 2.5% over SONIA (the floating amount fixed through an interest hedge agreement with a 4.5% cap rate and a 3% floor rate through to 16 June 2026. The loan is repayable in quarterly instalments of £75,000, with the final balance being due on the 16 June 2026.
17
Loans and overdrafts
2023
2022
£
£
Bank loans
27,122,673
28,246,278
Loans from group undertakings
6,421,004
6,646,004
33,543,677
34,892,282
Payable within one year - bank loans
300,000
28,246,278
Payable after one year - bank loans
26,822,673
-
Payable after one year - intercompany loans
6,421,004
6,646,004
18
Provisions for liabilities
2023
2022
£
£
Remediation
2,724,203
2,566,443
Movements on provisions:
Remediation
£
At 1 January 2023
2,566,443
Additional provisions in the year
157,760
At 31 December 2023
2,724,203
Provisions relate to remediation costs expected to be incurred as at 31 December 2023 by the company on its leasehold property. An agreement for the remediation works was signed in the year ended 31 December 2021 and the works have commenced post year end.
CP REGENTS PARK TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
15,000,000
15,000,000
15,000,000
15,000,000
There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
20
Reserves
Profit & loss account
The profit and loss account includes all current and prior period retained profits and losses.
21
Commitments under operating leases
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
19,280
19,280
Between two and five years
27,620
46,900
46,900
66,180
22
Ultimate controlling party
The parent undertaking of the smallest group of undertakings for which group financial statements are drawn up and of which the company is a member of CP Holdings Limited, whose registered office is CP House, Otterspool Way, Watford, Hertfordshire, WD25 8JJ. Copies of the group financial statements are available to the public from Companies House, Crown Way, Cardiff, CF14 3UZ.
The ultimate parent undertaking is CP Holdings Limited, a company incorporated in England and Wales.
In the opinion of the directors, the ultimate controlling parties are the Gibbor and Schreier families.
23
Related party transactions
The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2023.300M A GibborM HennebryMrs I GibborA J SchreierC Dudley-ScalesC Dudley-ScalesE Lewisfalse053079462023-01-012023-12-3105307946bus:Director12023-01-012023-12-3105307946bus:CompanySecretaryDirector12023-01-012023-12-3105307946bus:Director22023-01-012023-12-3105307946bus:Director32023-01-012023-12-3105307946bus:Director42023-01-012023-12-3105307946bus:Director52023-01-012023-12-3105307946bus:CompanySecretary12023-01-012023-12-3105307946bus:Director62023-01-012023-12-3105307946bus:RegisteredOffice2023-01-012023-12-31053079462023-12-31053079462022-01-012022-12-3105307946core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3105307946core:RetainedEarningsAccumulatedLosses2023-01-012023-12-31053079462022-12-3105307946core:LandBuildingscore:OwnedOrFreeholdAssets2023-12-3105307946core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-12-3105307946core:ConstructionInProgressAssetsUnderConstruction2023-12-3105307946core:FurnitureFittings2023-12-3105307946core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3105307946core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3105307946core:ConstructionInProgressAssetsUnderConstruction2022-12-3105307946core:FurnitureFittings2022-12-3105307946core:MotorVehicles2022-12-3105307946core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3105307946core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3105307946core:Non-currentFinancialInstrumentscore:AfterOneYear2023-12-3105307946core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3105307946core:CurrentFinancialInstruments2023-12-3105307946core:CurrentFinancialInstruments2022-12-3105307946core:Non-currentFinancialInstruments2023-12-3105307946core:Non-currentFinancialInstruments2022-12-3105307946core:ShareCapital2023-12-3105307946core:ShareCapital2022-12-3105307946core:RetainedEarningsAccumulatedLosses2023-12-3105307946core:RetainedEarningsAccumulatedLosses2022-12-3105307946core:ShareCapital2021-12-3105307946core:RetainedEarningsAccumulatedLosses2021-12-31053079462021-12-3105307946core:LandBuildingscore:OwnedOrFreeholdAssets2023-01-012023-12-3105307946core:LandBuildingscore:LongLeaseholdAssets2023-01-012023-12-3105307946core:FurnitureFittings2023-01-012023-12-3105307946core:MotorVehicles2023-01-012023-12-3105307946core:UKTax2023-01-012023-12-3105307946core:UKTax2022-01-012022-12-310530794612023-01-012023-12-310530794612022-01-012022-12-310530794622023-01-012023-12-310530794622022-01-012022-12-310530794632023-01-012023-12-310530794632022-01-012022-12-310530794642023-01-012023-12-310530794642022-01-012022-12-3105307946core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3105307946core:MotorVehicles2022-12-3105307946core:MotorVehicles2023-12-3105307946core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-01-012023-12-3105307946core:ConstructionInProgressAssetsUnderConstruction2023-01-012023-12-3105307946core:Non-currentFinancialInstruments12023-12-3105307946core:Non-currentFinancialInstruments12022-12-3105307946core:WithinOneYear2023-12-3105307946core:WithinOneYear2022-12-3105307946core:BetweenTwoFiveYears2023-12-3105307946core:BetweenTwoFiveYears2022-12-3105307946bus:PrivateLimitedCompanyLtd2023-01-012023-12-3105307946bus:FRS1022023-01-012023-12-3105307946bus:Audited2023-01-012023-12-3105307946bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP