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Registered number: 01588612










FIRMDALE HOTELS PLC










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2024

 
FIRMDALE HOTELS PLC
 
 
COMPANY INFORMATION


Directors
T J R Kemp 
J K Kemp 
A Kemp 
W Kemp 
R Cheles 
C A Markham 
M R Read 
C C Ring 
M T Soden 




Company secretary
M T Soden



Registered number
01588612



Registered office
18 Thurloe Place

London

SW7 2SP




Independent auditors
MHA
Statutory Auditor

6th Floor

2 London Wall Place

London

EC2Y 5AU





 
FIRMDALE HOTELS PLC
 

CONTENTS



Page
Strategic report
1 - 4
Directors' report
5 - 7
Independent auditors' report
8 - 11
Statement of comprehensive income
12
Statement of financial position
13
Statement of changes in equity
14 - 15
Notes to the financial statements
16 - 33


 
FIRMDALE HOTELS PLC
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

Introduction
 
The directors have pleasure in presenting their report and audited financial statements of the company for the year ended 31 January 2024.

Principal activities and business review
 
The principal activity of the Company is that of luxury hotel developer, operator and manager in Central London. 
During the financial year the Company operated the Dorset Square hotel in Marylebone and the Knightsbridge Hotel close to Harrods in Knightsbridge, both occupied under leasehold tenure. On 31st January 2024 a fellow group company acquired the freehold tenure of the Dorset Square Hotel. The operation of that hotel was then transferred out, but this Company will continue to manage the property. 
The predominant activity of the Company however was the management of a further six hotel properties on behalf of other Group companies. These properties are the Covent Garden Hotel, the Charlotte Street Hotel, the Soho Hotel, the Haymarket Hotel and the Ham Yard hotel in the West End, and Number 16 hotel in South Kensington. In addition the Company provides management oversight to three Firmdale hotel properties in New York, and carries all the central administration and property costs for the London Firmdale business.
The company was very pleased to receive the King’s Award for Enterprise 2024 in recognition of its outstanding achievements in International Trade. The company had received the Queen’s Award on four previous occasions. These awards are the most prestigious UK accolades for business.   
Revenue Performance
The UK economy in 2023 was characterised by stagnant growth with significant rises in the cost of living putting pressure on disposable incomes and corporate budgets alike. Continuing high interest rates provided a further drag on activity. However, international visitor numbers and spend continue to rise and hospitality remains one of the UK’s fastest growing sectors. 
   
Against this background, the total combined 2023/24 revenues for the two hotels operated by the company rose 8.2% to £9.3m, driven by growth in both rooms and food & beverage activity. 
Total combined 2023/24 revenues for the eight London hotels owned or managed by the company were a new record £120.4m, a 3.4% increase on prior year with growth in both rooms and food & beverage activity.
  
The extended strikes by both writers and actors significantly curtailed new product promotional activity by the entertainment industry. This normally provides a steady flow of high value business to the company, and is expected to recover substantially during 2024.
 

Page 1

 
FIRMDALE HOTELS PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

Principal risks and uncertainties
 
The principal financial risks faced by the Company, and the Company's objectives and policies in relation to those risks, are as follows:
Cash flow risk
The finance department closely manages the Company's cashflow. Detailed cashflow forecasts are regularly prepared with the objective of alerting the directors to potential future risks. It is the Company's policy to ensure that forecast funding requirements can be met with available committed facilities.
Credit risk
Credit risk is the financial exposure generated by the potential default of third parties in fulfilling their obligations. Credit risk arises for the Company if it is unable to recover sums due from clients and is mitigated by setting maximum levels of credit tolerance for more significant clients.
Currency risk
The Company faces minimal risks as it operates wholly in the UK.
Interest rate risk
The company’s interest rate policy has the twin objectives of minimising net interest expense whilst providing protection from material adverse movements in interest rates. The company had no debt at any time during the year and therefore has no exposure to interest rate risk.  

Page 2

 
FIRMDALE HOTELS PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

Financial key performance indicators
 
As Firmdale Hotels are predominantly a hotel management company for the wider Firmdale Group, its key performance indicators are based on the performance of all 8 hotels in the Firmdale UK business.  
Recent accolades include the Sunday Times list of Best Places to Work 2024, Ham Yard Bar & Restaurant two AA Rosettes for Culinary Excellence 2024 and AA Breakfast Award 2024, also The Telegraph Best Hotels in London 2024. The Soho Hotel was included in both The Telegraph and Conde Nast Traveller Best Hotels in London 2024, as well as The Times Coolest Hotels in London 2024 awards. Covent Garden Hotel - the British Vogue Best Hotels in London 2024. Charlotte Street hotel and Number Sixteen hotel - Country and Townhouse Best Afternoon Tea 2024. Number Sixteen hotel also The Times Best Boutique Hotels in London 2024.      Included in Sunday Times list of Best Places to Work 2024
The Dorset Square Hotel restaurant, The Potting Shed, was awarded one AA Rosette for Culinary Excellence 2024. 
Combined average room rate across the eight London managed properties was £562 (2022/23 - £568) a decline of 1.0% year on year as occupancy became the key focus for growth. 
Combined average occupancy across the eight London managed properties was 75% (2022/23 – 72%) a 3.1% points increase year on year. 
The resultant average rooms yield (RevPAR) growth across the eight London managed properties was 3.2%. 
Food & Beverage Revenues in London increased 3.9% over prior year.
Income from Private Events contributed 10.3% (2023 – 9.7%) of total revenues in London.
Conversion of Hotel Revenues to Gross Operating Profit was 39.4% compared to a prior year 42.8% as a result of significant cost inflation across the industry as a whole.

Directors' statement of compliance with duty to promote the success of the Company
 
The directors consider the successful running of the Group in terms of achieving its long-term growth strategy which centres around building a sustainable, profitable business which has brand reputation at its heart. The success of the Group centres around positive and effective dealings with all the stakeholders of the Group and the directors were mindful of the long-term consequences of key commercial decisions made during the year, and determined that these were in the interest of the Group's employees, suppliers, customers and other stakeholders, as they were all aligned to the Group's growth strategy.
The Group's success depends on maintaining a reputation for high standards of business conduct with customers and other stakeholders, whether in relation to specific community issues or with regard to environmental issues such as minimising the production of waste.
The directors confirm that throughout the year they have acted in the way that they consider, in good faith, to be most likely to promote the success of the company for the benefit of its members as a whole.

Page 3

 
FIRMDALE HOTELS PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

Going concern

The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis. 
Following the elimination of all material Covid related travel restrictions in mid 2021, international and domestic demand for both accommodation and food & beverage including events recovered very quickly. By March 2022 both Revenues and Earnings started to exceed those achieved in pre-Covid financial year 2020, and continuing growth led to record profitability for the Group in the financial year to January 2023. The financial year to January 2024 delivered further growth in profitability, and the current financial year is expected to do likewise. Excellent room rate growth, whilst maintaining substantial occupancies, has helped offset the effects of high cost base inflation. 
Rising interest rates have not had a significant impact on the Group given that in excess of 90% of group debt is either fixed or has the benefit of an interest rate cap.
In light of the cash reserves, positive trading projections, supportive banks and well progressed plans for the loan refinancing in November, the Board has a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts. The Board will continue to monitor developments closely and adjust their forecasting assumptions as required. 
In the year to 31 January 2024, the company generated a profit before tax of £4,322,000 (2023: £4,216,000) and net current assets at the reporting date of £80,526,000 (2023 £80,770,000) and this entity has fundamental importance to the management of the hotels and general activities of the Group. The directors therefore consider the going concern basis to remain appropriate. 

This report was approved by the board and signed on its behalf.





T J R Kemp
Director

Date: 25 July 2024

Page 4

 
FIRMDALE HOTELS PLC
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

The directors present their report and the financial statements for the year ended 31 January 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The profit for the year, after taxation, amounted to £299 thousand (2023 - £8,763 thousand).

The directors do not recommend the payment of a dividend (2023 - £Nil).

Directors

The directors who served during the year were:

T J R Kemp 
J K Kemp 
A Kemp 
W Kemp 
R Cheles 
C A Markham 
M R Read 
C C Ring 
M T Soden 

Page 5

 
FIRMDALE HOTELS PLC
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

Future developments

The Company is actively seeking further development opportunities in London. A long leasehold interest in three adjacent buildings in the Bloomsbury area was acquired in April 2022 by a fellow Group company. Plans for converting these to a first class hotel as part of the Firmdale Town House collection are well advanced. This hotel will then be managed by the company. 

Directors' qualifying third party indemnity provisions

Third party qualifying directors' and officers’ insurance has been maintained throughout the financial year and to the date of this report which extends to all subsidiaries within the wider group under Firmdale Holdings Limited.

Financial instruments

The company has established a risk and financial management framework whose primary objectives are to protect the company from events that hinder the achievement of the company's performance objectives.
The objectives aim to limit undue counterparty exposure, ensure sufficient working capital exists and monitor the management of risk at a business unit level.
Further detail in respect to the company's exposure to risks such as cash flow and liquidity risk has been provided in the strategic report on pages 1 - 4.

Matters covered in the Strategic report

As permitted by paragraph 1A of schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008, certain matters which are required to be disclosed in the directors' report have been omitted as they are included in the strategic report on pages 1 - 4.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsMHAwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 6

 
FIRMDALE HOTELS PLC
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

This report was approved by the board and signed on its behalf.
 





T J R Kemp
Director
Date: 25 July 2024

Page 7

 
FIRMDALE HOTELS PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOTELS PLC
 

Opinion


We have audited the financial statements of Firmdale Hotels Plc (the 'Company') for the year ended 31 January 2024, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 January 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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.


Page 8

 
FIRMDALE HOTELS PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOTELS PLC (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic report and 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.


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 or the Directors' report.


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 5, 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.


Page 9

 
FIRMDALE HOTELS PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOTELS PLC (CONTINUED)


Auditors' 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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
enquiry of management, those charged with governance and Company legal advisors around actual and potential litigation and claims;

performing audit work over the risk and management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;

reviewing minutes of meetings of those charged with governance; and

reviewing financial statement disclosures and testing to supporting documentation to assess compliance with
applicable laws and regulations.
 
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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


Page 10

 
FIRMDALE HOTELS PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FIRMDALE HOTELS PLC (CONTINUED)


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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Rajeev Shaunak BSc FCA (Senior Statutory Auditor)
  
for and on behalf of
MHA
 
Statutory Auditor
  
London, United Kingdom

31 July 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).

Page 11

 
FIRMDALE HOTELS PLC
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024

2024
2023
Note
£000
£000

  

Turnover
 4 
19,581
19,204

Cost of sales
  
(7,069)
(5,035)

Gross profit
  
12,512
14,169

Administrative expenses
  
(13,132)
(12,601)

Fair value movements
  
-
195

Operating (loss)/profit
 5 
(620)
1,763

Interest receivable and similar income
 9 
4,942
2,657

Interest payable and similar expenses
 10 
-
(204)

Profit before tax
  
4,322
4,216

Tax on profit
 11 
(4,023)
4,547

Profit for the financial year
  
299
8,763

All amounts relate to continuing operations.

There was no other comprehensive income for 2024 (2023:£NIL).

The notes on pages 16 to 33 form part of these financial statements.

Page 12

 
FIRMDALE HOTELS PLC
REGISTERED NUMBER: 01588612

STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2024

2024
2023
Note
£000
£000

Fixed assets
  

Tangible assets
 12 
1,855
2,170

Investments
 13 
72,381
71,523

Investment property
 14 
650
650

  
74,886
74,343

Current assets
  

Stocks
 15 
3,339
1,686

Debtors: amounts falling due within one year
 16 
226,124
204,653

Cash at bank and in hand
 17 
4,820
25,095

  
234,283
231,434

Creditors: amounts falling due within one year
 18 
(153,757)
(150,664)

Net current assets
  
 
 
80,526
 
 
80,770

Total assets less current liabilities
  
155,412
155,113

  

Net assets
  
155,412
155,113


Capital and reserves
  

Called up share capital 
 20 
1,668
1,668

Share premium account
 21 
4,592
4,592

Profit and loss account
 21 
149,152
148,853

  
155,412
155,113


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




T J R Kemp
Director

Date: 25 July 2024

The notes on pages 16 to 33 form part of these financial statements.

Page 13

 
FIRMDALE HOTELS PLC
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024


Called up share capital
Share premium account
Profit and loss account
Total equity

£000
£000
£000
£000

At 1 February 2023
1,668
4,592
148,853
155,113



Profit for the year
-
-
299
299
Total comprehensive income for the year
-
-
299
299


At 31 January 2024
1,668
4,592
149,152
155,412


The notes on pages 16 to 33 form part of these financial statements.

Page 14

 
FIRMDALE HOTELS PLC
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£000
£000
£000
£000

At 1 February 2022
1,668
4,592
140,090
146,350



Profit for the year
-
-
8,763
8,763
Total comprehensive income for the year
-
-
8,763
8,763


At 31 January 2023
1,668
4,592
148,853
155,113


The notes on pages 16 to 33 form part of these financial statements.

Page 15

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

1.


General information

Firmdale Hotels plc is a public limited company, incorporated and registered in England and Wales under the Companies Act. The company's registered office is 18 Thurloe Place, London, SW7 2SP.
The principal activity of the Company is that of luxury hotel developer, manager and operator in Central London.
The Company's functional and presentational currency is pound sterling (GBP), rounded to the nearest £1,000.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Firrndale Holdings Limited  as at 31 January 2024 and these financial statements may be obtained from the Registrar of Companies.

Page 16

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.3

Going concern

The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis. 
Following the elimination of all material Covid related travel restrictions in mid 2021, international and domestic demand for both accommodation and food & beverage including events recovered very quickly. By March 2022 both Revenues and Earnings started to exceed those achieved in pre-Covid financial year 2020, and continuing growth led to record profitability for the Group in the financial year to January 2023. The financial year to January 2024 delivered further growth in profitability, and the current financial year is expected to do likewise. Excellent room rate growth, whilst maintaining substantial occupancies, has helped offset the effects of high cost base inflation. 
Rising interest rates have not had a significant impact on the Group given that in excess of 90% of group debt is either fixed or has the benefit of an interest rate cap.
In light of the cash reserves, positive trading projections, supportive banks and well progressed plans for the loan refinancing in November, the Board has a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts. The Board will continue to monitor developments closely and adjust their forecasting assumptions as required. 
In the year to 31 January 2024, the company generated a profit before tax of £4,322,000 (2023: £4,216,000) and net current assets at the reporting date of £80,526,000 (2023 £80,770,000) and this entity has fundamental importance to the management of the hotels and general activities of the Group. The directors therefore consider the going concern basis to remain appropriate. 

 
2.4

Revenue

Revenue represents amounts receivable for accommodation, food and beverage sales and ancillary hotel services provided in the normal course of business.
In addition, further revenue represents management fees charged by the company to the wider Group with regards to the operation of the hotels. 
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 measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Deposits which have been received at the reporting date for which services have not yet been provided are included in accruals and deferred income within creditors.

Page 17

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.5

Tangible fixed assets

Tangible fixed assets under the cost model 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 condition necessary for it to be capable of operating in 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 the statement of comprehensive income 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.

Depreciation is provided on the following basis:

Short-term leasehold property improvements
-
Over the lease term
Motor vehicles
-
20% per annum on cost
Fixtures and fittings
-
15% per annum on cost


 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to the statement of comprehensive income on a straight line basis over the lease term.

 
2.7

Operating leases: the Company as lessor

Rental income from operating leases is credited to the statement of comprehensive income on a straight-line basis over the lease term.

 
2.8

Investment property

Certain company properties are held for long-term investment. Investment properties are accounted for as follows:
Investment properties are initially recognised at cost, which includes purchase cost and any directly attributable expenditure.
Investment properties whose fair value can be measured reliably are measured at fair value. The surplus or deficit on revaluation is recognised in the statement of comprehensive income and accumulated in retained earnings.

Page 18

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.9

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Loans to fellow group companies are recognised as investments where the nature of the loan agreement allows repayment in the form of equity or cash at the sole discretion of the borrower. Such investments are recognised at the fair value of consideration paid and subsequently at amortised cost.

 
2.10

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell after making due allowance for obsolete and slow-moving stocks. Cost is based on the cost of purchase on a first in, first out basis.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the statement of comprehensive income.

 
2.11

Debtors

Short term debtors are measured at transaction price, less any impairment, unless the arrangement constitutes a financing transaction.

 
2.12

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and in hand and short term deposits with a maturity date of three months or less and bank overdrafts.

 
2.13

Creditors

Short term creditors are measured at the transaction price unless the arrangement constitutes a financing transaction.

Page 19

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.14

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

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 the statement of comprehensive income.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the statement of comprehensive income within 'other comprehensive income'.

 
2.15

Pensions

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 Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.16

Holiday pay adjustment

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the reporting date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the reporting date.

To the extent that the holiday pay adjustment gives rise to an asset balance at the reporting date the amount is reported in prepayments.

Page 20

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.17

Provisions for liabilities

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 of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure
required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

 
2.18

Interest income

Interest income is recognised in the statement of comprehensive income using the effective interest method.

 
2.19

Borrowing costs

All borrowing costs are recognised in the statement of comprehensive income in the year in which they are incurred.

 
2.20

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 Statement of financial position when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less
Page 21

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)


2.20
Financial instruments (continued)

impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Page 22

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)


2.20
Financial instruments (continued)


 
2.21

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of comprehensive income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The following judgements (including the key areas of estimation uncertainty) have had the most significant effect on amounts recognised in the financial statements:
Fair value of investment properties
Fair value of the investment property has been determined by the directors with reference to the sales price of similar properties in the same geographic location.

Page 23

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£000
£000

Rooms
9,264
7,353

Other
-
72

Food and beverage
1,375
1,226

Operating lease rental income
2
-

Residential design fee income and Shop Kit Kemp
21
1,516

Management fee income
8,919
9,037

19,581
19,204


All turnover arose within the United Kingdom.


5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2024
2023
£000
£000

Depreciation of tangible fixed assets
595
654

Exchange differences
(33)
(239)

Other operating lease rentals
2,199
2,270


6.


Auditors' remuneration

2024
2023
£000
£000

Fees payable to the Company's auditors for the audit of the Company's financial statements
72
65
The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 24

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£000
£000

Wages and salaries
10,269
9,443

Social security costs
1,186
1,061

Cost of defined contribution scheme
167
140

11,622
10,644


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Hotel staff
103
86



Administrative staff
102
94



Sales staff
16
15



Directors
9
9

230
204


8.


Directors' remuneration

2024
2023
£000
£000

Directors' emoluments
2,708
2,510

Company contributions to defined contribution pension schemes
8
8

2,716
2,518


During the year retirement benefits were accruing to 5 directors (2023 - 5) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £505 thousand (2023 - £517 thousand).


9.


Interest receivable

2024
2023
£000
£000


Interest receivable from group companies
4,942
2,657

Page 25

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

10.


Interest payable and similar expenses

2024
2023
£000
£000


Bank interest payable
-
204


11.


Taxation


2024
2023
£000
£000


Total current tax
-
-

Deferred tax


Origination and reversal of timing differences
3,837
1,055

Adjustments in respect to prior periods
186
(5,602)

Total deferred tax
4,023
(4,547)


Tax on profit
4,023
(4,547)
Page 26

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - lower than) the standard rate of corporation tax in the UK of 24.03% (2023 - 19%). The differences are explained below:

2024
2023
£000
£000


Profit on ordinary activities before tax
4,322
4,216


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 24.03% (2023 - 19%)
1,039
801

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
2
3

Other permanent differences
3
-

Super-deduction expenditure adjustment
-
(9)

Adjustments to tax charge in respect of prior periods
186
(5,602)

Movement in deferred tax not recognised
2,479
-

Deferred tax recognised at a higher rate
53
254

Capital gains
-
43

Revaluation of investment property
-
(37)

Other differences leading to an increase in the tax charge
261
-

Total tax credit for the year
4,023
(4,547)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 27

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

12.


Tangible fixed assets





Short-term leasehold property improvements
Motor vehicles
Fixtures and fittings
Total

£000
£000
£000
£000



Cost or valuation


At 1 February 2023
12,292
294
6,364
18,950


Additions
1
27
281
309


Disposals
(6,007)
-
-
(6,007)



At 31 January 2024

6,286
321
6,645
13,252



Depreciation


At 1 February 2023
12,242
242
4,296
16,780


Charge for the year on owned assets
17
19
559
595


Disposals
(5,978)
-
-
(5,978)



At 31 January 2024

6,281
261
4,855
11,397



Net book value



At 31 January 2024
5
60
1,790
1,855



At 31 January 2023
50
52
2,068
2,170

On the 31 January 2024 Firmdale Hotels Plc transferred the leasehold interest in one of the hotels, 39-40 Dorset Square, London, NW1 6QN, to Dorset Square Hotel (Leasehold) Ltd, generating a loss on disposal of £29,000. Another group entity subsequently acquired the freehold to the hotel. 


Page 28

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

13.


Fixed asset investments





Loans to fellow subsidiaries

£000



Cost or valuation


At 1 February 2023
71,523


Additions
858



At 31 January 2024
72,381



Net book value



At 31 January 2024
72,381



At 31 January 2023
71,523


14.


Investment property


Freehold investment property

£000



Valuation


At 1 February 2023
650



At 31 January 2024
650

The fair value of the investment property has been determined by the directors with reference to the sales price of similar properties in the same geographic location.






Page 29

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

15.


Stocks

2024
2023
£000
£000

Food and beverage stocks
114
120

Refurbishment and maintenance stocks
3,225
1,566

3,339
1,686


The replacement cost of stock was not materially different to the amount stated above.


16.


Debtors

2024
2023
£000
£000


Trade debtors
102
82

Amounts owed by group undertakings
221,406
194,938

Other debtors
1,086
1,444

Prepayments and accrued income
3,006
3,642

Deferred taxation
524
4,547

226,124
204,653


All amounts shown under debtors fall due for payment within one year.
Amounts owed by group undertakings are unsecured, interest-free and are repayable on demand.
Included within other debtors is an amount of £433,934 (2023: Nil) which represents a reimbursement asset from an insurance provider to cover costs incurred following an incident. The group has already incurred all expenses and considers the recovery of this amount to be virtually certain based on the terms of the policy in place and amounts received subsequent to post year end. 


17.


Cash and cash equivalents

2024
2023
£000
£000

Cash at bank and in hand
4,820
25,095


Page 30

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

18.


Creditors: Amounts falling due within one year

2024
2023
£000
£000

Trade creditors
6,524
2,758

Amounts owed to group undertakings
139,427
139,523

Other taxation and social security
3,218
3,611

Other creditors
414
487

Accruals and deferred income
4,174
4,285

153,757
150,664


Amounts owed to group undertakings are unsecured, interest-free and are repayable on demand.


19.


Deferred taxation




2024


£000






At beginning of year
4,547


Charged to profit or loss
(4,023)



At end of year
524

The deferred tax asset is made up as follows:

2024
2023
£000
£000


Fixed asset timing differences
216
804

Tax losses carried forward and other deductions
293
2,622

Temporary difference on the revaluation of leasehold property
-
1,088

Short term timing differences
15
33

524
4,547

Page 31

 
FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

20.


Share capital

2024
2023
£000
£000
Allotted, called up and fully paid



1,667,596 (2023 - 1,667,596) Ordinary shares of £1.00 each
1,668
1,668

The ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not cover any rights of redemption.



21.


Reserves

Share premium account

This reserve records the amount above the nominal value received for shares issued, less transaction costs.

Profit and loss account

Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.


22.


Pension commitments

The company operates a defined contribution scheme for employees. The assets of the scheme are held separately from those of the company in independently administered funds. The pension costs charge for the year represents contributions payable by the company to the funds and amounted to £166,000 (2023 -£140,000). Contributions totaling £134,000 (2023 - £132,000) were payable to the fund at the reporting date.


23.


Commitments under operating leases

At 31 January 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£000
£000


Not later than 1 year
1,876
2,509

Later than 1 year and not later than 5 years
6,187
9,649

Later than 5 years
4,290
30,191

12,353
42,349

The company holds one residential property as investment property as disclosed in Note 14. The offices are occupied under non-cancellable leases and have remaining terms of between one and five years. The residential property is freehold tenure and is let to third parties.

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FIRMDALE HOTELS PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

24.


Related party transactions

The company has taken advantage of the exemption available under paragraph 33.1A of the Financial Reporting Standard 102 not to disclose transactions with other wholly owned members of the group.
At the reporting date T J R Kemp, a director of the company, was owed £10,000 by the company (2023: owed £793,000 to the company). The maximum amount owing to the company during the year was £1,186,019 (2023: £793,373). The loan is interest free and fully repaid post year end.
At the reporting date £2,960 (2023: Nil) was owed to Chelsea Textiles Limited. A member of key management personnel of Chelsea Textiles Ltd is a shareholder of the ultimate parent of Firmdale Hotels Plc. During the year Firmdale Hotels Plc purchased goods to the value of £25,829 (2023: £64,484) and made sales to the value of £9,427 (2023: £10,878) with Chelsea Textiles Limited.
During the year, a payment of £100,000 (2023: £Nil) was made to Red Investment Ltd in relation to property consultancy services. A member of key management personnel in Firmdale is a director for Red Investments Ltd. The balance remaining between the Group and Red Investments Ltd at year end was £Nil (2023: £Nil).


25.


Controlling party

The immediate parent and controlling company is Firmdale Holdings Limited, a company registered in England and Wales.
The company is included within the consolidation of the Firmdale Holdings Limited group and this is the parent of the smallest and largest group which draws up consolidated financial statements. Firmdale Holdings Limited registered office address is 18 Thurloe Place, London, SW7 2SP. The consolidated accounts of this group are publicly available from the Registrar of Companies.
In the opinion of the directors, the Trustees of Kemp Family Foundation are the ultimate controlling party of the Group and therefore of this entity.

 
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