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COMPANY REGISTRATION NUMBER: 09985535
A.B. Hotels (Five Lakes) Limited
Financial Statements
31 December 2023
A.B. Hotels (Five Lakes) Limited
Financial Statements
Year ended 31 December 2023
Contents
Pages
Officers and professional advisers
1
Strategic report
2 to 4
Director's report
5 to 6
Independent auditor's report to the members
7 to 10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14 to 21
A.B. Hotels (Five Lakes) Limited
Officers and Professional Advisers
Director
Mr John Hector Potter
Registered office
2 Westbrook Court
Sharrow Vale Road
Sheffield
South Yorkshire
S11 8YZ
Auditor
Hebblethwaites
Chartered accountants & statutory auditors
2 Westbrook Court
Sharrow Vale Road
Sheffield
S11 8YZ
Business address Potters Resorts Five Lakes
Colchester Road
Essex
CM9 8HX
A.B. Hotels (Five Lakes) Limited
Strategic Report
Year ended 31 December 2023
The director presents the strategic report for the period ended 31 December 2023. The principal activity of the business continued to be that of hoteliers, hospitality and leisure . Financial Performance and fair review of business In 2021, the purchase of the company by Potters Resorts Ltd was concluded. Potters Resorts Ltd also owns Potters Leisure Ltd, which has run the Potters resort in Norfolk for over 100 years - with Five Lakes having now become an alternative Potters holiday resort, offering the same all-inclusive packages and quality that has seen the Norfolk resort considered one of the best in the country. Five Lakes operates from a single resort in the Essex countryside. The re-brand saw a significant change for the Five Lakes Essex site, away from its traditional corporate and events base. The resort was refurbished, to the higher Potters standards, as well as significant capital investment carried out to add more amenities. Examples include a state of the art theatre built, with West End quality shows on every night for guests to enjoy, an indoor sports arena and a new outdoor bar and entertainment terrace. Investment has continued throughout 2023 and beyond, albeit at far lower levels than required in the prior period, to keep improving guest experiences, for example refurbishing bathrooms and increasing activities available. The golf course was also invested in significantly, with holes being re-modelled under the advice of a professional and the quality of the course having been upgraded. Green fees began to increase at pace as a result of the investment made. The all-inclusive holiday breaks began in May 2022, with a mix of guests who had never visited Potters before as well as those who had stayed at the Norfolk resort and wished to stay at the Essex resort as well. Capacity was limited during the prior year after reopening, as refurbishment continued to take place, however, the hotel was operating at full capacity by the beginning of 2023. Many guests continued to return for further breaks after previous visits. Business has been extremely strong in the so called staycation market, having remained buoyant in the post pandemic era despite a general return to international travel. There remains an element of reluctance, in the target market of the company, to return to overseas holidays which, allied to an expanding short break market, has resulted in strong and ongoing future reservation levels. Following on from significant recovery in the post pandemic and full refurbishment year, the latest year has reflected a further year of revenue enhancement, with a net improvement of 31%. The gross profit margin also improved, to 42%, reflective of a combination of economies of scale in relation to higher volumes of guests, along with the new Potters model being establised for the whole year, not just part of the year as with 2022. Administrative and overhead costs have increased as well, as expected given the global macroeconomic climate and resultant high inflation during the year. However, the impact of these has been limited where possible, for example, with the installation of solar panels on the roof of the main building during the year, with the hope and expectation that these will make the resort significantly more energy efficient in future periods. The continued refurbishment costs throughout the year, as well as interest rate rises, resulted though in a loss for the year to 31 December 2023. The significant, and ongoing, capital investment undertaken by the company in recent years is expected to continue to assist in the generation of future, and enhanced, levels of revenue and profitability, in addition to which the company continues to explore new avenues of revenue and profit generation.
Key performance indicators (2023 12 month period, 2022 14 month period) Turnover growth 2023: 31% (2022: 124%) Gross Profit Percentage 2023: 42.3% (2022: 33.8%) Profit/(loss) after tax 2023: (£1.4m) (2022: £2.3m loss) Principal risks and uncertainties FRAUD Risk of fraud exists in misappropriation of assets, theft of stock and theft of cash takings. The company mitigates this risk through the management structure and regular financial review with, and extensive use of, business systems. MARKET RISK FACTORS General Economic Conditions The disposable income of guests will be affected by changes in general economic environment and this may result in a fall in the number of guests and/or a decrease in on-site expenditure. The directors regularly review its product offering and engages with guests to ensure value for money, with the resort having a strong forward booking position. If this risk and uncertainty materialised, it could result in a material change in the forecast liquidity position of the company. Competition The company is now offering high quality all-inclusive breaks, but the company competes with other holiday options available to guests. The Director believes that this risk is mitigated by the strength and reputation of the brand and the high volume of return guests who enjoy the continual investment in the accommodation and central facilities. FINANCIAL RISKS The Director and senior management monitor the financial requirements of the company and associated risks. The company finances its operations and developments via group borrowings. Bank loan facilities have been made available to the group, and are held in the parent company Potters Resorts Limited. As a subsidiary of the group, the company has a fixed and floating charge over their assets. The director has assessed future compliance with financial covenants and at this time does not foresee any breach. Interest rate risk Principal sources of group borrowings are subject to variable rates of interest. Rates are not currently prohibitive, nor are they anticipated to be per continual detailed forecasts. Liquidity risk The company maintains sufficient levels of cash and liquidity to meet its medium-term working capital and funding obligations. Rolling forecasts of liquidity requirements are prepared and monitored. Credit risk Credit risk from revenue streams is limited as customers are required to pay in advance of their holiday. Financial reporting risks The company's financial systems are required to process a large number of transactions, weaknesses could result in the incorrect reporting of financial results. This risk is mitigated by the production of detailed management accounts which are compared to budgets and forecasts on a monthly basis. Position of the business at the year end Following a period of significant change, in terms of both the guest offering and resort facilities, the company continued to be in a position to build on this at the year end. The company has significant advanced bookings deep into 2025, and there are further plans to expand the site in terms of guest capacity. It is anticipated that the the significant investment made on the resort during the prior year, the current year and post year end, will enable the company to return to profitability.
This report was approved by the board of directors on 29 July 2024 and signed on behalf of the board by:
Mr John Hector Potter
Director
Registered office:
2 Westbrook Court
Sharrow Vale Road
Sheffield
South Yorkshire
S11 8YZ
A.B. Hotels (Five Lakes) Limited
Director's Report
Year ended 31 December 2023
The director presents his report and the financial statements of the company for the year ended 31 December 2023 .
Director
The director who served the company during the year was as follows:
Mr John Hector Potter
Dividends
The director does not recommend the payment of a dividend.
Employment of disabled persons
The company has a policy of equal opportunities and is committed to training, developing and promoting employees of all nationalities, religions, gender or physical ability.
Employee involvement
The company has continued its' policy of consultation with employees relative to the provision of information and in the context of performance and awareness of factors affecting the company.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the director's report.
Director's responsibilities statement
The director is responsible for preparing the strategic report, director's report and the financial statements in accordance with applicable law and regulations. Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the director is required to: - select suitable accounting policies 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 director is 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. He is 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 29 July 2024 and signed on behalf of the board by:
Mr John Hector Potter
Director
Registered office:
2 Westbrook Court
Sharrow Vale Road
Sheffield
South Yorkshire
S11 8YZ
A.B. Hotels (Five Lakes) Limited
Independent Auditor's Report to the Members of A.B. Hotels (Five Lakes) Limited
Year ended 31 December 2023
Opinion
We have audited the financial statements of A.B. Hotels (Five Lakes) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor'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 UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The director is responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the director's 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 director's report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - 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 director's remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of the director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: - the nature of the industry and sector, control environment and business performance, including the identification of related party transactions, and matters which could potentially impact on the company's continuation as a going concern; - results of our enquiries of management and assessment of the risks of irregularities; - any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to: - identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; - detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; - the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; - the matters discussed among the audit engagement team, including how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, UK Corporate Governance Code and local tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director. - Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Richard Murdoch FCA
(Senior Statutory Auditor)
For and on behalf of
Hebblethwaites
Chartered accountants & statutory auditors
2 Westbrook Court
Sharrow Vale Road
Sheffield
S11 8YZ
30 July 2024
A.B. Hotels (Five Lakes) Limited
Statement of Comprehensive Income
Year ended 31 December 2023
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
Note
£
£
Turnover
4
16,248,892
12,402,638
Cost of sales
9,383,095
8,216,532
-------------
-------------
Gross profit
6,865,797
4,186,106
Administrative expenses
7,851,498
6,210,450
------------
------------
Operating loss
5
( 985,701)
( 2,024,344)
Other interest receivable and similar income
8
284
Interest payable and similar expenses
9
9,223
3,126
------------
------------
Loss before taxation
( 994,924)
( 2,027,186)
Tax on loss
10
393,370
242,109
------------
------------
Loss for the financial year and total comprehensive income
( 1,388,294)
( 2,269,295)
------------
------------
All the activities of the company are from continuing operations.
A.B. Hotels (Five Lakes) Limited
Statement of Financial Position
31 December 2023
2023
2022
Note
£
£
Fixed assets
Tangible assets
11
19,403,635
16,979,798
Current assets
Stocks
12
167,503
169,468
Debtors
13
128,734
218,519
Cash at bank and in hand
95,003
107,075
---------
---------
391,240
495,062
Creditors: amounts falling due within one year
14
16,706,479
13,415,503
-------------
-------------
Net current liabilities
16,315,239
12,920,441
-------------
-------------
Total assets less current liabilities
3,088,396
4,059,357
Creditors: amounts falling due after more than one year
15
190,012
166,049
Provisions
17
514,464
121,094
------------
------------
Net assets
2,383,920
3,772,214
------------
------------
Capital and reserves
Called up share capital
20
10,000
10,000
Share premium account
21
5,990,000
5,990,000
Profit and loss account
21
( 3,616,080)
( 2,227,786)
------------
------------
Shareholders funds
2,383,920
3,772,214
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 29 July 2024 , and are signed on behalf of the board by:
Mr John Hector Potter
Director
Company registration number: 09985535
A.B. Hotels (Five Lakes) Limited
Statement of Changes in Equity
Year ended 31 December 2023
Called up share capital
Share premium account
Profit and loss account
Total
£
£
£
£
At 1 November 2021
10,000
5,990,000
41,509
6,041,509
Loss for the year
( 2,269,295)
( 2,269,295)
--------
------------
------------
------------
Total comprehensive income for the year
( 2,269,295)
( 2,269,295)
At 31 December 2022
10,000
5,990,000
( 2,227,786)
3,772,214
Loss for the year
( 1,388,294)
( 1,388,294)
--------
------------
------------
------------
Total comprehensive income for the year
( 1,388,294)
( 1,388,294)
--------
------------
------------
------------
At 31 December 2023
10,000
5,990,000
( 3,616,080)
2,383,920
--------
------------
------------
------------
A.B. Hotels (Five Lakes) Limited
Notes to the Financial Statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 2 Westbrook Court, Sharrow Vale Road, Sheffield, South Yorkshire, S11 8YZ.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The director acknowledges that there is a net current liability position at the balance sheet date. This net liability position is due to two core reasons:- - In order to restrict external borrowings to a minimum, the company has used working capital to fund a small element of the expansion and renovation of the resort. - The company has borrowed funds from a fellow subsidiary. The group loan has no formal repayment terms and is interest free and is classified for accounting purposes as due within one year. The reality is that the loan will not be recalled within one year, but will gradually be repaid as and when cash flow permits, once the company returns to profitability. The management and director keep liquidity under constant review, reporting various financial ratios at group level to the group's bankers, on a quarterly basis, which is a requirement of the group loan facility. The group loan is secured on the assets and future assets of all companies within the group. Despite the position outlined above, the director is forecasting the company liquidity position to improve relatively quickly, as a return on the investment by way of increased profitability starts to to take effect. The company has strong forward bookings with adequate support from fellow group members - the director continues to adopt the going concern basis of accounting in preparing the financial statements, and has considered a period in excess of 12 months from the approval date of the financial statements.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Potters Resorts Limited which can be obtained from Companies House. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) No cash flow statement has been presented for the company.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the opinion of management, there are no areas of judgement or key sources of estimation uncertainty that have a significant effect on the financial statements, other than those highlighted below. The directors review the estimated useful lives of property, plant and equipment at the end of each reporting period. During the current year, the directors have concluded that no revision is required to these estimates and that residual values exceed carrying values.
Revenue recognition
The turnover shown in the profit and loss account is exclusive of Value Added Tax and represents both residential income and daily income from operations. Residential income is recognised on completion of the guests stay, adjusted for breaks spanning the year end. Daily income from operations is recognised on the day of receipt.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Fixtures, fittings and equipment
-
2 - 10 years straight line
The estimated residual value of freehold buildings is such that their depreciable amount is insignificant. Accordingly, no depreciation is charged on freehold buildings.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Debtors and creditors with no stated interest rate and receivable or payable within one year are measured at transaction price. Any losses from impairment are recognised in the profit and loss account.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Provision of holiday accommodation and associated guest spend
16,248,892
12,402,638
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Operating loss
Operating profit or loss is stated after charging/crediting:
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Depreciation of tangible assets
1,413,994
657,546
Loss/(gains) on disposal of tangible assets
61,753
( 13,750)
------------
---------
6. Auditor's remuneration
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Fees payable for the audit of the financial statements
10,500
10,000
--------
--------
Fees payable to the company's auditor and its associates for other services:
Taxation advisory services
2,000
2,000
Other non-audit services
2,000
2,000
--------
--------
4,000
4,000
--------
--------
7. Staff costs
The average number of persons employed by the company during the year, including the director, amounted to:
2023
2022
No.
No.
Production staff
278
204
Administrative staff
12
15
----
----
290
219
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Wages and salaries
6,051,273
5,408,138
Social security costs
408,464
349,564
Other pension costs
84,041
60,809
------------
------------
6,543,778
5,818,511
------------
------------
8. Other interest receivable and similar income
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Other interest receivable and similar income
284
----
----
9. Interest payable and similar expenses
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Interest on obligations under finance leases and hire purchase contracts
9,223
3,126
-------
-------
10. Tax on loss
Major components of tax expense
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Current tax:
UK current tax income
( 98,397)
Deferred tax:
Origination and reversal of timing differences
393,370
340,506
---------
---------
Tax on loss
393,370
242,109
---------
---------
Reconciliation of tax expense
The tax assessed on the loss on ordinary activities for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 23.50 % (2022: 19 %).
Period from
Year to
1 Nov 21 to
31 Dec 23
31 Dec 22
£
£
Loss on ordinary activities before taxation
( 994,924)
( 2,027,186)
---------
------------
Loss on ordinary activities by rate of tax
( 233,807)
( 385,165)
Effect of capital allowances and depreciation
4,635
128,108
Utilisation of tax losses
581,398
822,760
Unused tax losses
41,144
( 323,594)
---------
------------
Tax on loss
393,370
242,109
---------
------------
11. Tangible assets
Freehold land and buildings
Fixtures, fittings and equipment
Total
£
£
£
Cost
At 1 January 2023
8,976,067
21,748,578
30,724,645
Additions
3,899,585
3,899,585
Disposals
( 12,911,735)
( 12,911,735)
------------
-------------
-------------
At 31 December 2023
8,976,067
12,736,428
21,712,495
------------
-------------
-------------
Depreciation
At 1 January 2023
13,744,847
13,744,847
Charge for the year
1,413,994
1,413,994
Disposals
( 12,849,981)
( 12,849,981)
------------
-------------
-------------
At 31 December 2023
2,308,860
2,308,860
------------
-------------
-------------
Carrying amount
At 31 December 2023
8,976,067
10,427,568
19,403,635
------------
-------------
-------------
At 31 December 2022
8,976,067
8,003,731
16,979,798
------------
-------------
-------------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Fixtures, fittings and equipment
£
At 31 December 2023
301,930
---------
At 31 December 2022
264,842
---------
12. Stocks
2023
2022
£
£
Stocks of food, beverages and consumables
167,503
169,468
---------
---------
13. Debtors
2023
2022
£
£
Trade debtors
26,919
17,292
Prepayments and accrued income
101,107
101,011
Other debtors
708
100,216
---------
---------
128,734
218,519
---------
---------
14. Creditors: amounts falling due within one year
2023
2022
£
£
Payments received on account
3,444,233
2,762,650
Trade creditors
1,342,615
990,391
Amounts owed to group undertakings
10,882,227
8,852,412
Accruals and deferred income
302,416
414,764
Social security and other taxes
615,176
298,689
Obligations under finance leases and hire purchase contracts
100,391
66,118
Other creditors
19,421
30,479
-------------
-------------
16,706,479
13,415,503
-------------
-------------
Included within creditors falling due within one year, is an amount of £100,391 (2022 £66,118) in relation to hire purchase contracts, which are secured on the assets which they relate to.
15. Creditors: amounts falling due after more than one year
2023
2022
£
£
Obligations under finance leases and hire purchase contracts
190,012
166,049
---------
---------
Included within creditors falling due after one year, is an amount of £190,012 (2022 £166,049) in relation to hire purchase contracts, which are secured on the assets which they relate to.
16. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
£
£
Not later than 1 year
100,391
66,118
Later than 1 year and not later than 5 years
190,012
166,049
---------
---------
290,403
232,167
---------
---------
17. Provisions
Deferred tax (note 18)
£
At 1 January 2023
121,094
Additions
393,370
---------
At 31 December 2023
514,464
---------
18. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 17)
514,464
121,094
---------
---------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
514,464
121,094
---------
---------
19. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 84,041 (2022: £ 60,809 ).
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
10,000
10,000
10,000
10,000
--------
--------
--------
--------
There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
21. Share premium account
This reserve represents the premium on shares issued at a value that exceeds their nominal value.
22. Related party transactions
During the year, the company received loans from Potters Leisure Limited, a fellow group subsidiary, for a total of £2,029,815 (2022: £8,852,412). At the year end date, loans owing to Potters Leisure Limited total £10,882,227 (2022: £8,852,412), and these are included within creditors due within one year. The loans are interest free with no formal terms of repayment. During the year, the company incurred group loan interest re-charges from Potters Resorts Limited, of £1,650,902 (2022: £585,696).
23. Controlling party
The ultimate controlling company is Potters Resorts Limited , a company registered in the United Kingdom, by virtue of its ownership of the entire issued share capital of the company. There is no ultimate controlling party of this company. Both the registered address and the principal place of business of Potters Resorts Limited are the same as the company's addresses as given on the Officers and Professional Advisers page of these financial statements.