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Registered number: 11139452










PALACE LAUNDRY LTD










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2024

 
PALACE LAUNDRY LTD
 
 
COMPANY INFORMATION


Directors
T J R Kemp 
R Cheles 
C A Markham 
C C Ring (appointed 12 January 2024)
M T Soden (appointed 12 January 2024)




Company secretary
M T Soden



Registered number
11139452



Registered office
18 Thurloe Place
London

SW7 2SP




Independent auditors
MHA
Statutory Auditor

6th Floor

2 London Wall Place

London

EC2Y 5AU





 
PALACE LAUNDRY LTD
 

CONTENTS



Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditors' report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25


 
PALACE LAUNDRY LTD
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

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

Principal activities and business review
 
The principal activity of the company is to provide premium quality laundry and dry cleaning services to the eight London hotels owned and operated by the Firmdale Group of Companies and some 15 third party clients.
It operates from a purpose built facility in Fulham, London SW6 and services the various hotel properties daily using a fleet of vans. Ongoing investment in equipment ensures both high staff productivity and also minimal use of water, gas and detergent. 
The laundry operation benefits from a highly motivated and experienced team of employees. Such is the reputation and standing of the service that new contracts are regularly declined due to capacity constraints.
Despite a significant trading improvement to the prior year, the company suffered a loss of £843,412 (2023: loss of £1,208,318). EBITDA before property revaluation adjustments was positive £35,428 (2023 - positive £30,605). 

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 cash flow. Detailed cash flow 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 it is mitigated by setting maximum levels of credit tolerance for more significant clients.

Financial key performance indicators
 
Total revenues for the year were £3.3m (2023 - £2.9m) an increase of 0.4m over prior year.

Page 1

 
PALACE LAUNDRY LTD
 

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.
The net current liabilities of £370,359 thousand at January 2024 are driven by three sizable long term loans maturing in November 2024, a total of £386,391 thousand. Heads of Terms for the two maturing UK loans have been agreed with two major high street banks, and the option to extend the US loan for a further twelve months will be exercised. 
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. 
Despite generating a loss before tax in the year to 31 January 2024 of £843,412 and net current liabilities at the reporting date of £8,979,697, the directors consider the company to remain a going concern. The net current liabilities position is largely driven by amounts due to fellow companies, who have confirmed this amount will not be recalled to the detriment of other creditors or the operations of the company. Operating loss before property revaluations for the reporting year was £398,426 in comparison to a of £399,818 in the year ended 31 January 2023, highlighting improved operating performance and the directors consider this function vital in supporting the activities of the wider Firmdale 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 2

 
PALACE LAUNDRY LTD
 
 
 
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 judgements and accounting estimates that are reasonable and prudent;

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

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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.

Principal activity

The principal activity of the company is that of laundry and dry cleaning services.

Results and dividends

The loss for the year, after taxation, amounted to £431,541 (2023 - loss £1,260,215).

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 
R Cheles 
C A Markham 
C C Ring (appointed 12 January 2024)
M T Soden (appointed 12 January 2024)

Future developments

There are no key future developments anticipated to the Company's usual trade.

Page 3

 
PALACE LAUNDRY LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

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 of the company's exposure to risks such as cash flow and credit risk has been provided in the strategic report on page 1.

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.

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.

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





T J R Kemp
Director

Date: 25 July 2024
Page 4

 
PALACE LAUNDRY LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD
 

Opinion


We have audited the financial statements of Palace Laundry Ltd (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 loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 5

 
PALACE LAUNDRY LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (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.


Page 6

 
PALACE LAUNDRY LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, 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.


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 7

 
PALACE LAUNDRY LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (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 8

 
PALACE LAUNDRY LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024

2024
2023
Note
£
£

  

Turnover
 4 
3,296,458
2,897,776

Cost of sales
  
(2,454,149)
(2,193,077)

Gross profit
  
842,309
704,699

Administrative expenses
  
(1,240,735)
(1,104,517)

Revaluation decrease in excess of revaluation gains
  
(447,515)
(808,500)

Operating loss
  
(845,941)
(1,208,318)

Interest receivable and similar income
 7 
2,529
-

Loss before tax
  
(843,412)
(1,208,318)

Tax on loss
 8 
411,871
(51,897)

Loss for the financial year
  
(431,541)
(1,260,215)

Other comprehensive income for the year
  

Unrealised surplus on revaluation of tangible fixed assets
  
-
(169,822)

Total comprehensive income for the year
  
(431,541)
(1,430,037)

The notes on pages 12 to 25 form part of these financial statements.

Page 9

 
PALACE LAUNDRY LTD
REGISTERED NUMBER: 11139452

STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 9 
5,557,427
6,324,105

Current assets
  

Debtors
 10 
351,461
364,895

Cash at bank and in hand
 11 
58,672
17,045

  
410,133
381,940

Creditors: amounts falling due within one year
 12 
(9,389,830)
(9,284,903)

Net current liabilities
  
 
 
(8,979,697)
 
 
(8,902,963)

Total assets less current liabilities
  
(3,422,270)
(2,578,858)

Provisions for liabilities
  

Deferred tax
 13 
(575,110)
(986,981)

  
 
 
(575,110)
 
 
(986,981)

Net liabilities
  
(3,997,380)
(3,565,839)


Capital and reserves
  

Called up share capital 
 14 
100
100

Profit and loss account
 15 
(3,997,480)
(3,565,939)

  
(3,997,380)
(3,565,839)


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

Page 10

 
PALACE LAUNDRY LTD
 

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


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 February 2023
100
(3,565,939)
(3,565,839)



Loss for the year
-
(431,541)
(431,541)
Total comprehensive income for the year
-
(431,541)
(431,541)


At 31 January 2024
100
(3,997,480)
(3,997,380)


The notes on pages 12 to 25 form part of these financial statements.


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


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£

At 1 February 2022
100
173,200
(2,309,102)
(2,135,802)



Loss for the year
-
-
(1,260,215)
(1,260,215)

Deficit on revaluation of freehold property
-
(169,822)
-
(169,822)
Total comprehensive income for the year
-
(169,822)
(1,260,215)
(1,430,037)

Transfer to/from profit and loss account
-
(3,378)
3,378
-


At 31 January 2023
100
-
(3,565,939)
(3,565,839)


The notes on pages 12 to 25 form part of these financial statements.

Page 11

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

1.


General information

Palace Laundry Limited is a private company, limited by shares, registered and incorporated 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 laundry and dry cleaning services.
The Company's functional and presentational currency is pound sterling (GBP), rounded to the nearest £1.

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 judgement 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 Firmdale Holdings Limited as at 31 January 2024 and these financial statements may be obtained from the Registrar of Companies.

Page 12

 
PALACE LAUNDRY LTD
 
 
 
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.
The net current liabilities of £370,359 thousand at January 2024 are driven by three sizable long term loans maturing in November 2024, a total of £386,391 thousand. Heads of Terms for the two maturing UK loans have been agreed with two major high street banks, and the option to extend the US loan for a further twelve months will be exercised. 
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. 
Despite generating a loss before tax in the year to 31 January 2024 of £843,412 and net current liabilities at the reporting date of £8,979,697, the directors consider the company to remain a going concern. The net current liabilities position is largely driven by amounts due to fellow companies, who have confirmed this amount will not be recalled to the detriment of other creditors or the operations of the company. Operating loss before property revaluations for the reporting year was £398,426 in comparison to a of £399,818 in the year ended 31 January 2023, highlighting improved operating performance and the directors consider this function vital in supporting the activities of the wider Firmdale Group. The directors therefore consider the going concern basis to remain appropriate. 

 
2.4

Revenue

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

Page 13

 
PALACE LAUNDRY LTD
 
 
 
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.

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
50 years straight line
Plant and machinery
-
15% straight line
Motor vehicles
-
25% straight line
Freehold land
-
Not depreciated

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.6

Revaluation of tangible fixed assets

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in the statement of comprehensive income.

 
2.7

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.8

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

Page 14

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.9

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.10

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.

 
2.11

Holiday pay accrual

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 adjustments gives rise to an asset balance at the reporting date the amount is reported in prepayments.

 
2.12

Government grants

Government subsidies and grant income are recognised when there is reasonable assurance that the conditions attached to the income will be met and that the income will be received. The income is recognised in the statement of comprehensive income over the periods in which the company incurs expenses for which the subsidies or grants are intended to compensate. In the prior financial year, under FRS102 reporting standards, the company has included its income from the Government's Coronavirus Job Retention Scheme within other income.

Page 15

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.13

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss 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.

 
2.14

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made of the amount of the obligation.
Provisions are changed as an expense to profit or loss in the year that the company becomes aware of the obligations, 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 the Statement of financial position.
Increases in provisions are generally charged as an expense to profit or loss.

 
2.15

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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

Page 16

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)


2.15
Financial instruments (continued)

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 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
Page 17

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)


2.15
Financial instruments (continued)

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 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.


3.


Judgements 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:
Revaluation of tangible fixed assets
The freehold property and freehold land is held under the revaluation model based on detailed valuation reports completed by independent valuation specialists. These valuers hold recognised and relevant professional qualifications. The valuations are based on estimated rental values in the surrounding area to the property which includes judgements relating to various market factors and conditions. 


4.


Turnover

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


2024
2023
£
£

Laundry services
2,279,829
1,966,297

Dry cleaning services
1,016,629
931,479

3,296,458
2,897,776


All turnover arose within the United Kingdom.

Page 18

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

5.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
13,125
12,500

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.


6.


Employees

Staff costs were as follows:


2024
2023
£
£

Wages and salaries
1,681,208
1,522,303

Social security costs
143,757
134,412

Cost of defined contribution scheme
32,223
26,991

1,857,188
1,683,706


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


        2024
        2023
            No.
            No.







Directors
3
3



Operational Staff
74
68

77
71


7.


Interest receivable

2024
2023
£
£


Other interest receivable
2,529
-

Page 19

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

8.


Taxation


2024
2023
£
£



Deferred tax


Origination and reversal of timing differences
(411,871)
51,897

Total deferred tax
(411,871)
51,897


Tax on loss
(411,871)
51,897

Factors affecting tax charge for the year

The tax assessed for the year is lower 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
£
£


Loss on ordinary activities before tax
(843,412)
(1,208,318)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 24.03% (2023 - 19%)
(202,673)
(229,580)

Effects of:


Fixed asset differences
81,537
-

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
107,723
176,734

Utilisation of tax losses surrendered to group companies
-
257,255

Super-deduction expenditure adjustment
-
(11,671)

Adjustments to tax charge in respect of prior periods
(338,494)
(24,791)

revaluation of freehold property
-
(209,000)

Deferred tax recognised at a higher rate
-
18,405

Adjustment to tax charge in respect of previous periods - deferred tax - short term timing differences
(172)
-

Remeasurement of deferred tax for changes in tax rates
(2,840)
-

Chargeable gains/ (losses)
(132,166)
-

Group relief surrendered
75,214
74,545

Total tax charge for the year
(411,871)
51,897

Page 20

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

9.


Tangible fixed assets





Freehold property
Freehold land
Plant and machinery
Motor vehicles
Total

£
£
£
£
£



Cost or valuation


At 1 February 2023
4,611,821
688,179
2,151,782
19,169
7,470,951


Additions
-
-
114,691
-
114,691


Disposals
-
-
(92,000)
-
(92,000)


Revaluations
(497,568)
(52,432)
-
-
(550,000)



At 31 January 2024

4,114,253
635,747
2,174,473
19,169
6,943,642



Depreciation


At 1 February 2023
-
-
1,127,677
19,169
1,146,846


Charge for the year on owned assets
102,485
-
331,369
-
433,854


Disposals
-
-
(92,000)
-
(92,000)


On revalued assets
(102,485)
-
-
-
(102,485)



At 31 January 2024

-
-
1,367,046
19,169
1,386,215



Net book value



At 31 January 2024
4,114,253
635,747
807,427
-
5,557,427



At 31 January 2023
4,611,821
688,179
1,024,105
-
6,324,105

The freehold property and freehold land were valued based on reports completed by independent valuation specialists, Cushman & Wakefield, Chartered Surveyors. The valuer holds a recognised and relevant professional qualification with recent experience in the location and category of the property being valued.  
The valuations are based on estimated rental values in the surrounding area to the property which includes judgements relating to various market factors and conditions.
The valuation was carried out on the basis of fair value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors.

Page 21

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

           9.Tangible fixed assets (continued)

If the freehold property had not been included at valuation they would have been included under the historical cost convention as follows:

As restated
2024
2023
£
£



Cost
5,915,000
5,915,000

Accumulated depreciation
(709,800)
(591,500)

Net book value
5,205,200
5,323,500

If the freehold land had not been included at valuation they would have been included under the historical cost convention as follows:

2024
2023
£
£



Cost
785,000
785,000

Net book value
785,000
785,000

Page 22

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

10.


Debtors


2024
2023
£
£

Trade debtors
320,733
335,399

Other debtors
930
-

Prepayments
29,798
29,496

351,461
364,895



11.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
58,672
17,045



12.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
72,544
17,880

Amounts owed to group undertakings
9,098,667
9,061,710

Other taxation and social security
126,766
100,889

Other creditors
7,693
7,166

Accruals
84,160
97,258

9,389,830
9,284,903


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


13.


Deferred taxation




2024
2023


£

£






At beginning of year
(986,981)
(935,084)


Charged to profit or loss
411,871
(51,897)



At end of year
(575,110)
(986,981)

Page 23

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
 
13.Deferred taxation (continued)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Fixed asset timing differences
(58,400)
(13,950)

Short term timing differences
810
1,618

Temporary difference on the revaluation of freehold property
(864,590)
(1,002,090)

Losses and other deductions
347,070
27,441

575,110
986,981


14.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



100 (2023 - 100) Ordinary shares of £1.00 each
100
100

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



15.


Reserves

Revaluation reserve

This reserve records the amount above the historic cost of tangible fixed assets. The amount of depreciation provided on book value which represents a surplus on valuation is transferred as a reserves movement to the profit and loss account. 

Profit and loss account

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


16.


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 cost charge for the year represents contributions payable by the company to the funds and amounted to £32,223 (2023 - £26,991). Included in other creditors are contributions totalling £7,693 (2023 - £7,166) which were payable to the fund at the reporting date.

Page 24

 
PALACE LAUNDRY LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

17.


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.


18.


Controlling party

The immediate and ultimate parent and controlling company is Firmdale Holdings Limited, head of the ultimate group and 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.
 
Page 25