The director presents the strategic report for the year ended 31 December 2023.
2023 was a very mixed year. Established sites continued to deliver strong results backed by a raft of awards – but the failure of Reading (see below) and delays to the new Beacon Tower site were very costly. That mixture of investment and losses added up to a loss making year. But at the time of writing, having taken those losses and the tough decisions necessary, we are back to profit.
DeskLodge is now B-Corp certified, and achieved a grading in excess of 100 points. This represents areas across Environmental, Social and Governance (“ESG”) and signifies the accomplishments in our impact.
Examples include less than 1.5% of our overall waste going to land fill, water conservation processes to minimise water usage. Active EMS with over 90 social and environmental targets are being implemented throughout the business. Discounts of services and free event space offered to non-profit businesses. In addition, DeskLodge is a Living Wage employer, as well as all employees having private health care, and £500 to put towards personal growth.
We were also named Sunday Times Top 10 Places to Work and won a number of awards including winner of the South West Regional Award for Englands Businesses, Winner in the ESG category of the Flexible Space Association, winner of the Coworking Spaces in the Bristol Property Awards, and number 63 in the Happiest Workplaces List.
Innovation
DL continued to find companies very interested in our “part-time offices” and “day offices” as a solution to staff wanting to continue working in a hybrid manner. A “part-time office” is a private office, complete with screens and power on each desk. These let a company book an office for a certain number of regular days each week, and then the staff have the option to use the hotdesking areas the rest of the week or work from home.
This innovation led to DL being one of three finalists nationwide in the FlexSA industry awards for Service Innovation (Alongside being a national finalist for Workspace Design with Reading and the winner of Excellence in Customer Service for Southwest England). Our experience is that it really helps companies to be in a space for brief periods to start with to see the benefits, and clients often progress from day-offices to a regular part-time office to a normal, full-time office.
These products are more intensive on staff time, but more profitable when full. More importantly, they allow us to have a (currently unique in Bristol) offering, which attracts companies who are likely to grow with us. Having the option of a part-time office also serves as a “holding pattern” for companies waiting for a full-time office with us, giving fewer voids and fewer client losses when we cannot help them immediately.
Desklodge also held its first family fun day, with stalls, entertainment and food in the parking area at Desklodge House, Bristol. This was a great opportunity for children / families to see where the work happens – and great fun was had by all. This is another way to help grow the community at Desklodge House, to reinforce that where you work matters and will be repeated!
Existing locations
Desklodge House continues to be our flagship location and is a hive of activity with a strong team looking after it, who have built a supportive community among its occupants. The smaller area at One Castle Park in Bristol, has continued to be a solid location, with the South Wing now being occupied also from January 2024, which will make it a highly profitable location until the end of the current lease in May 2025. Our planning assumes a termination then, but succession conversations are underway about possibly extending the lease or moving the occupants which would improve those assumptions.
Reading was an opportunity to take a temporary location close to the back of Reading station. New competitors on the main, city side of Reading dominated sales and income per desk fell in the town. The details of the short lease meant cutting our losses and closing the site was the best option. We were able to reuse some of the assets at Beacon Tower and negotiate an early termination with no dilapidations in early 2024. Lessons have been learned, and a deeper analysis of a location will be undertaken before any new sites are considered.
With the decision to close Reading and delay future growth, we reduced our management team accordingly in August 2023. All restructuring costs fell during 2023.
New locations
Beacon Tower was further delayed, and we eventually obtained keys in April 2023 (ten months later than scheduled by the landlord). The fit-out has been very successful with many positive reviews, that it is “the best Desklodge yet”. A launch party was held in November with over 200 attendees and the space is well received. It has been filling up steadily with a wide variety of companies. The view over Bristol from the upper windows and the external terrace is wonderful, and 2024 will see the outside space completed for regular use – although landlord scaffolding will mean we don’t get the full benefit of this until early 2025. Our investments in systems, recruitment processes and training have worked very well to create a strong community in the new site with a very strong team already in operation.
Future locations
The experience of the last year has had a knock-on effect in delaying future growth. DL now has a strong but slim leadership team. DL are always on the lookout for good locations to expand into, so watch our website for where we will pop up next! DL seeks locations that are near to railway stations, promoting the use of public transport, and also provides bike storage and showers to encourage walking or cycling to work. DL will be working with consultants in new towns before taking on further space.
Strategic management
DL has a strong senior leadership team who meet weekly with daily update calls.
DL recognises the importance of its staff and their role in the creation of the right atmosphere at each of its locations. Staff are carefully selected, and once established are encouraged to develop their skills and progress within the company. DL offer both internal and external training to help staff develop – which is commented on almost daily in public Google reviews.
In terms of the longer goals, the business plan is to open some new locations in the southwest over the next 8 years; being a mixture of larger and smaller venues. DL are aiming to provide the best working experience for the small business community. “It looks like work, feels like fun: this is hybrid working 2023”. This growth is expected to be funded by a mix of revenue and short-term debt. Our balance sheet is in a strong position to support this – but we are open to selling equity if required.
Competitors
There are around fifty other serviced office locations in Bristol, however the style of Desklodge, and the desire to build a community for the residents seems to be popular and to clearly differentiate DeskLodge from competitors.
Growth
When seeking new locations, care will be taken to examine possible sites considering the experience gained from existing locations. DL will review local communities to assess whether the DL brand and desire for community will be received well.
Finance
Last year Desklodge had hoped to seek a more efficient mortgage for the Desklodge House property (owned by subsidiary Ringstead 201 Ltd). However, with the economic uncertainty, the rise in mortgage interest, and also the delays to the Beacon Tower location, the decision was taken to extend the current facility with Stondon Capital to June 2024. With the financial pressures caused by the delays to Beacon Tower, and the early closure of the Reading location, finance with Stondon Capital will be extended with an option for another 12 months. As soon as the company feels the climate is right, replacement finance will be considered.
Profit and Loss
Turnover for the year for the group was £3.06m from 2.5 locations. This is down 4% from the previous year [2022: £3.17m].
After operating costs for the locations, and all overheads have been allocated, the group has posted pre-tax loss of £771k [2022: Profit of: £781k]
In view of the above strategic challenges above, the loss is to be expected, but should be replaced by a healthy profit in 2024.
Financial Position
The group is showing £356k in the bank, a decrease of 48% compared to the previous year, immediately prior to works at Beacon [2022: £686k].
Current assets other than cash are valued at £502k, [2022: £314k]. Fixed assets are valued at £7.5m [2022: £6.7m].
There are current liabilities of £2.4m, [2022: £4.2m]; These include loans of £480K repayable in the short-term.
Net assets reduced due to the challenging results to £2.2m, a decrease of 31% compared to the previous year [2022: £3.2m].
The debt ratio remains satisfactory at 0.42:1. This is a decrease on the previous year of 0.59:1. and reflects the current situation.
The long-term liabilities from leases has increased to £9.5m due to the new lease at Beacon Tower, Bristol as well as extension of the Stondon loan repayment to 30 September 2025. Included in £9.5m are the lease commitments of £6.5m and £3m of external loans due after more than 1 year.
Financial forecast
In terms of the budget going forwards the DL Group expects for 2024: Pre-tax Profits of £183k; EBITDA of £1.3m; and approx. £487k in the bank; and net assets of £2.7m. Based on 2.5 locations equivalent.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2023.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
We have audited the financial statements of Desklodge Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the director's report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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; or
the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the director's report and from the requirement to prepare a strategic report.
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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The extent to which the audit was considered capable of detecting irregularities including fraud:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
•the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
•we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the company operates;
•we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including, but not limited to, laws covering the Companies Act 2006 and relevant taxation legislation;
•we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting relevant documentation; and
•identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the group and company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
•understanding the business model as part of the control and business environment;
•making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
•considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
•performed analytical procedures to identify any unusual or unexpected relationships;
•tested journal entries to identify unusual transactions;
•assessed whether judgements and assumptions made in determining the accounting estimates and judgements identified in note 2 were indicative of potential bias; and
•investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
•agreeing financial statement disclosures to underlying supporting documentation;
•reading the minutes of meetings of those charged with governance;
•enquiring of management as to actual and potential litigation and claims; and
•reviewing documentation and enquiring with the company of actual and potential non-compliance with laws and regulations.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
These financial statements have been prepared in accordance with the provisions applicable to groups and companies subject to the small companies regime.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £978,651 (2022 - £655,324 profit).
Desklodge Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Desklodge House, 2 Redcliffe Way, Bristol, United Kingdom, BS1 6NL.
The group consists of Desklodge Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Desklodge Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the director holds all reasonable expectations that the group has sufficient resources for operational continuity for the foreseeable future, whilst also repaying the loan at £480,000 per annum. This confidence is based on a thorough review of recent trading, budgeting for the expected closure of 1 Castle Park and is supported by the subsequent agreement with the external lender to extend the loan repayment deadline from 30 June 2024 to 30 September 2025. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The Company is engaged in lease arrangements. As part of the lease arrangements, the company is responsible for the cost of replacing, reinstalling or rectifying the assets where there is a present contractual or statutory requirement. The dilapidations provision is based on the future expected repair costs required to restore the leased building to their fair condition at the end of their respective lease term.
Included in other operating income is £0 (2022 - £612,500) for compensation received for the early surrender of a lease.
The average monthly number of persons (including directors) employed by the group and company during the year was:
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 December 2023 are as follows:
In March 2023, the Stondon loan was increased to £3m, and in August 2023 a loan of £500k was received from Victoria Naylor-Leyland.
As at 31 December 2023, Stondon Capital Limited holds a fixed and floating charge over property assets of group companies. The loan incurred interest at 10% per annum for the first three months of the year, and 12% per annum for the rest of the year. The loan facility of £3m expires 30 September 2025, with repayments of £40,000 per month in the short term. The loan of £500,000 is secondary to the Stondon loan.
The guarantees for the loan are as follows:
A personal guarantee from the director limited to £3,750,000 plus interest, costs and charges; and
A corporate guarantee from Ringstead 201 Limited limited to £3,750,000 plus interest, costs and charges.
Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid. There has been no dividends paid in the current year.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows: Included below is £2.6m in relation to the ground rent (Headlease) lease commitment on Desklodge House with the city council.
In July 2024, the director concluded an amendment and restatement agreement to the existing external loan facility. This agreement extends the repayment date from 30 June 2024 to 30 September 2025 and further supports the group to continue operating as a going concern for the next 12 months after the audit report date.
Additionally, to mitigate losses from the Reading branch, the company made the decision to close down the location and concluded the lease surrender for Sovereign House in March 2024 with no dilapidation costs.
The following amounts were outstanding at the reporting end date:
During the reporting period, the company received a loan of £500,000 from a related party, specifically the wife of the director. The terms of the loan are:
• Interest- 12% fixed interest rate
• Repayment term- Repayable in full on the anniversary of this loan or immediately if the loan from Stondon Capital is repaid in full.
In the year, £20,000 in interest was paid on the loan.