Registered number:
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
COMPANY INFORMATION
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CUBITT HOUSE LIMITED
CONTENTS
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CUBITT HOUSE LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
The directors present their Strategic Report for the Company for the period ended 31st December 2023.
The principal activity of the Company is the operating of pubs and restaurants.
The Directors are satisfied with the Company’s performance during the period.
The previous period was a transformational period for Cubitt House with acquisition and investment in 3 new sites (The Builders Arms, The Princess Royal and The Barley Mow), significant improvements in product and service and an overhaul of the underlying business model. The focus at the beginning of 2023 was to consolidate all these strategic improvements and focus on exceptional delivery. At the beginning of the period, the Company continued to be in the midst of economic uncertainty driven by the energy crisis driving up consumer costs, as well as business costs resulting in consumer uncertainty. The Company has also seen a detrimental impact of inflationary pressures within the economy as well as staff shortages and the on-going industrial action however on the whole, have withstood these challenges and performed well across the period striving to provide an excellent product. The Company also surrendered the lease of The Beau Brummell site in September 2023 taking the total number of sites operated from 9 to 8. The surrender of the lease has been a huge positive for the Company. In November 2023, the wider Group re-negotiated its Barclays debt facility increasing the facility by £1m, taking the Group’s total bank debt to £6m. The additional £1m of funds were allocated to refurbishment projects largely across two sites in the estate, The Builders Arms and The Orange. The Orange was refurbished in Q1 2024 and performed a successful relaunch of the site. The Company continues to invest in its employees with the on-going development of the Cubitt House Academy. This, alongside regular training and development programmes such as management training and supplier trips, ensure the Company is well placed to attract the best talent in the industry to ensure our employees successfully continually grow and learn. The Company ended the period was LFL sales 21.9% up vs 2022 and 4% up on budget. The Company also made significant improvements in its underlying adjusted EBITDA with a year-on-year swing of £2,174k. The shareholders remain supportive of the on-going progress of the Company with the ambition to grow the business through increasing the portfolio of sites.
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CUBITT HOUSE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
The principal risks and uncertainties faced by the business are considered by the Directors to be as follows
Macroeconomic risk The Company has been exposed to a number of macroeconomic challenges including the cost of living crisis, increase in interest rates and inflationary impacts. However, given the location of its sites (Mayfair, Notting Hill, Marylebone and Belgravia), the Company is well placed to continue to provide a quality product at reasonable prices to its guests. Supplier and Price Risk The Company is reliant on raw ingredient supply from local producers and the prices that we pay for these ingredients can fluctuate due to a number of factors, largely due to inflationary pressures. Price increases as a result of these factors could negatively impact margins, or risk deterring our guests through excessive pricing. The directors believe that the flexibility in menu’s allows us to mitigate risk, with no over-reliance on a particular source of ingredients. Alongside this we also regularly review our supplier base for cost to ensure that these are appropriate. Staffing Risk The hospitality sector continues to face the challenge of recruitment and retention of staff, particularly with the impact of Brexit and other structural changes to the labour market. The directors place a great emphasis on the welfare and development of our staff as well as rewarding their valuable contribution. The Company also take steps to provide greater structure to the development of our teams and to ensure that they are properly rewarded. We continue to believe that we have a sector leading employee proposition, and that this will support our recruitment and retention efforts in the current labour market.
The directors measure the group’s performance using a number of key performance indicators:
31 Dec 2023 1 Jan 2023 Total revenue £19,933k £16,351k Like-for-like sales 21.9% 108.6% EBITDA before pre-opening costs and exceptionals £1,478k £(696k)
Non-financial KPI’s are monitored on a regular basis and include employee turnover levels, customer feedback, food standards and health and safety audits. These are reviewed by the management and appropriate action is taken if required. The management is satisfied with the performance of these KPI’s during the year.
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CUBITT HOUSE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
The Directors are aware of their duty under section 172 of the Companies Act 2006, to act in a way which they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and in doing so, have regard (amongst other matters) to:
∙the likely consequences of any decision in the long-term;
∙the interests of the company’s employees;
∙the need to foster the company’s business relationships with suppliers, customers and others;
∙the impact of the company’s operations on the community and the environment;
∙the desirability of the company maintaining a reputation for high standards of business conduct; and
∙the need to act fairly as between members.
Below is how we focus and promote these areas:
Long term impact
The Directors regularly update their stakeholders on the balanced scorecard KPI measures and see debate, challenge and approval from the Board.
Engagement with employees
The business has gone through a period of growth during the period alongside a change in the operational model including strategic and operational processes including the way we communicate with our employees. The overall management of the Company along side individual site management collectively have a number of years of experience working and leading teams in the hospitality industry.
With the new operational model now in place such as our people, our systems and processes, the Company will be well placed to explore opportunities going forward and to enhance growth.
We have strengthened our recruitment initiative and have been well placed to attract new talent into both the existing sites, new openings and our head office. A key measure of our ongoing success in the future is being able to retain the talent in the business and to help us achieve our ambition and therefore introduced:
∙Structured bonus schemes driven by specific key performance indicators in place for site level management and head office employees
∙We hold weekly calls with site management including General Managers, Head Chefs and Bar Managers to discuss site level performance and any significant operating issues which enables quick decision making at the operational level
∙We also hold senior management meetings on a weekly basis and bi-weekly head of department meetings to ensure all departments are aligned with strategic goals and to take advantage of specific initiatives
∙Head of Department’s have regular communication with site management.
Disabled employees
It is the Company’s policy that all persons should be considered for employment, training, career development and promotion of the basis of their abilities and aptitudes, regardless of physical ability, age, gender, sexual orientation, religion or ethnic origin.
The Company applies employment policies that are fair and equitable for all employees and these ensure that entry into and progression within the Company is determined solely by application of job criteria and personal ability and competency.
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CUBITT HOUSE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
Customers
∙Building trust with our customers at every stage of the customer journey and ensuring our customers are at the heart of the internal processes such as collection of deposits, cancellations, no shows, refunds, complaints and feedback
∙Providing premium dining experience consistently
∙Responding to customer feedback
Suppliers
∙Long term partnerships with suppliers and landlords has been built
∙Maintain regular conversations with suppliers to act in the best interest of both parties
∙Building long term partnerships focusing on quality, provenance and sustainability which is constantly reviewed
∙Engaging with suppliers to increase knowledge amongst our produce and sharing this with our customers
This report was approved by the board and signed on its behalf.
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CUBITT HOUSE LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the period ended 31 December 2023.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the period, after taxation, amounted to £1,563,881 (1 January 2023 - loss £3,022,573).
The directors recommend the payment of a dividend amounting to £nil (1 January 2023: £nil).
The directors who served during the period were:
The company will continue to operate the sites currently under management and will look to expand the number of sites under the Cubitt House brand.
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CUBITT HOUSE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
The auditors, Haysmacintyre LLP, will 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.
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CUBITT HOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED
We have audited the financial statements of Cubitt House Limited (the 'Company') for the period ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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.
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.
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CUBITT HOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED (CONTINUED)
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 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.
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 period 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.
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.
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CUBITT HOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED (CONTINUED)
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:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to regulatory requirements and trade regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included: • inspecting correspondence with regulators and tax authorities; • discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; • evaluating management’s controls designed to prevent and detect irregularities; • identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and • challenging assumptions and judgements made by management in their critical accounting estimates. 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.
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CUBITT HOUSE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED (CONTINUED)
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 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.
for and on behalf of
Statutory Auditors
10 Queen Street Place
EC4R 1AG
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CUBITT HOUSE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
REGISTERED NUMBER: 05399542
BALANCE SHEET
AS AT 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
REGISTERED NUMBER: 05399542
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 15 to 30 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
Cubitt House Limited is a private company, limited by shares and incorporated in England and Wales, registration number 05399542. The address of the registered office is 10 Motcomb Street, London, England, SW1W 8NE. The Company does not have a principal place of business as it operates across multiple sides which are centrally controlled at its registered office.
The principal activity of the Company is that of a pub and restaurant operator.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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 Carpenter Holdco Limited as at 31 December 2023 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Directors have prepared their going concern assessment of the Company. During the period, the Company has continued to recover from the impacts of COVID-19 and managed the business through an uncertain macroeconomic environment driven by the energy crisis, inflationary pressures and the wider cost of living crisis impacting consumer confidence.
The Company is well placed to respond and pre-empt any further challenges faced due to the macroeconomic environment with increased management of margins and cost analysis to ensure the underlying profitability of the business remains. The Company has prepared budgets and a cash flow forecast outlining its future position and has concluded the financial statements should be prepared on a going concern basis. The directors have demonstrated that the business will continue to generate sales, manage its liquidity and meet its covenant compliance under the Group’s existing banking facility. As a result, the Directors consider it is appropriate to adopt the going concern basis in preparing its financial statements.
Revenue is measured at the fair value of the consideration received and is mainly derived from bar
and kitchen sales, after deducting discounts and value added tax. Revenue is recognised when goods are delivered to the customer at the point of sale. Revenue derived from the provision of hotel accommodation is recognised over the period of the occupancy.
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
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.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The preparation of the financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Key judgements made by management include. Useful lives of tangible assets Depreciation and amortisation are provided in order to write down to estimated residual values the cost of each asset over its estimated useful economic life. These useful economic lives require the use of management judgement. These estimates are regularly reviewed. Valuation of leasehold properties Each cash generating unit (CGU) is reviewed annually for indicators of fair value movements. In assessing whether an asset requirements a revaluation or impairment the carrying value of the CGU is compared to its recoverable amount. The recoverable amount is the higher of its fair value and its value in use. Where value in use is estimated, this is calculated using a discounted cash flow model, which includes assumptions around future performance and the use of an appropriate discount rate. Further projections are compared to actual performance on a regular basis to assess the accuracy of such projections. Onerous lease provision The onerous lease provision in the period to 1 January 2023 relates to the associated exit costs of one site as part of the surrender process. Assumptions are used in calculating these provisions and changes to these assumptions or future events could cause the value of these provisions to change. Below market rate loan value In estimating the net present value of the future cash flows in connection with the interest free loans within the Group, the directors have assessed the market rate of interest that would apply. The directors have used a composite single rate of 4.98% which they believe is a reasonable estimate of the market rate which would be applicable to debt instruments of a similar time, risk and subordination profile.
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
11.Taxation (continued)
In March 2021 a change to the future corporation tax was substantively enacted to increase from 19% to 25% from 1 April 2023. Accordingly, the rate used to calculate the deferred tax balances at 1 January 2023 is 25% as the timing of the release of this asset is materially expected to be after this date.
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
Revaluation reserve
Other reserves
Other reserves further include contributions made by the Company's parent by way of interest charged at lower than market rate.
Profit and loss account
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £111,868 (1 January 2023: £85,937). Contributions totalling £52,895 (1 January 2023: £51,623) were payable to the fund at the reporting date and are included in creditors.
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CUBITT HOUSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
The Company has granted a fixed and floating charge over all assets of the company, in favour of Barclays Bank PLC for the Group overdraft facility and a £5m loan facility held in the immediate parent company, Carpenter Sub-Finco Limited. At the period end, the group balance of this facility was £nil (1 January 2023: £nil).
The ultimate parent undertaking of the group is Carpenter Topco (Jersey) Limited which is ultimately controlled by investment funds managed by TDR Capital LLP. The registered office and principal place of business is 20 Bentinck Street, London, W1U 2EU.
The result of Cubitt House Limited are included in the consolidated financial statements of Carpenter Holdco Limited, a subsidiary of Carpenter Topco (Jersey) Limited. Copies of these financial statements are available at Companies House, Crown Way, Cardiff, CF14 3UZ.
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