Company Registration No. 11926262 (England and Wales)
4WALL HOLDINGS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
4WALL HOLDINGS UK LIMITED
COMPANY INFORMATION
Directors
W Bailey
J Lassiter
DJ Poultney
Company number
11926262
Registered office
Unit E & F Glenfield Business Park
Phillips Road
Blackburn
Lancashire
BB1 5PF
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
4WALL HOLDINGS UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 32
4WALL HOLDINGS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Overall Assessment

The consolidated group accounts for 4Wall Holdings UK Ltd comprise the main trading entity (4Wall Entertainment UK Ltd) and the holding company (4Wall Holdings UK Ltd). The holding company does not trade, but simply holds the investment in 4Wall Entertainment UK Ltd (“4Wall UK”) and the associated loan with the group parent company that has funded all UK acquisitions to date.

 

As such, the group accounts need to be viewed with this context in mind; that being that there is a significant intercompany loan and associated interest charge, resulting in a notable P&L loss and overall Net Liabilities.

 

With strong, underlying profitability and a positive, growing EBITDA, management are satisfied that the core business is in a good position to continue this positive trajectory.

 

Fair Review of the Business

The Group had a strong 2023, with both the Events industry (being exhibitions and conferences) and Festivals/touring industry coming back strong after the previous COVID affected years. There were no interruptions due to COVID in 2023, so demand for live events continued to be high throughout the year, and 4Wall UK are well positioned in both markets to take advantage of the upturn in demand, due to our commitment to investing in the latest kit and in our people. We expect this level of activity, in terms of demand for live events, will continue going into 2024 and for the foreseeable.

 

Acquisition of Transition Video

4Wall UK completed the trade and asset purchase of Transition Video (“Transition”) in 2022, and so 2023 was the first full year of Transition trading as part of 4Wall UK. This acquisition cemented the wide range of services that 4Wall UK offers and has already provided great opportunities for cross pollination of clients and cross selling of services, both within the UK and between the UK and the US.

 

Acquisition update

There were no new acquisitions in 2023, however 4Wall UK were able to fully harness the value of the synergies available through the new structure, with some examples below:

Development and performance

In 2022, the Group opened a new unit at Production Park, Unit 2. This pre-visualization suite has allowed the Group to obtain access to top tier clients rehearsing at the park and allows us to deepen our excellent relationships with The Academy of Live Technology (“ALT”) (previously Backstage Academy), where the future talent of the industry come to train. We are already seeing the benefit of having Unit 2, and have recruited two former students of ALT, as well as taking on three Trainee AV Technicians as part of the Live Event Technician apprenticeship.

 

In Q4 of 2023, the Group decided to dismantle Studio 19, our permanent studio at the Royal Lancaster hotel, as the demand for virtual events had diminished due to the return of physical events. In its place, the Group is now using the space as a demo area, for the Group to bring clients to, to showcase our latest products and use as a meeting space in London.

 

In 2023, the Group continued to invest in new hire of staff, primarily in the delivery and operations teams, which allowed us to deliver the level of revenue and EBITDA we achieved in 2023 and put the Group in a strong position to deliver more projects in 2024.

4WALL HOLDINGS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators

 

31 Dec 23

31 Dec 22

Change

Turnover

24,926,360

22,434,969

2,491,391

 

 

 

 

 

 

 

 

EBITDA (exc. Exceptional Items)

5,956,165

4,068,556

1,887,609

 

 

 

The prior year, being 2022, saw the market return to “more normal” trading conditions post-COVID, although Q1 had been impacted due to Omicron. In 2023, there were less interruptions to the events calendar, and so trading conditions were back to similar levels, to that of pre-COVID. As a result of this, general growth across the business, and a full year of Transition Video being included in the results, turnover grew by 11% year-on-year from 2022 to 2023.

 

EBITDA (excluding exceptional items) was £5,956,165 (2022: £4,068,556), being an increase of 46%. The directors see this growth as positive, in what continues to be, a very competitive market and continue to monitor overheads to find ways to improve EBITDA where possible.

Principle Risks & Uncertainties

Exchange Rate Risk

The majority of our equipment purchases are made in dollars or euros, and as such there are times in the year where the business is susceptible to exchange rate movements. Management utilize forward contracts to mitigate such risks where necessary. However, we also invoice some revenue in dollars and euros, so have a level of natural hedging inbuilt.

 

Equipment Failure or Loss

The Group’s hire fleet comprises equipment which is subject to the risk of mechanical or electronic failure, theft or damage. These risks are mitigated through appropriate maintenance and quality control programs, as well as the existence of various insurance policies.

 

Credit Risk

Whilst credit risk is something that exists in any business, it is tightly controlled by our finance team and we do not believe that any one customer represents a material risk to the company in this regard.

 

Brexit

With the UK out of the European Union, the administrative process of transporting equipment into Europe on a temporary basis to service European based events is more complicated. However, given our experience of managing this since the regulations changed, through careful planning and strict adherence to customs regulations, we do not believe that this risk is material.

On behalf of the board

DJ Poultney
Director
25 April 2024
4WALL HOLDINGS UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the group continued to be that of the provision and management of audio visual equipment at major conferences, events and exhibitions worldwide. The group has also developed a retail offering for permanent installations of such equipment.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

W Bailey
J Lassiter
DJ Poultney
Auditor

Rickard Luckin Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

4WALL HOLDINGS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
DJ Poultney
Director
25 April 2024
4WALL HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF 4WALL HOLDINGS UK LIMITED
- 5 -
Opinion

We have audited the financial statements of 4Wall Holdings UK 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, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).

In our opinion the financial statements:

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 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 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 directors 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

4WALL HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF 4WALL HOLDINGS UK LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Capability of the audit in detecting irregularities, including fraud

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management, and via inspection of the group’s regulatory and legal correspondence.

We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the group.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the group is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution; relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

4WALL HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF 4WALL HOLDINGS UK LIMITED
- 7 -

Secondly the group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; data protection legislation; anti-bribery and anti-corruption legislation.

ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance which laws and regulations that could have a material impact on the financial statements.

In relation to fraud, we performed the following specific procedures in addition to those already noted:

These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.

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.

4WALL HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF 4WALL HOLDINGS UK LIMITED
- 8 -

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.

Michael Breame (Senior Statutory Auditor)
For and on behalf of Rickard Luckin Limited
25 April 2024
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
4WALL HOLDINGS UK LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
2
24,926,360
22,434,969
Cost of sales
(16,764,062)
(15,275,946)
Gross profit
8,162,298
7,159,023
Administrative expenses
(8,783,801)
(12,669,039)
Other operating income
2,393
54,501
Operating loss
3
(619,110)
(5,455,515)
Interest receivable and similar income
7
29
343
Interest payable and similar expenses
8
(4,466,621)
(3,086,114)
Fair value gains/(losses) on financial instruments
9
-
(176,057)
Loss before taxation
(5,085,702)
(8,717,343)
Tax on loss
10
-
0
613,687
Loss for the financial year
(5,085,702)
(8,103,656)
The loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
4WALL HOLDINGS UK LIMITED
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
8,508,809
9,971,187
Tangible assets
12
11,893,759
10,403,220
20,402,568
20,374,407
Current assets
Stocks
-
1,916
Debtors
15
3,995,700
5,037,638
Cash at bank and in hand
947,982
1,492,847
4,943,682
6,532,401
Creditors: amounts falling due within one year
16
(8,814,394)
(10,971,695)
Net current liabilities
(3,870,712)
(4,439,294)
Total assets less current liabilities
16,531,856
15,935,113
Creditors: amounts falling due after more than one year
17
(39,765,257)
(35,730,425)
Provisions for liabilities
Provisions
20
150,000
425,000
(150,000)
(425,000)
Net liabilities
(23,383,401)
(20,220,312)
Capital and reserves
Called up share capital
22
1
1
Other reserves
23
2,687,890
765,277
Profit and loss reserves
(26,071,292)
(20,985,590)
Total equity
(23,383,401)
(20,220,312)
The financial statements were approved by the board of directors and authorised for issue on 25 April 2024 and are signed on its behalf by:
25 April 2024
DJ Poultney
Director
Company registration number 11926262 (England and Wales)
4WALL HOLDINGS UK LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
13
17,455,196
17,455,196
Current assets
Debtors
15
4,763,766
6,328,530
Cash at bank and in hand
973
2,313
4,764,739
6,330,843
Creditors: amounts falling due within one year
16
(523,212)
(1,776,289)
Net current assets
4,241,527
4,554,554
Total assets less current liabilities
21,696,723
22,009,750
Creditors: amounts falling due after more than one year
17
(37,363,861)
(34,798,818)
Net liabilities
(15,667,138)
(12,789,068)
Capital and reserves
Called up share capital
22
1
1
Profit and loss reserves
(15,667,139)
(12,789,069)
Total equity
(15,667,138)
(12,789,068)

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 £2,878,070 (2022 - £6,690,292 loss).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 25 April 2024 and are signed on its behalf by:
25 April 2024
DJ Poultney
Director
Company registration number 11926262 (England and Wales)
4WALL HOLDINGS UK LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Other reserves
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
1
-
(12,881,934)
(12,881,933)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(8,103,656)
(8,103,656)
Capital contribution from ultimate parent
-
765,277
-
765,277
Balance at 31 December 2022
1
765,277
(20,985,590)
(20,220,312)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(5,085,702)
(5,085,702)
Capital contribution from ultimate parent
-
1,922,613
-
1,922,613
Balance at 31 December 2023
1
2,687,890
(26,071,292)
(23,383,401)
4WALL HOLDINGS UK LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1
(6,098,777)
(6,098,776)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(6,690,292)
(6,690,292)
Balance at 31 December 2022
1
(12,789,069)
(12,789,068)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(2,878,070)
(2,878,070)
Balance at 31 December 2023
1
(15,667,139)
(15,667,138)
4WALL HOLDINGS UK LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
2,547,606
6,048,341
Interest paid
(260,030)
(65,232)
Income taxes refunded
65,456
-
Net cash inflow from operating activities
2,353,032
5,983,109
Investing activities
Proceeds from new lease arrangements
3,625,587
290,254
Purchase of intangible assets
-
(1,091,120)
Purchase of tangible fixed assets
(6,801,766)
(5,731,242)
Proceeds from disposal of tangible fixed assets
275,173
4,927
Payment against provision
(275,000)
(125,000)
Interest received
29
343
Net cash used in investing activities
(3,175,977)
(6,651,838)
Financing activities
Proceeds from issue of capital reserve
1,922,613
765,277
Proceeds from new bank loans
600,000
-
Repayment of bank loans
(1,078,333)
(520,000)
Payment of finance leases obligations
(1,166,162)
(686,353)
Net cash generated from/(used in) financing activities
278,118
(441,076)
Net decrease in cash and cash equivalents
(544,827)
(1,109,805)
Cash and cash equivalents at beginning of year
1,492,809
2,602,614
Cash and cash equivalents at end of year
947,982
1,492,809
Relating to:
Cash at bank and in hand
947,982
1,492,847
Bank overdrafts included in creditors payable within one year
-
(38)
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

4Wall Holdings UK Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of 4Wall Holdings UK Limited and all of its subsidiaries.

1.1
Accounting convention

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.

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, modified to include the revaluation of certain financial instruments at fair value. 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:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company 4Wall Holdings UK 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.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.4
Going concern

The group has reported a loss for the period after taxation of £5,085,702, resulting in an overall Net Liability position of £23,383,401. However, it must be noted that the group's KPI is EBITDA which increased to £5,956,165 from £4,068,556. The group loss has been caused predominantly by amortisation charged on goodwill, which has no cash impact, and intercompany interest charged by the parent company which is not repayable in the foreseeable future; as a result, management do not believe that either of these charges negatively impact the ability of the group to continue as a going concern. The group's diversification into virtual event services and the returning confidence in events suggests a far more positive future outlook. The directors have made reasonable assumptions in forecasting future cash-flows through 2024 and beyond, working on scenarios which include a significant further investment in state of the art technology. The projected position through 2024 means that the group will continue to rely on certain support from its ultimate parent company in the USA and that parent have confirmed that they will continue to provide that support and are able to do so.

 

At the time of approving the financial statements, the directors have a reasonable expectation that the company has sufficient resources to continue to operate for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

Audio visual technology rental and associated income is recognised over the period of the rental and where additional services are provided at the point at which the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from the permanent installation of audio visual equipment is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on installation of the product), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over 5 years or 10 years based on the expected useful life of the intangible.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings leasehold
20% straight line
Assets for hire
20% straight line
Fixtures, fittings & equipment
25% straight line
Computer equipment
33% straight line
Motor vehicles
25% straight line

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.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

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.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.10
Stocks

Stocks represent consumable goods held for resale and low value items used in the hire operations of the company, which are written off over their operational life of 3 years.

 

The accounting for short life "consumable" goods in this way applied to such purchases through until August 2020. From this date all new purchases of such goods are being individually recorded on the company asset register and written off over their useful economic life accordingly. The financial impact on the results for the year is therefore not materially different.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

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

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.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

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.

Derecognition of financial assets

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.

Classification of financial liabilities

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

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.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

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.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current 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

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.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.15
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.16
Employee benefits

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.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.18
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

1.19
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Asset rental sales
24,634,636
21,920,824
New sales
291,724
514,145
24,926,360
22,434,969
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Turnover and other revenue
(Continued)
- 22 -
2023
2022
£
£
Turnover analysed by geographical market
UK
20,581,388
17,550,840
Rest of the World
4,344,972
4,884,129
24,926,360
22,434,969
2023
2022
£
£
Other revenue
Interest income
29
343
3
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(1,890,608)
3,323,096
Depreciation of owned tangible fixed assets
4,258,339
3,671,873
Depreciation of tangible fixed assets held under finance leases
854,558
224,832
(Profit)/loss on disposal of tangible fixed assets
(76,843)
97,444
Amortisation of intangible assets
1,462,378
1,280,525
Operating lease charges
1,025,462
881,950
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
7,675
6,925
Audit of the financial statements of the company's subsidiaries
15,500
14,000
23,175
20,925
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
5
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Administration
17
16
-
-
Delivery/Operations
80
60
-
-
Sales
24
22
-
-
Total
121
98
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
5,559,392
4,679,780
-
0
-
0
Social security costs
634,735
485,206
-
-
Pension costs
126,922
105,295
-
0
-
0
6,321,049
5,270,281
-
0
-
0
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
381,743
127,276

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 0).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
381,743
-
Company pension contributions to defined contribution schemes
28,620
-
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
29
43
Other interest income
-
300
Total income
29
343
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
91,292
57,633
Other interest on financial liabilities
4,206,591
3,020,882
Interest on finance leases and hire purchase contracts
168,738
7,599
Total finance costs
4,466,621
3,086,114

Other interest payable on financial liabilities represents interest amounts payable to group undertakings, further details of which are disclosed in note 26.

9
Fair value gains/(losses) on financial instruments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial liabilities held at fair value through profit or loss
-
(176,057)
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
-
0
(613,687)
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 25 -

The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(5,085,702)
(8,717,343)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(1,271,426)
(1,656,295)
Tax effect of expenses that are not deductible in determining taxable profit
569,077
616,974
Change in unrecognised deferred tax assets
390,298
850,762
Depreciation on assets not qualifying for tax allowances
1,012
(2,945)
Amortisation on assets not qualifying for tax allowances
311,039
236,389
Adjustment in respect of previous periods
-
0
(613,687)
Change in tax rates
-
0
(44,885)
Taxation charge/(credit)
-
(613,687)
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
13,464,479
Amortisation and impairment
At 1 January 2023
3,493,292
Amortisation charged for the year
1,462,378
At 31 December 2023
4,955,670
Carrying amount
At 31 December 2023
8,508,809
At 31 December 2022
9,971,187
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
12
Tangible fixed assets
Group
Land and buildings leasehold
Assets for hire
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
463,146
22,959,263
464,066
440,045
251,166
24,577,686
Additions
17,964
6,571,046
62,032
143,686
7,038
6,801,766
Disposals
-
0
(814,978)
-
0
-
0
(51,675)
(866,653)
At 31 December 2023
481,110
28,715,331
526,098
583,731
206,529
30,512,799
Depreciation and impairment
At 1 January 2023
285,289
13,213,681
288,821
233,707
152,968
14,174,466
Depreciation charged in the year
53,698
4,879,800
78,452
66,787
34,160
5,112,897
Eliminated in respect of disposals
-
0
(616,649)
-
0
-
0
(51,674)
(668,323)
At 31 December 2023
338,987
17,476,832
367,273
300,494
135,454
18,619,040
Carrying amount
At 31 December 2023
142,123
11,238,499
158,825
283,237
71,075
11,893,759
At 31 December 2022
177,857
9,745,582
175,245
206,338
98,198
10,403,220
The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Assets for hire
3,277,520
658,350
-
0
-
0
Motor vehicles
54,740
72,144
-
0
-
0
3,332,260
730,494
-
-
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
17,455,196
17,455,196

 

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Fixed asset investments
(Continued)
- 27 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
17,455,196
Carrying amount
At 31 December 2023
17,455,196
At 31 December 2022
17,455,196
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
4Wall Entertainment UK Limited
1st Floor County House, 100 New London Road, Chelmsford, Essex, United Kingdom, CM2 0RG
Ordinary
100.00
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,660,413
1,432,534
12,725
25,161
Corporation tax recoverable
-
0
65,456
-
0
-
0
Other debtors
170,164
173,549
45,349
67,511
Prepayments and accrued income
1,165,123
3,366,099
41,078
48,693
3,995,700
5,037,638
99,152
141,365
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
-
4,664,614
6,187,165
Total debtors
3,995,700
5,037,638
4,763,766
6,328,530
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
18
420,000
995,038
-
0
38
Obligations under finance leases
19
1,419,805
339,867
-
0
-
0
Trade creditors
3,274,991
4,661,854
91,582
91,582
Amounts owed to group undertakings
1,678,108
1,570,224
-
0
-
0
Other taxation and social security
961,668
575,231
-
-
Other creditors
434,653
1,703,338
418,208
1,671,247
Accruals and deferred income
625,169
1,126,143
13,422
13,422
8,814,394
10,971,695
523,212
1,776,289

Amounts owed to group undertakings on the Group balance sheet are amounts owed to the parent company of 4Wall Holdings UK Limited, a company incorporated in the USA, which does not form part of this consolidated UK group.

17
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
18
756,667
660,000
-
0
-
0
Obligations under finance leases
19
1,644,729
265,242
-
0
-
0
Other borrowings
18
37,363,861
34,805,183
37,363,861
34,798,818
39,765,257
35,730,425
37,363,861
34,798,818

Other borrowings include £37,363,861 (2022: £34,798,818) which is due to the parent company, 4Wall Entertainment Inc.

18
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
1,176,667
1,655,000
-
0
-
0
Bank overdrafts
-
0
38
-
0
38
Loans from group undertakings
37,363,861
34,805,183
37,363,861
34,798,818
38,540,528
36,460,221
37,363,861
34,798,856
Payable within one year
420,000
995,038
-
0
38
Payable after one year
38,120,528
35,465,183
37,363,861
34,798,818
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Loans and overdrafts
(Continued)
- 29 -

Bank loans relate to loans taken out with National Westminster Bank Plc under the Coronavirus Large Business Interruption Loan scheme (CLBIL) and the Recovery Loan Scheme. During the year the CLBIL balances were refinanced under a Natwest Resolution loan. These loans are secured by a debenture on the assets of the company.

Loans from the group undertakings are not due for repayment until at least 12 months from the date of these financial statements.

19
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
1,847,739
401,647
-
0
-
0
In two to five years
2,138,231
364,694
-
0
-
0
3,985,970
766,341
-
-
Less: future finance charges
(921,436)
(161,232)
-
0
-
0
3,064,534
605,109
-
0
-
0

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The lease obligations are secured by fixed charges on the assets to which they relate.

20
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Deferred consideration
150,000
425,000
-
-
Movements on provisions:
Deferred consideration
Group
£
At 1 January 2023
425,000
Utilisation of provision
(275,000)
At 31 December 2023
150,000
4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Provisions for liabilities
(Continued)
- 30 -

Provisions are balances owed for further revenue costs in relation to a company acquisition from a previous year where the recognition criteria for provisions are met and additional costs in relation to the acquisition in the current year.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
126,922
105,295

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

22
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
100
100
1
1

The ordinary shares carry full voting rights and full rights to dividends and distributions.

23
Capital contribution Reserve
2023
2022
Group
£
£
At the beginning of the year
765,277
-
Additions
1,922,613
765,277
At the end of the year
2,687,890
765,277
2023
2022
Company
£
£
At the beginning and end of the year
-
-

During the year the ultimate parent company made a further capital contribution of £1,922,613. This reserve is non-distributable.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
24
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
934,359
943,576
400,000
400,000
Between two and five years
818,581
1,452,352
600,000
1,000,000
1,752,940
2,395,928
1,000,000
1,400,000
25
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
403,905
2,407,372
-
-
26
Related party transactions

The Group has an intercompany loan with their US parent company totalling £37,363,861 (2022: £34,798,818). The original loan is denominated in US dollars and therefore any exchange gains/losses arising are reflected accordingly in these financial statements. The loan has been charged interest at a rate of 11.8%.

27
Controlling party

In this and the preceding financial year, the immediate parent undertaking is 4Wall Entertainment Inc, a company incorporated in Nevada, United States of America.

 

In this and the preceding financial year, the ultimate parent undertaking is LAV Gear Parent Inc, a company incorporated in Delaware, United States of America.

4WALL HOLDINGS UK LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
28
Cash generated from group operations
2023
2022
£
£
Loss for the year after tax
(5,085,702)
(8,103,656)
Adjustments for:
Finance costs
4,466,621
3,086,114
Investment income
(29)
(343)
(Gain)/loss on disposal of tangible fixed assets
(76,843)
97,444
Amortisation and impairment of intangible assets
1,462,378
1,280,525
Depreciation and impairment of tangible fixed assets
5,112,897
3,896,705
Foreign exchange (gain)/loss on other borrowings
(1,707,441)
3,214,424
Other gains and losses
-
176,057
Increase in provisions
-
300,000
Movements in working capital:
Decrease in stocks
1,916
64,071
Decrease/(increase) in debtors
970,117
(1,292,841)
(Decrease)/increase in creditors
(2,596,308)
3,329,841
Cash generated from operations
2,547,606
6,048,341
29
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,492,847
(544,865)
947,982
Bank overdrafts
(38)
38
-
0
1,492,809
(544,827)
947,982
Borrowings excluding overdrafts
(36,460,183)
2,126,246
(38,540,528)
Obligations under finance leases
(605,109)
(2,459,425)
(3,064,534)
(35,572,483)
(878,006)
(40,657,080)
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