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2023-12-31 05399542 f:PoundSterling 2023-01-01 2023-12-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 05399542










CUBITT HOUSE LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2023

 
CUBITT HOUSE LIMITED
 
 
COMPANY INFORMATION


Directors
C Wilkie 
B Magnus 
G Pearman 
S Pearman 




Registered number
05399542



Registered office
10 Motcomb Street

London

England

SW1X 8LA




Independent auditors
Haysmacintyre LLP

10 Queen Street Place

London

EC4R 1AG





 
CUBITT HOUSE LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 4
Directors' Report
 
5 - 6
Independent Auditors' Report
 
7 - 10
Statement of Comprehensive Income
 
11
Balance Sheet
 
12 - 13
Statement of Changes in Equity
 
14
Notes to the Financial Statements
 
15 - 30


 
CUBITT HOUSE LIMITED
 
 
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

Introduction
 
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. 

Business review
 
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. 

Page 1

 
CUBITT HOUSE LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
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.

Financial key performance indicators
 
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)    

Other key performance indicators
 
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.

Page 2

 
CUBITT HOUSE LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Directors' statement of compliance with duty to promote the success of the Company
 
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. 
Page 3

 
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.



................................................
B Magnus
Director

Date: 26 June 2024
Page 4

 
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.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make 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 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

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).

Directors

The directors who served during the period were:

C Wilkie 
B Magnus 
G Pearman 
S Pearman 

Future developments

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.

Page 5

 
CUBITT HOUSE LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditorsHaysmacintyre LLPwill 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.
 





................................................
B Magnus
Director

Date: 26 June 2024
Page 6

 
CUBITT HOUSE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED
 

Opinion


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 policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its loss for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 7

 
CUBITT HOUSE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic Report and the Directors' Report for the financial 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.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 8

 
CUBITT HOUSE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

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


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

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.


Page 9

 
CUBITT HOUSE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUBITT HOUSE LIMITED (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Emma Bernardez (Senior Statutory Auditor)
for and on behalf of
Haysmacintyre LLP
Statutory Auditors
10 Queen Street Place
London
EC4R 1AG

26 June 2024
Page 10

 
CUBITT HOUSE LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023

 31 December 2023
1 January 2023
Note
£
£

  

Turnover
 4 
19,932,710
16,351,422

Cost of sales
  
(4,855,450)
(4,314,384)

Gross profit
  
15,077,260
12,037,038

Administrative expenses
  
(14,691,826)
(13,845,598)

Exceptional administrative expenses
  
(730,795)
(967,128)

Operating loss
 6 
(345,361)
(2,775,688)

Interest payable and similar expenses
 10 
(1,030,310)
(472,506)

Loss before tax
  
(1,375,671)
(3,248,194)

Tax on loss
 11 
(188,210)
225,621

Loss for the financial period
  
(1,563,881)
(3,022,573)

Unrealised surplus on revaluation of tangible fixed assets
  
216,000
33,815

Deferred tax movement in respect of tangible fixed assets
  
216,995
10,122

Total comprehensive income for the period
  
(1,130,886)
(2,978,636)

The notes on pages 15 to 30 form part of these financial statements.

Page 11

 
CUBITT HOUSE LIMITED
REGISTERED NUMBER: 05399542

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2023
Note
£
£

Fixed assets
  

Tangible assets
 12 
20,998,996
21,252,072

  
20,998,996
21,252,072

Current assets
  

Stocks
 13 
558,738
525,088

Debtors: amounts falling due after more than one year
 14 
40,500
-

Debtors: amounts falling due within one year
 14 
2,623,371
2,277,886

Cash at bank and in hand
 15 
1,974,451
1,682,742

  
5,197,060
4,485,716

Creditors: amounts falling due within one year
 16 
(12,010,394)
(10,449,911)

Net current liabilities
  
 
 
(6,813,334)
 
 
(5,964,195)

Total assets less current liabilities
  
14,185,662
15,287,877

Creditors: amounts falling due after more than one year
 17 
(5,030,615)
(4,793,159)

Provisions for liabilities
  

Deferred tax
 18 
(1,618,787)
(1,647,572)

Other provisions
 19 
-
(180,000)

  
 
 
(1,618,787)
 
 
(1,827,572)

Net assets
  
7,536,260
8,667,146


Capital and reserves
  

Called up share capital 
 20 
250,002
250,002

Revaluation reserve
 21 
9,928,247
9,595,982

Other reserves
 21 
3,984,765
3,984,765

Profit and loss account
 21 
(6,626,754)
(5,163,603)

  
7,536,260
8,667,146


Page 12

 
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 26 June 2024.




................................................
B Magnus
Director

The notes on pages 15 to 30 form part of these financial statements.

Page 13

 

 
CUBITT HOUSE LIMITED


 

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023



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


£
£
£
£
£



At 1 January 2022
2
9,739,621
3,984,765
(2,328,606)
11,395,782





Loss for the year
-
-
-
(3,022,573)
(3,022,573)


Surplus on revaluation of leasehold property
-
33,815
-
-
33,815


Deferred tax movement on revaluation of leasehold property
-
10,122
-
-
10,122


Shares issued during the year
250,000
-
-
-
250,000


Transfer of excess depreciation to profit and loss account
-
(187,576)
-
187,576
-





At 1 January 2023
250,002
9,595,982
3,984,765
(5,163,603)
8,667,146





Loss for the period
-
-
-
(1,563,881)
(1,563,881)


Surplus on revaluation of leasehold property
-
216,000
-
-
216,000


Deferred tax movement on revaluation of leasehold property
-
216,995
-
-
216,995


Transfer of excess depreciation to profit and loss accounts
-
(100,730)
-
100,730
-



At 31 December 2023
250,002
9,928,247
3,984,765
(6,626,754)
7,536,260



The notes on pages 15 to 30 form part of these financial statements.

Page 14

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

1.


General information

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

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Carpenter Holdco Limited as at 31 December 2023 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

Page 15

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

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.   

  
2.4

Revenue

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. 

 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 16

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.8

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.9

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

Page 17

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Short-term leasehold property
-
straight line over the estimated useful life of the leases of between 15 and 43 years
Plant and machinery
-
10 - 33% straight line
Motor vehicles
-
33% straight line
Fixtures and fittings
-
25 - 33% straight line
Office equipment
-
25 - 33% straight line
Other fixed assets
-
10 - 33% straight line

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

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

 
2.11

Revaluation of tangible fixed assets

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

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

Page 18

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.13

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Smallware inventories are held at cost which is determined by reference to the quantity in issue to each restaurant. Smallware inventory relates to small value items which have short life spans relating to kitchen and bar equipment. These items are recorded under inventory as they are utilised in providing food and beverage to customers. 

 
2.14

Debtors

Short-term debtors are measured at transaction price, less any impairment.

 
2.15

Cash

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

 
2.16

Creditors

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

 
2.17

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 19

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.18

Onerous leases

Where the unavoidable costs of a lease exceed the economic benefit expected to be received from it, a provision is made for the present value of the obligations under the lease.

 
2.19

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Critical judgements
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.

Page 20

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

4.


Turnover

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


31 December 2023
1 January 2023
£
£

Sales - Dry
8,339,452
7,149,309

Sales - Wet
11,065,792
8,774,914

Sales - Accommodation
481,712
364,746

Sales - Other
45,754
62,453

19,932,710
16,351,422


All turnover arose within the United Kingdom.


5.


Exceptional items

31 December 2023
1 January 2023
£
£


Onerous lease provision
-
180,000

Pre-opening costs
32,176
399,052

Settlement costs
30,951
138,097

Exceptional utility costs
571,382
153,134

Other
96,286
96,845

730,795
967,128


6.


Operating loss

The operating loss is stated after charging:

31 December 2023
1 January 2023
£
£

Depreciation of tangible fixed assets
1,008,762
1,187,055

Other operating lease rentals
1,092,289
843,618

Page 21

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

7.


Auditors' remuneration

During the period, the Company obtained the following services from the Company's auditors and their associates:


31 December 2023
1 January 2023
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
25,800
24,000

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.


8.


Employees

Staff costs, including directors' remuneration, were as follows:


31 December 2023
1 January 2023
£
£

Wages and salaries
7,695,373
7,120,421

Social security costs
654,393
484,854

Cost of defined contribution scheme
111,868
85,937

8,461,634
7,691,212


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


  31 December 2023
   1 January 2023
            No.
            No.







Retail Staff
342
319



Management and administration
23
23



Directors
4
4

369
346

Page 22

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

9.


Directors' remuneration

31 December 2023
1 January 2023
£
£

Directors' emoluments
240,000
240,000

Company contributions to defined contribution pension schemes
2,642
2,642

242,642
242,642


The highest paid director received remuneration of £120,000 (1 January 2023 - £120,000).


10.


Interest payable and similar expenses

31 December 2023
1 January 2023
£
£


Intercompany interest payable
1,030,310
472,506


11.


Taxation


31 December 2023
1 January 2023
£
£



Total current tax
-
-

Deferred tax


Origination and reversal of timing differences
188,210
(225,621)

Total deferred tax
188,210
(225,621)


Taxation on profit/(loss) on ordinary activities
188,210
(225,621)
Page 23

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the period/year

The tax assessed for the period/year is higher than (2022 - the same as) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

31 December 2023
1 January 2023
£
£


Loss on ordinary activities before tax
(1,375,671)
(3,248,194)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.53% (2022 - 19%)
(323,736)
(617,157)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
1,640
7,819

Capital allowances for period/year in excess of depreciation
172,892
85,697

Other tax adjustments, reliefs and transfers
3,823
-

Other permanent differences
73
-

Chargeable gains
(204,262)
(7,693)

Group relief
182,222
254,788

Movement in deferred tax
355,558
50,925

Total tax charge for the period/year
188,210
(225,621)


Factors that may affect future tax charges

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.

Page 24

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

12.


Tangible fixed assets





Short-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment
Other fixed assets
Total

£
£
£
£
£
£
£



Cost or valuation


At 2 January 2023
19,120,481
1,999,654
18,963
1,353,025
147,980
814,417
23,454,520


Additions
209,229
130,599
-
192,853
17,006
13,586
563,273


Revaluations
(297,018)
-
-
-
-
-
(297,018)



At 31 December 2023

19,032,692
2,130,253
18,963
1,545,878
164,986
828,003
23,720,775



Depreciation


At 2 January 2023
-
903,331
18,197
529,685
149,495
601,740
2,202,448


Charge for the period on owned assets
513,018
146,828
766
268,597
1,949
101,191
1,032,349


On revalued assets
(513,018)
-
-
-
-
-
(513,018)



At 31 December 2023

-
1,050,159
18,963
798,282
151,444
702,931
2,721,779



Net book value



At 31 December 2023
19,032,692
1,080,094
-
747,596
13,542
125,072
20,998,996



At 1 January 2023
19,120,481
1,096,323
766
823,340
(1,515)
212,677
21,252,072

The valuation for the period ended 31 December 2023 was a directors' valuation. In determining the value of the property, the use of estimates such as future net income, environmental matters, the overall condition of the property and applicable yield have been used.

Page 25

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

13.


Stocks

2023
2023
£
£

Consumables
235,598
235,598

Smallware inventories
323,140
289,490

558,738
525,088



14.


Debtors

2023
2023
£
£

Due after more than one year

Other debtors
40,500
-

40,500
-


2023
2023
£
£

Due within one year

Trade debtors
205,420
-

Amounts owed by group undertakings
1,640,882
1,502,057

Other debtors
193,284
190,416

Prepayments and accrued income
583,785
585,413

2,623,371
2,277,886


Amounts owed by group undertakings are interest free and repayable on demand. 


15.


Cash

2023
2023
£
£

Cash at bank and in hand
1,974,451
1,682,742


Page 26

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

16.


Creditors: Amounts falling due within one year

2023
2023
£
£

Trade creditors
2,154,341
2,627,101

Amounts owed to group undertakings
6,769,786
4,898,949

Other taxation and social security
1,315,474
1,232,646

Other creditors
768,648
570,214

Accruals and deferred income
1,002,145
1,121,001

12,010,394
10,449,911


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


17.


Creditors: Amounts falling due after more than one year

2023
2023
£
£

Amounts owed to group undertakings
4,783,073
4,556,159

Other creditors
247,542
237,000

5,030,615
4,793,159


Included within the above is a principal loan balance of £5,000,000 due to Carpenter Finco Limited, a fellow group undertaking. The loan is considered to be interest free however as the loan is below market rate of interest, the principal balance has been discounted using an annual rate of 4.98%. Total interest recognised in respect of the balance was £226,914 (1 January 2023: £216,159). The total discounted loan is as above and is due for repayment at May 2025.

Page 27

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

18.


Deferred taxation




31 December
2023
1 January
2023


£

£






At beginning of year
(1,647,572)
(1,883,315)


Charged to profit or loss
(188,210)
225,621


Charged to other comprehensive income
216,995
10,122



At end of year
(1,618,787)
(1,647,572)

The provision for deferred taxation is made up as follows:

2023
2023
£
£


Accelerated capital allowances
(927,550)
(801,039)

Short term timing difference
13,224
12,906

Losses and other deductions
(1,943,266)
1,300,822

Gains on revaluations of leasehold properties
1,238,805
(2,160,261)

(1,618,787)
(1,647,572)


19.


Provisions




Onerous lease

£





At 1 January 2023
180,000


Charged to profit or loss
(180,000)



At 31 December 2023
-

The onerous lease provision related to the associated exit costs of one site as part of the surrender process.
The onerous lease provision has been reversed in the period on the surrender of The Beau Brummell lease in September 2023.

Page 28

 
CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

20.


Share capital

2023
2023
£
£
Allotted, called up and fully paid



250,002 (1 January 2023 - 250,002) Ordinary shares shares of £1.00 each
250,002
250,002



21.


Reserves

Revaluation reserve

The revaluation reserve represents unrealised gains on tangible fixed assets net of deferred tax movements in respect of the unrealised gains. 

Other reserves

Capital contribution reserve represents funds provided by shareholders by way of a non-refundable gift. 
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 profit and loss account represents cumulative profits and losses net of dividends and other adjustments. 


22.


Pension commitments

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.


23.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2023
£
£


Not later than 1 year
945,000
1,055,000

Later than 1 year and not later than 5 years
3,780,000
4,220,000

Later than 5 years
11,766,667
13,426,667

16,491,667
18,701,667

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CUBITT HOUSE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

24.


Related party transactions

The Company has taken advantage of exemptions from disclosing transactions with related company under the provision of Section 33 paragraph 1A not to disclose distractions with wholly owned group members. 
During the period, purchases were made with Stonegate Pub Company, a company under common control of £576,912 (1 January 2023: £371,527). The amount owed as at 31 December 2023 included in trade creditors is £148,907 (1 January 2023: £228,951). 
During the period, purchases of £2,710 (1 January 2023: £115,102) were made with Country Creatures Management LLP, an entity of which S Pearman and G Pearman are designated members. The amount owed as at 31 December 2023 included in trade creditors is £nil (1 January 2023: £1,600).
During the period, purchases of £9,062 (1 January 2023: £10,684) were made from Hundred Acres Apothecary Limited, a company of which S Pearman and G Pearman are directors. The amount owed as at 31 December 2023 included in trade creditors is £nil (1 January 2023: £nil). 


25.


Secured liabilties and financial guarantees

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). 


26.


Ultimate parent undertaking and ultimate controlling party

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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