Company Registration No. 12008434 (England and Wales)
NQ64 ARCADE BARS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
28 FEBRUARY 2024
28 February 2024
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
NQ64 ARCADE BARS LTD
COMPANY INFORMATION
Directors
A J Haygarth
M W Robson
P D McCulloch
Secretary
Z P Round
Company number
12008434
Registered office
12 Hilton Street
Manchester
England
M1 1JF
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
NQ64 ARCADE BARS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
NQ64 ARCADE BARS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 1 -
The directors present the strategic report for the year ended 28 February 2024.
Business review
The following business review relates to the NQ64 group of companies as a whole. NQ64 Arcade Bars Ltd is the cost centre for the group.
Twelve month revenue for the year was £17.2m (2023: £12.8m). Adjusted earnings before interest, tax, depreciation and amortisation. (“EBITDA”), was a profit of £4.1m after adjusting for exceptional items of £1.3m relating to the pre-opening costs of new sites in the year and costs incurred in raising an additional £7.5m of bank funding.
The additional funding was used in part to complete the share buyback of the minority shareholding of Imbiba Private Equity, generating a six times multiple for the private equity firm in two years.
Three new sites were opened in the year in Bristol, Shoreditch and Manchester, bringing the total number of venues to 12. The board is pleased to report that all three locations are trading ahead of their pre-investment expectations. Excluding the consolidation adjustments the group made a profit after taxation for the 12 months ended 28 February 2024 was £0.5m (2023: £1.2m).
The Group continues to pursue its strategy to expand across the UK. At the time of filing the financial statements, the Group operates 13 venues in the UK after a recent opening in Leeds.
The Group continues to plan expansion in the coming years and has several sites with deals agreed for 2024-2025.
Principal risks and uncertainties
The directors believe that the principal risks and uncertainties that the Group faces are recruitment and consumer demand. Recruitment remains highly competitive and shortages across the hospitality industry are well documented. The Group has a business model that facilitates recruiting and retaining the best people and we are working hard to ensure that this remains at the heart of our business.
The industry continues to face significant inflationary cost pressures across drink, wages and energy cost lines. The Group has agreed distribution deals with drinks suppliers until 2026 and energy costs have been fixed until June 2027.
Analysis of development and performance
The Directors’ key decisions are made with due regards to the Group’s key stakeholders. Each Director ensures that they act in the best interests of the Group’s success when making decisions.
The Directors act to support employees to benefit from working for the Group. Employees are provided with regular communication on operational performance, new site openings and strategy of the business and staff are encouraged to provide feedback to management.
Key management decisions included new site openings to further improve profitability, grow the brand and enhance customer experience. Management continually reviews the offering of our sites and regularly refresh each site, through new drinks ranges and games line-up refreshes via feedback from both our customers and employees.
Key suppliers are managed through strong relationships with major suppliers many of which have been developed over several years. These range from our building contractors delivering our new sites, to those providing security services, to all of our drinks suppliers.
The Group is committed to minimising the environmental impact of our operations and looks to continuously improve its performance.
NQ64 ARCADE BARS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 2 -
Financial key performance indicators
The principal KPIs for the Group are as follows:
Management continues to measure both financial and non-financial KPIs on an ongoing basis. Non-financial KPIs include customer feedback, staff engagement and site audit scores.
P D McCulloch
Director
23 September 2024
NQ64 ARCADE BARS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 28 February 2024.
Principal activities
The principal activity of the company continued to be that of a head office.
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:
A J Haygarth
M W Robson
P D McCulloch
Auditor
The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 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 and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 company’s auditor 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 company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
NQ64 ARCADE BARS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 4 -
On behalf of the board
P D McCulloch
Director
23 September 2024
NQ64 ARCADE BARS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NQ64 ARCADE BARS LTD
- 5 -
Opinion
We have audited the financial statements of NQ64 Arcade Bars Ltd (the 'company') for the year ended 28 February 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 28 February 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
NQ64 ARCADE BARS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NQ64 ARCADE BARS LTD (CONTINUED)
- 6 -
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 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, 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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
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.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
NQ64 ARCADE BARS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NQ64 ARCADE BARS LTD (CONTINUED)
- 7 -
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
the nature of the industry and sector, control environment and business performance including the design of the Company's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the matters discussed among the audit engagement team and relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;
any matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the identified risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
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 auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
NQ64 ARCADE BARS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NQ64 ARCADE BARS LTD (CONTINUED)
- 8 -
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.
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.
Ceri Dixon BSc (Hons) FCA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
23 September 2024
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
NQ64 ARCADE BARS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 9 -
2024
2023
as restated
Notes
£
£
Turnover
Administrative expenses
(2,053,132)
(1,826,048)
Other operating income
730,520
325,870
Exceptional item
3
(73,931)
Operating loss
4
(1,396,543)
(1,500,178)
Interest payable and similar expenses
7
(105,240)
Loss before taxation
(1,396,543)
(1,605,418)
Tax on loss
8
(41,613)
27,444
Loss for the financial year
(1,438,156)
(1,577,974)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
NQ64 ARCADE BARS LTD
BALANCE SHEET
AS AT
28 FEBRUARY 2024
28 February 2024
- 10 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
9
64,828
1,922
Tangible assets
10
167,944
142,809
Investments
11
1,207,100
1,207,100
1,439,872
1,351,831
Current assets
Stocks
13
35,208
32,967
Debtors
14
8,949,000
2,171,563
Cash at bank and in hand
47,742
51,357
9,031,950
2,255,887
Creditors: amounts falling due within one year
15
(14,359,159)
(6,078,252)
Net current liabilities
(5,327,209)
(3,822,365)
Total assets less current liabilities
(3,887,337)
(2,470,534)
Provisions for liabilities
Deferred tax liability
16
21,353
(21,353)
-
Net liabilities
(3,908,690)
(2,470,534)
Capital and reserves
Called up share capital
18
100
100
Profit and loss reserves
(3,908,790)
(2,470,634)
Total equity
(3,908,690)
(2,470,534)
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 23 September 2024 and are signed on its behalf by:
P D McCulloch
Director
Company registration number 12008434 (England and Wales)
NQ64 ARCADE BARS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 28 February 2023:
Balance at 1 March 2022
100
(892,660)
(892,560)
Year ended 28 February 2023:
Loss and total comprehensive income
-
(1,577,974)
(1,577,974)
Balance at 28 February 2023
100
(2,470,634)
(2,470,534)
Year ended 28 February 2024:
Loss and total comprehensive income
-
(1,438,156)
(1,438,156)
Balance at 28 February 2024
100
(3,908,790)
(3,908,690)
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 12 -
1
Accounting policies
Company information
NQ64 Arcade Bars Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 12 Hilton Street, Manchester, England, M1 1JF.
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. The principal accounting policies adopted are set out below.
This 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:
The financial statements of the company are consolidated in the financial statements of NQ64 Topco Limited, a company registered in England and Wales. These consolidated financial statements are available from its registered office, 12 Hilton Street, Manchester, England, M1 1JF.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
NQ64 Arcade Bars Ltd is a wholly owned subsidiary of NQ64 Holdings Limited and the results of NQ64 Arcade Bars Ltd are included in the consolidated financial statements of NQ64 Topco Limited which are available from 12 Hilton Street, Manchester, England, M1 1JF.
1.2
Prior period error
In the prior period, the bank loan was incorrectly recorded within the company, when the legal obligation was with the parent company, NQ64 Holdings Ltd. A restatement journal has been made to move the bank loan into NQ64 Holdings Ltd and reclassify the creditor in the company to amounts due to group companies. All bank interest and loan arrangement fees have also been moved which has adjusted the retained earnings in the prior period. See the prior period adjustment note for more detail.
1.3
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The company has a number of subsidiaries with significant net assets and the directors have not intention of making any of the group balances repayable within the next 12 months.
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Trademarks
20% Straight line
Software
20% Straight line
1.5
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.
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:
Leasehold improvements
6.25% Straight line
Plant and equipment
20% Straight line
Fixtures and fittings
20% 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 credited or charged to profit or loss.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company 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.
1.8
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 14 -
1.10
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
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.
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 company 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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 15 -
1.11
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 company’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 when the company has 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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
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 leases asset are consumed.
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
There are no material judgements or key estimates within the financial statements.
3
Exceptional item
2024
2023
£
£
Expenditure
Rent
26,139
-
Legal and professional fees
47,792
-
73,931
-
4
Operating loss
2024
2023
Operating loss for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
67,250
57,500
Depreciation of owned tangible fixed assets
21,081
10,490
Amortisation of intangible assets
1,470
480
Operating lease charges
113,555
81,760
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Management and Administration
20
15
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
5
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
943,858
859,062
Social security costs
148,104
101,296
Pension costs
120,092
92,282
1,212,054
1,052,640
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
480,540
382,279
Company pension contributions to defined contribution schemes
73,510
83,842
554,050
466,121
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
164,736
140,000
Company pension contributions to defined contribution schemes
25,789
41,921
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
105,240
8
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
37,500
(27,444)
Adjustment in respect of prior periods
4,113
Total deferred tax
41,613
(27,444)
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
8
Taxation
(Continued)
- 18 -
On 1 April 2023, the corporation tax rate changed to 25% from 19%. This resulted in an effective tax rate for the period 24.49%.
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:
2024
2023
£
£
Loss before taxation
(1,396,543)
(1,605,418)
Expected tax credit based on the standard rate of corporation tax in the UK of 24.49% (2023: 19.00%)
(342,013)
(305,029)
Tax effect of expenses that are not deductible in determining taxable profit
2,508
33,793
Group relief
374,813
309,997
Permanent capital allowances in excess of depreciation
1,355
(3,581)
Other permanent differences
94
Deferred tax adjustments in respect of prior years
4,113
Remeasurement of deferred tax for changes in tax rate
837
(6,587)
Restatement of prior period
-
(56,131)
Taxation charge/(credit) for the year
41,613
(27,444)
9
Intangible fixed assets
Trademarks
Software
Total
£
£
£
Cost
At 1 March 2023
2,402
2,402
Additions
64,376
64,376
At 28 February 2024
2,402
64,376
66,778
Amortisation and impairment
At 1 March 2023
480
480
Amortisation charged for the year
480
990
1,470
At 28 February 2024
960
990
1,950
Carrying amount
At 28 February 2024
1,442
63,386
64,828
At 28 February 2023
1,922
1,922
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 19 -
10
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 March 2023
79,320
39,035
39,429
157,784
Additions
25,112
21,104
46,216
At 28 February 2024
104,432
60,139
39,429
204,000
Depreciation and impairment
At 1 March 2023
2,187
8,160
4,628
14,975
Depreciation charged in the year
4,178
9,018
7,885
21,081
At 28 February 2024
6,365
17,178
12,513
36,056
Carrying amount
At 28 February 2024
98,067
42,961
26,916
167,944
At 28 February 2023
77,133
30,875
34,801
142,809
11
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
12
1,207,100
1,207,100
12
Subsidiaries
Details of the company's subsidiaries at 28 February 2024 are as follows:
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
12
Subsidiaries
(Continued)
- 20 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Retro Arcade Rentals Limited
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Manchester NQ Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Digbeth Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Liverpool Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Peter Street Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Edinburgh Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Cardiff Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Glasgow Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Newcastle Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Soho Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Leeds Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ54 Bristol Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Shoreditch Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 Nottingham Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
NQ64 NQ2 Ltd
12 Hilton Street, Manchester, England, M1 1JF
Ordinary
100.00
-
Black Dog (Holdings) Ltd
12 Hilton Street, Manchester, England, M1 1JF
-
100.00
Blackdog Bars Limited
12 Hilton Street, Manchester, England, M1 1JF
100.00
-
Dog Bowl Ltd
12 Hilton Street, Manchester, England, M1 1JF
-
100.00
NQ64 Nottingham Ltd and NQ64 Leeds Ltd are dormant as at 28 February 2024.
The investments in subsidiaries are all stated at cost.
13
Stocks
2024
2023
£
£
Finished goods and goods for resale
35,208
32,967
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
59,048
39,551
Amounts owed by group undertakings
8,081,856
1,336,017
Other debtors
481,834
661,889
Prepayments and accrued income
326,262
110,254
8,949,000
2,147,711
Deferred tax asset (note 16)
23,852
8,949,000
2,171,563
Amounts owed by group undertakings are interest free and repayable on demand.
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 21 -
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
158,204
147,313
Amounts owed to group undertakings
12,940,909
4,273,549
Taxation and social security
618,510
118,952
Other creditors
534,982
1,378,253
Accruals and deferred income
106,554
160,185
14,359,159
6,078,252
Amounts owed to group undertakings are interest free and repayable on demand.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Accelerated capital allowances
21,353
-
-
(16,266)
Tax losses
-
-
-
34,118
Short term timing differences
-
-
-
6,000
21,353
-
-
23,852
2024
Movements in the year:
£
Asset at 1 March 2023
(23,852)
Charge to profit or loss
45,205
Liability at 28 February 2024
21,353
NQ64 ARCADE BARS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 22 -
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
120,092
92,282
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.
Contributions totalling £72,349 (2023: £17,345) were payable to the fund at the balance sheet date.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
19
Financial commitments, guarantees and contingent liabilities
The company's assets are secured by a fixed and floating charge held by TC Loans Limited.
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
46,356
33,500
Between two and five years
96,575
103,292
142,931
136,792
21
Ultimate controlling party
The parent company is NQ64 Holdings Ltd and its registered office is 12 Hilton Street, Manchester, England, M1 1JF.
The smallest and largest group into which the company is consolidated is NQ64 Topco Limited and its registered office is 12 Hilton Street, Manchester, England, M1 1JF.
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