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COMPANY REGISTRATION NUMBER:
10498823
Year ended 31 December 2023
Independent auditor's report to the members |
8 |
|
|
Statement of comprehensive income |
14 |
|
|
Statement of financial position |
15 |
|
|
Statement of changes in equity |
16 |
|
|
Statement of cash flows |
17 |
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Notes to the financial statements |
18 |
|
|
Year ended 31 December 2023
Review of the business
During the year
Box Broadband Limited
(the "company") continued its network expansion. Premises passed increased from 35k at 31 December 2022 to 62k by 31 December 2023, with the company's customer base growing to 7069 from 2217 in the same period. The directors of the company took the decision to pause the expansion of its network footprint and instead focus its available resources on building customer connections within the existing network. This decision was made with careful consideration of the best interests of the company's stakeholders. The group has a network rollout model predicated on engaging large build contractors, each with the experience and access to a deep pool of skilled labour to handle a complex portfolio of network rollout projects. In November 2023, the company announced that it would pause the expansion of its network footprint and instead focus its available on building customer connections within the existing network. As a result, Box intends to reach a peak network size in excess of 70K over the next 18 months across Surrey and Sussex as the internal team optimise the network assets. The company has always sought to be price competitive with other operators but more importantly offer its customers high speed, reliable, full fibre connectivity at affordable prices. An emphasis on customer service makes the Community Fibre brand one of the highest regarded ISPs on TrustPilot with scores regularly exceeding 4.5. Financial position and risk management As at 31 December 2023 the company had cash on hand of £2.4m and external borrowing of £35.0m, with the size and amount of the facilities now available as follows:
|
|
Facility £m |
Drawn as of 31st Dec 2023 £m |
|
Term loan facility |
35 |
35 |
|
Revolving facility (from 1st February 2024) |
15 |
– |
|
Total facility |
50 |
35 |
|
|
|
|
During 2023, the group benefited from £3.5m of equity investment from its shareholders. Financial Risk Management The group's financial risk is monitored closely by the finance function, through the following processes: - Liquidity management - Each week, the company updates a 3-month cash flow forecast to manage short-term liquidity, ensure debt facility drawdowns are optimised to minimise interest costs. This forecast is provided to Community Fibre and reviewed as part of the group with the Community Fibre CEO and CFO weekly, by the majority shareholders monthly, and provided as part of the quarterly Box Board meetings. - Equity funding rounds - As part of the company's annual budget process and 3-month liquidity management process, shareholders are informed about anticipated equity funding requirements. Funding rounds of varying time periods are the mechanism by which the equity funding is delivered by shareholders. - Cash flow performance review - Each month, the company measures the cash flow performance of the business against the annual budget. This is reviewed by the Board as part of the monthly management accounts.
Principal risks & uncertainties
- Climate risk - The company recognises that climate change poses both physical and transitional risks and opportunities. The former include both physical risks caused by the increased frequency and severity of climate and weather events, and transitional risks associated with economic, technology or regulatory changes related to the move towards a greener economy. The three main physical risks are flooding, high winds and extreme heat: - Flooding - Extreme localised flooding could impact the group's underground units, though most are already protected against water damage and have battery backup units installed in the event that power is interrupted. - High winds - These naturally pose a greater risk to the group's overhead infrastructure than the underground network though tree falls can cause significant damage to both; further, there may be health and safety considerations to staff working at heights. - Extreme temperatures could affect the company's street cabinets but given all powered units have built-in cooling and temperature monitoring this is considered a low risk. Ultimately, the company faces all these risks today, with climate change representing a risk of increased frequency and severity. The company continues to work to embed consideration of the effects of climate change into its core operational processes and longer-term business planning so that it can maximise the value it brings to its customers, investors and the communities where it operates. It also monitors changes in the business and regulatory landscape to understand where there may be opportunities resulting from the transition to a low-carbon economy. - Health and safety - The company is involved in activities that could: cause injury to employees or the public; cause damage to public and private buildings and the public highways; cause environmental harm; or cause reputational damage to the group. The company continues to rely on subcontractors to deliver the majority of its network build and customer connections. The company continues to treat health and safety as its highest priority with ongoing monitoring of subcontractor activity underp inned by clear processes and policies, which are regularly updated. - Supply chain logistics - The company saw pressures ease on its supply chain during 2023 though lead times remain elevated compared to the pre-pandemic years. The company alongside Community Fibre continues to monitor the performance of individual suppliers and constantly works to obtain the optimal mix of pricing and reliability. - Availability of funding - The company continues to consume cash in order to invest in customer acquisition and customer connections and to pay interest on its debt. The cash shortfall of the group is funded by a combination of committed debt facilities and uncommitted equity from shareholders. There is a risk that further committed debt funding might not be available on acceptable terms or that existing shareholders might be unable or unwilling to provide equity financing. In the short-term th e group has access to sufficient committed debt facilities and is confident that in the longer term it can raise additional investment as needed, as it has done in preceding years. - Customer acquisition - The company needs to continue to increase the customer base on its network, at an acceptable cost per customer acquired ("CPA") and average revenue per customer, to ensure sufficient returns on invested capital. To achieve this, the group uses a mix of online, telesales and door-to-door sales channels, supported by a sophisticated marketing operation. The company has agreed a fixed price cost per customer acquired with Community fibre to minimize risk for Box and take ad vantage of the scales of Community Fibre. - Competitive overbuild of network footprint - The company continues to monitor the risks of overbuild. On balance, the group believes the competitor most likely to build a fibre-to-the-premises network overlapping with the group's existing network footprint is BT Openreach. The company remains confident that as a low-cost broadband operator with a first-mover advantage across the majority of its network footprint, it remains well-placed to meet its customer connection and revenue targets. - Alternative broadband technologies and technological obsolescence - The group continues to monitor the availability and pricing of alternative broadband technologies delivered without (or with significantly less) physical infrastructure connections to the home, including: 5G and other mobile technologies; satellite broadband; and point-to-point microwave. There will always be a place for alternative technologies, particularly in remote rural or otherwise hard-to-reach locations, but globally, FTTP remains the undisputed gold standard for delivery of high-speed broadband in urban and semi-urban areas. - Government regulation of the broadband market - The government can intervene in the broadband market directly, by subsidising network rollout, or through various quasi-autonomous non-governmental agencies such as Ofcom and the Competition and Markets Authority. Management continue to engage fully with regulators and trade forums, with Community Fibre's Regulatory & Trade Director sitting on the board of the Independent Networks Co-operative Association ("INCA") since 2022. - Cyber-security and GDPR - A cyber-attack on the company could disrupt the group's operations and, in the result of a leak of sensitive customer information, could cause reputational damage. The company has put in place policies and procedures to minimise the risk of a cyber-attack, to minimise the risk of sensitive data loss in the event of such an attack and in the event of data loss to appropriately manage the disclosure of such an attack to the UK's Information Commissioner's Office.
Suppliers & customers
The company works with the best suppliers and contractors to ensure the highest quality workmanship and the most reliable network possible which in turn gives customers the best experience deliverable. The company has always aimed to provide service to areas poorly served by other providers.
Operating review
Revenue for the year was £1.2m (2022: £0.5m) an increase of 127% from the prior year. This was driven by an increase in connected customers, enabled by the expansion of the network and premises passed. Gross profit margin has increased to 35% (2022: 29%), which is expected to continue to improve as the rapidly increasing customer base makes the use of the network more efficient. The loss before tax for the year has increased to £7.2m (2022: £3.9m). The company has continued to invest heavily in network roll-out, with property, plant and equipment additions of £19.2m in the year (2022: £19.9m). This relates to both the expansion of the network footprint and with the increase in customer premises connections as a result of new customers. In November 2023, the company announced that it would pause the expansion of its network footprint and instead focus its available resources on building customer connections within the existing network. As such, an overall reduction in employee numbers in 2024 is anticipated.
Financial key performance indicators
Financial
|
|
2023 £000's |
2022 £000's |
|
Revenue |
1,242 |
547 |
|
Gross profit |
440 |
159 |
|
Gross profit margin (%) |
35 |
35 |
|
Loss before tax for the year |
7,209 |
3,876 |
|
Fixed asset additions |
19,159 |
19,922 |
|
|
|
|
Non-financial
|
|
Number |
Number |
|
Residential premises passed |
26,715 |
29,813 |
|
Net customers connected |
4,852 |
1,605 |
|
|
|
|
Fundraising
The company completed one Equity round in July 2023 of £3.5m and took on £20m of Debt in the year.
Post balance sheet events
The company agreed a rolling credit facility of £15m as of 1st February 2024. As at 31st Maythe company has drawn down £5m against this facility.
Future outlook
The company will continue to increase the number of residential and business customers on its network, which will provide further opportunities for other revenue streams. The group's core business challenge is to connect customers quickly enough, with low enough customer acquisition and connection costs and tightly controlled network maintenance and other overheads to ensure sufficient economic returns on its assets.
This report was approved by the board of directors on 13 June 2024 and signed on behalf of the board by:
Registered office: |
57a Broadway |
Leigh-on-Sea |
Essex |
SS9 1PE |
|
Year ended 31 December 2023
The directors present their report and the financial statements of the company for the year ended
31 December 2023
.
Directors
The directors who served the company during the year were as follows:
G R Sargood |
|
A J Gartrell |
|
G A Oxby |
|
O K M Swantee |
|
N A Vautier |
|
R F W Brandmeier |
(Appointed
15 June 2023) |
D Banerjee |
(Retired
15 June 2023) |
|
|
Dividends
The directors do not recommend the payment of a dividend.
Events after the end of the reporting period
Particulars of events after the reporting date are detailed in note 24 to the financial statements.
Going concern review
Under company law, the directors are required to consider whether it is appropriate to prepare financial statements on a going concern basis.
The directors have considered the ability of the group to meet its liabilities as they fall due for a period of 12 months from the date of signing of the financial statements. During 2023, the company continued the rapid expansion of its network footprint and its customer base, resulting in significant capital and operating expenditure, supported by debt and equity inflows. The company plans to grow its revenues significantly, which will require further capital and operating expenditure supported by by inward investment in the form of debt and equity. Due to the decision to pause network rollout and focus available resources on connecting customers, the level of external financial support required in the going concern period is forecast to be lower than would have been the case if the group had continued expanding its network footprint
Community Fibre Limited have provided a letter of support confirming their intention to provide financial support to the company in order that it may continue to operate, to invest in customer acquisition and customer connection and to service its liabilities as they fall due.
At the time of approving the financial statements the directors have reasonable expectation that the company has adequate resources to continue in operational existence for at least twelve months. Thus the directors continue to adopt the going concern basis in preparing the financial statements.
In line with FRC guidance, the group has considered a downside scenario to assess the impact of adverse events. The directors are satisfied that the group remains a going concern in all scenarios modelled and the group will be able to continue in business and meet its liabilities as they fall due for a period of at least twelve months from the date of signature of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
As a result, the financial statements do not include any adjustments that would result from the consequences of the group not being able to trade.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 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 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 judgments 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
-
so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on
13 June 2024
and signed on behalf of the board by:
Registered office: |
57a Broadway |
Leigh-on-Sea |
Essex |
SS9 1PE |
|
Independent Auditor's Report to the Members of
Box Broadband Limited |
|
Year ended 31 December 2023
Qualified opinion
We have audited the financial statements of Box Broadband Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, 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 year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
We were not appointed as auditor of the company until after 31 December 2022 and thus did not observe the counting of physical stock at the start of the year. We were unable to satisfy ourselves by alternative means concerning the stock quantities held at 31 December 2022 and disclosed as a subcategory of network assets. Consequently we were unable to determine whether any adjustment to these amounts were necessary. Our audit opinion on the financial statements for the year ended 31 December 2023 is modified accordingly.
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 qualified opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor's opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.
In our evaluation of the directors' conclusions, we considered the inherent risks associated with the company's business model including effects arising from macro-economic uncertainties such as the cost of living crisis, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period.
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.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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. As described in the basis for qualified opinion section of our report, our audit opinion is qualified as we were unable to satisfy ourselves concerning the amount disclosed as stock as a sub-category of network assets for the comparative period. We have concluded that where the other information refers to cost of network assets, it may have been materially misstated.
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:
-
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-
the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - the financial statements are not in agreement with the accounting records and the returns; or - certain disclosures of directors' remuneration specified by law are not made; or - the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption in preparing the directors reports and take advantage of the small companies exemption from the requirement to prepare a strategic report. Arising solely from the limitation of scope of our work relating to the figure for stock as a sub-category of network assets in the comparative year: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; 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. 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 identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management and via inspection of the company's regulatory and legal correspondence. We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations, communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company. The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company's constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect; employment legislation; health and safety legislation; GDPR; anti-bribery and corruption legislation. International Auditing Standards (UK) limit the required procedures to identify non-compliance with these laws and regulations to the procedures, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance which laws and regulations that could have a material impact on the financial statements. In relation to fraud, we performed the following specific procedures in addition to those already noted: - Challenging assumptions made by management in its significant accounting estimates in particular regarding income recognition; - Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations; - Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud; - Ensuring that testing undertaken on both the performance statement, and the Statement of Financial Position includes a number of items selected on a random basis; These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with International Auditing Standards UK. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud. A further description of our responsibilities is located on the Financial Reporting Council's website at https:www.frc.org.uk/auditors responsibilities. This description forms part of our auditors report. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
SPENCER WATSON FCA |
(Senior Statutory Auditor) |
|
For and on behalf of |
Buckley Watson Limited |
Chartered Accountants & statutory auditor |
57a Broadway |
Leigh-on-Sea |
Essex |
SS9 1PE |
|
14 June 2024
Statement of Comprehensive Income |
|
Year ended 31 December 2023
|
2023 |
2022 |
|
|
(restated) |
Note |
£ |
£ |
Turnover |
4 |
1,242,188 |
547,074 |
|
|
|
|
Cost of sales |
802,237 |
388,520 |
|
------------ |
--------- |
Gross profit |
439,951 |
158,554 |
|
|
|
Administrative expenses |
5,995,698 |
4,082,259 |
Other operating income |
5 |
564,079 |
464,247 |
|
|
------------ |
------------ |
Operating loss |
6 |
(
4,991,668) |
(
3,459,458) |
|
|
|
|
Other interest receivable and similar income |
2,362 |
86 |
Interest payable and similar expenses |
10 |
2,219,237 |
417,010 |
|
------------ |
------------ |
Loss before taxation |
(
7,208,543) |
(
3,876,382) |
|
|
|
|
Tax on loss |
11 |
– |
– |
|
------------ |
------------ |
Loss for the financial year and total comprehensive income |
(
7,208,543) |
(
3,876,382) |
|
------------ |
------------ |
|
|
|
|
All the activities of the company are from continuing operations.
Statement of Financial Position |
|
31 December 2023
|
2023 |
2022 |
|
|
|
(restated) |
Note |
£ |
£ |
£ |
|
|
|
|
Fixed assets
Intangible assets |
12 |
|
198,077 |
90,611 |
Tangible assets |
13 |
|
40,231,877 |
22,767,319 |
|
|
------------- |
------------- |
|
|
40,429,954 |
22,857,930 |
|
|
|
|
|
Current assets
Debtors |
14 |
1,831,559 |
|
1,260,309 |
Cash at bank and in hand |
2,363,870 |
|
2,837,191 |
|
------------ |
|
------------ |
|
4,195,429 |
|
4,097,500 |
|
|
|
|
|
Creditors: amounts falling due within one year |
15 |
3,042,045 |
|
1,933,977 |
|
------------ |
|
------------ |
Net current assets |
|
1,153,384 |
2,163,523 |
|
|
------------- |
------------- |
Total assets less current liabilities |
|
41,583,338 |
25,021,453 |
|
|
|
|
|
Creditors: amounts falling due after more than one year |
16 |
|
35,259,773 |
14,999,001 |
|
|
------------- |
------------- |
Net assets |
|
6,323,565 |
10,022,452 |
|
|
------------- |
------------- |
|
|
|
|
|
Capital and reserves
Called up share capital |
20 |
|
314 |
273 |
Share premium account |
21 |
|
18,594,388 |
15,084,773 |
Profit and loss account |
21 |
|
(
12,271,137) |
(
5,062,594) |
|
|
------------- |
------------- |
Shareholders funds |
|
6,323,565 |
10,022,452 |
|
|
------------- |
------------- |
|
|
|
|
|
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the
board of directors
and authorised for issue on
13 June 2024
, and are signed on behalf of the board by:
Company registration number:
10498823
Statement of Changes in Equity |
|
Year ended 31 December 2023
|
Called up share capital |
Share premium account |
Profit and loss account |
Total |
|
£ |
£ |
£ |
£ |
At 1 January 2022 |
201 |
7,584,845 |
(
1,186,212) |
6,398,834 |
|
|
|
|
|
Loss for the year |
|
|
(
3,876,382) |
(
3,876,382) |
|
---- |
------------ |
------------ |
------------ |
Total comprehensive income for the year |
– |
– |
(
3,876,382) |
(
3,876,382) |
|
|
|
|
|
Issue of shares |
72 |
7,499,928 |
– |
7,500,000 |
|
---- |
------------ |
------------ |
------------ |
Total investments by and distributions to owners |
72 |
7,499,928 |
– |
7,500,000 |
|
|
|
|
|
At 31 December 2022 (as previously reported) |
273 |
15,084,773 |
(
7,694,589) |
7,390,457 |
Prior period adjustments |
– |
– |
2,631,995 |
2,631,995 |
|
---- |
------------- |
------------ |
------------- |
At 31 December 2022 (restated) |
273 |
15,084,773 |
(
5,062,594) |
10,022,452 |
|
---- |
------------- |
------------ |
------------- |
|
|
|
|
|
Loss for the year |
|
|
(
7,208,543) |
(
7,208,543) |
|
---- |
------------- |
------------ |
------------- |
Total comprehensive income for the year |
– |
– |
(
7,208,543) |
(
7,208,543) |
|
|
|
|
|
Issue of shares |
41 |
3,509,615 |
– |
3,509,656 |
|
---- |
------------ |
---- |
------------ |
Total investments by and distributions to owners |
41 |
3,509,615 |
– |
3,509,656 |
|
|
|
|
|
|
---- |
------------- |
------------- |
------------ |
At 31 December 2023 |
314 |
18,594,388 |
(
12,271,137) |
6,323,565 |
|
---- |
------------- |
------------- |
------------ |
|
|
|
|
|
Year ended 31 December 2023
Cash flows from operating activities
Loss for the financial year |
(
7,208,543) |
(
3,876,382) |
|
|
|
Adjustments for: |
|
|
Depreciation of tangible assets |
1,361,602 |
562,609 |
Impairment of tangible assets |
208,141 |
199,432 |
Amortisation of intangible assets |
17,508 |
3,839 |
Impairment of intangible assets |
– |
48,216 |
Government grant income |
(
564,079) |
(
464,247) |
Other interest receivable and similar income |
(
2,362) |
(
86) |
Interest payable and similar expenses |
2,219,237 |
417,010 |
Accrued income |
(
607,076) |
(
45,642) |
|
|
|
Changes in: |
|
|
Trade and other debtors |
(
456,555) |
(
1,123,903) |
Trade and other creditors |
1,231,521 |
928,620 |
|
------------ |
------------ |
Cash generated from operations |
(
3,800,606) |
(
3,350,534) |
|
|
|
Interest paid |
(
2,029,114) |
(
342,918) |
Interest received |
2,362 |
86 |
|
------------ |
------------ |
Net cash used in operating activities |
(
5,827,358) |
(
3,693,366) |
|
------------ |
------------ |
|
|
|
Cash flows from investing activities
Purchase of tangible assets |
(
19,034,301) |
(
19,921,706) |
Purchase of intangible assets |
(
124,974) |
(
142,666) |
|
------------- |
------------- |
Net cash used in investing activities |
(
19,159,275) |
(
20,064,372) |
|
------------- |
------------- |
|
|
|
Cash flows from financing activities
Proceeds from issue of ordinary shares |
3,509,656 |
7,500,000 |
Proceeds from loans from group undertakings |
20,098,583 |
14,999,001 |
Government grant income |
564,079 |
464,247 |
Payments of finance lease liabilities |
340,994 |
– |
|
------------- |
------------- |
Net cash from financing activities |
24,513,312 |
22,963,248 |
|
------------- |
------------- |
|
|
|
Net decrease in cash and cash equivalents |
(
473,321) |
(
794,490) |
Cash and cash equivalents at beginning of year |
2,837,191 |
3,631,681 |
|
------------ |
------------ |
Cash and cash equivalents at end of year |
2,363,870 |
2,837,191 |
|
------------ |
------------ |
|
|
|
Notes to the Financial Statements |
|
Year ended 31 December 2023
1.
General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 57a Broadway, Leigh-on-Sea, Essex, SS9 1PE.
2.
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3.
Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis and in accordance with Financial Reporting Standards.
Going concern
Under company law, the directors are required to consider whether it is appropriate to prepare financial statements on a going concern basis. The directors have considered the ability of the company to meet its liabilities as they fall due for a period of 12 months from the date of signing of the financial statements. During 2023, the company continued the rapid expansion of its network footprint and its customer base, resulting in significant capital and operating expenditure, supported by debt and equity inflows. The company continues to have plans to grow its revenues significantly, which will require further capital and operating expenditure supported by inward investment in the form of debt and equity. Due to the decision to pause the network rollout and focus available resources on connecting customers, the level of financial support required in the going concern period is forecast to be lower than would have been the case if the company had continued expanding its network footprint concern. Community Fibre Limited has provided a letter of support confirming its intention to provide financial support to the company in order that it may continue to operate, to invest in network expansion and to service its liabilities as they fall due. If Community Fibre Limited did not continue to provide financial support, it is unlikely that the company would be able to access further debt financing. In addition if the investors in the Community Fibre Limited did not continue to provide financial support themselves, it is unlikely that the company would be able to access further debt financing. At the time of approving the financial statements the directors have reasonable expectation that the company has adequate resources to continue in operational existence for at least twelve months. Thus the directors continue to adopt the going concern basis in preparing the financial statements. In line with FRC guidance, the company has stress-tested its forecasts to assess the impact of adverse events. The directors are satisfied that the company remains a going concern in all scenarios modelled and the company will be able to continue in business and meet its liabilities as they fall due for a period of at least twelve months from the date of signature of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. As a result, the financial statements do not include any adjustments that would result from the consequences of the company not being able to trade.
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below. In addition, this note also explains where there have been actual adjustments this year as a result of errors and changes to previous estimates. Key sources of estimation uncertainty Useful economic life of network assets The company depreciates the network assets over their useful economic lives which reflects management's estimate for the period that the company intends to derive future economic benefits from the use of those network fixed assets. Changes in the expected level of usage from technological developments could affect the useful economic lives and residual values of these assets. This could affect the future depreciation charge of these assets. The carrying amount of the company's network assets is disclosed in note 13 to the financial statements. Useful economic life of customer Wi-Fi routers Customer Wi-Fi routers are recognised as non-current assets when dispatched and subsequently charged to administrative expenses over their useful life. A change in the rate of churn for that cohort of customers could affect the useful economic life of the customer Wi-Fi routers. This could affect the future profit and loss charge for these assets. The carrying value of customer Wi-Fi routers is disclosed in note 14 to the financial statements. Network asset accrual methodology The company constructs the majority of its network assets by engaging build partners to provide skilled labour. Each section of network is run as a separate project, with cost per premise passed ("CPPP") estimated in advance. These CPPPs are used to estimate the value of network assets to be recognised on a percentage completion basis for each project in advance of the third party raising invoices and therefore represents a source of uncertainty around the accuracy of the cost of the network asset recognised at the end of the period, which could result in an increase or decrease in the value of that asset in subsequent periods. Carrying value of intangible and tangible fixed assets At December 31, 2023 the company carried a net book value of £198,077 in respect of intangible assets, and £40.2 million in respect of tangible assets. The company assesses whether there are any indicators of impairment for all non-financial assets at each reporting date.
Revenue recognition
The company's main source of revenue is the provision of broadband and associated add-on services. These services include: - One, or more than one, fibre-to-the-premises broadband service with a defined download speed and identical upload speed; - Provision of a working Wi-Fi router for the duration of the customer's contract; - Broadband installation; - Voice-over-IP telephony services; Broadband services may be priced individually or as part of a package, but, irrespective of the pricing structure, the company treats all products as being part of a single bundled service obligation within a wider contract with common start and end dates. The total consideration for the provision of the service is measured as the amount payable by the customer to the company over the life of the contract, excluding any amounts collected by the company on behalf of third parties. Revenue is recognised monthly in line with the satisfaction of the service obligations for each customer contract, with the difference between the cumulative amount invoiced during the life of the contract and the revenue recognised to date for each customer being a contract asset or liability. Identifiable incremental costs of obtaining customer contracts, including transaction fees paid to third parties or commissions paid to sales employees ("customer acquisition costs"), are recognised in administrative costs over the life of the contract where the contract length is greater than 12 months, otherwise they are immediately expensed in administrative costs. The vast majority of customers are on contracts with term 12 months, 24 months or month-to-month. The identifiable incremental costs of fulfilling the contractual service obligations to a customer, other than those already recognised as network assets, are recognised in administrative costs over the average life of a customer. Management has estimated the average customer life at 7 years based on an analysis of customer churn rates. The only cost treated this way is the cost of customer Wi-Fi routers. When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income. The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are within the month of invoice date. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses
.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
|
Website and database |
- |
20% straight line |
|
|
|
|
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
|
Right of use asset & improvements |
- |
Straight line over the life of the lease |
|
Network assets |
- |
Straight line over 25 years and 5 years where applicable |
|
Plant and machinery |
- |
20% straight line |
|
Fixtures,fittings, tools and equipment |
- |
20% straight line |
|
|
|
|
Assets in the course of construction, included as a subcategory of network assets, are not depreciated.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
Finance leases and hire purchase contracts
At inception, the company assesses whether a contract is, or contains, a lease whereby the contract conveys the right to control the use of an identified physical asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, and amounts expected to be payable under a residual value guarantee.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Correction of error in accounting for intangible assets, stock and deferred taxation
As a result of the company breaching the medium company threshold and therefore being subject to audit for the first time, the directors undertook a review of its compliance with group accounting policies and certain classification, recognition and calculation errors that occurred during the preparation of the 2022 financial statements were identified. These errors, in aggregate, resulted in a material misstatement of the 2022 financial position and as a result management has restated the 2022 results.
The restatements related to the classification of stock held in respect of network assets from current to non-current; the classification of website costs from tangible to intangible assets and the de-recognition of the provision for deferred taxation as a result of taxable losses carried forward.
The following primary statements required a 2022 restatement as a result of the errors identified: the statement of comprehensive income, the statement of financial position, the statement of changes in equity and the statement of cash flows. There was no impact on the 2022 tax charge to the income statement.
The following notes required a 2022 restatement as a result of the errors identified below: notes 12,13 and 14.
The nature and quantity of each error is described below:
Intangible assets classification
During 2023, management carried out a detailed review of items capitalised on the company's fixed asset register and identified that in respect of database and website development costs of £142,666 and accumulated amortisation of £52,055 recorded under fixtures, fittings and equipment were intangible in nature.
Stock in respect of network assets under construction
During 2023, management undertook a review of its accounting treatment of stock and identified disclosure of £1,480,817 separately on the Balance Sheet as current assets should be recorded as a subcategory of Network assets under fixed assets.
Recognition of deferred taxation liability
As a result of receiving the group taxation calculations for 31 December 2023 and the derecognition of the deferred taxation liability of £2,631,995 therein, management performed a review of the previous year's group taxation calculation and assessed that this liability was not valid last year due to the availability of taxation losses carried forward.
Prior period reclassifications
During the preparation of the 2023 financial statements, management determined that the usefulness of certain information would be enhanced by changing the categorisation of the information within the notes to the financial statements for the prior year and accordingly £672,048 representing the carrying amount of customer wifi routers was reclassified from prepayments to a separate customer routers line in note 14, £77,369 of which was disclosed separately as amounts falling due after more than one year. This change had no other impact on the financial statements.
4.
Turnover
Turnover arises from:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Internet provision |
1,242,188 |
547,074 |
|
------------ |
--------- |
|
|
|
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5.
Other operating income
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Government grant income |
564,079 |
464,247 |
|
--------- |
--------- |
|
|
|
6.
Operating loss
Operating profit or loss is stated after charging:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Amortisation of intangible assets |
17,508 |
3,839 |
Depreciation of tangible assets |
1,361,601
|
562,609 |
|
|
|
Impairment of intangible assets recognised in:
Administrative expenses |
– |
48,216 |
|
|
|
Impairment of tangible assets recognised in:
|
Administrative expenses |
208,142 |
199,432 |
Impairment of trade debtors |
17,098 |
– |
Operating lease rentals |
137,044 |
141,632 |
|
------------ |
--------- |
|
|
|
|
7.
Auditor's remuneration
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Fees payable for the audit of the financial statements |
40,000 |
– |
|
-------- |
---- |
|
|
|
Fees payable to the company's auditor and its associates for other services:
Other non-audit services |
28,000 |
20,800 |
|
-------- |
-------- |
|
|
|
8.
Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
|
2023 |
2022 |
|
No. |
No. |
Executive and management |
6 |
7 |
Customer services and sales |
21 |
14 |
Network delivery, engineering and installations |
56 |
40 |
Planning |
9
|
6
|
Finance and administration |
6
|
4
|
|
---- |
---- |
|
98 |
71 |
|
---- |
---- |
|
|
|
The aggregate payroll costs incurred during the year, relating to the above, were:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Wages and salaries |
1,741,228 |
1,124,448 |
Social security costs |
147,755 |
112,083 |
Other pension costs |
38,098 |
48,759 |
|
------------ |
------------ |
|
1,927,081 |
1,285,290 |
|
------------ |
------------ |
|
|
|
9.
Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Remuneration |
214,500 |
229,680 |
|
--------- |
--------- |
|
|
|
Remuneration of the highest paid director in respect of qualifying services:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Aggregate remuneration |
214,500 |
299,680 |
|
--------- |
--------- |
|
|
|
10.
Interest payable and similar expenses
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Interest on obligations under finance leases and hire purchase contracts |
8,952 |
– |
Interest due to group undertakings |
2,210,285 |
417,010 |
|
------------ |
--------- |
|
2,219,237 |
417,010 |
|
------------ |
--------- |
|
|
|
Interest due to group undertakings represents payable arises on the principal drawn on the debt facility with Community Fibre Limited. The interest rate charged is comprised of SONIA plus a fixed margin.
11.
Tax on loss
Reconciliation of tax income
The tax assessed on the loss on ordinary activities for the year is higher than (2022: higher than) the
standard rate of corporation tax in the UK
of
23.52
% (2022:
19
%).
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Loss on ordinary activities before taxation |
(
7,208,543) |
(
3,876,382) |
|
------------ |
------------ |
Loss on ordinary activities by rate of tax |
(
1,695,489) |
(
736,513) |
Effect of expenses not deductible for tax purposes |
57,616 |
107,281 |
Effect of capital allowances and depreciation |
(
107,751) |
22,098 |
Adjustments to deferred tax charge in respect of previous periods |
– |
(
332,561)
|
Re-measurement of deferred tax for changes in tax rates |
(
110,890)
|
711,494
|
Movement in deferred tax not recognised |
1,856,514 |
228,201 |
|
------------ |
------------ |
Tax on loss |
– |
– |
|
------------ |
------------ |
|
|
|
12.
Intangible assets
|
Website and database costs |
|
£ |
Cost |
|
At 1 January 2023 (as restated) |
142,666 |
Additions |
124,974 |
|
--------- |
At 31 December 2023 |
267,640 |
|
--------- |
Amortisation |
|
At 1 January 2023 |
52,055 |
Charge for the year |
17,508 |
|
--------- |
At 31 December 2023 |
69,563 |
|
--------- |
Carrying amount |
|
At 31 December 2023 |
198,077 |
|
--------- |
At 31 December 2022 |
90,611 |
|
--------- |
|
|
See note 3 for further details on the restatement of the 2022 figures
.
13.
Tangible assets
|
Leasehold property - Right-of-use |
Network assets |
Plant & machinery |
Fixtures, Fittings & Equipment |
Total |
|
£ |
£ |
£ |
£ |
£ |
Cost |
|
|
|
|
|
At 1 January 2023 (as restated) |
– |
23,386,423 |
231,838 |
133,562 |
23,751,823 |
Additions |
480,999 |
18,501,400 |
– |
51,902 |
19,034,301 |
|
--------- |
------------- |
--------- |
--------- |
------------- |
At 31 December 2023 |
480,999 |
41,887,823 |
231,838 |
185,464 |
42,786,124 |
|
--------- |
------------- |
--------- |
--------- |
------------- |
Depreciation |
|
|
|
|
|
At 1 January 2023 |
– |
847,900 |
108,577 |
28,027 |
984,504 |
Charge for the year |
98,511 |
1,141,724 |
88,286 |
33,081 |
1,361,602 |
Impairment losses |
– |
208,141 |
– |
– |
208,141 |
|
--------- |
------------- |
--------- |
--------- |
------------- |
At 31 December 2023 |
98,511 |
2,197,765 |
196,863 |
61,108 |
2,554,247 |
|
--------- |
------------- |
--------- |
--------- |
------------- |
Carrying amount |
|
|
|
|
|
At 31 December 2023 |
382,488 |
39,690,058 |
34,975 |
124,356 |
40,231,877 |
|
--------- |
------------- |
--------- |
--------- |
------------- |
At 31 December 2022 |
– |
22,538,523 |
123,261 |
105,535 |
22,767,319 |
|
--------- |
------------- |
--------- |
--------- |
------------- |
|
|
|
|
|
|
Right-of-use assets have been recognised in respect of operating leases for property. Included within Network Assets are assets with a cost and net book value of £3,280,002 (2022: £4,062,207) in respect of assets under construction at the year-end and a figure of £1,892,599 (2022: £1,480,817) representing the valuation of stock held at the year-end to be utilised in respect of assets under construction. See note 3 for further details on the restatement of the 2022 figures.
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
|
Short leasehold property |
|
£ |
At 31 December 2023 |
382,488 |
|
--------- |
At 31 December 2022 |
– |
|
--------- |
|
|
14.
Debtors
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Trade debtors |
52,503 |
31,756 |
Prepayments and accrued income |
783,956 |
413,196 |
Customer routers |
532,539 |
594,679 |
Other debtors |
462,561 |
220,678 |
|
------------ |
------------ |
|
1,831,559 |
1,260,309 |
|
------------ |
------------ |
|
|
|
The debtors above include the following amounts falling due after more than one year:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Customer routers |
302,416 |
77,369 |
|
--------- |
-------- |
|
|
|
See note 3 for further details on the restatement of the 2022 figures.
15.
Creditors:
amounts falling due within one year
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Trade creditors |
2,215,207 |
922,456 |
Amounts owed to group undertakings |
77,420 |
– |
Accruals and deferred income |
633,559 |
929,752 |
Social security and other taxes |
– |
81,765 |
Obligations under finance leases and hire purchase contracts |
101,385 |
– |
Other creditors |
14,474 |
4 |
|
------------ |
------------ |
|
3,042,045 |
1,933,977 |
|
------------ |
------------ |
|
|
|
16.
Creditors:
amounts falling due after more than one year
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Amounts owed to group undertakings |
35,020,164 |
14,999,001 |
Obligations under finance leases and hire purchase contracts |
239,609 |
– |
|
------------- |
------------- |
|
35,259,773 |
14,999,001 |
|
------------- |
------------- |
|
|
|
The company entered into an Intercompany Facility Agreement with Community Fibre Limited, dated 12 August 2021 and this was amended and restated on 30 November 2022. The loan facility under this agreement was originally £35 million and when fully utilisation of this was anticipated a further revolving credit facility of £15 million was agreed. Loans drawn on the debt facility are subject to interest payable in arrears, at a rate of SONIA plus a fixed margin. The borrowings of the company and group are secured by way of fixed and floating charges over the company's and group's property and assets.
17.
Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Not later than 1 year |
101,385 |
– |
Later than 1 year and not later than 5 years |
239,609 |
– |
|
--------- |
---- |
|
340,994 |
– |
|
--------- |
---- |
|
|
|
18.
Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £
38,098
(2022: £
48,759
).
19.
Government grants
The amounts recognised in the financial statements for government grants are as follows:
Recognised in other operating income:
Government grants recognised directly in income |
564,079 |
464,247 |
|
--------- |
--------- |
|
|
|
20.
Called up share capital
Issued, called up and fully paid
|
2023 |
2022 |
|
|
|
(restated) |
|
No. |
£ |
No. |
£ |
Ordinary shares of £ 0.000001 each |
306,682,011 |
307 |
273,137,829 |
273 |
Ordinary 'C' shares of £ 0.000001 each |
6,896,419 |
7 |
– |
– |
|
-------------- |
---- |
-------------- |
---- |
|
313,578,430 |
314 |
273,137,829 |
273 |
|
-------------- |
---- |
-------------- |
---- |
|
|
|
|
|
21.
Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Profit and loss account - This reserve records retained earnings and accumulated losses.
22.
Analysis of changes in net debt
|
At 1 Jan 2023 |
Cash flows |
At 31 Dec 2023 |
|
£ |
£ |
£ |
Cash at bank and in hand |
2,837,191 |
(473,321) |
2,363,870 |
Debt due within one year |
– |
(178,805) |
(178,805) |
Debt due after one year |
(14,999,001) |
(20,260,772) |
(35,259,773) |
|
------------- |
------------- |
------------- |
|
(
12,161,810) |
(
20,912,898) |
(
33,074,708) |
|
------------- |
------------- |
------------- |
|
|
|
|
23.
Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
|
2023 |
2022 |
|
|
(restated) |
|
£ |
£ |
Not later than 1 year |
132,768 |
48,638 |
Later than 1 year and not later than 5 years |
265,685 |
93,283 |
|
--------- |
--------- |
|
398,453 |
141,921 |
|
--------- |
--------- |
|
|
|
24.
Events after the end of the reporting period
The company drew a further total of £3.65 million of debt to the end of May 2024. This was in accordance with its revolving credit facility with Community Fibre Limited.
25.
Related party transactions
The company had the following related party transactions with Community Fibre Limited, the parent company of Community Fibre Holdings Limited who is the parent company of Box Broadband. Loan facility with a balance of £35,020,164 at 31 December 2023 (2022: £15 million). See note 16 for details. Interest payable on the above during the year of £2,210,285 (2022: £417,010). See note 10 for details
26.
Controlling party
The immediate parent undertaking is Community Fibre Holdings Limited, a company registered in England and Wales with a registered address of 167-169 Great Portland Street, 5th Floor, London, United Kingdom, W1W 5PF.