Company registration number 03618979 (England and Wales)
LONE STAR EUROPE ACQUISITIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LONE STAR EUROPE ACQUISITIONS LIMITED
COMPANY INFORMATION
Directors
D Quintin
J Gunn
N H Beevers
Secretary
J Gunn
Company number
03618979
Registered office
12 Queen Anne Street
London
W1G 9LF
Auditor
Gravita II LLP
30 City Road
London
EC1Y 2AB
LONE STAR EUROPE ACQUISITIONS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 28
LONE STAR EUROPE ACQUISITIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

The group made a profit after tax of £1,465,013 (2022: £8,828,077 ) during the year ended 31st December 2023 and at that date had net assets of £59,315,681 (2022: £57,864,158) and liabilities of £6,101,495 (2022: £6,395,287).

 

The reason for the decrease in profit is that the group did not close more deals when compared to 2022. This is due in the main to timing differences on deal transactions and in what period they close. The results for the year end and the financial position of the company are considered satisfactory by the directors.

 

Principal risks and uncertainties

The group's principal financial instruments comprise bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the group’s operations.

 

Due to the nature of the instruments used by the group there is no exposure to price risk. However success fees are dependent on the value of the Lone Star Funds.

 

The group’s approach to managing the other risks applicable to the other financial instruments concerned is shown below:

 

Liquidity risk is monitored on an ongoing basis and positive cash reserves were held at the year end.

 

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet the funds due.

Promoting the success of the company

The Board of Directors of the Company recognizes its responsibility to maintain high standards of business conduction and to recognize the impact on all stakeholders when making business decisions including the long-term impact of these decisions. The Board meets as appropriate, to consider key business decisions.

 

The Board’s analysis of how it has exercised its duty to promote the long-term success of the company is set out below.

Consequences of decision making in the longterm

Interests of the companies employees

 

LONE STAR EUROPE ACQUISITIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Business relationships with suppliers, customers and others

 

Maintaining a reputation for high standards of business conduct

 

Acting fairly between

On behalf of the board

J Gunn
Director
23 April 2024
LONE STAR EUROPE ACQUISITIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Principal activities

The principal activity of the group continued to be that of seeking investment opportunities and providing advisory services to its parent company.

Results and dividends

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

The directors do not recommend payment of a dividend (2022: £Nil).

Directors

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

D Quintin
J Gunn
N H Beevers
Energy and carbon report

As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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

Statement of disclosure to auditor

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

LONE STAR EUROPE ACQUISITIONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
J Gunn
Director
23 April 2024
2024-09-26
LONE STAR EUROPE ACQUISITIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LONE STAR EUROPE ACQUISITIONS LIMITED
- 5 -
Opinion

We have audited the financial statements of Lone Star Europe Acquisitions Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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 the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted this statement is not a guarantee as to the group's and parent company's ability to continue as a going concern.

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

LONE STAR EUROPE ACQUISITIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LONE STAR EUROPE ACQUISITIONS LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

LONE STAR EUROPE ACQUISITIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LONE STAR EUROPE ACQUISITIONS LIMITED
- 7 -

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

To address the risk of fraud through management bias and override of controls, we:

 

 

Through these procedures, we did not identify any material actual or suspected incidents of fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment by for example forgery, or intentional misrepresentation or through collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations

 

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.

LONE STAR EUROPE ACQUISITIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LONE STAR EUROPE ACQUISITIONS LIMITED
- 8 -

Use of our report

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

Ian Hughes ACA (Senior Statutory Auditor)
For and on behalf of Gravita II LLP
24 April 2024
Chartered Accountants
Statutory Auditor
30 City Road
London
EC1Y 2AB
LONE STAR EUROPE ACQUISITIONS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
2
34,241,548
30,293,345
Cost of sales
(865,721)
(1,192,659)
Gross profit
33,375,827
29,100,686
Administrative expenses
(32,035,228)
(18,430,912)
Other operating income
3
402,631
291,801
Operating profit
3
1,743,230
10,961,575
Interest receivable and similar income
77,816
7,435
Interest payable and similar expenses
-
0
(113)
Profit before taxation
1,821,046
10,968,897
Tax on profit
7
(356,033)
(2,140,820)
Profit for the financial year
1,465,013
8,828,077
Other comprehensive income
Currency translation differences
(13,490)
211,256
Total comprehensive income for the year
1,451,523
9,039,333
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
LONE STAR EUROPE ACQUISITIONS LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
1,280,592
899,460
Current assets
Debtors falling due after more than one year
11
229,644
-
Debtors falling due within one year
11
60,350,463
57,126,830
Cash at bank and in hand
3,569,563
6,233,155
64,149,670
63,359,985
Creditors: amounts falling due within one year
12
(6,114,581)
(6,395,287)
Net current assets
58,035,089
56,964,698
Total assets less current liabilities
59,315,681
57,864,158
Capital and reserves
Called up share capital
14
35,002
35,002
Other reserves
16
(48,603)
(48,603)
Profit and loss reserves
15
59,329,282
57,877,759
Total equity
59,315,681
57,864,158
The financial statements were approved by the board of directors and authorised for issue on 23 April 2024 and are signed on its behalf by:
23 April 2024
J Gunn
Director
LONE STAR EUROPE ACQUISITIONS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
1,276,872
881,850
Investments
9
145,098
146,909
1,421,970
1,028,759
Current assets
Debtors falling due after more than one year
11
229,644
-
0
Debtors falling due within one year
11
55,504,767
52,435,181
Cash at bank and in hand
2,657,186
5,150,900
58,391,597
57,586,081
Creditors: amounts falling due within one year
12
(5,272,463)
(5,428,694)
Net current assets
53,119,134
52,157,387
Total assets less current liabilities
54,541,104
53,186,146
Capital and reserves
Called up share capital
14
35,002
35,002
Profit and loss reserves
15
54,506,102
53,151,144
Total equity
54,541,104
53,186,146

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,354,958 (2022 - £7,943,668 profit).

The financial statements were approved by the board of directors and authorised for issue on 23 April 2024 and are signed on its behalf by:
23 April 2024
J Gunn
Director
Company Registration No. 03618979
LONE STAR EUROPE ACQUISITIONS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Other reserves
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
35,002
(48,603)
48,838,426
48,824,825
Year ended 31 December 2022:
Profit for the year
-
-
8,828,077
8,828,077
Other comprehensive income:
Currency translation differences
-
-
211,256
211,256
Total comprehensive income
-
-
9,039,333
9,039,333
Balance at 31 December 2022
35,002
(48,603)
57,877,759
57,864,158
Year ended 31 December 2023:
Profit for the year
-
-
1,465,013
1,465,013
Other comprehensive income:
Currency translation differences
-
-
(13,490)
(13,490)
Total comprehensive income
-
-
1,451,523
1,451,523
Balance at 31 December 2023
35,002
(48,603)
59,329,282
59,315,681
LONE STAR EUROPE ACQUISITIONS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
35,002
45,207,476
45,242,478
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
7,943,668
7,943,668
Balance at 31 December 2022
35,002
53,151,144
53,186,146
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
1,354,958
1,354,958
Balance at 31 December 2023
35,002
54,506,102
54,541,104
LONE STAR EUROPE ACQUISITIONS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(1,506,147)
6,124,858
Interest paid
-
0
(113)
Income taxes paid
(973,500)
(1,747,016)
Net cash (outflow)/inflow from operating activities
(2,479,647)
4,377,729
Investing activities
Purchase of tangible fixed assets
(577,725)
(746,542)
Proceeds from disposal of tangible fixed assets
3,200
3,794
Advance / (Repayment) of loans
326,254
(399,620)
Interest received
77,816
7,435
Net cash used in investing activities
(170,455)
(1,134,933)
Net (decrease)/increase in cash and cash equivalents
(2,650,102)
3,242,796
Cash and cash equivalents at beginning of year
6,233,155
2,779,103
Effect of foreign exchange rates
(13,490)
211,256
Cash and cash equivalents at end of year
3,569,563
6,233,155
LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

Lone Star Europe Acquisitions Limited is a private limited company domiciled and incorporated in England and Wales. The registered office and principal place of business is 12 Queen Anne Street, London, W1G 9LF.

 

The Group consists of Lone Star Europe Acquisitions Limited and its subsidiaries as detailed in Note 11.

1.1
Accounting convention

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

 

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 company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

The consolidated financial statements incorporate those of Lone Star Europe Acquisitions Limited and its subsidiaries. All financial statements are made up to 31 December 2023.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

1.4
Turnover

Turnover represents the amounts receivable for management fees and success fees net of VAT and is recognised to the extent that it is probable that the economic benefits will flow to the group and it can be reliably measured.

1.5
Tangible fixed assets

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

LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

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

Land and buildings Leasehold
10 years straight line
Fixtures, fittings & equipment
5 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

1.6
Fixed asset investments

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

1.7
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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

 

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

 

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

1.8
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and comprise cash in hand.

LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.9
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors 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.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Derecognition of financial liabilities

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

1.10
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.11
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
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 leased asset are consumed.

1.15
Foreign exchange

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

 

Exchange differences arising on translation of subsidiary companies on consolidation, are recognised in other comprehensive income and accumulated in equity.

 

 

LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
2
Turnover and other revenue

The total turnover of the group for the year has been derived from its principal activity wholly undertaken outside the United Kingdom.

 

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Fee income
34,241,548
30,293,345
2023
2022
£
£
Other revenue
Interest income
77,816
7,435
Management recharge to other related parties
402,631
291,801
3
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
2,889,015
(5,509,633)
Depreciation of owned tangible fixed assets
193,393
93,442
Operating lease charges
746,805
560,334
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
34,000
34,000
For other services
All other non-audit services
14,500
14,500
5
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
General staff
30
26
27
22
LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 20 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
21,189,638
17,226,490
18,971,396
15,088,055
Social security costs
2,823,663
2,400,918
2,745,583
2,309,550
Pension costs
155,286
119,851
155,286
119,851
24,168,587
19,747,259
21,872,265
17,517,456
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
5,360,746
3,570,705
Company pension contributions to defined contribution schemes
12,000
24,267
5,372,746
3,594,972

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2022 - 2).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
2,873,964
2,704,915
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
425,496
2,140,820
Adjustments in respect of prior periods
(69,514)
-
0
Total UK current tax
355,982
2,140,820
Foreign current tax on profits for the current period
51
-
0
Total current tax
356,033
2,140,820

From April 2023 the Corporation Tax rate changed from 19% to 25% in the UK.

LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 21 -

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

2023
2022
£
£
Profit before taxation
1,821,046
10,968,897
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
428,320
2,084,090
Tax effect of expenses that are not deductible in determining taxable profit
2,160
5,383
Adjustments in respect of prior years
(69,514)
-
0
Permanent capital allowances in excess/(less) of depreciation
(42,706)
(23,950)
Depreciation on assets not qualifying for tax allowances
45,487
-
Other permanent differences
365
-
0
Effect of overseas tax rates
(8,079)
75,297
Taxation charge
356,033
2,140,820
8
Tangible fixed assets
Group
Land and buildings Leasehold
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 January 2023
1,137,173
1,023,232
2,160,405
Additions
444,420
133,305
577,725
Disposals
-
0
(3,200)
(3,200)
At 31 December 2023
1,581,593
1,153,337
2,734,930
Depreciation and impairment
At 1 January 2023
407,941
853,004
1,260,945
Depreciation charged in the year
131,821
61,572
193,393
At 31 December 2023
539,762
914,576
1,454,338
Carrying amount
At 31 December 2023
1,041,831
238,761
1,280,592
At 31 December 2022
729,232
170,228
899,460
LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Tangible fixed assets
(Continued)
- 22 -
Company
Land and buildings Leasehold
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 January 2023
1,017,859
543,073
1,560,932
Additions
444,420
133,305
577,725
At 31 December 2023
1,462,279
676,378
2,138,657
Depreciation and impairment
At 1 January 2023
288,627
390,455
679,082
Depreciation charged in the year
131,821
50,882
182,703
At 31 December 2023
420,448
441,337
861,785
Carrying amount
At 31 December 2023
1,041,831
235,041
1,276,872
At 31 December 2022
729,232
152,618
881,850
9
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
10
-
0
-
0
145,098
146,909

 

Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
146,909
Foreign exchange movement
(1,811)
At 31 December 2023
145,098
Carrying amount
At 31 December 2023
145,098
At 31 December 2022
146,909
LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
10
Subsidiaries

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

Name of undertaking
Address
Class of
% Held
shares held
Direct
Lone Star France Acquisitions SARL
1
Ordinary
100.00
Lone Star Germany Acquisitions GmbH
2
Ordinary
100.00
Lone Star Spain Acquisitions S.L.U.
3
Ordinary
100.00
Lone Star Netherlands Acquisitions B.V.
4
Ordinary
100.00
L Star Portugal Acquisitions SA
5
Ordinary
100.00
Lone Star Switzerland Acquisitions GmbH
6
Ordinary
100.00

Lone Star Europe Advisors Limited a subsidiary was dissolved on 24 January 2023.

Registered Office addresses:

 

1    5 Rue de Castiglione - 20 rue du Mont-Thabor - 75001 Paris, France.

2    Hamburger Alee 14, 60486 Frankfurt am Main, Germany.

3    la Avenida de Aragon, 330, PE Las Mercedes, Edifico 5, Planta 3, Madrid, Spain.

4    Strawinskylaan 615, 1077 XX Amsterdam, Netherlands.

5    Av. Joao II no. 46, 4A, 1990-095, Lisboa, Portugal.

6    c/o TMF Services SA, Talstresse 83, 8001 Zurich, Switzerland.

 

11
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
20,941
62,358
20,941
62,358
Corporation tax recoverable
773,200
219,697
749,265
169,160
Amounts owed by group undertakings
58,482,385
55,370,813
53,776,128
50,827,381
Other debtors
560,131
1,044,191
444,773
966,275
Prepayments and accrued income
513,806
429,771
513,660
410,007
60,350,463
57,126,830
55,504,767
52,435,181
Amounts falling due after more than one year:
Other debtors
229,644
-
0
229,644
-
0
Total debtors
60,580,107
57,126,830
55,734,411
52,435,181

Included within amounts owed by group undertakings are trade receivable balances that are unsecured, interest free and repayable on demand.

LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
12
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Amounts owed to group undertakings
-
0
-
0
18
2,145
Corporation tax payable
214,215
278,179
-
0
-
0
Other taxation and social security
5,499,053
5,325,808
4,971,416
4,759,924
Other creditors
111,149
408,176
51,995
367,319
Accruals and deferred income
290,164
383,124
249,034
299,306
6,114,581
6,395,287
5,272,463
5,428,694
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
155,286
119,851

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.

14
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
35,002
35,002
35,002
35,002
15
Reserves
Other reserves

Other reserves represent a merger reserve.

Profit and loss reserves

Profit and loss reserves represent accumulated comprehensive income for the year and prior periods less dividends paid.

LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
16
Operating lease commitments
Lessee

Operating lease payments represent rentals payable for office premises.

 

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
413,718
703,777
206,081
495,180
Between two and five years
852,310
952,905
601,440
486,080
In over five years
588,910
889,630
588,910
889,630
1,854,938
2,546,312
1,396,431
1,870,890
17
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
-
534,874
-
534,874
18
Related party transactions
Remuneration of key management personnel

Directors of the company and management of the subsidiaries who have authority and responsibility for planning, directing and controlling the activities of the group are considered to be key management personnel. Total remuneration in respect of all other key individuals in addition to the UK Directors is as follows:

2023
2022
£
£
Aggregate compensation
4,899,492
1,217,749
LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Related party transactions
(Continued)
- 26 -
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Group
Entities with control, joint control or significant influence over the group
34,241,548
30,293,345
1,507,382
1,170,707
Other related parties
-
-
637,458
714,468
Company
Entities with control, joint control or significant influence over the company
31,130,194
26,117,034
898,726
1,013,772
Entities over which the company has control, joint control or significant influence
-
-
93,109
39,082
Other related parties
-
-
384,862
478,949
Other income
2023
2022
£
£
Group
Other related parties
402,631
291,801
Company
Other related parties
402,631
291,801

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Other related parties
80,194
124,886
Company
Entities over which the company has control, joint control or significant influence
18
2,145
Other related parties
20,026
583
LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Related party transactions
(Continued)
- 27 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group
Entities with control, joint control or significant influence over the group
58,482,385
55,370,813
Key management personnel
191,947
15,644
Other related parties
46,306
148,920
Company
Entities with control, joint control or significant influence over the company
53,775,561
50,824,494
Entities over which the company has control, joint control or significant influence
8,013
2,887
Key management personnel
191,947
15,644
Other related parties
35,138
62,290
19
Controlling party

The intermediate parent company is Lone Star Global Acquisitions Limited, a company registered in Bermuda.

 

The ultimate parent company is LSGA Holdings Limited, a company registered in Bermuda. LSGA Holdings Limited is the largest group for which consolidated accounts, including Lone Star Europe Acquisitions Limited and its subsidiaries, are prepared.

20
Cash (absorbed by)/generated from group operations
2023
2022
£
£
Profit for the year after tax
1,465,013
8,828,077
Adjustments for:
Taxation charged
356,033
2,140,820
Finance costs
-
0
113
Investment income
(77,816)
(7,435)
Depreciation and impairment of tangible fixed assets
193,393
93,442
Movements in working capital:
Increase in debtors
(3,226,028)
(6,143,384)
(Decrease)/increase in creditors
(216,742)
1,213,225
Cash (absorbed by)/generated from operations
(1,506,147)
6,124,858
LONE STAR EUROPE ACQUISITIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
21
Analysis of changes in net debt - group
2023
£
Opening net funds
Cash and cash equivalents
6,233,155
Changes in net debt arising from:
Cash flows of the entity
(2,650,102)
Changes in market value and exchange rates
(13,490)
Closing net funds as analysed below
3,569,563
Closing net funds
Cash and cash equivalents
3,569,563
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