Company registration number 05298491 (England and Wales)
VAULKHARD LEISURE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
VAULKHARD LEISURE LIMITED
COMPANY INFORMATION
Directors
H Vaulkhard
O Vaulkhard
S B Cook
CA Bell
(Appointed 31 January 2024)
Secretary
O Vaulkhard
Company number
05298491
Registered office
Bealim House
17 - 25 Gallowgate
Newcastle upon Tyne
NE1 4SG
Auditor
Sumer Auditco Limited
Unit 2
Gosforth Park Avenue
Newcastle upon Tyne
NE12 8EG
Bankers
HSBC Bank Plc
110 Grey Street
Newcastle upon Tyne
NE1 6JG
VAULKHARD LEISURE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Income statement
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
VAULKHARD LEISURE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Principal activity and review of the business

The company’s principal activity during the year continued to be that of the operation of licenced premises.The reporting period represents trading for the 12 months to 31 December 2023. The prior reporting period was for the 15 month period to 31 December 2022.

The challenges within the sector have been widely documented and despite this challenging trading environment the company recorded turnover of £15.3m (2022 - £17.5m) and positive EBITDA of £433k (2022 - £749k). When taking into account the seasonality of the prior 15m period, the directors believe that this performance is an improvement on the EBITDA generated for the 15m period to December 2022.

In recent years, company performance has been dominated by challenges ranging from COVID-19 to more recently cost of living problems and energy cost crisis. It is therefore pleasing to note that as we look to the future, there is genuine hope that these are a thing of the past and that we can continue to focus on customer experience.

At the balance sheet date, net assets had increased to £4.2m compared to £4.0m at the end of the previous period representing an increase of 5%

The company’s leasehold values are revalued annually by the directors, taking into account each site’s fair maintainable trade. This revaluation exercise has resulted in an overall revaluation gain of £889k. This gain is a testament to the hard work of the Board who continued to add value to the portfolio during this challenging trading period.

During the year, the company continued to reposition its trading portfolio with the disposal of two late night, leasehold venues. These disposals are in line with the Board’s long term strategic objectives to reposition the company away from late-night young people venues.

As we approach the final quarter of FY24, the Board believes that the company is well placed to overcome the challenging market conditions and the well documented inflationary pressures, including high utility costs, wage inflation and an overall increase in costs, The positive changes made by the directors during the period of the Pandemic and beyond can now be seen to be taking effect and gives the board confidence as we look toward 2025 and beyond.

Financial key performance indicators

The company is controlled on a day to day basis by an operational management team, based predominantly at the company’s head office.

Forecasts and rotas are prepared and reviewed with sufficient regularity to monitor site by site performance.

Regular price review meetings with suppliers, together with the preparation and analysis of monthly management accounts, enables the company to proactively manage its gross margin.

The company’s assets, liabilities and liquidity position are reviewed in regular finance meetings.

VAULKHARD LEISURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principle risks and uncertainties

Like all businesses, the company faces a number of operating risks and uncertainties which could impact performance and long term goals.

The most fundamental risks and uncertainties faced by the company are summarised below.

Loss of licences

If the company fails to comply with current licensing regulations, regulatory action could include the revocation of the licence to operate. However the company ensures managers and supervisors are fully conversant with licensing legislation to mitigate risk.

Health and safety

Health and safety regulations are taken very seriously by the company and the risk of non-compliance is minimised through regular training and monitoring of policies and procedures to maintain standards. Sufficient public and employer’s liability insurance cover is taken in order to minimise any financial impact.

Economic climate

As the economy bounces back following the Pandemic, the directors regularly assess the likely effects on company revenue and profitability in an attempt to mitigate any risk as far as practicable.

 

Continual increases in minimum wage and pension contributions as well as inflationary cost pressures across the board will inevitably increase our cost base. Regular review of prices, costs and staffing levels helps to ensure these do not negatively impact on profitability.

On behalf of the board

O Vaulkhard
Director
25 September 2024
VAULKHARD LEISURE 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.

Results and dividends

The results for the year are set out on page 8.

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

Directors

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

H Vaulkhard
O Vaulkhard
S B Cook
CA Bell
(Appointed 31 January 2024)
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Auditor

The auditor, Sumer Auditco Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

VAULKHARD LEISURE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Statement of directors' responsibilities

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

 

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

 

 

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.

Strategic Report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of principal activity and future developments.

Statement of disclosure to auditor

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

On behalf of the board
O Vaulkhard
Director
25 September 2024
VAULKHARD LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VAULKHARD LEISURE LIMITED
- 5 -
Opinion

We have audited the financial statements of Vaulkhard Leisure Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

 

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

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

VAULKHARD LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VAULKHARD LEISURE LIMITED
- 7 -
Capability of the audit in detecting irregularities, including fraud

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

 

The following laws and regulations were identified as being of significance to the entity:

 

 

 

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal costs incurred; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

 

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

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.

Paul Gainford
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
Statutory Auditor
Unit 2
Gosforth Park Avenue
Newcastle upon Tyne
NE12 8EG
26 September 2024
VAULKHARD LEISURE LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Year
Period
ended
ended
31 December 2023
25 December 2022
Notes
£
£
Turnover
3
15,257,885
17,544,107
Cost of sales
(9,412,134)
(10,871,486)
Gross profit
5,845,751
6,672,621
____________________________________________________________________________________________
Depreciation and gain/loss on disposal of tangible fixed assets
(133,461)
(179,746)
Administrative expenses excluding depreciation
(5,533,054)
(6,074,945)
Other operating income
119,810
151,371
EBITDA
432,507
749,047
____________________________________________________________________________________________
Administrative expenses
(5,666,515)
(6,254,691)
Other operating income
119,810
151,371
Operating profit
4
299,046
569,301
Interest payable and similar expenses
7
(339,911)
(335,722)
Other gains and losses
(1,214,981)
(724,381)
Loss before taxation
(1,255,846)
(490,802)
Tax on loss
8
(118,406)
(86,021)
Loss for the financial year
(1,374,252)
(576,823)

The income statement has been prepared on the basis that all operations are continuing operations.

VAULKHARD LEISURE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Year
Period
ended
ended
31 December 2023
25 December 2022
£
£
Loss for the year
(1,374,252)
(576,823)
Other comprehensive income
Revaluation of tangible fixed assets
1,577,869
1,654,375
Total comprehensive income for the year
203,617
1,077,552
VAULKHARD LEISURE LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
31 December 2023
25 December 2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
16,754,573
14,566,360
Current assets
Stocks
10
256,094
239,644
Debtors falling due after more than one year
11
162,821
147,231
Debtors falling due within one year
11
1,104,440
1,038,078
Cash at bank and in hand
1,031,188
775,260
2,554,543
2,200,213
Creditors: amounts falling due within one year
12
(4,297,767)
(3,720,834)
Net current liabilities
(1,743,224)
(1,520,621)
Total assets less current liabilities
15,011,349
13,045,739
Creditors: amounts falling due after more than one year
13
(7,474,770)
(6,357,140)
Provisions for liabilities
Deferred tax liability
15
3,369,648
2,725,285
(3,369,648)
(2,725,285)
Net assets
4,166,931
3,963,314
Capital and reserves
Called up share capital
17
83
83
Share premium account
1,133,104
1,133,104
Revaluation reserve
7,504,822
5,926,953
Other reserves
82
82
Profit and loss reserves
(4,471,160)
(3,096,908)
Total equity
4,166,931
3,963,314
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
O Vaulkhard
Director
Company Registration No. 05298491
VAULKHARD LEISURE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Revaluation reserve
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 October 2021
83
1,133,104
4,272,578
82
(2,520,085)
2,885,762
Period ended 25 December 2022:
Loss for the period
-
-
-
-
(576,823)
(576,823)
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
1,654,375
-
-
1,654,375
Total comprehensive income for the year
-
-
1,654,375
-
(576,823)
1,077,552
Balance at 25 December 2022
83
1,133,104
5,926,953
82
(3,096,908)
3,963,314
Year ended 31 December 2023:
Loss for the year
-
-
-
-
(1,374,252)
(1,374,252)
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
1,577,869
-
-
1,577,869
Total comprehensive income for the year
-
-
1,577,869
-
(1,374,252)
203,617
Balance at 31 December 2023
83
1,133,104
7,504,822
82
(4,471,160)
4,166,931
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Vaulkhard Leisure Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bealim House, 17 - 25 Gallowgate, Newcastle upon Tyne, NE1 4SG.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold and short-term leasehold properties. The principal accounting policies adopted are set out below.

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

Ÿ

 

The financial statements of the company are consolidated in the financial statements of Vaulkhard Group Limited. These consolidated financial statements are available from its registered office, Bealim House, 17-25 Gallowgate, Newcastle upon Tyne, NE1 4SG.

1.2
Going concern

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

1.3
Reporting period

The prior reporting period was extended to 15 months ended 25 December 2022 for commercial reasons. Therefore the financial statements (including the related notes) are not entirely comparable to the current year ended 31 December 2023.

1.4
Turnover

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

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.6
Tangible fixed assets

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

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

Short-term leasehold property
No depreciation charged
Fixtures and fittings
10 - 33% straight line
Computer equipment
25% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in profit or loss.

No depreciation is charged on leasehold properties because the expected residual value is not materially less than the carrying value.

1.7
Impairment of fixed assets

At each reporting period end date, the company 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).

1.8
Stocks

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

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

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

 

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

Basic financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

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 company after deducting all of its liabilities.

VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received, if considered material to the financial statements.

 

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.

VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.12
Retirement benefits

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

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Assessing indicators of impairment

In assessing whether there have been any indicators of impairment in assets, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability. There have been no indicators of impairments identified during the current financial year.

VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Determining residual values and useful economic lives of fixed assets

The company depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management.

 

Judgement is applied by management when determining the residual values of tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life.

 

The carrying amount of tangible fixed assets, excluding freehold and leasehold property at the reporting date was £579,606 (2022 - £636,267).

Valuation of property

Individual short-term leasehold properties are carried at revaluation less any subsequent accumulated depreciation (reflecting clear consumption of economic benefits) and subsequent accumulated impairment losses. Fair values are determined from market based evidence such as lease terms and future market conditions.

 

The fair value of short-term leasehold properties as at the reporting date was £16,174,967 (2022 - £13,930,093).

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Wet sales
11,415,655
13,719,204
Food sales
3,200,714
3,502,359
Other income
641,516
322,544
15,257,885
17,544,107

Turnover arose wholly in the United Kingdom.

4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
7,250
5,000
Depreciation of owned tangible fixed assets
132,157
179,746
Loss on disposal of tangible fixed assets
1,304
-
Operating lease charges
1,567,842
1,914,589
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Employees

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

2023
2022
Number
Number
Hospitality staff
301
324
Coffee shop staff
-
11
Administration
24
23
Total
325
358

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,595,167
5,351,787
Social security costs
304,588
336,955
Pension costs
118,050
145,984
5,017,805
5,834,726
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
86,635
106,250
Company pension contributions to defined contribution schemes
38,986
58,140
125,621
164,390

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

7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
9,911
10,722
Interest payable to group undertakings
330,000
325,000
339,911
335,722
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
118,406
86,021

The main rate of corporation tax increased to 25% from 1 April 2023 under the Finance Bill 2021. Deferred tax has been provided at the rates expected to be in place when the timing differences reverse. A marginal rate of 23.45% has been used for the year to 31 December 2023 when assessing the corporation tax charge as below.

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

2023
2022
£
£
Loss before taxation
(1,255,846)
(490,802)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.45% (25 December 2022: 19.00%)
(294,496)
(93,252)
Tax effect of expenses that are not deductible in determining taxable profit
365,339
140,955
Tax effect of income not taxable in determining taxable profit
-
0
(19,648)
Adjustments in respect of prior years
24,402
(5,930)
Effect of change in corporation tax rate
5,822
21,804
Group relief
-
0
41,182
Other
17,339
910
Taxation charge for the year
118,406
86,021
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
9
Tangible fixed assets
Short-term leasehold property
Fixtures and fittings
Computer equipment
Total
£
£
£
£
Cost or valuation
At 26 December 2022
13,930,093
1,006,989
33,847
14,970,929
Additions
1,357,333
86,918
2,318
1,446,569
Disposals
(1,304)
(64,928)
-
0
(66,232)
Revaluation
888,845
-
0
-
0
888,845
At 31 December 2023
16,174,967
1,028,979
36,165
17,240,111
Depreciation and impairment
At 26 December 2022
-
0
374,724
29,845
404,569
Depreciation charged in the year
-
0
130,515
1,642
132,157
Eliminated in respect of disposals
-
0
(51,188)
-
0
(51,188)
At 31 December 2023
-
0
454,051
31,487
485,538
Carrying amount
At 31 December 2023
16,174,967
574,928
4,678
16,754,573
At 25 December 2022
13,930,093
632,265
4,002
14,566,360

At 31 December 2023, the short-term leasehold properties are stated at directors' valuation. The directors took into consideration the net present value of each site's future cashflows, over the remaining lease terms of the properties, using a discount rate of 8.5%.


In the opinion of the directors the carrying amount of short-term leasehold properties does not differ materially from the fair value of the properties at the balance sheet date.

Short-term leasehold property are carried at valuation. If they were measured using the cost model, the carrying amounts would have been approximately £9,052,286 (2022 - £7,696,257).

10
Stocks
2023
2022
£
£
Finished goods and goods for resale
256,094
239,644
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
171,881
24,525
Amounts owed by group undertakings
32,757
32,757
Other debtors
185,589
237,724
Prepayments and accrued income
714,213
743,072
1,104,440
1,038,078
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
162,821
147,231
Total debtors
1,267,261
1,185,309
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
14
533,318
9,707
Deferred lease incentives
14
85,830
15,794
Trade creditors
1,900,847
2,044,539
Other taxation and social security
898,091
664,431
Other creditors
324,411
644,908
Accruals and deferred income
555,270
341,455
4,297,767
3,720,834
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
14
22,672
32,383
Deferred lease incentives
14
1,104,609
214,247
Amounts due to group undertakings
6,347,489
6,110,510
7,474,770
6,357,140
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Creditors: amounts falling due after more than one year
(Continued)
- 22 -
Amounts included above which fall due after five years are as follows:
Deferred lease incentives
800,302
76,917
14
Loans
2023
2022
£
£
Bank loans
32,383
42,090
Bank overdraft
523,607
-
0
Deferred lease incentives
1,190,439
230,041
1,746,429
272,131
Payable within one year
619,148
25,501
Payable after one year
1,127,281
246,630

The bank loan is repayable over 6 years and attracts an annual interest rate of 2.5% above Bank Of England base rate.

15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,224,370
1,125,096
Tax losses
(349,314)
(367,926)
Leasehold property revaluations
2,501,608
1,975,651
Other timing differences
(7,016)
(7,536)
3,369,648
2,725,285
2023
Movements in the year:
£
Liability at 26 December 2022
2,725,285
Charge to profit or loss
118,406
Charge to equity
525,957
Liability at 31 December 2023
3,369,648
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
118,050
145,984

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Contributions totalling £81,338 (2022 - £62,698) were payable to the fund at the balance sheet date and are included within other creditors.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.01p each
824,750
824,750
83
83
18
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
1,443,762
1,393,935
Between two and five years
5,580,243
5,499,711
In over five years
12,305,227
11,944,249
19,329,232
18,837,895
Lessor

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
125,000
125,000
Between two and five years
469,531
484,736
In over five years
1,358,174
1,469,982
1,952,705
2,079,718
VAULKHARD LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
19
Financial commitments, guarantees and contingent liabilities

The Company's bank facilities, and those of certain other companies within the group headed by Vaulkhard Group Limited, are secured by a debenture over all assets of the Company, a first legal charge over certain freehold and short-term leasehold properties of the Group, and an unlimited multilateral guarantee given by all of the companies in the group.

 

As at the date the financial statements were signed the Company has not been called upon to provide funds in relation to these securities.

20
Related party transactions

The company is a wholly owned subsidiary and has taken advantage of the exemption permitted by Section 33 Related Party Disclosures not to provide disclosures of transactions entered into with other wholly owned members of the group.

21
Ultimate controlling party

The company is controlled by O Vaulkhard and H Vaulkhard, through their control of the company's ultimate parent undertaking, Vaulkhard Group Limited.

 

Vaulkhard Group Limited is a company incorporated in England & Wales and its registered office is Bealim House, 17-25 Gallowgate, Newcastle upon Tyne, NE1 4SG.

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