Company registration number 08938527 (England and Wales)
HOUSING GATEWAY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
HOUSING GATEWAY LIMITED
COMPANY INFORMATION
Directors
P Nwosu
J Embling
J Drew
K Wilson
S Ozaydin
Company number
08938527
Registered office
Civic Centre
Silver Street
Enfield
EN1 3XA
Auditor
Moore NHC Audit Limited
East Wing
Goffs Oak House
Goffs Lane
Goffs Oak
Hertfordshire
EN7 5GE
HOUSING GATEWAY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 22
HOUSING GATEWAY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
Results and Dividends
The income statement of the company appears on page 8 which shows that the company made a loss for the year, due to property revaluations. As a result, no dividends were paid during the year. The forecast budget shows a profitable position for the next three years.
Principal Activities
The principal activity of the company is the acquisition and management of a property portfolio, to provide submarket accommodation for residents in Enfield. The company's aim is to secure properties for local people with housing needs.
To increase the supply of accommodation, in October 2020 the company launched a social letting agency under the trading name Enfield Let (EL). EL takes short leases of 3-5 years on properties in Enfield and sublets them on assured short hold tenancies to tenants nominated by Enfield Council who would otherwise be at risk of homelessness. EL manages the properties and takes the void risk by offering its landlords guaranteed rent which is paid monthly in advance.
During 2023 the company started a Temporary Accommodation scheme within EL, transferring the temporary accommodation stock from the Council to EL. This delivers savings to the Council and provides residents with a housing solution.
Housing Gateway Limited is wholly owned by Enfield Council and was formed to help assist the Council in reducing its budget pressure, by providing more affordable accommodation in the private rented sector.
Review of Business and Future Developments
Housing Gateway Ltd is continuing to grow its business and deliver innovative solutions to Enfield Council, with a specific focus on the following outcomes:
Maximise the financial return (including minimising the nominations fee for TA and Enfield Let) to the Shareholder, contributing to the alleviation of the Council’s financial pressures arising from the shortfall in the provision of temporary accommodation, whilst balancing the needs of our residents and condition of housing stock.
Develop Enfield Let, an innovative ethical lettings agency, collaborating with the Council to complete a stock transfer of Temporary Accommodation.
Deliver demonstrably, good quality housing for residents ensuring the portfolio meets decency standards and aligns with the Shareholders decarbonisation strategy whilst maximising operating surplus.
Review HGL's operating model to ensure that residents in the most need are prioritised and the number of residents who benefit from HGL's stable, affordable accommodation, are maximised.
Ensure effective governance through a board that adopts best practice in governance arrangements and ensuring the retention and renewal of Board members as required.
Support the Council's need for specialist accommodation by developing innovative housing solutions.
Financial Risks and uncertainties
Availability of debt funding: HGL relies on loans provided by the Council to fund property acquisitions. As with most Local Authorities the Council continuously reviews its borrowing capacity and the best use of capital, as such it could choose not to provide HGL with new loans in the future. HGL has a sustainable business model which does not rely on growth and therefore, in this instance, HGL could pause purchasing more properties. Alternatively, HGL could seek alternative funding streams outside the Council.
Volatile private rented market: An increasing share of HGL’s business is in direct competition with the private rented market. Any changes to this market will have a significant impact on HGL. The most likely risk is inflated prices within the market leading to landlords requesting higher lease fees, whilst the rental income does not keep pace. Whilst HGL will endeavour to negotiate costs down, if required the nomination arrangement with the Council will mitigate any risk of increased costs within this business stream.
Property Quality: Increased legislation and regulation in the sector is welcomed, however this has had the impact of increased costs on HGL and landlords in the private rented sector (PRS). HGL strives to ensure delivery against quality, building safety and decarbonisation commitments across its portfolio.
HOUSING GATEWAY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Macro-economic changes: The cost of living increase has placed pressure on the company and residents alike. Cost inflation and high energy costs may have an impact on residents’ ability to pay their rent and in turn HGL’s business model. HGL has been proactive with this regard, creating a hardship fund to assist residents and actively works to find solutions to support them.
HGL’s diverse business model continues to be well placed to mange anticipated risks and take advantage of the opportunities that arise from them.
This report was approved by the Board on 02/10/2024 and signed on its behalf.
J Drew
Director
2 October 2024
HOUSING GATEWAY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company is the acquisition and management of a property portfolio, to provide good quality accommodation for residents. The company's aim is to secure properties for local people with housing needs.
To increase the supply of accommodation, in October 2020 the company launched a social letting agency under the trading name Enfield Let (EL). EL takes short leases of 3-5 years on properties in Enfield and sublets them on assured short hold tenancies to tenants nominated by Enfield Council who would otherwise be at risk of homelessness. EL manages the properties and takes the void risk by offering it's landlords guaranteed rent which is paid monthly in advance.
During 2023 the company started a Temporary Accommodation scheme within EL, to provide stable rented solutions and efficient management of such, for Enfield residents.
Housing Gateway Limited is wholly owned by Enfield Council and was formed to help assist the Council in reducing its budget pressure, by providing more affordable accommodation in the private rented sector.
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:
P Nwosu
J Embling
J Drew
K Wilson
S Ozaydin
Auditor
The auditor, Moore NHC Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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
J Drew
Director
2 October 2024
HOUSING GATEWAY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HOUSING GATEWAY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF HOUSING GATEWAY LIMITED
- 5 -
Opinion
We have audited the financial statements of Housing Gateway Limited (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HOUSING GATEWAY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF HOUSING GATEWAY 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
HOUSING GATEWAY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF HOUSING GATEWAY LIMITED
- 7 -
Our approach was as follows:
• We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation
• We obtained an understanding of how the company complies with these requirements by discussions
with management and those charged with governance.
• We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
• We inquired of management and those charged with governance as to any known instances of non- compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Francis Corbishley
Senior Statutory Auditor
For and on behalf of Moore NHC Audit Limited
2 October 2024
Chartered Accountants
Statutory Auditor
East Wing
Goffs Oak House
Goffs Lane
Goffs Oak
Hertfordshire
EN7 5GE
HOUSING GATEWAY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
17,356,939
12,970,879
Cost of sales
(7,000,034)
(3,894,207)
Gross profit
10,356,905
9,076,672
Administrative expenses
(6,870,035)
(4,211,337)
Other operating income
286,485
275,175
Operating profit
4
3,773,355
5,140,510
Interest receivable and similar income
177,728
43,330
Interest payable and similar expenses
6
(3,410,832)
(3,209,837)
Changes in the fair value of investment properties
7
(2,156,258)
542,093
(Loss)/profit before taxation
(1,616,007)
2,516,096
Tax on (loss)/profit
8
270,238
(523,467)
(Loss)/profit for the financial year
(1,345,769)
1,992,629
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HOUSING GATEWAY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
£
£
(Loss)/profit for the year
(1,345,769)
1,992,629
Other comprehensive income
-
-
Total comprehensive income for the year
(1,345,769)
1,992,629
HOUSING GATEWAY LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
124,422
118,986
Investment properties
10
160,823,688
156,616,182
160,948,110
156,735,168
Current assets
Debtors
11
5,646,759
1,837,179
Cash at bank and in hand
755,001
2,507,902
6,401,760
4,345,081
Creditors: amounts falling due within one year
12
(24,585,744)
(17,355,171)
Net current liabilities
(18,183,984)
(13,010,090)
Total assets less current liabilities
142,764,126
143,725,078
Creditors: amounts falling due after more than one year
13
(131,730,321)
(130,806,440)
Provisions for liabilities
(272,502)
(811,566)
Net assets
10,761,303
12,107,072
Capital and reserves
Called up share capital
16
5,000,001
5,000,001
Profit and loss reserves
5,761,302
7,107,071
Total equity
10,761,303
12,107,072
The financial statements were approved by the board of directors and authorised for issue on 2 October 2024 and are signed on its behalf by:
J Drew
Director
Company Registration No. 08938527
HOUSING GATEWAY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
5,000,001
5,114,442
10,114,443
Year ended 31 March 2023:
Profit and total comprehensive income
-
1,992,629
1,992,629
Balance at 31 March 2023
5,000,001
7,107,071
12,107,072
Year ended 31 March 2024:
Loss and total comprehensive income
-
(1,345,769)
(1,345,769)
Balance at 31 March 2024
5,000,001
5,761,302
10,761,303
HOUSING GATEWAY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
2,122,929
7,785,060
Interest paid
(3,410,832)
(3,209,837)
Income taxes paid
(268,826)
(387,944)
Net cash (outflow)/inflow from operating activities
(1,556,729)
4,187,279
Investing activities
Purchase of tangible fixed assets
(53,168)
(48,352)
Purchase of investment property
(6,632,684)
(9,698,133)
Proceeds on disposal of investment property
455,000
945,045
Interest received
177,728
43,330
Net cash used in investing activities
(6,053,124)
(8,758,110)
Financing activities
Repayment of borrowings
(643,048)
(627,496)
Proceeds of new bank loans
6,500,000
Net cash generated from/(used in) financing activities
5,856,952
(627,496)
Net decrease in cash and cash equivalents
(1,752,901)
(5,198,327)
Cash and cash equivalents at beginning of year
2,507,902
7,706,229
Cash and cash equivalents at end of year
755,001
2,507,902
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information
Housing Gateway Limited is a private company limited by shares incorporated in England and Wales. The registered office is Civic Centre, Silver Street, Enfield, EN1 3XA.
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 investment properties and certain financial instruments at fair value. The principle accounting policies adopted are set out below.
1.2
Turnover
Turnover represents rental income receivable from housing benefit tenants and is recognised on a straight-line basis over the term of the tenancy agreement.
1.3
Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation is provided to write off the cost of tangible fixed assets as follows:
Leasehold improvements
- Over 4 to 7 years
Fixtures, fittings & equipment
- 20% on cost
1.4
Investment properties
Investment properties are included in the balance sheet at their open market value in accordance with the Financial Reporting Standards 102 and are not depreciated. This treatment is contrary to the Companies Act 2006 which states fixed assets should be depreciated but is, in the opinion of the directors, necessary in order to give a true and fair view of the financial position of the company.
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.
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
1.5
Borrowing costs related to fixed assets
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.6
Taxation
Current tax
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gain and losses in the financial statements and recognition in the tax computation.
A net deferred tax asset is recognised only if it can be regarded as more likely than not there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse.
Deferred tax assets and liabilities are not discounted.
1.7
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.
1.8
Government grants
Government grants in respect of capital expenditure are deferred and released to the profit and loss over the estimated useful life of the relevant asset which is between fifty years and seventy five years.
1.9
The directors have reviewed the company's forecasts and have a reasonable expectation that the company has adequate resources to continue its operations for a period of not less than one year from the date that these financial statements are approved. The company has therefore continued to prepare its accounts on a going concern basis.
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Rental income from owned properties
8,872,037
8,308,907
Rental income from leased properties
6,929,902
4,222,346
Management income
1,555,000
439,626
17,356,939
12,970,879
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Turnover and other revenue
(Continued)
- 16 -
2024
2023
£
£
Other revenue
Interest income
177,728
43,330
Grants received
286,485
275,175
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(286,485)
(275,175)
Fees payable to the company's auditor for the audit of the company's financial statements
43,030
35,099
Depreciation of owned tangible fixed assets
47,732
59,367
Profit on disposal of investment property
(75,000)
(294,759)
Operating lease charges
7,000,034
3,894,207
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
2
2
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
12,000
12,000
12,000
12,000
Directors' remuneration represents salaries of non-executive directors, Joanna Embling and Peter Nwosu, for their services.
6
Interest payable and similar expenses
2024
2023
£
£
Other interest
3,410,832
3,209,837
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
7
Fair value movement on investment properties
2024
2023
£
£
Changes in the fair value of investment properties
(2,156,258)
542,093
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
268,826
387,944
Deferred tax
Origination and reversal of timing differences
(539,064)
135,523
Total tax (credit)/charge
(270,238)
523,467
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(1,616,007)
2,516,096
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(404,002)
478,058
Tax effect of expenses that are not deductible in determining taxable profit
224,667
109,866
Tax effect of income not taxable in determining taxable profit
(90,371)
(108,287)
Gains not taxable
(27,770)
Depreciation on assets not qualifying for tax allowances
11,933
11,280
Deferred tax adjustment for revaluation gain
(539,064)
135,523
Movement on revaluation of investment properties
539,065
(102,998)
Tax on capital gain
15,304
25
Taxation (credit)/charge for the year
(270,238)
523,467
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
9
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Total
£
£
£
Cost
At 1 April 2023
172,703
148,899
321,602
Additions
53,168
53,168
At 31 March 2024
172,703
202,067
374,770
Depreciation and impairment
At 1 April 2023
153,507
49,109
202,616
Depreciation charged in the year
11,019
36,713
47,732
At 31 March 2024
164,526
85,822
250,348
Carrying amount
At 31 March 2024
8,177
116,245
124,422
At 31 March 2023
19,196
99,790
118,986
10
Investment property
2024
£
Fair value
At 1 April 2023
156,616,183
Additions through external acquisition
6,632,684
Disposals
(380,000)
Net gains or losses through fair value adjustments
(2,156,257)
Reversal of impairment
111,078
At 31 March 2024
160,823,688
The investment property portfolio was revalued by Sanderson Weatherall, a chartered surveyor firm regulated by RICS.
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
981,035
246,400
Other debtors
4,061,080
1,400,263
Prepayments and accrued income
604,644
190,516
5,646,759
1,837,179
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
11
Debtors
(Continued)
- 19 -
Included in other debtors and due within one year is £1,661,363 (2023: £1,359,373) owed by the London Borough of Enfield in respect of recharges for goods and services in the year.
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Other borrowings
13,143,047
6,627,496
Trade creditors
1,802,803
2,487,757
Amounts owed to group undertakings
268,826
387,944
Taxation and social security
39,944
Deferred income
15
376,101
302,676
Accruals
8,955,023
7,549,298
24,585,744
17,355,171
Included in trade creditors and accruals and due within one year is £3,726,716 (2023: £3,020,869) owed to the London Borough of Enfield in respect of recharges for goods and services in the year. Other borrowings consist of loans which are secured against the company's investment properties and are expected to be repaid within the next twelve months.
13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Other borrowings
119,485,788
120,144,385
Deferred income
15
12,244,533
10,662,055
131,730,321
130,806,440
Included in creditors due after more than one year are loans of £119,485,788 (2023: £120,144,385) which are secured against the company's investment properties and are due after more than one year.
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Revaluations
272,502
811,566
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
14
Deferred taxation
(Continued)
- 20 -
2024
Movements in the year:
£
Liability at 1 April 2023
811,566
Credit to profit or loss
(539,064)
Liability at 31 March 2024
272,502
The deferred tax liability at the year end has been calculated at an effective tax rate of 25% (2023: 25%). This is in line with the proposed increase in the corporation tax rate when these gains will be realised.
15
Deferred income
2024
2023
£
£
Arising from government grants
12,615,821
10,964,581
Other deferred income
4,813
150
12,620,634
10,964,731
Included in the financial statements as follows:
Current liabilities
376,101
302,676
Non-current liabilities
12,244,533
10,662,055
12,620,634
10,964,731
The government grant balance of £12.62 million (2023: £10.96 million) relates to various grants received by the company in over the years for the acquisition of investment properties. The grants have been recognised on the balance sheet and are being released to the P/L over the estimated useful life of the investment properties.
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
5,000,001
5,000,001
5,000,001
5,000,001
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
17
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
7,273,924
4,009,083
Between two and five years
3,788,938
5,920,317
11,062,862
9,929,400
Lessor
The operating leases represent leases to housing tenants and the council.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2024
2023
£
£
Within one year
2,531,967
3,317,757
Between two and five years
1,987,886
5,189,158
In over five years
70,978
314,693
4,590,831
8,821,608
18
Ultimate controlling party
The ultimate controlling party is the London Borough of Enfield by virtue of 100% ownership of the company's shares held by The Mayor and Burgesses of the Borough on behalf of the Council.
19
Related party transactions
The company's ultimate parent undertaking is the London Borough of Enfield by virtue of 100% ownership held by The Mayor and Burgesses of the Borough on behalf of the Council. The company has taken advantage of the exemptions available under Financial Reporting Standard 102 not to disclose any transactions or balances with entities that are 100% controlled by the Council.
HOUSING GATEWAY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
20
Cash generated from operations
2024
2023
£
£
(Loss)/profit for the year after tax
(1,345,769)
1,992,629
Adjustments for:
Taxation (credited)/charged
(270,238)
523,467
Finance costs
3,410,832
3,209,837
Investment income
(177,728)
(43,330)
Gain on disposal of investment property
(75,000)
(294,759)
Depreciation and impairment of tangible fixed assets
47,732
59,367
Other gains and losses
2,156,258
(542,093)
Impairment of investment properties
(111,078)
-
Movements in working capital:
(Increase)/decrease in debtors
(3,809,580)
1,059,870
Increase/(decrease) in creditors
641,597
(791,608)
Increase in deferred income
1,655,903
2,611,680
Cash generated from operations
2,122,929
7,785,060
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