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Registration number: 10493331

London European Securities Limited

Unaudited Filleted Financial Statements

for the Year Ended 31 December 2023

 

London European Securities Limited

Contents

Company Information

1

Director's Report

2 to 3

Balance Sheet

4 to 5

Notes to the Unaudited Financial Statements

6 to 13

 

London European Securities Limited

Company Information

Director

M Young

Registered office

114 St Martin's Lane
Covent Garden
London
WC2N 4BE

Accountants

Bourner Bullock
Chartered Accountants
114 St Martin's Lane
Covent Garden
London
WC2N 4BE

 

London European Securities Limited

Director's Report for the Year Ended 31 December 2023

The director presents his report and the financial statements for the year ended 31 December 2023.

Director of the Company

The director who held office during the year was as follows:

M Young

Director's Statement

2023 has been a challenging yet significant year for London European Securities Limited as we carefully navigated an increasingly uncertain global economic environment. Our strategic focus remained on delivering secure investment opportunities for our sophisticated clients, particularly through property-backed securities. Despite persistent inflationary pressures in the UK and economic challenges in Germany, we have worked diligently to maintain stability in our offerings and provide reliable returns.

The UK's economic conditions were significantly impacted by heightened inflation, which prompted the Bank of England to implement substantial interest rate increases throughout the year. These monetary adjustments posed considerable challenges across industries, including ours. However, by maintaining a disciplined approach to portfolio management and risk mitigation, we were able to manage these fluctuations and preserve the stability of our fixed-income securities portfolio. In Germany, where economic growth slowed, investor demand shifted towards safer, lower-risk assets. We were able to respond to this shift by aligning our investment solutions with the needs of high-net-worth clients across Europe, although market conditions remained volatile.

Our long-term strategy has served us well in this uncertain landscape. While 2023 presented many difficulties, we believe our approach allowed us to navigate the complexities of the market. We remain cautiously optimistic about our ability to continue delivering value in the future.

Review of the business

The prevailing theme for 2023 was the sharp rise in interest rates and the corresponding increase in the cost of capital. Central banks across the globe raised rates to address inflationary pressures, which inevitably resulted in higher borrowing costs. These developments added strain to financial markets, which were already contending with broader global turbulence, including tight labour markets and ongoing geopolitical uncertainties. Despite these headwinds, London European Securities maintained a cautious but steady performance by continuing to focus on secured lending and property-backed investments.

While rising capital costs reduced our margins in the short term, we believe this is a temporary condition. As the interest rate environment normalizes, we anticipate a gradual reduction in capital costs, which should allow for improved margins over time.

Key Performance Indicators
In 2023, London European Securities successfully processed over 2,500 interest and maturity payments, all delivered on or, ahead of schedule. This consistent performance, particularly in a difficult economic environment, underscores our commitment to timely payments and maintaining investor confidence. A high rate of returning clients further highlights the strength of our business model and its ability to deliver customer satisfaction.

 

London European Securities Limited

Director's Report for the Year Ended 31 December 2023

Regulatory Framework
We continue to maintain our regulatory status with the FCA but do not engage in regulated activities. Following careful consultation in 2021, we ceased our registration as an AIFM firm, as our current operations do not require it. Our business is focused on transactions using our own balance sheet and is not a collective investment company or a mini-bond provider. We continue to provide substantial property security to our sophisticated investors, and we are vigilant in monitoring any changes in our regulatory requirements to ensure ongoing compliance.

Financial Performance
Our financial performance in 2023 reflected the broader challenges posed by increased interest rates. Revenues declined by 15% to £1.94 million, compared to £2.509 million in the previous year. Nevertheless, we managed to significantly reduce total expenditure to £778,232, down from £1.26 million in 2022, achieving a break-even result after last year’s operating profit of £344,692. Our net assets saw a modest increase to £920,673, demonstrating conservative asset management and a cautious approach to future valuations.

Looking Ahead
As we enter 2024, London European Securities continues to build on a solid foundation developed over the past seven years. Our focus remains on providing consistent and reliable interest and capital payments, which we believe will sustain investor loyalty. We also anticipate potential growth opportunities from our real estate investments, such as the 25% shareholding in the €46 million German SchlossAllee Bickenbach project, expected to be completed by late 2024. Additionally, our wholly owned property investments should provide steady income and capital appreciation over the long term.

While our secured lending activities continue to be a key source of income, our directly owned properties enhanced our security and the potential for capital growth. We have maintained a lean operational structure, relying on over 20 professionals to support the business effectively.

Looking ahead, we remain cautiously optimistic about the prospects for 2024. While we see potential for growth, we will continue to monitor economic and political developments closely and adjust our strategy accordingly. Our priority remains on maintaining liquidity, seeking new lending opportunities, and cautiously expanding our property portfolio where appropriate.

Small companies provision statement

This report has been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

Approved and authorised by the director on 8 October 2024
 

.........................................
M Young
Director

 

London European Securities Limited

(Registration number: 10493331)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

5

13,743

29,108

Investments

6

20,838

20,937

 

34,581

50,045

Current assets

 

Debtors

7

15,073,754

14,077,264

Cash at bank and in hand

 

499,060

18,199

 

15,572,814

14,095,463

Creditors: Amounts falling due within one year

8

(5,978,914)

(5,689,323)

Net current assets

 

9,593,900

8,406,140

Total assets less current liabilities

 

9,628,481

8,456,185

Creditors: Amounts falling due after more than one year

8

(8,707,808)

(7,535,909)

Net assets

 

920,673

920,276

Capital and reserves

 

Called up share capital

10

35,182

35,182

Share premium reserve

117,018

117,018

Retained earnings

768,473

768,076

Shareholders' funds

 

920,673

920,276

 

London European Securities Limited

(Registration number: 10493331)
Balance Sheet as at 31 December 2023

For the financial year ending 31 December 2023 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Director's responsibilities:

The members have not required the Company to obtain an audit of its accounts for the year in question in accordance with section 476; and

The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. As permitted by section 444 (5A) of the Companies Act 2006, the director has not delivered to the registrar a copy of the Profit and Loss Account.

Approved and authorised by the director on 8 October 2024
 

.........................................
M Young
Director

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

1

General information

The Company is a private company limited by share capital, incorporated in England and Wales.

Principal activity

The principal activity of the Company is commercial finance lending and investing.

The address of its registered office is:
114 St Martin's Lane
Covent Garden
London
WC2N 4BE
England

These financial statements were authorised for issue by the director on 8 October 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Going concern

The financial statements have been prepared on a going concern basis.

Turnover recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services and interest charged in the ordinary course of the Company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

The Company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the Company's activities.

Government grants

Grants relating to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate. A grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in income in the period in which it becomes receivable.

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Tax

The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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 taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Company. Deferred income tax is determined using tax rates and laws that have been
enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Office equipment

25% straight line

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the Group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Financial instruments

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial asset and liabilities classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a finance transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the balance sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Debtors

Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment,

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Share capital

Preference shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Research and development

Expenditure on research and development is charged to the profit and loss account in the year in which it is incurred.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

Creditors

Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, 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. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

3

Significant judgements and estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. In the Director's opinion there are no significant judgements or key sources of estimation uncertainty.

4

Staff numbers

The average number of persons employed by the Company (including the director) during the year, was 3 (2022 - 3).

5

Tangible assets

Fixtures and fittings
£

Total
£

Cost or valuation

At 1 January 2023

71,353

71,353

At 31 December 2023

71,353

71,353

Depreciation

At 1 January 2023

42,245

42,245

Charge for the year

15,365

15,365

At 31 December 2023

57,610

57,610

Carrying amount

At 31 December 2023

13,743

13,743

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

6

Investments

2023
£

2022
£

Investments in subsidiaries

20,838

20,937

Subsidiaries

£

Cost or valuation

At 1 January 2023

20,937

Disposals

(99)

At 31 December 2023

20,838

Carrying amount

At 31 December 2023

20,838

At 31 December 2022

20,937

7

Debtors

Current

2023
£

2022
£

Trade debtors

34,840

616,454

Amounts owed by group undertakings

14,002,738

12,184,533

Amounts owed by related parties

675,868

450,988

Prepayments

142,684

169,115

Other debtors

217,624

656,174

 

15,073,754

14,077,264

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

8

Creditors

Creditors: amounts falling due within one year

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

9

5,818,545

5,433,101

Trade creditors

 

3,548

34,607

Amounts owed to Group undertakings

12

10,514

28,051

Amounts owed to related parties

 

1,500

17,491

Taxation and social security

 

103,158

159,259

Accruals and deferred income

 

35,015

9,436

Other creditors

 

6,634

7,378

 

5,978,914

5,689,323

Creditors: amounts falling due after more than one year

Note

2023
£

2022
£

Due after one year

 

Loans and borrowings

9

8,707,808

7,535,909

9

Loans and borrowings

Non-current loans and borrowings

2023
£

2022
£

Secured debentures

8,707,808

7,535,909

Current loans and borrowings

2023
£

2022
£

Bank borrowings

50,000

70,000

Secured debentures

5,768,545

5,363,101

5,818,545

5,433,101

There are fixed and floating charges over the company's assets on all secured debentures included in loans and borrowings.

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

10

Share capital

Allotted, called up and fully paid shares

2023

2022

No.

£

No.

£

Executive E shares of £1 each

1,000

1,000

1,000

1,000

Ordinary A shares of £1 each

34,182

34,182

34,182

34,182

35,182

35,182

35,182

35,182

11

Dividends

There were no dividends paid or proposed in either the current year or the previous year.

12

Related party transactions

Transactions with the director

2023

At 1 January 2023
£

Advances to director
£

Repayments by director
£

At 31 December 2023
£

M Young

Advances and repayments

374,124

493,049

(397,882)

469,291

2022

At 1 January 2022
£

Advances to director
£

Repayments by director
£

At 31 December 2022
£

M Young

Advances and repayments

359,060

126,515

(111,451)

374,124

Director's remuneration

The director's remuneration for the year was as follows:

2023
£

2022
£

Remuneration

162,500

275,000

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

13

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

66,000

55,000

The amount of non-cancellable operating lease payments recognised as an expense during the year was £66,500 (2022 - £60,500).