REGISTERED NUMBER: 10449423 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
BGAM HOTELS (KW) LIMITED |
REGISTERED NUMBER: 10449423 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
BGAM HOTELS (KW) LIMITED |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Consolidated Income Statement | 8 |
Consolidated Other Comprehensive Income | 9 |
Consolidated Balance Sheet | 10 |
Company Balance Sheet | 11 |
Consolidated Statement of Changes in Equity | 12 |
Company Statement of Changes in Equity | 13 |
Consolidated Cash Flow Statement | 14 |
Notes to the Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Financial Statements | 16 |
BGAM HOTELS (KW) LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors and Chartered Accountants |
Rutland House |
90-92 Baxter Avenue |
Southend on Sea |
Essex |
SS2 6HZ |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their strategic report of the company and the group for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group during the year under review was a hotel operating under the IHG Holiday Inn franchise. |
REVIEW OF BUSINESS |
The results for the year show revenues generated of £3,467,920 (2022 - £2,722,982) and a resultant loss before tax of £(436,044) (2022 - £(1,320,352)). Full details of the group's financial performance can be found in the annexed financial statements. |
Like many, the group entered the financial year among tough trading conditions. However, conditions continued to strengthen and the group saw a return to more normal activities. Bookings increased, footfall increased and cashflows improved. Costs have been cut, or deferred, where possible to do so without damaging the group's core undertaking. The directors remain proud of the business' diverse and experienced workforce. |
Furthermore, tireless efforts to tackle the group's pandemic borrowings paid off - by the end of the year most extended credit lines had been repaid or were massively reduced. The final operational challenge remaining is the group's short term debt financing which was due to expire in September 2024. Since the balance sheet date, the directors have secured a refinance of that obligation on a more sustainable, longer term, profile. |
Nevertheless, the directors continually review and improve the business. Whilst future bookings are encouraging the business is still evolving to tackle the operative challenges which remain and look at new opportunities for improvement too. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risk to the business is inadequate occupancy of its available rooms and therefore an inability to generate sufficient revenues to service operations. The directors closely monitor the group's performance against similar businesses operating in comparable markets and respond accordingly. |
Similarly, the group carefully monitors its compliance with brand standards, and regularly compares its performance against other (local and national) hotels to ensure it remains competitive. |
The group is also susceptible to any loss in key members of operational staff and therefore operates a number of performance reward and incentive programmes to mitigate these risks. |
Finally, the current economic situation has put a strain on the group's financing costs. The directors continue to monitor this closely, and seek alternative financing options where they mitigate the business' exposure to the same. |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
SECTION 172(1) STATEMENT |
Stakeholder engagement |
The board of directors have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, in good faith, would be most likely to promote the group's success for the benefit of its members as a whole, and to have regard to the long-term effect of our decisions on the group and its stakeholders. This statement addresses the ways in which we as a board handle this responsibility. |
Decision making |
Regular operational and strategic meetings are held by the directors and general managers. This ensures the board has access to the key factors affecting all areas of the business' decision making, shorter term or longer. |
Furthermore, the group is in constant communication with IHG and various industry specific news sources. This enables the directors to keep abreast of, and address, all longer-term shifts in the group's operating markets. |
Employee engagement |
The subsidiary maintains a diverse workforce of local employees spanning all aspects of the hotel delivery, supplemented by outsourced staff and suppliers where necessary. Staff are rewarded in line with comparable local markets, provided with specific training relevant to their needs and have access to wider industry opportunities as a result of the same. |
Business relationships |
The group actively maintains strong relationships with its key suppliers and support functions, to ensure it has access to the resources it needs to operate effectively. |
The wider franchise ensures the company group has access to a broad array of customers, visiting for various purposes. The group monitors compliance with brand standards to ensure all customers' expectations are satisfied and deliver the best possible service it can achieve. |
Community and environmental impact |
The directors remain ever conscious of the impact their business has on the local community and environment. As well as being a supportive local employer, the group also complies with all franchise environmental incentives. |
Business conduct |
The directors closely monitor the group's service delivery to ensure at all times the business is honest, fair and professional in its conduct with all stakeholders. |
Shareholder engagement |
The group is actively managed by its ultimate shareholders, who are all represented on the board of directors. |
ON BEHALF OF THE BOARD: |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 December 2023. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Goldwyns Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
BGAM HOTELS (KW) LIMITED |
Opinion |
We have audited the financial statements of BGAM Hotels (KW) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 group's and of the parent company affairs as at 31 December 2023 and of the group's 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. |
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
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 directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
BGAM HOTELS (KW) LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' 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 Statement of Directors' Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. |
In order to address the risks of misstatements in respect of irregularities, including fraud, we have: |
- | obtained an understanding of the key laws and regulations applicable to the group, including the Companies Act 2006, its IHG Holiday Inn franchise agreement and applicable taxation legislation; |
- | assessed the group's own internal controls and systems for the prevention and detection of irregularities and particularly the control environment within which they operate; |
- | determined a materiality level and audit approach sufficient to identify most irregularities, including fraud, that may occur; |
- | considered our own involvement in the preparation of the group's statutory financial statements and taxation returns; |
- | conducted audit verification work, on a sample basis, on the key audit areas and risks we have identified; and |
- | reflected on the outcome of our work, and the likelihood that conclusions drawn may be indicative of other areas of potential irregularity. |
We therefore consider our audit approach has been sufficient to detect material irregularities, including fraud. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
BGAM HOTELS (KW) LIMITED |
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 a Report of the Auditors 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. |
for and on behalf of |
Statutory Auditors and Chartered Accountants |
Rutland House |
90-92 Baxter Avenue |
Southend on Sea |
Essex |
SS2 6HZ |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
CONSOLIDATED |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 3,467,920 | 2,722,982 |
Cost of sales | 1,940,755 | 1,905,248 |
GROSS PROFIT | 1,527,165 | 817,734 |
Administrative expenses | 676,585 | 1,156,022 |
850,580 | (338,288 | ) |
Other operating income | - | 2,775 |
OPERATING PROFIT/(LOSS) | 4 | 850,580 | (335,513 | ) |
Interest payable and similar expenses | 6 | 1,286,624 | 984,839 |
LOSS BEFORE TAXATION | (436,044 | ) | (1,320,352 | ) |
Tax on loss | 7 | - | - |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (436,044 | ) | (1,320,352 | ) |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
CONSOLIDATED |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
LOSS FOR THE YEAR | (436,044 | ) | (1,320,352 | ) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(436,044 |
) |
(1,320,352 |
) |
Total comprehensive income attributable to: |
Owners of the parent | (436,044 | ) | (1,320,352 | ) |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
CONSOLIDATED BALANCE SHEET |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 | - | 3,000 |
Tangible assets | 10 | 8,239,301 | 8,375,998 |
Investments | 11 | - | - |
8,239,301 | 8,378,998 |
CURRENT ASSETS |
Stocks | 12 | 11,540 | 11,430 |
Debtors | 13 | 565,399 | 361,468 |
Cash at bank and in hand | 4,626 | 923,532 |
581,565 | 1,296,430 |
CREDITORS |
Amounts falling due within one year | 14 | 9,025,248 | 4,042,170 |
NET CURRENT LIABILITIES | (8,443,683 | ) | (2,745,740 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
(204,382 |
) |
5,633,258 |
CREDITORS |
Amounts falling due after more than one year |
15 |
8,941,475 |
14,343,071 |
NET LIABILITIES | (9,145,857 | ) | (8,709,813 | ) |
CAPITAL AND RESERVES |
Called up share capital | 19 | 38 | 38 |
Retained earnings | 20 | (9,145,895 | ) | (8,709,851 | ) |
SHAREHOLDERS' FUNDS | (9,145,857 | ) | (8,709,813 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on 8 October 2024 and were signed on its behalf by: |
J D Levy - Director |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
COMPANY BALANCE SHEET |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
Investments | 11 |
CURRENT ASSETS |
Debtors | 13 |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings | 20 |
SHAREHOLDERS' FUNDS |
Company's loss for the financial year | (36,200 | ) | (28,250 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 | 38 | (7,389,499 | ) | (7,389,461 | ) |
Changes in equity |
Total comprehensive income | - | (1,320,352 | ) | (1,320,352 | ) |
Balance at 31 December 2022 | 38 | (8,709,851 | ) | (8,709,813 | ) |
Changes in equity |
Total comprehensive income | - | (436,044 | ) | (436,044 | ) |
Balance at 31 December 2023 | 38 | (9,145,895 | ) | (9,145,857 | ) |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2023 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
CONSOLIDATED CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 254,101 | 3,117,620 |
Interest paid | (357,338 | ) | (312,249 | ) |
Interest element of finance lease payments paid |
(929,286 |
) |
(672,590 |
) |
Tax paid | - | 2,916 |
Net cash from operating activities | (1,032,523 | ) | 2,135,697 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (23,098 | ) | (114,411 | ) |
Net cash from investing activities | (23,098 | ) | (114,411 | ) |
Cash flows from financing activities |
Rolled up finance interest | 193,079 | - |
Other loan advances | - | 5,525,000 |
Loan repayments | - | (6,207,944 | ) |
Capital repayments in year | (104,150 | ) | (381,869 | ) |
Net cash from financing activities | 88,929 | (1,064,813 | ) |
(Decrease)/increase in cash and cash equivalents | (966,692 | ) | 956,473 |
Cash and cash equivalents at beginning of year |
2 |
913,021 |
(43,452 |
) |
Cash and cash equivalents at end of year |
2 |
(53,671 |
) |
913,021 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Loss before taxation | (436,044 | ) | (1,320,352 | ) |
Depreciation charges | 162,794 | 499,321 |
Finance costs | 1,286,624 | 984,839 |
1,013,374 | 163,808 |
Increase in stocks | (110 | ) | (4,712 | ) |
(Increase)/decrease in trade and other debtors | (203,931 | ) | 207,493 |
(Decrease)/increase in trade and other creditors | (555,232 | ) | 2,751,031 |
Cash generated from operations | 254,101 | 3,117,620 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31/12/23 | 1/1/23 |
£ | £ |
Cash and cash equivalents | 4,626 | 923,532 |
Bank overdrafts | (58,297 | ) | (10,511 | ) |
(53,671 | ) | 913,021 |
Year ended 31 December 2022 |
31/12/22 | 1/1/22 |
£ | £ |
Cash and cash equivalents | 923,532 | 11,373 |
Bank overdrafts | (10,511 | ) | (54,825 | ) |
913,021 | (43,452 | ) |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1/1/23 | Cash flow | At 31/12/23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 923,532 | (918,906 | ) | 4,626 |
Bank overdrafts | (10,511 | ) | (47,786 | ) | (58,297 | ) |
913,021 | (966,692 | ) | (53,671 | ) |
Debt |
Finance leases | (8,757,554 | ) | (84,091 | ) | (8,841,645 | ) |
Debts falling due within 1 year | (50,644 | ) | (5,528,768 | ) | (5,579,412 | ) |
Debts falling due after 1 year | (5,623,761 | ) | 5,523,931 | (99,830 | ) |
(14,431,959 | ) | (88,928 | ) | (14,520,887 | ) |
Total | (13,518,938 | ) | (1,055,620 | ) | (14,574,558 | ) |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
BGAM Hotels (KW) Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page. |
The group trades from its property in Kenilworth, Warwick. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Basis of consolidation |
The group accounts consolidated the affairs of BGAM Hotels (KW) Limited and all its subsidiary undertakings drawn to 31 December each year. The subsidiary accounts have been included in the group figures under the acquisition method of accounting. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover represents the income receivable by the group from its trading activities as a hotel. Sales encompass room hire, food and beverage income and all other associated ancillary hotel and guest services. Turnover is recognised in the period in which physical goods are sold, as services are performed or otherwise as entitlement accrues to the group. |
Goodwill |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Long leasehold | - |
Equipment | - |
Fixtures and fittings | - |
Computer equipment | - |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
3. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 895,187 | 1,055,862 |
Social security costs | 56,427 | 73,277 |
Other pension costs | 13,009 | 15,089 |
964,623 | 1,144,228 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
2023 | 2022 |
Staff | 70 | 66 |
Directors | 5 | 5 |
2023 | 2022 |
£ | £ |
Directors' remuneration | - | - |
4. | OPERATING PROFIT/(LOSS) |
The operating profit (2022 - operating loss) is stated after charging: |
2023 | 2022 |
£ | £ |
Hire of plant and machinery | 9,676 | 10,217 |
Depreciation - owned assets | 59,795 | 131,137 |
Depreciation - assets on finance leases | 100,000 | 100,000 |
Goodwill amortisation | - | 265,185 |
Patents and licences amortisation | 3,000 | 3,000 |
5. | AUDITORS' REMUNERATION |
2023 | 2022 |
£ | £ |
Fees payable to the company's auditors for the audit of the company's financial statements |
15,000 |
14,000 |
Auditors' remuneration - other non-audit services | 78 | 3,824 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Leasing | 275,094 | 248,724 |
Bank charges | 82,244 | 63,525 |
Loan interest payable | 893,086 | 646,840 |
Other interest | 36,200 | 25,750 |
1,286,624 | 984,839 |
7. | TAXATION |
Analysis of the tax charge |
No liability to UK corporation tax arose for the year ended 31 December 2023 nor for the year ended 31 December 2022. |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
7. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Loss before tax | (436,044 | ) | (1,320,352 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 25 % (2022 - 19 %) |
(109,011 |
) |
(250,867 |
) |
Effects of: |
Expenses not deductible for tax purposes | 25,141 | 69,587 |
Losses not recognised | 83,870 | 181,280 |
Total tax charge | - | - |
Although historically deferred tax assets have not been recognised, the subsidiary does benefit from significant trading losses (£2.5m) carried forward, ongoing capital allowances (£236k) and capital losses (£2.26m) which will reduce its exposure to future taxable profits accordingly. |
8. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements. |
9. | INTANGIBLE FIXED ASSETS |
Group |
Patents |
and |
Goodwill | licences | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
and 31 December 2023 | 5,303,719 | 30,000 | 5,333,719 |
AMORTISATION |
At 1 January 2023 | 5,303,719 | 27,000 | 5,330,719 |
Amortisation for year | - | 3,000 | 3,000 |
At 31 December 2023 | 5,303,719 | 30,000 | 5,333,719 |
NET BOOK VALUE |
At 31 December 2023 | - | - | - |
At 31 December 2022 | - | 3,000 | 3,000 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
10. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
Long | and | Computer |
leasehold | Equipment | fittings | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2023 | 8,500,000 | 22,167 | 745,666 | 5,627 | 9,273,460 |
Additions | - | 3,200 | 17,047 | 2,851 | 23,098 |
At 31 December 2023 | 8,500,000 | 25,367 | 762,713 | 8,478 | 9,296,558 |
DEPRECIATION |
At 1 January 2023 | 322,466 | 16,206 | 553,164 | 5,626 | 897,462 |
Charge for year | 100,000 | 1,691 | 57,391 | 713 | 159,795 |
At 31 December 2023 | 422,466 | 17,897 | 610,555 | 6,339 | 1,057,257 |
NET BOOK VALUE |
At 31 December 2023 | 8,077,534 | 7,470 | 152,158 | 2,139 | 8,239,301 |
At 31 December 2022 | 8,177,534 | 5,961 | 192,502 | 1 | 8,375,998 |
On 10 October 2019 the group entered into agreement to sell and then leaseback the property from which it trades, over a period of 225 years. This lease substantially amounts to a financing lease, as the group will subsidiary derive benefit from the property throughout a major part of its useful life, and has been recognised accordingly. |
Fixed assets, included in the above, which are held under finance leases are as follows: |
Long |
leasehold |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 | 8,500,000 |
DEPRECIATION |
At 1 January 2023 | 322,466 |
Charge for year | 100,000 |
At 31 December 2023 | 422,466 |
NET BOOK VALUE |
At 31 December 2023 | 8,077,534 |
At 31 December 2022 | 8,177,534 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
11. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiary |
Registered office: Greenhill House, 90/93 Cowcross Street, London EC1M 6BF |
Nature of business: |
% |
Class of shares: | holding |
The company acquired the entire issued share capital of Khanna Enterprises (Kenilworth) Limited on 21 March 2017. A proportion of the purchase price was attributed to repaying the company's existing financing liabilities at that time, with the majority representing the cost of shares acquired. |
From this date the subsidiary's financial affairs have been consolidated into the group figures in full. |
12. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Stocks | 11,540 | 11,430 |
13. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 167,556 | 129,602 |
Other debtors | 82,928 | 104,083 |
Prepayments | 314,915 | 127,783 |
565,399 | 361,468 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 16) | 5,583,297 | 10,511 |
Other loans (see note 16) | 54,412 | 50,644 |
Finance leases (see note 17) | - | 38,244 |
Trade creditors | 368,021 | 353,699 |
Amounts owed to group undertakings | - | - |
Social security and other taxes | 94,982 | 60,614 |
Other creditors | 2,863,057 | 3,458,035 |
Accrued expenses | 61,479 | 70,423 |
9,025,248 | 4,042,170 |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
2023 | 2022 |
£ | £ |
Bank loans (see note 16) | - | 5,469,520 |
Other loans (see note 16) | 99,830 | 154,241 |
Finance leases (see note 17) | 8,841,645 | 8,719,310 |
8,941,475 | 14,343,071 |
16. | LOANS |
An analysis of the maturity of loans is given below: |
Group |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or | on demand: |
Bank overdrafts | 58,297 | 10,511 |
Bank loans | 5,525,000 | - |
Other loans | 54,412 | 50,644 |
5,637,709 | 61,155 |
Amounts falling due between one and | two years: |
Bank loans | - | 5,469,520 |
Other loans | 58,460 | 112,871 |
58,460 | 5,582,391 |
Amounts falling due between two and | five years: |
Other loans | 41,370 | 41,370 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
17. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Finance leases |
2023 | 2022 |
£ | £ |
Gross obligations repayable: |
Within one year | 297,403 | 275,385 |
Between one and five years | 1,019,945 | 970,701 |
In more than five years | 130,323,230 | 123,183,984 |
131,640,578 | 124,430,070 |
Finance charges repayable: |
Within one year | 297,403 | 237,141 |
Between one and five years | 1,019,945 | 970,701 |
In more than five years | 121,481,585 | 114,464,674 |
122,798,933 | 115,672,516 |
Net obligations repayable: |
Within one year | - | 38,244 |
In more than five years | 8,841,645 | 8,719,310 |
8,841,645 | 8,757,554 |
On 10 October 2019 the group entered into an agreement to lease the property from which it trades for a period of 225 years. This transaction amounts to a finance lease and has been recognised accordingly. The group is liable for an annual rent of £170,306, adjusted for changes in the retail price index but subject to a minimum of 1% and a maximum of 4% increase per year. |
Throughout the initial period of the lease the annual interest arising will exceed the rental payments due and therefore the group's recognised finance liability will continue to increase. |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
18. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group |
2023 | 2022 |
£ | £ |
Bank overdrafts | 58,297 | 10,511 |
Bank loans | 5,525,000 | 5,469,520 |
Other loans | 154,242 | 204,885 |
Finance leases | 8,841,645 | 8,757,554 |
14,579,184 | 14,442,470 |
The group's bank loans are secured by fixed and floating charge over the group's property and equipment and all assets. |
Finance lease liabilities are secured on the assets to which they relate. |
Other loans consists of a Coronavirus Business Interruption Loan, which the group drew in September 2020. The loan is backed by a partial guarantee from the UK Government. |
The bank overdraft is secured by a guarantee from Dragonglass Milton Keynes Limited, Leigh Hotels Limited, Stonehenge Hotels Limited and Tankersley Hotels Limited. The subsidiary had also given cross-guarantees in respect of other associated companies' bank overdrafts. At the balance sheet date, those companies' liabilities to the bank totalled £229,367 (2022 - £119,889). |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
"A" Ordinary | 1p | 38 | 38 |
20. | RESERVES |
Group |
Retained |
earnings |
£ |
At 1 January 2023 | (8,709,851 | ) |
Deficit for the year | (436,044 | ) |
At 31 December 2023 | (9,145,895 | ) |
Company |
Retained |
earnings |
£ |
At 1 January 2023 |
Deficit for the year | ( |
) |
At 31 December 2023 |
BGAM HOTELS (KW) LIMITED (REGISTERED NUMBER: 10449423) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
21. | PENSION COMMITMENTS |
The group operates a defined contribution scheme in respect of its eligible employees. During the year, total contributions to this scheme amounted to £13,009 (2022 - £15,089). There was a contribution of £305 outstanding at the balance sheet date (2022 - £3,374). |
22. | RELATED PARTY DISCLOSURES |
The group works closely with a portfolio of four other hotels and their respective companies, all under similar (but not identical) control. Further, the whole portfolio is managed by BGAM Limited, a hotel management enterprise, again with ownership similarities and common directors. These close working relationships enables all businesses to access necessary trading expertise when needed, negotiate beneficial relationships with suppliers and leverage various economies of scale for mutual benefit. |
The group utilises management services provided by a company under common control. During the year the total costs arising for these management services amounted to £nil (2022 - £102,817). |
At the balance sheet date, the group owed £2,822,351 to other companies under the control of various directors and their immediate family (2022 - £3,273,414). |
During the year the group's total compensation to key management personnel (including directors) amounted to £26,463 (2022 - £65,904). |
23. | GOING CONCERN |
The consolidated financial statements show that, as at 31 December 2023, the group has a deficiency of net assets of £9,145,857 (2022 - £8,709,813). The continuation of the group's activities are dependent upon the continued support of its associated companies and the group's bankers, which is forthcoming. The accounts are therefore still prepared on a going concern basis. |
The directors have taken into consideration the events after the end of the period when assessing the group's ability to continue as a going concern. |