Company Registration No. 12490976 (England and Wales)
ELECTRIC GROUP HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
ELECTRIC GROUP HOLDINGS LIMITED
COMPANY INFORMATION
Directors
D J G Madden
J H Lewis
Company number
12490976
Registered office
Electric Brixton
Town Hall Parade
Brixton Hill
London
SW2 1RJ
United Kingdom
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
ELECTRIC GROUP HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 33
ELECTRIC GROUP HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

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

Fair review of the business

During the year to 31 May 2023, the Group continued to grow healthily following the end of Covid restrictions in the previous year.

 

Electric Brixton continued to operate strongly, SWX Bristol re-launched and NX Newcastle launched successfully in September 2022. SWX Bristol reopened following a substantial refurbishment following the arson at the venue, for which the culprit was found and imprisoned. Insurance proceeds were received in the period relating to the fire of £2.945m (2022: £nil). NX Newcastle, following a significant refurbishment, opened as a new venue under Group operation for the first time to great acclaim.

 

As can be seen in the cash flow statement, in FY23 the Group invested £6.46m net cash in investing activities, in addition to £1.06m in the previous year, for these refurbishments.

 

Turnover for the Group almost doubled to £8,135,436 (2022: £4,227,664) driven by the two newly refurbished venues and supported by strong performance at Electric Brixton. The number of events more than doubled from 177 in FY22 to 431 (144% growth), supported by a footfall of 422,670 admissions across the Group’s portfolio (146% growth from 171,968 in FY22).

 

Despite significant pre-opening, marketing and launch costs, EBITDA for 3 trading venues demonstrated a healthy 12% growth from the previous year at £1.09m (2022: £0.97m).

 

Net assets of the Group as at 31 March 2023 were £5,774,570 (2022: £3,870,978), even after recognising impairment losses on one of the freehold properties of £1,928,603.

Principal risks and uncertainties

The Board has overall responsibility for risk management and the system of internal controls, and for reviewing their effectiveness. Monitoring exposure to risk and uncertainty is an integral part of the company’s management processes, and risk management activities are designed to manage rather than eliminate risk.

 

Generally the principal risk that the Group faces are operational risk, competition, regulatory and legislative impacts, recruitment and retention of staff, and maintenance of reputation, as well as financial risk.

 

The Group acknowledges increases in the cost of living and inflation rates during the year however does not consider these a principal risk or uncertainty.

 

The Group acknowledges increases in the costs of living and inflation rates during the year, and how this may impact its operations. The Group does not consider these a principal risk or uncertainty.

Key performance indicators

The group’s key performance indicators are footfall, number of shows, gross profit, gross profit margin and operating profit before exceptional items. The directors monitor the group’s KPIs on a regular basis in order to assess the group’s ongoing financial performance. The performance of the group in the current and prior year can be summarised as follows:

 

2023           2022           % movement

 

Turnover         £8,135,436      £4,227,664     

Number of shows   431             177             144%

Footfall.           422,670 171,968      146%

 

Other information and explanations

The Group will continue to actively pursue new opportunities relating to the development of its circuit of touring-class music venues. The Group intends on undertaking a refurbishment and rebranding of its Freehold venue, the Sheffield Leadmill when legal proceedings are concluded.

ELECTRIC GROUP HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -

On behalf of the board

D J G Madden
Director
11 October 2024
ELECTRIC GROUP HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -

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

Principal activities

The principal activity of the company and group continued to be that of owner and operator of successful and culturally significant music venues.

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 further dividend.

Directors

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

D J G Madden
J H Lewis
Auditor

HW Fisher LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

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

On behalf of the board
D J G Madden
Director
11 October 2024
ELECTRIC GROUP HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
- 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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

ELECTRIC GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ELECTRIC GROUP HOLDINGS LIMITED
- 5 -
Opinion

We have audited the financial statements of Electric Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

 

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:

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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

As part of our planning process:

ELECTRIC GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ELECTRIC GROUP HOLDINGS LIMITED
- 7 -

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

Other matters which we are required to address

The corresponding figures for the year ended 31 May 2022 were not audited.

Use of our report

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

Gary Miller (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
11 October 2024
ELECTRIC GROUP HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
8,135,436
4,227,664
Cost of sales
(3,833,266)
(1,448,641)
Gross profit
4,302,170
2,779,023
Administrative expenses
(5,355,720)
(2,162,478)
Other operating income
2,945,000
598,624
Operating profit
5
1,891,450
1,215,169
Interest receivable and similar income
9
1,933
183
Interest payable and similar expenses
10
(69,942)
(31)
Fair value gains and losses on investment properties
15
543,367
-
0
Profit before taxation
2,366,808
1,215,321
Tax on profit
11
(463,216)
(313,054)
Profit for the financial year
1,903,592
902,267
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
ELECTRIC GROUP HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 9 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
13
587,092
722,119
Tangible assets
14
6,385,210
641,739
Investment properties
15
1,435,000
2,345,961
8,407,302
3,709,819
Current assets
Stocks
18
136,101
39,218
Debtors
19
1,318,053
434,794
Cash at bank and in hand
1,264,134
2,963,650
2,718,288
3,437,662
Creditors: amounts falling due within one year
20
(3,859,336)
(2,560,381)
Net current (liabilities)/assets
(1,141,048)
877,281
Total assets less current liabilities
7,266,254
4,587,100
Provisions for liabilities
Provisions
22
892,854
650,000
Deferred tax liability
23
598,830
66,122
(1,491,684)
(716,122)
Net assets
5,774,570
3,870,978
Capital and reserves
Called up share capital
25
1,230
1,230
Other reserves
605,892
198,367
Profit and loss reserves
5,167,448
3,671,381
Total equity
5,774,570
3,870,978
The financial statements were approved by the board of directors and authorised for issue on 11 October 2024 and are signed on its behalf by:
11 October 2024
D J G Madden
Director
ELECTRIC GROUP HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
16
1,872,833
1,872,833
Current assets
Debtors
19
4,568,274
2,513,380
Cash at bank and in hand
23,119
2,064,497
4,591,393
4,577,877
Creditors: amounts falling due within one year
20
(557,100)
(1,815,025)
Net current assets
4,034,293
2,762,852
Total assets less current liabilities
5,907,126
4,635,685
Capital and reserves
Called up share capital
25
1,230
1,230
Profit and loss reserves
5,905,896
4,634,455
Total equity
5,907,126
4,635,685

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,271,441 (2022 - £74,569 profit).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 11 October 2024 and are signed on its behalf by:
11 October 2024
D J G Madden
Director
Company Registration No. 12490976
ELECTRIC GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
Share capital
Investment property reserve
Profit and loss reserves
Total
£
£
£
£
As restated for the period ended 31 May 2022:
Balance at 1 June 2021
1,230
-
3,546,387
3,547,617
Effect of change in accounting policy
-
198,367
(777,273)
(578,906)
As restated
1,230
198,367
2,769,114
2,968,711
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
-
902,267
902,267
Balance at 31 May 2022
1,230
198,367
3,671,381
3,870,978
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
-
1,903,592
1,903,592
Transfers
-
407,525
(407,525)
-
Balance at 31 May 2023
1,230
605,892
5,167,448
5,774,570
ELECTRIC GROUP HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 May 2022:
Balance at 1 June 2021
1,230
4,559,886
4,561,116
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
74,569
74,569
Balance at 31 May 2022
1,230
4,634,455
4,635,685
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
1,271,441
1,271,441
Balance at 31 May 2023
1,230
5,905,896
5,907,126
ELECTRIC GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
32
4,631,988
2,274,769
Interest paid
(69,942)
(31)
Income taxes paid
(4,415)
(61,153)
Net cash inflow from operating activities
4,557,631
2,213,585
Investing activities
Purchase of tangible fixed assets
(3,015,870)
(557,373)
Purchases for the development of investment property
(3,447,807)
(498,600)
Interest received
1,933
183
Net cash used in investing activities
(6,461,744)
(1,055,790)
Financing activities
Proceeds from borrowings
1,750,000
-
Repayment of borrowings
(1,545,403)
-
Net cash generated from/(used in) financing activities
204,597
-
Net (decrease)/increase in cash and cash equivalents
(1,699,516)
1,157,795
Cash and cash equivalents at beginning of year
2,963,650
1,805,855
Cash and cash equivalents at end of year
1,264,134
2,963,650
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 14 -
1
Accounting policies
Company information

Electric Group Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Electric Brixton, Town Hall Parade, Brixton Hill, London, United Kingdom, SW2 1RJ.

 

The group consists of Electric Group Holdings Limited and all of its subsidiaries.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investment properties. The principal accounting policies adopted are set out below.

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

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

The group applied the principles of merger accounting, following a share for share exchange, given the shareholders of Electric Group Holdings Limited were the same as Electric Group Limited and their rights, relative to each other, remained unchanged. Hence shareholders have a continuing interest in the company both before and after the share for share exchange.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Electric Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 May 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.4
Going concern

The group has net current liabilities of £1,141,048 as at 31 May 2023. The group received funds post year end in excess of the net current liability as at 31 May 2023 from an insurance settlement of £1,223,006. The group have achieved profit post year end, and are forecasting further profits and therefore are forecasting sufficient funds to be able to continue trading at expected levels.

 

However, a number of provisions are recognised as at 31 May 2023. The group has the financial backing of one its directors who is providing support for a period of at least 12 months after the approval of these financial statements so the company and group can meet any liabilities which may fall due.

 

Accordingly, and having been satisfied that such support is available, at the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is derived from operating music venues and leasing of investment properties and arose wholly in the United Kingdom. Turnover is recognised when services have been rendered. The turnover is primarily derived from venue hire fees, ticket sales and beverage sales. Turnover is all rendered of goods and services.

 

Turnover from leasing of investment property represents rental income, property insurance premiums and service charges excluding value added tax. Recognition of rental income takes into account the terms of the lease including any lease incentives which are spread over the length of the lease.

 

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of AT and other sales related taxes.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -
1.7
Tangible fixed assets

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

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

Freehold land and buildings
50 years straight line
Leasehold land and buildings
No depreciation charged in the year
Leasehold improvements
Straight line over the period of the lease
Fixtures and fittings
5 years straight line
Computer equipment
3 years straight line
Plant and equipment
5 years straight line

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

1.8
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

Property rented to a group entity is accounted for as tangible fixed assets.

1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

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

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.10
Impairment of fixed assets

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

 

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

1.11
Stocks

Stocks are stated at the lower of cost and estimated selling price. The cost of stock includes the purchase of beverages.

 

Work in progress is valued on the basis of cost of materials, labour and direct site expenses.

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -
1.12
Financial instruments

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

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -
Derecognition of financial liabilities

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

1.13
Equity instruments

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

1.14
Taxation

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

Current tax

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

Deferred tax

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

 

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

1.15
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.16
Employee benefits

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

 

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

 

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

1.17
Retirement benefits

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

 

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 19 -
1.18
Leases

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

1.19
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.20
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

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

Valuation of investments

At the end of each financial year, the directors assess investments in subsidiaries for any indicators of impairment. The performance of the subsidiaries has been reviewed and based on the performance during the year and post year end, as well as consideration of the fair value of leasehold properties held at costs in the subsidiary accounts, the directors consider there to be no indicators of impairment.

Recoverability of intercompany debtors

Amounts owed from the group are assessed for the recoverability of the balance. The directors have assessed the recoverability of this balance based on the trading results and forecasts of the group undertakings. Net present value calculations have been used and in considering the recoverability of the intercompany debtor which have been sensitised for movement in WACC as well as growth and RPI %. The directors consider amounts due from one of its subsidiaries to not be recoverable and these have been provided for in these accounts. The bad debt provision against the amounts due from the company's subsidiary is £2,557,429 (2022: £nil). The directors deem that the future trading potential of group companies, along with the intention to put charges in place over the freehold properties, all other amounts are deemed fully recoverable.

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
Key sources of estimation uncertainty

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

Amortisation of goodwill

The directors have carried out an assessment of useful life of goodwill and it has been determined that 10 years is an appropriate amortisation policy.

Impairment of goodwill

Goodwill is tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill has been impaired, for example due to a changed business climate. In order to determine if the value of goodwill has been impaired, the group relied on a number of factors, including historical results, business plans, forecasts and market data. Changes in the conditions for these judgements and estimate can significantly affect the assessed value of goodwill and its recoverable amount.

Valuation of investment property

Investment properties are valued at fair value with changes in fair value being recognised in the profit and loss account. The fair value of the investment property has been arrived at on the basis of a valuation carried out in August 2024 by an independent third party valuation expert, with the effective date of the valuation being 31 May 2023. At the balance sheet date of 31 May 2023, the investment property has been revalued to £1,435,000. Determining the fair value of investment properties involves an element of estimation by referring to available market evidence, including rental yields and realised sales values for similar properties.

Impairment of freehold land and buildings

Freehold land and buildings are held at cost less depreciation and impairment. In August 2024 an independent third party valuation expert undertook valuation of the freehold land and buildings with the effective date of the valuation being 31 May 2023. At the balance sheet date of 31 May 2023, the freehold land and buildings were valued at £2,900,000, and therefore an impairment has been recognised against freehold land and buildings of £1,928,603. Determining the fair value of freehold land and buildings involves an element of estimation by referring to available market evidence, including rental yields and realised sales values for similar properties.

Provisions

Provisions have been recognised relating to dilapidations in respect of the lease the group are entered into. The dilapidations relate to wear and tear which has accumulated over the course of the lease. An independent third party expert has completed their assessment of the dilapidation works to be completed and which are estimated to be of £110,000, which has been provided for in these financial statements.

 

As at 31 May 2023, a provision is recognised for amounts of £650,000 (2022: £650,000) in relation to compensation payable to a tenant at one of the properties owned by the group at the end of the lease period, being 23 March 2023. The compensation relates to works completed by the tenant on a number of individual improvements, as outlined in the lease agreement. On entering into the lease, the cost of carrying out the improvement works was valued by an independent third party, which has been adjusted for current value at the balance sheet date. A provision has been recognised as at 31 May 2023 for this amount, and a prior year adjustment recognised. Please see note 26 for further details.

 

A provision has been recognised in the period for amounts of £132,854 (2022: £Nil) being the best estimate of the directors for additional amounts payable in relation to the property development works undertaken during the period. The directors have reviewed available information and information from suppliers in determining the figure.

 

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Rental income
83,814
95,964
Venue and ticketing income
2,873,882
1,157,794
Bar sales
5,177,740
2,973,906
8,135,436
4,227,664
2023
2022
£
£
Other significant revenue
Interest income
1,933
183
Grants received
-
598,624
4
Exceptional item
2023
2022
£
£
Expenditure
Provision for property development costs
132,854
-

A provision has been recognised for amounts of £650,000 (2022: £nil) relating to compensation payable to a tenant on demise of the lease for improvement works completed by the tenant, as agreed upon when entering into the lease. The lease end date was 25 March 2023.

5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
-
(598,624)
Depreciation of owned tangible fixed assets
245,931
61,843
Impairment of owned tangible fixed assets
1,928,603
-
(Profit)/loss on disposal of tangible fixed assets
-
94,682
Amortisation of intangible assets
135,027
135,027
Operating lease charges
304,942
90,335
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
10,500
-
Audit of the financial statements of the company's subsidiaries
80,000
-
90,500
-
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 22 -
7
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Administrative staff
22
17
1
1
Venue staff
145
52
-
-
Total
167
69
1
1

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,718,422
974,498
50,000
33,333
Social security costs
115,038
80,845
5,858
4,131
Pension costs
20,480
15,561
1,511
-
0
1,853,940
1,070,904
57,369
37,464
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
50,000
33,333
Company pension contributions to defined contribution schemes
1,511
-
51,511
33,333
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,933
183
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
2,164
-
Other interest on financial liabilities
67,637
-
Other interest
141
31
Total finance costs
69,942
31
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 23 -
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
313,054
Adjustments in respect of prior periods
(69,492)
-
0
Total current tax
(69,492)
313,054
Deferred tax
Origination and reversal of timing differences
532,708
-
0
Total tax charge
463,216
313,054

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

2023
2022
£
£
Profit before taxation
2,366,808
1,215,321
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
473,362
230,911
Tax effect of expenses that are not deductible in determining taxable profit
443,349
22,224
Gains not taxable
11,515
-
0
Adjustments in respect of prior years
(199,725)
-
0
Permanent capital allowances in excess of depreciation
(607,168)
2,578
Other permanent differences
117,639
26,351
Movement in deferred tax not recognised
209,462
30,990
Remeasurement of deferred tax for changes in tax rates
55,260
-
0
Other differences
(40,478)
-
0
Taxation charge
463,216
313,054
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 24 -
12
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Property, plant and equipment
14
1,928,603
-
Recognised in:
Administrative expenses
1,928,603
-

Impairment losses have been recognised within the profit and loss account against freehold land and buildings. Freehold land and buildings are held in the accounts at historic cost, and based on valuations completed in the period there were indicators for impairment. Therefore an impairment has been recognised against freehold land and buildings of £1,928,603.

13
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 June 2022 and 31 May 2023
1,350,273
Amortisation and impairment
At 1 June 2022
628,154
Amortisation charged for the year
135,027
At 31 May 2023
763,181
Carrying amount
At 31 May 2023
587,092
At 31 May 2022
722,119
The company had no intangible fixed assets at 31 May 2023 or 31 May 2022.
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
14
Tangible fixed assets
Group
Freehold land and buildings
Leasehold land and buildings
Leasehold improvements
Fixtures and fittings
Computer equipment
Plant and equipment
Total
£
£
£
£
£
£
£
Cost
At 1 June 2022
-
0
175,000
566,191
53,611
19,230
148,035
962,067
Additions
-
0
-
0
2,498,160
46,641
16,614
454,455
3,015,870
Transfer from investment property
4,902,135
-
0
-
0
-
0
-
0
-
0
4,902,135
At 31 May 2023
4,902,135
175,000
3,064,351
100,252
35,844
602,490
8,880,072
Depreciation and impairment
At 1 June 2022
-
0
143,182
14,493
45,252
9,083
108,318
320,328
Depreciation charged in the year
73,532
15,909
62,195
10,165
7,182
76,948
245,931
Impairment losses
1,928,603
-
0
-
0
-
0
-
0
-
0
1,928,603
At 31 May 2023
2,002,135
159,091
76,688
55,417
16,265
185,266
2,494,862
Carrying amount
At 31 May 2023
2,900,000
15,909
2,987,663
44,835
19,579
417,224
6,385,210
At 31 May 2022
-
0
31,818
551,698
8,359
10,147
39,717
641,739
The company had no tangible fixed assets at 31 May 2023 or 31 May 2022.
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
14
Tangible fixed assets
(Continued)
- 26 -

More information on impairment movements in the year is given in note 12.

15
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 June 2022
2,345,961
-
Additions through subsequent expenditure
3,447,807
-
Transfers to owner-occupied property
(4,902,135)
-
Net gains or losses through fair value adjustments
543,367
-
At 31 May 2023
1,435,000
-

The fair value of the investment properties has been arrived at on the basis of a valuation made at 31 May 2023 by Gerald Eve, who are not connected with he company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

 

The historic cost of the investment property held by the company as at 31 May 2023 is £627,144 (2022: £623,844).

On 25 September 2022, an investment property owned by the group became owner-occupied and therefore was transferred to freehold land and buildings within tangible fixed assets.

16
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
17
-
0
-
0
1,872,833
1,872,833
Movements in fixed asset investments
Company
Shares in group undertakings
£
Cost or valuation
At 1 June 2022 and 31 May 2023
1,872,833
Carrying amount
At 31 May 2023
1,872,833
At 31 May 2022
1,872,833
17
Subsidiaries

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

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
17
Subsidiaries
(Continued)
- 27 -
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Electric Group Limited
1
Letting of leased real estate
Ordinary
100.00
Music Venues Limited
1
Operating independent music venues
Ordinary
100.00
Harewood Bristol Limited
1
Letting of leased real estate
Ordinary
100.00
MVL Properties (2017) Limited
1
Owner of investment property
Ordinary
100.00
MVL Properties (2015) Limited
1
Owner of investment property
Ordinary
100.00
Music Venues (Trading) LImited
1
Management of independent music venues
Ordinary
100.00
Latenight (Trading) Limited
1
Operating independent music venues
Ordinary
100.00
Latenight Investments Limited
1
Dormant
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

1
Electric Brixton, Town Hall Parade, Brixton Hill, London, SW2 1RJ
18
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
136,101
39,218
-
0
-
0
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
197,450
79,865
-
0
-
0
Amounts owed by group undertakings
-
-
4,523,246
2,424,444
Other debtors
919,501
119,874
1,730
-
0
Prepayments and accrued income
167,278
201,231
43,298
88,936
1,284,229
400,970
4,568,274
2,513,380
Amounts falling due after more than one year:
Other debtors
33,824
33,824
-
0
-
0
Total debtors
1,318,053
434,794
4,568,274
2,513,380
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 28 -
20
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Other borrowings
21
204,597
-
0
204,597
-
0
Trade creditors
901,748
655,825
101,913
89,886
Amounts owed to group undertakings
-
0
-
0
184,293
1,606,706
Corporation tax payable
272,701
346,608
7,558
7,558
Other taxation and social security
1,264,227
226,811
-
20,501
Other creditors
449,486
495,474
-
0
-
0
Accruals and deferred income
766,577
835,663
58,739
90,374
3,859,336
2,560,381
557,100
1,815,025
21
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Other loans
204,597
-
0
204,597
-
0
Payable within one year
204,597
-
0
204,597
-
0

The group have drawn borrowings from a company which is owned by one of the directors. Interest is being charged at a rate of 8%. There is no formal agreement for the timing of repayment.

22
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Tenant compensation provision
650,000
650,000
-
-
Dilapidation provision
110,000
-
-
-
Costs relating to property development
132,854
-
-
-
892,854
650,000
-
-
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
22
Provisions for liabilities
(Continued)
- 29 -
Movements on provisions:
Tenant compensation provision
Dilapidation provision
Costs relating to property development
Total
Group
£
£
£
£
At 1 June 2022
650,000
-
-
650,000
Additional provisions in the year
-
110,000
132,854
242,854
At 31 May 2023
650,000
110,000
132,854
892,854

Tenant compensation

As at 31 May 2023, a provision has been recognised for £650,000 (2022: £650,000) in relation to compensation payable to the tenant at the end of the lease period, being 23 March 2023, for works completed by the tenant on a number of individual improvements, as outlined in the lease agreement.

 

Costs relating to property development

A provision has been recognised in the period for amounts of £132,854 (2022: £Nil) being the best estimate of the directors for additional amounts payable in relation to the property development works undertaken during the period. The directors have reviewed available information and information from suppliers in determining the figure.

23
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
559,366
-
Investment property
201,964
66,122
Short term timing differences
(162,500)
-
598,830
66,122
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 June 2022
66,122
-
Charge to profit or loss
532,708
-
Liability at 31 May 2023
598,830
-
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 30 -
24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
20,480
15,561

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

25
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
800
800
800
800
B Ordinary shares of £1 each
430
430
430
430
1,230
1,230
1,230
1,230
26
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
461,551
342,524
-
-
Between two and five years
968,000
679,551
-
-
In over five years
6,095,000
3,080,000
-
-
7,524,551
4,102,075
-
-
27
Prior period adjustment

During the preparation of the financial statements, management identified errors in the prior period figures. These have been corrected and further details are set out below.

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
27
Prior period adjustment
(Continued)
- 31 -
Changes to the balance sheet - group
As previously reported
Adjustment at 1 Jun 2021
Adjustment at 31 May 2022
As restated at 31 May 2022
Note
£
£
£
£
Fixed assets
Tangible assets
a)
609,921
47,727
(15,909)
641,739
Investment properties
c)
2,256,472
89,489
-
2,345,961
Provisions for liabilities
Deferred tax
c)
-
(66,122)
-
(66,122)
Other provisions
b)
-
(650,000)
-
(650,000)
Net assets
4,465,793
(578,906)
(15,909)
3,870,978
Capital and reserves
Investment property reserve
-
198,367
-
198,367
Profit and loss
4,464,563
(777,273)
(15,909)
3,671,381
Total equity
4,465,793
(578,906)
(15,909)
3,870,978
Changes to the profit and loss account - group
As previously reported
Adjustment
As restated
Period ended 31 May 2022
£
£
£
Administrative expenses
(2,146,569)
(15,909)
(2,162,478)
Reconciliation of changes in equity - company
1 June
31 May
2021
2022
£
£
Adjustments to prior year
Total adjustments
-
-
Equity as previously reported
4,561,116
4,635,685
Equity as adjusted
4,561,116
4,635,685
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Total adjustments
(15,909)
Profit as previously reported
90,478
Profit as adjusted
74,569
ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
27
Prior period adjustment
(Continued)
- 32 -
Notes to reconciliation
a) Adjustment for the capitalisation of premium paid on operating lease

In 2013, the company paid £175,000 to be assigned a lease from which a group company operates. The cost was capitalised as investment property despite the lease being an operating lease, and therefore an adjustment has been posted to recognise the lease premium as leasehold land and buildings to be depreciated over the life of the lease.

b) Tenant compensation

A prior period adjustment has been made to recognise a provision for compensation payable to a tenant upon the demise of the lease. This provision should have been recognised in prior periods when the repairs were done to the property and the compensation agreement was entered into.

c) Fair value investment property

The group’s investment property should have been stated at fair value as required by accounting standards. A prior year adjustment has been made to account for the fair value movement, with a related adjustment to deferred tax.

28
Related party transactions

The group have drawn borrowings from a company which is owned by one of the directors. Advances were received of £1.75m of which £150,000 is still outstanding at 31 May 2023. Interest has accrued on the loan of £54,597 which are still owed as at 31 May 2023.

 

During the year, the group held an event for a company owned by the father of one the directors. Total income received from the event was £78,500 (2022: £nil). The group received project management advice relating to a building refurbishment from the related party for the amounts of £23,313 (2022: £22,835). As at 31 May 2023, there were amounts owed from the related party of £nil (2022: £9,516).

29
Controlling party

The controlling party of the group is one of the directors, J Lewis.

30
S479A parent company guarantee

For the financial year ended 31 May 2023, the company's subsidiary, Latenight Investments Limited, was entitled to exemption from audit under section 479A of the Companies Act 2006.

 

The net outstanding liabilities which the company has guaranteed pursuant to s479A and s479C of the Companies Act 2006 amounted to £906. These liabilities are already incorporated in the consolidated financial statements.

31
Events after the reporting date

On 8 August 2023 the group received £1,223,006 in an insurance settlement following a fire at the Bristol venue in 2021.

ELECTRIC GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 33 -
32
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
1,903,592
902,267
Adjustments for:
Taxation charged
463,216
313,054
Finance costs
69,942
31
Investment income
(1,933)
(183)
(Gain)/loss on disposal of tangible fixed assets
-
94,682
Fair value gain on investment properties
(543,367)
-
0
Amortisation and impairment of intangible assets
135,027
135,027
Depreciation and impairment of tangible fixed assets
2,174,534
61,843
Increase in provisions
242,854
-
Movements in working capital:
Increase in stocks
(96,883)
(14,399)
(Increase)/decrease in debtors
(883,259)
56,144
Increase in creditors
1,168,265
736,686
Decrease in deferred income
-
(10,383)
Cash generated from operations
4,631,988
2,274,769
33
Analysis of changes in net funds - group
1 June 2022
Cash flows
31 May 2023
£
£
£
Cash at bank and in hand
2,963,650
(1,699,516)
1,264,134
Borrowings excluding overdrafts
-
(204,597)
(204,597)
2,963,650
(1,904,113)
1,059,537
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