Company registration number 03498548 (England and Wales)
PENNYFARTHING DEVELOPMENTS LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
PENNYFARTHING DEVELOPMENTS LIMITED
COMPANY INFORMATION
Directors
Mr M S S Dukes
Mr M Adams
Mr T R Adams
Mr D Adams
Secretary
Mr M Adams
Company number
03498548
Registered office
Pennyfarthing Farmhouse
Ossemsley
New Milton
Hampshire
BH25 5TL
Auditor
HJS Reading Limited
3 Richfield Place
Richfield Avenue
Reading
Berkshire
RG1 8EQ
PENNYFARTHING DEVELOPMENTS LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Company statement of cash flows
17
Notes to the financial statements
18 - 34
PENNYFARTHING DEVELOPMENTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

The Directors present the strategic report for the year ended 31 January 2024.

Review of the business

The directors consider the performance of the Group to be in line with expectations for the year ending 31 January 2024. This is considering the significant challenges the industry has faced and continues to face.

 

This has led to reduced financials year on year with the key financial metrics seen below:

 

£’000

2024

2023

Turnover

£21,303

£26,992

Retained Earnings

£24,612

£27,282

Net Assets

£28,190

£30,947

Return on Capital Employed

-9.89%

7.07%

 

Operational Metrics

 

During the year the following metrics were achieved:

 

 

Private plot completions have dropped year on year as the challenging market conditions continue to make buyers cautious. Sales activity remained uncertain owing to a lack of mortgage availability and affordability. However, confidence in the market is returning, although slower than we would like there are certainly signs of improvement given lower cancellation rates than we have seen historically. We also note first time buyer activity has remained low, mainly due to the lack of availability of products in the market place. We are, however, seeing increased levels of customer engagement as we prepare to launch our First Homes product.

 

Demand amongst existing homeowners remained challenging with those opting to purchase requiring elevated levels of sales incentives and increased use of enablers such as Early Bird, Part exchange or Assisted Move to secure a sale.

During the year, we operated from 5 outlets, albeit 2 are considered as tail end sites. Our larger schemes provide a varied product range, indicating we should appeal to a wide audience, subject to implementation of a good marketing strategy which we continue to do. Whilst in previous years, having lower brought forward stock, the rate of build and continued challenges in the planning cycle resulted in less plots available to sell we are now mindful to not over stock while demand is sensitive.

Supply chain issues endured during the Covid pandemic and more recently with the war in Ukraine have certainly eased in respect of availability of materials. However, the expectation of a reversal of price inflation has not eased off at the same pace which is having negative effects on margins. Our dedicated procurement team work tirelessly with key suppliers to overcome issues, constantly monitoring prices and keeping construction sites operational.

 

Planning consents remain challenging with local authorities struggling with resource constraints. However, we are pleased with the progress that has been made after years of liaison with all stakeholders that a number of our strategic sites are starting to come to fruition. So far, 4 of our strategic sites have now obtained planning permission equating to approximately 1,100 plots providing future certainty to the gorup. This will help hugely with the well documented housing shortages in the United Kingdom and our regional demographic.

- 1 -
PENNYFARTHING DEVELOPMENTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

We welcome the newly elected Labour Governments enthusiasm on housing and support its ambitious pledge to build 1.5m homes in the next 5 years. Fundamentally, in order to achieve these targets we see that radical change is required throughout the whole process to make it more efficient to allow construction activity to start earlier. We will continue to support the industry through engagement with industry bodies in a constructive manner, hopefully playing our part in making positive industry changes to target the continual shortfall of housing across the United Kingdom.

 

Our long-term strategy continues to be that of developing strategic land interests and convert them into consented sites.

 

Following the year end, the successful planning consents achieved on a number of large housing developments allow the continued throughput of stock in a consistent and well managed basis. Of these sites the group has forward sold 106 plots, being the single largest contract ever entered into and construction is well under way. This will allow us to maintain our strong cash position allowing us to be resilient to any adverse macro- economic changes.

 

The directors are confident of the prospects of the group will continue and will adapt to ever changing challenges as they present themselves.

Principal risks and uncertainties

As with any business, Pennyfarthing faces risks and uncertainties in the course of its operations. It is only by timely identification and effective management of these risks that we are able to deliver our strategy and grow the business.

 

The board have considered the prospects of the company and have taken into account its current financial position and its principal risks. Fundamentally, these arise from the deterioration of the health of the UK economy, brought about by uncertainty, loss of consumer confidence, higher interest rates and increasing unemployment, leading to decreased affordability, reducing demand for housing and falling house prices.

 

The main activities of the group is that of building and development of private dwelling houses for sale. With this comes the potential risks such as:

 

 

 

 

- 2 -
PENNYFARTHING DEVELOPMENTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
Description of Principal Risks and Uncertainties continued
Key performance indicators

Given the straightforward nature of the business, the directors are of the opinion that an analysis using KPI's is not necessary for an understanding of the development, performance or position of the company.

Financial Risk Management

The company is funded by a mix of retained earnings and group funding.

 

Long term and short term cashflow forecasts are prepared and monitored ensuring the company has adequate funds in place to meet its working capital requirements.

 

The Group have a proud track record of paying suppliers on time and this has resulted in existing suppliers offering further credit terms supporting the future growth of the company. There is certainly more caution amongst new suppliers with more onerous due diligence undertaken before on-boarding. Payment terms are currently 30 days from the end of the month.

 

In addition, should the business fail to adhere to the stringent demand of the regulatory planning and technical requirements there is the potential for increased costs, disruption and reputational damage which all potentially have financial impacts. Constant review of the planning cycle, keeping up to date with regulatory or technical changes through on-going training as well as planning for at least 3 years ahead help mitigate these impacts.

- 3 -
PENNYFARTHING DEVELOPMENTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
Other information and explanations

 

Health and Safety

The company places particular emphasis on the health and safety of its employees, subcontractors, customers and others on its sites during the construction process strives for zero accidents through an improving safety culture.

 

Environment

Evolving environmental regulations with an emphasis on sustainability presents challenges and in many cases leads to increased cost and margin erosion. However, taking Corporate responsibility seriously, all companies and staff within the business and wider group are encouraged to be environmentally aware and committed to environmental improvements. The business continues to focus on environmental improvements in the design of its developments and dealing with waste. In addition, the group's housing developments have to provide Biodiversity Net Gain (BNG) which is a concept proposed in the 25 Year Environmental Plan and mandated as a condition of planning permission in the 2019 Environmental Bill. BNG requires a 10% increase in biodiversity after development, compared to the level of biodiversity prior to development taking place. Also and specific to the geographical area in which we develop some of our developments in the Solent catchment area are required to provide nitrate neutrality and within the Avon River catchment phosphate neutrality.

 

Furthermore, the Company continues to deliver Alternative Natural Recreational Greenspace (ANRG) and Suitable Alternative Natural Greenspace (SANG) as part of our developments. Such new public open spaces are intended to mitigate impacts of additional population on protected habitat sites (including the New Forest and Dorset Heathlands) by providing alternative recreation and dog walking opportunities to reduce pressure on protected sites. They provide a health and wellbeing benefit for our residents, being closely located to our developments and a wider resource and benefit for existing communities where we are delivering new homes. Further funding, towards strategic habitats mitigation infrastructure delivery, is also typically secured from our developments.

 

On behalf of the board

 

Mr M Adams
Director
29 October 2024
- 4 -
PENNYFARTHING DEVELOPMENTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

The Directors present their annual report and financial statements for the year ended 31 January 2024.

Principal activities

The principal activity of the company and group continued to be that of building and development of private dwelling houses for sale.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £590,000. 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:

Mr M S S Dukes
Mr M Adams
Mr T R Adams
Mr D Adams
Energy and carbon report

The energy and carbon reporting at group level only needs to include subsidiaries which are obligated to report the energy and carbon in their own financial statements. In this group there are no individual subsidiaries which are obligated to disclosure this information and therefore there is nothing to disclose.

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
Mr M Adams
Director
29 October 2024
- 5 -
PENNYFARTHING DEVELOPMENTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2024

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.

- 6 -
PENNYFARTHING DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PENNYFARTHING DEVELOPMENTS LIMITED
Opinion

In our opinion the financial statements:

We have audited the financial statements of Pennyfarthing Developments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2024 which comprise and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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 group and parent 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:

- 7 -
PENNYFARTHING DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PENNYFARTHING DEVELOPMENTS 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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors' report.

 

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

Responsibilities of Directors

As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the 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 parent 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 extend to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK and overseas regulatory principles. We also considered the laws and regulations which have a direct impact on the financial statements such as the Companies Act 2006.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements.

- 8 -
PENNYFARTHING DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PENNYFARTHING DEVELOPMENTS LIMITED

Audit procedures performed by the audit engagement team included:

 

 

 

 

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or though collusion.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

- 9 -
Mark H Rogers FCCA (Senior Statutory Auditor)
For and on behalf of HJS Reading Limited
29 October 2024
Chartered Accountants and Statutory Auditor
3 Richfield Place
Richfield Avenue
Reading
Berkshire
RG1 8EQ
PENNYFARTHING DEVELOPMENTS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JANUARY 2024
2024
2023
Notes
£
£
Turnover
3
21,302,571
26,992,200
Cost of sales
(18,009,501)
(21,569,041)
Gross profit
3,293,070
5,423,159
Administrative expenses
(4,841,797)
(4,972,512)
Other operating income
34,690
37,017
Operating (loss)/profit
4
(1,514,037)
487,664
Interest receivable and similar income
8
253,713
209,633
Interest payable and similar expenses
9
(1,663,714)
(775,085)
Loss before taxation
(2,924,038)
(77,788)
Tax on loss
10
757,071
448,167
(Loss)/profit for the financial year
28
(2,166,967)
370,379
(Loss)/profit for the financial year is attributable to:
- Owners of the parent company
(2,079,708)
472,410
- Non-controlling interests
(87,259)
(102,031)
(2,166,967)
370,379
- 10 -
PENNYFARTHING DEVELOPMENTS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
2024
2023
£
£
(Loss)/profit for the year
(2,166,967)
370,379
Other comprehensive income
-
-
Total comprehensive income for the year
(2,166,967)
370,379
Total comprehensive income for the year is attributable to:
- Owners of the parent company
(2,079,708)
472,410
- Non-controlling interests
(87,259)
(102,031)
(2,166,967)
370,379
- 11 -
PENNYFARTHING DEVELOPMENTS LIMITED
GROUP BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
341,295
197,041
Investment property
13
814,750
814,750
Investments
14
11,944
11,944
1,167,989
1,023,735
Current assets
Stocks
17
50,799,755
43,555,551
Debtors
18
3,371,265
5,002,846
Cash at bank and in hand
3,046,967
4,833,187
57,217,987
53,391,584
Creditors: amounts falling due within one year
19
(14,734,872)
(20,127,947)
Net current assets
42,483,115
33,263,637
Total assets less current liabilities
43,651,104
34,287,372
Creditors: amounts falling due after more than one year
20
(15,425,296)
(3,304,597)
Provisions for liabilities
Deferred tax liability
23
35,500
35,500
(35,500)
(35,500)
Net assets
28,190,308
30,947,275
Capital and reserves
Called up share capital
26
516,108
516,108
Share premium account
27
1,607,910
1,607,910
Profit and loss reserves
28
24,612,141
27,281,849
Equity attributable to owners of the parent company
26,736,159
29,405,867
Non-controlling interests
1,454,149
1,541,408
28,190,308
30,947,275
The financial statements were approved by the board of directors and authorised for issue on 29 October 2024 and are signed on its behalf by:
Mr M  Adams
Director
Company registration number 03498548 (England and Wales)
- 12 -
PENNYFARTHING DEVELOPMENTS LIMITED
COMPANY BALANCE SHEET
AS AT 31 JANUARY 2024
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
14
2,873,683
2,873,683
Current assets
Debtors
18
2,219,521
2,887,291
Cash at bank and in hand
148,017
25,765
2,367,538
2,913,056
Creditors: amounts falling due within one year
19
(3,020,965)
(2,664,820)
Net current (liabilities)/assets
(653,427)
248,236
Net assets
2,220,256
3,121,919
Capital and reserves
Called up share capital
26
516,108
516,108
Share premium account
27
1,607,910
1,607,910
Profit and loss reserves
28
96,238
997,901
Total equity
2,220,256
3,121,919

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £311,663 (2023 - £208,542 profit).

The financial statements were approved by the board of directors and authorised for issue on 29 October 2024 and are signed on its behalf by:
Mr M  Adams
Director
Company registration number 03498548 (England and Wales)
- 13 -
PENNYFARTHING DEVELOPMENTS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
Share capital
Share premium account
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 1 February 2022
516,108
1,607,910
27,484,439
29,608,457
1,643,439
31,251,896
Year ended 31 January 2023:
Profit and total comprehensive income
-
-
472,410
472,410
(102,031)
370,379
Dividends
11
-
-
(675,000)
(675,000)
-
(675,000)
Balance at 31 January 2023
516,108
1,607,910
27,281,849
29,405,867
1,541,408
30,947,275
Year ended 31 January 2024:
Loss and total comprehensive income
-
-
(2,079,708)
(2,079,708)
(87,259)
(2,166,967)
Dividends
11
-
-
(590,000)
(590,000)
-
(590,000)
Balance at 31 January 2024
516,108
1,607,910
24,612,141
26,736,159
1,454,149
28,190,308
- 14 -
PENNYFARTHING DEVELOPMENTS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 February 2022
516,108
1,607,910
789,359
2,913,377
Year ended 31 January 2023:
Profit and total comprehensive income for the year
-
-
208,542
208,542
Balance at 31 January 2023
516,108
1,607,910
997,901
3,121,919
Year ended 31 January 2024:
Profit and total comprehensive income
-
-
(311,663)
(311,663)
Dividends
11
-
-
(590,000)
(590,000)
Balance at 31 January 2024
516,108
1,607,910
96,238
2,220,256
- 15 -
PENNYFARTHING DEVELOPMENTS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
29
(9,017,188)
(12,629,204)
Interest paid
(1,663,714)
(775,085)
Income taxes paid
(104,527)
(436,358)
Net cash outflow from operating activities
(10,785,429)
(13,840,647)
Investing activities
Purchase of tangible fixed assets
(272,818)
(168,077)
Proceeds from disposal of tangible fixed assets
93,000
6,420
Purchase of investment property
-
(171,125)
Proceeds from disposal of joint ventures
-
(11,944)
Interest received
52,623
139
Other income received from investments
201,090
209,494
Net cash generated from/(used in) investing activities
73,895
(135,093)
Financing activities
Repayment of bank loans
9,325,705
3,451,939
Payment of finance leases obligations
189,609
(11,803)
Dividends paid to equity shareholders
(590,000)
(675,000)
Net cash generated from financing activities
8,925,314
2,765,136
Net decrease in cash and cash equivalents
(1,786,220)
(11,210,604)
Cash and cash equivalents at beginning of year
4,833,187
16,043,791
Cash and cash equivalents at end of year
3,046,967
4,833,187
- 16 -
PENNYFARTHING DEVELOPMENTS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
30
511,144
(199,198)
Investing activities
Proceeds from disposal of joint ventures
-
0
(11,944)
Interest received
18
29
Other income received from investments
201,090
209,494
Net cash generated from investing activities
201,108
197,579
Financing activities
Dividends paid to equity shareholders
(590,000)
-
Net cash used in financing activities
(590,000)
-
Net increase/(decrease) in cash and cash equivalents
122,252
(1,619)
Cash and cash equivalents at beginning of year
25,765
27,384
Cash and cash equivalents at end of year
148,017
25,765
- 17 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
Company information

Pennyfarthing Developments Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of Pennyfarthing Developments 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 freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

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.

 

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.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Pennyfarthing Developments Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 January 2024. 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. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

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

- 18 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

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 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 VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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

1.6
Tangible fixed assets

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

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

Plant and equipment
25% on cost
Fixtures and fittings
25% on cost
Motor vehicles
25% on cost

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.

1.7
Investment property

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.

- 19 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
1.8
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, associates and jointly controlled entities 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.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

- 20 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.10
Stocks
- 21 -

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
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, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

- 22 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
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
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.

1.16
Retirement benefits

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

- 23 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
1.17
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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

2
Judgements and key sources of estimation uncertainty

Preparation of the financial statements requires the directors to make significant judgements, estimates and assumptions. 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 associated 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 that period and future periods where the revision affect both the current and future periods.

 

The main accounting estimates are:

 

Land stock values - The company establishes a reliable estimate of the market value of the land which it holds in stock for future development and provides for any loss in value based on internal valuations and the directors expertise in this area.

 

Assessment of costs to complete - This involves estimating final development costs and selling prices and impacts profit recognised in allocating costs to sales completions before and after the year end.

 

Accrued costs - involving a degree of estimation uncertainty in respect of final account settlement.

3
Turnover and other revenue
2024
2023
£
£
Other revenue
Interest income
52,623
139
4
Operating (loss)/profit
2024
2023
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
116,761
68,841
Depreciation of tangible fixed assets held under finance leases
-
8,142
Profit on disposal of tangible fixed assets
(81,197)
(6,420)
- 24 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
9,870
9,375
Audit of the financial statements of the company's subsidiaries
34,667
33,125
44,537
42,500
For other services
Taxation compliance services
-
500
6
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Administrative staff
40
38
-
-
Site operatives
30
30
-
-
Directors
4
4
4
4
Total
74
72
4
4

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
3,910,956
4,748,373
528,006
756,775
Social security costs
509,375
566,277
67,844
102,994
Pension costs
318,473
101,910
43,992
6,164
4,738,804
5,416,560
639,842
865,933
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
528,006
756,775
Company pension contributions to defined contribution schemes
43,992
6,164
571,998
762,939
- 25 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
7
Directors' remuneration
(Continued)
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
288,632
286,770
Company pension contributions to defined contribution schemes
15,120
2,055
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
52,623
139
Income from fixed asset investments
Income from participating interests - joint ventures
201,090
209,494
Total income
253,713
209,633
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
52,623
139
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,651,587
774,791
Other finance costs:
Interest on finance leases and hire purchase contracts
12,127
294
Total finance costs
1,663,714
775,085
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
23,693
238,994
Adjustments in respect of prior periods
-
0
(493,601)
Total current tax
23,693
(254,607)
- 26 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
10
Taxation
(Continued)
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
(780,764)
(193,560)
Total tax credit
(757,071)
(448,167)

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

2024
2023
£
£
Loss before taxation
(2,924,038)
(77,788)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
(731,010)
(19,447)
Tax effect of expenses that are not deductible in determining taxable profit
(29,190)
14,040
Tax effect of income not taxable in determining taxable profit
(3,891)
-
0
Group relief
(26,929)
(22,428)
Under/(over) provided in prior years
(2,877)
(70,961)
Deferred tax adjustments in respect of prior years
43,801
(193,560)
Tax at marginal rate
(6,975)
-
0
Corporation Tax Restatement Adjustment
-
0
(155,811)
Taxation credit
(757,071)
(448,167)
11
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Interim paid
590,000
-
- 27 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
12
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 February 2023
812,581
91,806
293,186
1,197,573
Additions
172,100
4,432
96,286
272,818
Disposals
(104,990)
-
0
(40,465)
(145,455)
At 31 January 2024
879,691
96,238
349,007
1,324,936
Depreciation and impairment
At 1 February 2023
676,710
79,634
244,188
1,000,532
Depreciation charged in the year
82,841
4,394
29,526
116,761
Eliminated in respect of disposals
(104,990)
-
0
(28,662)
(133,652)
At 31 January 2024
654,561
84,028
245,052
983,641
Carrying amount
At 31 January 2024
225,130
12,210
103,955
341,295
At 31 January 2023
135,871
12,172
48,998
197,041
The company had no tangible fixed assets at 31 January 2024 or 31 January 2023.
13
Investment property
Group
Company
2024
2024
£
£
Fair value
At 1 February 2023 and 31 January 2024
814,750
-

Investment property was valued on an open market basis on 31 January 2022 by the directors.

14
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
2,861,739
2,861,739
Investments in joint ventures
16
11,944
11,944
11,944
11,944
11,944
11,944
2,873,683
2,873,683
- 28 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
14
Fixed asset investments
(Continued)
Movements in fixed asset investments
Group
Shares in joint ventures
£
Cost or valuation
At 1 February 2023 and 31 January 2024
11,944
Carrying amount
At 31 January 2024
11,944
At 31 January 2023
11,944
Movements in fixed asset investments
Company
Shares in subsidiaries and joint ventures
£
Cost or valuation
At 1 February 2023 and 31 January 2024
2,873,683
Carrying amount
At 31 January 2024
2,873,683
At 31 January 2023
2,873,683
15
Subsidiaries

Details of the company's subsidiaries at 31 January 2024 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Pennyfarthing New Homes Limited
A
Ordinary
50.00
Dormy Care Homes Limited
A
Ordinary
100.00
Pennyfarthing Investments Limited
A
Ordinary
100.00
Pennyfarthing Landholdings Limited
A
Ordinary
50.00
Pennyfarthing Homes Limited
A
Ordinary
100.00
Pennyfarthing Constrcution Limited
A
Ordinary
100.00
Ordinary
PF No.1 Limited
A
100.00
PF No.2 Limited
A
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

A
Pennyfarthing House, Ossemsley, New Milton, Hants, BH25 5TL
16
Joint ventures

Details of joint ventures at 31 January 2024 are as follows:

- 29 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
16
Joint ventures
(Continued)
Name of undertaking
Registered office
Interest
% Held
held
Direct
PO4 Limited
7 & 8 Church Street, Wimborne, Dorset, BH21 1JH
Pennyfarthing
50.00
17
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Work in progress
50,799,755
43,555,551
-
-
18
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
186,515
228,139
-
0
-
0
Corporation tax recoverable
1,289,718
1,289,718
-
0
-
0
Amounts owed by group undertakings
394,385
2,867,402
1,981,210
2,875,046
Amounts owed by undertakings in which the company has a participating interest
101,090
-
101,090
-
Other debtors
367,870
193,550
-
0
5,876
Prepayments and accrued income
81,056
230,477
-
0
6,369
2,420,634
4,809,286
2,082,300
2,887,291
Deferred tax asset (note 23)
950,631
193,560
137,221
-
0
3,371,265
5,002,846
2,219,521
2,887,291
19
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
21
4,329,921
7,008,205
-
0
-
0
Obligations under finance leases
22
77,657
4,758
-
0
-
0
Other borrowings
21
1,945,000
1,945,000
-
0
-
0
Trade creditors
3,367,313
3,347,658
-
0
300
Amounts owed to group undertakings
1,047,387
2,867,402
2,979,851
2,616,308
Corporation tax payable
31,244
135,771
31,244
31,244
Other taxation and social security
149,433
133,560
-
1,224
Deferred income
24
32,590
32,590
-
0
-
0
Other creditors
474
524
-
0
50
Accruals and deferred income
3,753,853
4,652,479
9,870
15,694
14,734,872
20,127,947
3,020,965
2,664,820
- 30 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
20
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
21
15,308,586
3,304,597
-
0
-
0
Obligations under finance leases
22
116,710
-
0
-
0
-
0
15,425,296
3,304,597
-
-
21
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
19,638,507
10,312,802
-
0
-
0
Other loans
1,945,000
1,945,000
-
0
-
0
21,583,507
12,257,802
-
-
Payable within one year
6,274,921
8,953,205
-
0
-
0
Payable after one year
15,308,586
3,304,597
-
0
-
0

The bank loans are secured by first charges over certain land and properties included in work in progress.

22
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
77,657
4,758
-
0
-
0
In two to five years
116,710
-
0
-
0
-
0
194,367
4,758
-
-

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

- 31 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
23
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Group
£
£
£
£
Accelerated capital allowances
35,500
35,500
-
-
Tax losses
-
-
950,631
193,560
35,500
35,500
950,631
193,560
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Company
£
£
£
£
Tax losses
-
-
137,221
-
Group
Company
2024
2024
Movements in the year:
£
£
Asset at 1 February 2023
(158,060)
-
Credit to profit or loss
(757,071)
(137,221)
Asset at 31 January 2024
(915,131)
(137,221)

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

24
Deferred income
Group
Company
2024
2023
2024
2023
£
£
£
£
Other deferred income
32,590
32,590
-
-
25
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
318,473
101,910

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.

- 32 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
26
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
516,108
516,108
516,108
516,108
27
Share premium account
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning and end of the year
1,607,910
1,607,910
1,607,910
1,607,910
28
Profit and loss reserves
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the year
31,050,428
27,484,439
997,901
789,359
Profit/(loss) for the year
(2,079,708)
472,410
(311,663)
208,542
Dividends
(590,000)
(675,000)
(590,000)
-
At the end of the year
24,612,141
27,281,849
96,238
997,901
29
Cash absorbed by group operations
2024
2023
£
£
(Loss)/profit for the year after tax
(2,166,967)
199,254
Adjustments for:
Taxation credited
(757,071)
(448,167)
Finance costs
1,663,714
775,085
Investment income
(253,713)
(209,633)
Gain on disposal of tangible fixed assets
(81,197)
(6,420)
Depreciation and impairment of tangible fixed assets
116,761
76,983
Movements in working capital:
Increase in stocks
(7,244,204)
(10,996,392)
Decrease/(increase) in debtors
2,388,652
(2,164,396)
Decrease in creditors
(2,683,163)
(59,233)
Increase in deferred income
-
32,590
Cash absorbed by operations
(9,017,188)
(12,800,329)
- 33 -
PENNYFARTHING DEVELOPMENTS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
30
Cash generated from/(absorbed by) operations - company
2024
2023
£
£
(Loss)/profit for the year after tax
(311,663)
208,542
Adjustments for:
Taxation (credited)/charged
(137,221)
25,397
Investment income
(201,108)
(209,523)
Movements in working capital:
Decrease/(increase) in debtors
804,991
(501,532)
Increase in creditors
356,145
277,918
Cash generated from/(absorbed by) operations
511,144
(199,198)
31
Analysis of changes in net debt - group
1 February 2023
Cash flows
31 January 2024
£
£
£
Cash at bank and in hand
4,833,187
(1,786,220)
3,046,967
Borrowings excluding overdrafts
(12,257,802)
(9,325,705)
(21,583,507)
Obligations under finance leases
(4,758)
(189,609)
(194,367)
(7,429,373)
(11,301,534)
(18,730,907)
32
Analysis of changes in net funds - company
1 February 2023
Cash flows
31 January 2024
£
£
£
Cash at bank and in hand
25,765
122,252
148,017
33
Prior period adjustment

The directors’ have carried out an assessment of work in progress balance recoverability and as such have undertaken to adjust the prior period reserves by £2,004,301 in 2022 and £1,664,278 in 2023, these balances are inclusive of corporation tax and deferred tax movements.

- 34 -
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