The directors present the strategic report for the year ended 31 March 2024.
Principal activities
The principal activity of the Company is a holding company for its subsidiaries detailed in note 16 to the financial statements.
The principal activity of the Group is the operation of a portfolio of marinas and associated services in the United Kingdom to provide an excellent quality of experience for customers whilst maximising the returns for shareholders.
Aquavista operates 29 marinas across England, making it the largest marina operator by number of locations across the UK. The business owns and operates over 5,000 moorings across its 29 locations. The principal objective of the Group is the operation of these marinas and associated services to provide an excellent quality of experience for customers whilst maximising the returns for shareholders.
The key to achieving this is the recruitment and retention of a well-trained and motivated workforce supported by a strong brand and marketing message and investment in the marina infrastructure to improve its offering to customers and drive strong shareholder returns.
The business operates a range of sites across the inland and coastal network and is the only large marina operator to offer planning approved residential moorings to its customers. We operate over 985 of these currently across 17 sites with plans to extend this offering further into other locations under the Group’s management.
The Group is focused on building on this industry leading platform to improve customer services through targeted capital investment to create long-term value. The business grew significantly following the acquisition of Castle Marinas in 2021 and this enlarged group of marinas, coupled with additional targeted investment has enabled the brand to offer greater benefits to all mooring customers through continued initiatives such as Explore 100 and our Moor Card. These strategic initiatives allow our annual contract holders access to a series of national and local commercial benefits that improve their mooring experience. This includes the ability to spend up to 100 nights away from their “home” berth at any of Aquavista’s other marinas across the network allowing our customers to make the most of life boating with us.
The Group’s results comprise the trading activities for the year ended 31 March 2024.
The Group utilises a range of key performance indicators to manage the business, including total revenue, occupancy volumes and profitability with reference to EBITDA before exceptional and non-recurring costs; with the business delivering growth across each of these key operational metrics.
Trading for the Group has remained resilient. Management accounts show that average occupancy fell slightly by 1% from 84% to 83% with revenue yield increasing 10% (2023: 5%) from the prior year resulting in total turnover increasing by 6.5% to £22,522,000 (2023: £21,149,000).
The revenue performance by each of the main business areas was:
2024 2023
£'000 £'000
Moorings (including hardstanding) 15,132 13,918
Brokerage fees 1,489 1,094
Retail 1,396 1,466
Other income 3,348 3,056
Floating homes 1,157 1,615
22,522 21,149
Other income includes revenue from marina services, property rents, caravan permits, storage, car parking and cost recoveries.
The Group’s results for the year show an operating profit of £1,698,000 (2023: operating loss of £5,202,000), a loss for the year of £13,538,000 (2023: £17,238,000).
There were £1,517,000 (2023: £6,573,000) of exceptional costs, of which £207,000 (2023: £955,000) related to acquisition and integration costs, £102,000 (2023: £nil) related to abortive acquisition costs, £975,000 (2023: £nil) related to operational restructuring costs, £7,000 (2023: £5,618,000) relating to the impairment of goodwill and tangible assets, and £226,000 (2023: £nil) relating to remedial costs on the final fixed costs on floating home sales.
Key movements on the Balance Sheet show:
A decrease of £2,157,000 in the groups cash position from £4,495,000 to £2,338,000;
An increase of £762,000 creditors falling due within one year, driven principally from deferred income;
A decrease of £2,003,000 in intangible assets from £8,886,000 to £6,883,000 representing impairment and annual amortisation of goodwill;
An increase of £9,177,000 in creditors falling due after one year representing additional borrowings and rolled up interest.
In order to form an assessment of the continued applicability of the going concern basis of preparation, the Directors have prepared trading and cash flow forecasts for the Group for a period of at least 12 months from the date of approval of the financial statements. As at 31 March 2024, the Group had net current liabilities of £2,466,000 (2023: £1,216,000 net current assets) and net liabilities of £34,172,000 (2023: £20,634,000). The Directors have also reviewed the associated credit facilities of the Group, including assessment of the recent and forecast future compliance with covenants.
These trading and cash flow forecasts indicate the Group will be able to operate within the committed facilities, without recourse to the equity commitment, and in full compliance with all associated covenants. Given the ongoing economic and political uncertainty, particularly surrounding inflation and interest rates, the Directors have also applied various sensitivities to the trading and cash flow forecasts.
These scenarios confirm that the Group will be able to continue to operate and settle its liabilities as they fall due under all reasonably foreseeable scenarios. Should the potential future impacts be greater than the Directors predict, they would look to implement cost management and cash flow initiatives. Based on the above the Directors are satisfied that the Group and the Company will be able to continue as a going concern.
The Group’s operations are managed according to policies and procedures approved by the Board of Directors. As a holding company the principal risks relate to the recovery of its investment. The risks associated with the trade of Aquavista Watersides Ltd are disclosed in that company’s financial statements and are summarised below.
Macro economy
The current year has seen interest rates being held at a high level to combat inflation, which is now falling. Anticipated reductions in interest rates are yet to occur. Whilst there appears to be no end to the war in Ukraine, the energy markets have started to settle, albeit at a much higher level than before and this still contributes to further pressure on the cost of living and cost to the business. Stability and reductions in inflation towards the Bank of England target rate will improve the outlook for the business and its customers.
Environment
The impact and trajectory of climate change remains uncertain and remains a potential threat to the business in the future.
Competition
The Group operates in a competitive environment with other marinas in similar geographical locations. The actions and performance of a competitor can have an impact on the Group. Competitors’ pricing and strategies are kept under review and the Group strives to mitigate this risk by maintaining and improving customer service and investing in essential infrastructure to remain competitive.
Information systems
The Group’s activities are dependent upon the performance of a variety of software packages and the stability of the platforms upon which they are hosted. The Group have utilised off site hosting and have partnered with a specialist IT support company to provide comprehensive support and continues to invest internally and externally where necessary. This includes the Groups’ systems continually carrying out penetration testing, and colleagues have annual mandatory cyber security training, which has resulted in the Group obtaining Cyber Essential Plus accreditation during the year.
Retention of key personnel
The retention of key personnel is a significant factor in the Group’s ability to meet its growth expectations. The Group’s employment policies, remuneration and benefits packages are regularly reviewed and are designed to be competitive.
The Group's activities expose it to financial risks including interest rate risk, and liquidity risk.
Price risk
The Group is exposed to fluctuations in pricing of supplies and seeks to mitigate this wherever appropriate by making use of fixed-price contracts.
Credit risk
The Group's principal financial assets are bank balances and cash, trade debtors and other receivables. The Group's credit risk is primarily related to trade debtors. The amount shown in the Balance Sheet is net of allowances for doubtful receivables. The Group has no concentration of credit risk with the amounts due spread over many customers and is continuing to improve its processes around the management of this to further reduce its exposure.
Interest rate risk
The Group finances its operations through related party loan facilities and long-term loan facilities (Loan Facilities B and C and a PIK Facility). The loan notes are listed on The International Stock Exchange. The related party loan facilities attract a fixed rate of interest whilst long term loan facilities attract interest based on SONIA plus a margin as described in note 22 to the financial statements. The levels of debt and associated interest costs are carefully monitored, and cash generation of the Group is modelled to ensure that all interest payments can be paid when they fall due. Aquavista Watersides 2 Ltd had an interest rate cap in place to reduce its exposure to interest rate risk which ended in April 2024.
Liquidity risk
The Group measures its liquidity risk by the performance of its trading subsidiaries. It seeks to manage the financial risk by ensuring sufficient liquidity is available in these subsidiaries to meet foreseeable needs assessed through careful monitoring of the long-term cash requirements of the business. The objective is to ensure a mix of funding methods offering flexibility and costs effectiveness to match the needs of the Group. As described in note 22 to the financial statements, the Group has long-term loan facilities totalling £136m (2023: £127m) and the following undrawn facilities, as at the year end, to ensure its liquidity requirements are met as required:
a. Loan facility C - £18,750,000 (2023: £18,750,000). This loan facility is available on the same terms and conditions as Loan facility B above as detailed in note 22 to the financial statements; and
b. Revolving credit facility - £4,400,000 (2023: £4,400,000).
Future cashflows arising in the trading subsidiaries are closely monitored to manage cashflow and liquidity risk.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2024.
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Directors do not anticipate any significant future changes to the activity of the group.
MHA 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.
During the year, and up to the date of this report, Directors' indemnity insurance was in place. This covers all qualifying Directors.
There have been no significant events affecting the Group since the year end.
We have audited the financial statements of Aquavista Watersides Topco Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 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 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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiry of management, including directors, about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing minutes of meetings of those charged with governance;
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
Auditing the risk of fraud in revenue, including through the testing of income cut off at the period end and through sales transaction testing to provide comfort over revenue occurrence in the financial statements; and
Challenging assumptions made by management in respect of accounting estimates and key judgements in particular in relation to fixed asset impairment reviews, classification of long term leases, classification of loans to subsidiaries, valuation of financial instruments, treatment of network access agreements and recognition and classification of contingent consideration.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
The notes on pages 16 to 39 form part of these financial statements.
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 £2,992,000 (2023: £2,734,000).
Aquavista Watersides Topco Ltd (“the company”) is company incorporated and registered in England and Wales under the Companies Act 2006 and domiciled in the United Kingdom. The registered office is Sawley Marina, Long Eaton, Nottinghamshire, NG10 3AE.
The group consists of Aquavista Watersides Topco Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the UK and
Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
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 £000, except where otherwise stated.
The financial statements have been prepared under the historical cost convention as modified by the recognition of certain financial assets measured at fair value. 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements present the results of the Group and its own subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
In order to form an assessment of the continued applicability of the going concern basis of preparation, the Directors have prepared trading and cash flow forecasts for the Group for a period of at least 12 months from the date of approval of the financial statements. As at 31 March 2024, the Group had net current liabilities of £2,466,000 (2023: £1,216,000 net current assets) and net liabilities of £34,172,000 (2023: £20,634,000). The Directors have also reviewed the associated credit facilities of the Group, including assessment of the recent and forecast future compliance with covenants. These trading and cash flow forecasts indicate the Group will be able to operate within the committed facilities, without recourse to the equity commitment, and in full compliance with all associated covenants.
Given the ongoing economic and political uncertainty, particularly surrounding inflation and interest rates, the Directors have also applied various sensitivities to the trading and cash flow forecasts. These scenarios confirm that the Group will be able to continue to operate and settle its liabilities and they fall due under all reasonably foreseeable scenarios. Should the potential future impacts be greater than the Directors predict, they would look to implement cost management and cash flow initiatives.
Based on the above the Directors are satisfied that the Group and the Company will be able to continue as a going concern.
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.
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.
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Revenue invoiced in advance is held in deferred income until the service has been provided whilst revenue billed in arrears is included within accrued income.
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.
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.
Loans to subsidiaries are accounted for within fixed asset investments to reflect the long term nature and intention of the arrangement. They are repayable on demand and have been recognised at the undiscounted transaction amount.
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.
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.
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.
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, 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.
Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.
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.
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.
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, including creditors, bank loans, loans from fellow group companies 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.
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a consistent rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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.
Derivatives, including interest rate swaps, 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments, including ordinary shares, 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.
The tax expense represents the sum of the tax currently payable and deferred 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 and laws that have been enacted or substantively enacted by the reporting end date.
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 and laws 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the consolidated financial statements.
A number of marinas are held on long term leases. Judgement is made to classify these as operating leases and not finance leases. this is based on the assessment indicators in FRS102. Included within the indicators is a comparison between lease length and useful economic life. In estimating the useful economic life, management consider the age of other similar assets on the waterway network from which value is still being derived (e.g. docks) and ease terms on similar properties.
The Group holds an interest cap derivative that has been valued on a market basis to give a fair value at the balance sheet date.
Management has determined that the network access agreements are not classified as operating leases under accounting standards. Factors taken into consideration in reaching this decision include: the company does not control specific assets as the network infrastructure remains under the control of the network provider, and the company does not receive all economic benefits from the infrastructure as the provider retains significant rights. These agreements are right of access contracts with payments recognised as expenses when incurred.
The Board has considered whether there are indicators of impairment of the company's investments in or loans to subsidiary undertakings. Factors taken into consideration in reaching such a decision include economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
The Board consider the loans to subsidiaries to be a long term arrangement, despite the legal form being repayable on demand. Hence, it is considered appropriate to classify these loans as fixed asset investments.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
Acquisition and integration costs are in respect of the integration of the Castle Marinas business into the Aquavista Group.
Abortive acquisition costs are in respect of the acquisition of marinas which were subsequently aborted.
See note 12 for the detailed breakdown of the impairments costs.
Redundancy costs are in respect of senior staff who left the business.
Remedial costs are final fixed costs relating to prior years delivered floating home sales.
The comparative non-audit fees were in respect of the previous auditor, BDO LLP.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The Directors receive remuneration for their services to the Group from Aquavista Watersides Ltd.
During the year retirement benefits were accruing to 3 Directors (2023: 5) in respect of defined contribution pension schemes.
The highest paid Director received remuneration of £175,000 (2023: £170,000).
The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £16,000 (2023: £24,000).
Included in the Directors' emoluments are the chairman's invoiced fees of £32,000 (2023: £32,000) to the Group during the year in respect of his services.
The Board of Directors are considered to be the Key Management Personnel.
The actual (credit)/charge 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:
A UK corporation tax rate of 25% was announced in the Chancellor's Budget of 3 March 2021 and applied from 1 April 2023. Deferred tax has been calculated at this rate.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
Details of the company's subsidiaries at 31 March 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
*Subsidiaries of Castle Marinas Limited
Castle Marinas Limited and its subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.
Stocks are stated after provision for impairment of £33,000 (2023 - £73,000).
Trade debtors are stated after provision for impairment of £205,000 (2023 - £100,000).
Prior year numbers have been restated in accordance with note 20.
Group Bank loans due in 2-5 years
Aquavista Watersides 2 Ltd £68,495,000 (2023: £65,523,000).
The loans comprise, Loan facility B of £48,000,000 (2023: £48,000,000), Loan facility C of £6,250,000 (2023: £6,250,000) and a PIK facility of £16,389,000 (2023: £14,086,000).
Loan facilities B and C attract interest based on SONIA + 6% as long as adjusted senior net leverage is 5.5%.
If net debt leverage is 5.0-5.5% it is SONIA + 5.75%, if it is 4.5-5.0% it is 5.5% and if it is below 4.5% it is 5.25%. The interest on the PIK facility is based on SONIA plus 10.5%. Both loans are repayable in 2028.
The loans are secured by a fixed and floating charge over property and undertakings o the Group. The loans are recognised net of debt issue costs at £2,744,000 (2023: £3,413,000).
Bank loans also include a revolving credit facility of £600,000 (2023: £600,000). Interest is accrued at SONIA + 6% and is included in accruals and deferred income in note 21. The facility is repayable in 2028 and are secured by a fixed and floating charge over property and undertakings of the Group.
Group other loans due in 2-5 years
Project Belize Ltd - £37,998,000 (2023: £34,426,000).
The loan notes are recognised in Project Belize Limited and are held by LDC (Nominees) Limited, LDC Parallel (Nominees) Limited, Samelhana Limited (a company related to Mr G P Fletcher, a Director) and the management of the Company.
All loan notes issued attract an interest rate of 10% and are repayable in December 2025 and have a balance of £34,953,000 (2023: £31,742,000) before debt issue costs of £86,000 (2023: £242,000), which include principal loan notes of £10,206,000 (2023: £10,206,000) secured by a Guarantee and Debenture over the Group's assets. The remaining loan notes are unsecured.
A deferred consideration with Canal River Trust, attracts a non-compounding interest rate of 10%, repayable on a trigger event or sale, is owed £3,131,000 (2023: £2,926,000).
Group & Company other loans due after more than 5 years
Total loan notes of £29,680,000 (2023: £27,148,000) held by LDC (Nominees) Limited and the management of the Company also attract an interest rate of 10% and are repayable in 2029, which include principal loan notes of £9,016,000 (2023: £9,608,000) secured by a Guarantee and Debenture over the Group's assets. The remaining loans are unsecured.
The loans are recognised net of debt issue costs of £463,000 (2023: £564,000).
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is expected to reverse within 4 years and relates to accelerated capital allowances that are expected to mature within the same period.
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. Contributions totalling £29,000 (2023 - £36,000) were payable to the fund at the Balance Sheet date and included within creditors.
A Ordinary shares carry voting rights of 1 per share, provided that all such shares held by LDC entities shall not confer more than 49.9% of the total voting rights of all shares. B and C Ordinary shares carry voting rights of 1 vote per share. All shares rank equally on a return of capital and full dividend rights are pro rata on the nominal value of shares. All shares are entitled to participate in a distribution arising from a winding up of the company and the shares are not redeemable or liable to be redeemed, either at the option of the company or the shareholder.
Called up share capital
Called up share capital represents the nominal value of the shares issued.
Merger relief reserve
The other reserves arose on the acquisition of Project Belize Limited and represent £1,704,000 (2023: £1,704,000) of merger relief reserve from shares issued where the merger relief provisions of the Companies Act were applied.
Profit and loss account
The profit and loss account includes all current and prior period profits and losses, net of dividends and historic gift aid payments.
As at 31 March 2024, there were guarantees with group companies in respect of group borrowings which are secured by a fixed and floating charge over the properties of Aquavista Watersides Limited, Castle Marinas Limited and its subsidiaries. At the period end date, the total drawn bank facilities over which a guarantee has been given were £72.9m (2023 - £70.3m) of outstanding capital.
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:
Management has made significant judgements in determining that the licence agreements are considered operating leases, and the network access agreements are not considered operating leases, under the applicable accounting standards. Therefore the disclosure note has been adjusted above and the 2023 comparatives restated.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The group has taken advantage of the exemption conferred by Section 33 FRS102, namely from disclosing any transactions entered into between two or more members of the group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.