Company registration number 13634371 (England and Wales)
OUTERNET LONDON LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
OUTERNET LONDON LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
OUTERNET LONDON LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
4
274,193
759,027
Tangible assets
5
422,143
513,679
696,336
1,272,706
Current assets
Debtors
6
4,114,264
9,897,364
Cash at bank and in hand
204,789
59,905
4,319,053
9,957,269
Creditors: amounts falling due within one year
7
(66,193,081)
(45,984,415)
Net current liabilities
(61,874,028)
(36,027,146)
Net liabilities
(61,177,692)
(34,754,440)
Capital and reserves
Called up share capital
100
100
Profit and loss reserves
(61,177,792)
(34,754,540)
Total equity
(61,177,692)
(34,754,440)
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 13 November 2024
Mr L Kirschel
Director
Company Registration No. 13634371
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Outernet London Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, 114a Cromwell Road, London, SW7 4AG.
1.1
Reporting period
The financial statements cover the year ended 31 December 2023. The comparative figures are presented for a period longer than one year, and cover the period from incorporation (21 September 2021) to 31 December 2022. Therefore, the comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.
1.2
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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. The principal accounting policies adopted are set out below.
This 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:
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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Consolidated Holdings Limited. These consolidated financial statements are available from its registered office, 3rd Floor, 114a Cromwell Road, London, United Kingdom, SW7 4AG.
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
1.3
Going concern
The Director, along with the senior management of the “Group” (being Consolidated Developments Limited, Outernet London Limited and all its subsidiaries) have reviewed forecasts and budgets for the coming year, which have been drawn up with appropriate regard for the current economic environment and the circumstances in which the Group operates. These were prepared with reference to historical and current industry knowledge and considering the future strategy of the Group.true
2023 was a challenging year for the Group, with rising interest rates and companies in their first full year of trade, using up significant cash reserves. Despite equity injections early in the year, in December 2023, Consolidated Developments Limited defaulted on the quarterly interest payment on its loan and continues to do so at the date of approval of these financial statements. . The Company is part of a cross-guarantee arrangement with Consolidated Developments Limited.
As a result, there is a material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern.
In response to these matters, the Group has taken the following actions:
1. Since the date of default on the loan, we continue to work constructively with the senior bank lender, St Giles Issuer S.a r.l., to find appropriate next steps for the St Giles estate . It is the bank’s present intention to work supportively with the business with the expectation that both entities continue to trade and generate revenue
2. The existing operations have been generating increasing funds in 2024 to contribute to the short-term operating cash requirements. Management is confident that incremental sales revenue over the next twelve months will improve group liquidity yet further. Despite the improving cashflow, we do not expect to fully pay the bank interest due on the loan advanced by St Giles Issuer S.a r.l., to Consolidated Developments Limited over the next twelve months.
3. We have received undertakings from fellow Group companies that they will not seek repayment of their loans until such time as the Group is able to repay them.
As a result of these considerations, at the time of approving the financial statements, the Director considers that the Group will have sufficient resources to continue in operational existence for the foreseeable future, despite the degree of uncertainty that exists. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
1.4
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 contracts for the provision of professional 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. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. 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.
1.5
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
Straight line basis over 3 years
Contents
Straight line basis over the content play-out period
Trademarks
Straight line basis over the trademark term
1.7
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold Improvements
Straight line basis over the term of the lease
Plant and equipment
Straight line basis over 5 years
Fixtures and fittings
Straight line basis over 5 years
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 credited or charged to profit or loss.
1.8
Impairment of fixed assets
At each reporting period end date, the company 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.
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.
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
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.
1.9
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.
1.10
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
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 company 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.
1.11
Equity instruments
Equity instruments issued by the company 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 company.
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 6 -
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful lives of non-current assets
Depreciation of tangible fixed assets and amortisation of intangible assets is charged so as to write down the value of those assets to their residual value of their respective estimated useful lives. The directors are required to assess the useful economic lives and residual values of the assets so that depreciation is charged on a systematic and proportionate basis to the current carrying amount, and have deemed the current policy to be appropriate.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
64
50
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
4
Intangible fixed assets
Software
Contents
Trademarks
Total
£
£
£
£
Cost
At 1 January 2023
456,418
471,584
13,571
941,573
Additions
6,883
293,912
300,795
At 31 December 2023
463,301
765,496
13,571
1,242,368
Amortisation and impairment
At 1 January 2023
164,341
18,205
182,546
Amortisation charged for the year
153,994
630,278
1,357
785,629
At 31 December 2023
318,335
648,483
1,357
968,175
Carrying amount
At 31 December 2023
144,966
117,013
12,214
274,193
At 31 December 2022
292,077
453,379
13,571
759,027
5
Tangible fixed assets
Leasehold Improvements
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 January 2023
314,542
163,652
92,560
570,754
Additions
22,618
5,651
28,269
At 31 December 2023
314,542
186,270
98,211
599,023
Depreciation and impairment
At 1 January 2023
31,454
16,365
9,256
57,075
Depreciation charged in the year
62,909
37,254
19,642
119,805
At 31 December 2023
94,363
53,619
28,898
176,880
Carrying amount
At 31 December 2023
220,179
132,651
69,313
422,143
At 31 December 2022
283,088
147,287
83,304
513,679
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,563,939
3,893,051
Amounts owed by group undertakings
48,868
128,250
Amounts owed by undertakings in which the company has a participating interest
166,945
206,987
Other debtors
98,200
1,029,183
Prepayments and accrued income
236,312
4,639,893
4,114,264
9,897,364
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
833,492
719,254
Amounts owed to group undertakings
55,475,137
37,934,744
Corporation tax
98,200
Other taxation and social security
574,193
121,105
Other creditors
3,189,249
3,587,467
Accruals and deferred income
6,022,810
3,621,845
66,193,081
45,984,415
8
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006.
The auditor's report is unqualified and includes the following:
Opinion
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Senior Statutory Auditor:
Statutory Auditor:
Bright Grahame Murray
Date of audit report:
18 November 2024
OUTERNET LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
9
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
190,027,397
210,253,470
10
Financial commitments
The company's assets are subject to first legal charge as a result of a cross-guarantee with a fellow group undertaking in respect of a bank loan.
11
Parent company
The company's immediate parent undertaking is Outernet London Holdings Limited. The ultimate parent undertaking is Consolidated Holdings Limited and its registered office is 3rd Floor 114a Cromwell Road, London, England, SW7 4AG. Both companies are registered in England and Wales.