Company Registration No. 08614282 (England and Wales)
GREAT LEIGHS ESTATES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 AUGUST 2023
GREAT LEIGHS ESTATES LIMITED
COMPANY INFORMATION
Directors
SP Shore
NA Graham
Company number
08614282
Registered office
Moulsham Hall Mews
Moulsham Hall Lane
Great Leighs
Chelmsford
Essex
CM3 1PZ
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
GREAT LEIGHS ESTATES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
GREAT LEIGHS ESTATES LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 AUGUST 2023
- 1 -
The directors present the strategic report for the period ended 30 August 2023.
Principal activities
The principal activity of the company continued to be that of the operation of Chelmsford City Racecourse.
Review of the business
The period was incredibly challenging for the company as reflected in the losses incurred over the period.
Racing division
The negotiation of a new media contract with SIS resulted in the racing division performing strongly and enabling the racecourse to maintain its commitment to provide some of the best prize money for its grade of racing in the UK and continue its support of the British Horseracing Industry, its owners, trainers and stable staff.
The company has invested heavily in prize money and facilities over the period 2022 to build the racecourse reputation, its customer experience and standing which has been recognised within the industry and by customers with various awards.
The sale of the remainder of the business to Moulsham Hall Estates Group post year-end leaves the business with just this division which it plans to continue to invest in and grow despite coming under increasing pressure with falling racing fixture allocations from the British Horseracing Authority.
Events division
The Events division underwent strategic repositioning during the period, reflecting our long-term vision to diversify revenue streams beyond racing.
Significant investments in summer 2022 established the foundations for Chelmsford City Racecourse as a premier entertainment venue. While these initial investments impacted short-term performance, they proved valuable in understanding our market position and optimal event mix.
Through careful analysis of event performance, the strategy for 2023 and 2024 focused on high-margin events that align with the venue's strengths. This data-driven approach has led to notable success in the private and corporate events sector, where the business has secured several major bookings.
The transfer of the events business to Moulsham Hall Estates Group marks an exciting development, positioning the division for focused growth and expansion. This strategic shift enables dedicated resource allocation and specialised management of the events portfolio, though these activities will no longer appear in the company accounts.
Property division
This element has been the hardest hit during the period with delays in securing planning for racecourse assets putting significant financial pressure on both the cashflow and profitability of the business.
The company borrowed significant amounts against its assets on the realistic projection that planning approvals would be achieved in reasonable time but these remain outstanding. The company has been able and continues to fund this debt and continues to support the ongoing business.
Principal risks and uncertainties
The main risks to the business relate to:
Public Liability; potential injuries to those operating at the racecourse and spectators. The company has an Operation Risk group that monitors risks and ensures adequate safeguards are put in place to mitigate risks. Beyond what it is able to control it has put in place appropriate insurance policies to cover any liabilities arising from potential incidents
Licensing Authority; the British Horseracing Authority controls British racing and has the authority to change the fixtures allocated to racecourses and withdraw fixtures from racecourses. As such the business is reliant on this third party for it’s continued operation. The business remains in regular contact with the BHA to manage its relationship and provide information required to support its ongoing fixture programme.
GREAT LEIGHS ESTATES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
- 2 -
Key performance indicators
17 months to 12 months to
31st August 2023 31st March 2022
Turnover from Racing Events £5,292,534 £2,851,948
Driving up income from racing activities is critical for the GLEL business. The new media deal was critical to this in 2023 and should reflect positively going forwards.
In the above, the 2022 figures were significantly impacted by Covid and the collapse of the lights which resulted in several meetings having to be abandoned.
The business has however now increased focus and whilst not directly comparable year on year improvement can be seen.
Number of race meetings 65 49
As set out in the Directors Report the number of race fixtures is critical to the profitability of the business.
Great Leighs Estates Limited has 12 Racecourse Fixtures, which it owns, and has recently been awarded another 4 which have significant value. This is low in comparison to other racecourses as these are generally historic and, as one of the newest racecourses, Great Leighs does not benefit from that longevity and also, as a stand-alone operator, it is not able to balance fixtures across multiple racecourses.
Allocations of additional fixtures are governed by the British Horseracing Authority and as such the business is constantly seeking to acquire additional fixtures against strong competition from larger racecourse groups. The business is positive following recent discussions with the BHA about the review of the fixture allocation metrics and is hopeful of acquiring more fixtures
Understanding the metrics to acquire fixtures is a priority and the business actively pursues additional fixtures when these are available but has to be minded of the profitability of these fixtures when it seeks to secure them.
Average attendances 1,254 764
The racecourse has seen a return on its significant investment in its infrastructure and customer experience with a 64% increase in average attendances between the two periods.
SP Shore
Director
29 November 2024
GREAT LEIGHS ESTATES LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 AUGUST 2023
- 3 -
The directors present their annual report and financial statements for the period ended 30 August 2023.
Results and dividends
The results for the period are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
SP Shore
NA Graham
JM Scanlon
(Resigned 21 September 2024)
PZ Sierzputowski
(Resigned 21 September 2024)
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.
Credit risk
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Future developments
In September 2024 the Directors agreed to sell the company’s assets to Moulsham Hall Estates Group for the sum of £35m. The majority of the company’s liabilities were transferred alongside the assets to ensure that the company was able to present a positive net asset position as at September 2024.
The only asset that remained within Great Leighs Estates Limited was the land known as Banters Field for which several offers had been received in excess of the outstanding debt. As the sale of this land is expected within the next six months to be completed at a positive contribution to the business, this was retained.
Going forward Great Leighs Estates Limited will operate merely as a racecourse, renting the racetrack from Moulsham Hall Estates Group to put on horse racing events only. Moulsham Hall Estates Group will going forward manage the site and put on non-racing events.
The Directors decided this was in the best interest of the company as it ensured it has a positive asset position with fully structured debt and a positive cashflow and profit forecast going forwards.
Auditor
Rickard Luckin Limited were appointed as auditors after the period end under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
GREAT LEIGHS ESTATES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
- 4 -
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 company’s auditor 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 company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
SP Shore
Director
29 November 2024
GREAT LEIGHS ESTATES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GREAT LEIGHS ESTATES LIMITED
- 5 -
Opinion
We have audited the financial statements of Great Leighs Estates Limited (the 'company') for the period ended 30 August 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 August 2023 and of its loss for the period 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to note 1.3 in the financial statements, which indicates that the company incurred a net loss of £11,859,401 during the period ended 30 August 2023 and reported a balance sheet deficit amounting to £20,288,670 at that date. As stated in note 1.3, these conditions, along with other matters set out therein, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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 period 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.
GREAT LEIGHS ESTATES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GREAT LEIGHS ESTATES LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Capability of the audit in detecting irregularity, including fraud
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
GREAT LEIGHS ESTATES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GREAT LEIGHS ESTATES LIMITED (CONTINUED)
- 7 -
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: British Horseracing Authority regulations; betting and alcohol licensing; employment legislation; health and safety legislation; trade legislation; data protection legislation; anti-bribery and anti-corruption legislation.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates in particular: depreciation and present value calculations;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, journal entries posted around the period end, journal entries crediting cash or any revenue account, and journal entries posted by senior management;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the Performance Statement and the Balance Sheet includes a number of items selected on a random basis;
Discussion with management.
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there mains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intention omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
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.
GREAT LEIGHS ESTATES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GREAT LEIGHS ESTATES LIMITED (CONTINUED)
- 8 -
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.
Michael Breame
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
29 November 2024
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
GREAT LEIGHS ESTATES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 AUGUST 2023
- 9 -
Period
Year
ended
ended
30 August
30 March
2023
2022
Notes
£
£
Turnover
3
15,961,436
11,072,665
Cost of sales
(14,562,798)
(8,078,266)
Gross profit
1,398,638
2,994,399
Administrative expenses
(9,123,440)
(4,458,680)
Other operating income
170,829
48,733
Operating loss
4
(7,553,973)
(1,415,548)
Interest receivable and similar income
150
578
Interest payable and similar expenses
7
(4,305,578)
(568,133)
Loss before taxation
(11,859,401)
(1,983,103)
Tax on loss
8
Loss for the financial period
(11,859,401)
(1,983,103)
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
GREAT LEIGHS ESTATES LIMITED
BALANCE SHEET
AS AT
30 AUGUST 2023
30 August 2023
- 10 -
30 August 2023
30 March 2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
23,682,402
20,537,952
Current assets
Stocks
10
106,977
118,230
Debtors
11
16,958,915
907,116
Cash at bank and in hand
229,848
4,164,691
17,295,740
5,190,037
Creditors: amounts falling due within one year
12
(26,995,562)
(17,825,944)
Net current liabilities
(9,699,822)
(12,635,907)
Total assets less current liabilities
13,982,580
7,902,045
Creditors: amounts falling due after more than one year
13
(34,271,250)
(16,331,314)
Net liabilities
(20,288,670)
(8,429,269)
Capital and reserves
Called up share capital
17
6,400,000
6,400,000
Share premium account
1,800,000
1,800,000
Profit and loss reserves
(28,488,670)
(16,629,269)
Total equity
(20,288,670)
(8,429,269)
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 29 November 2024 and are signed on its behalf by:
SP Shore
Director
Company registration number 08614282 (England and Wales)
GREAT LEIGHS ESTATES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 AUGUST 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2021
6,400,000
1,800,000
(14,646,166)
(6,446,166)
Year ended 31 March 2022:
Loss and total comprehensive income
-
-
(1,983,103)
(1,983,103)
Balance at 31 March 2022
6,400,000
1,800,000
(16,629,269)
(8,429,269)
Period ended 30 August 2023:
Loss and total comprehensive income
-
-
(11,859,401)
(11,859,401)
Balance at 30 August 2023
6,400,000
1,800,000
(28,488,670)
(20,288,670)
GREAT LEIGHS ESTATES LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 AUGUST 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(25,050,128)
5,655,412
Interest paid
(4,305,578)
(568,133)
Net cash (outflow)/inflow from operating activities
(29,355,706)
5,087,279
Investing activities
Purchase of tangible fixed assets
(4,888,512)
(1,853,274)
Proceeds from disposal of tangible fixed assets
45,540
Interest received
150
578
Net cash used in investing activities
(4,842,822)
(1,852,696)
Financing activities
Proceeds from new bank loans
30,505,200
Payment of finance leases obligations
(241,515)
(84,035)
Net cash generated from/(used in) financing activities
30,263,685
(84,035)
Net (decrease)/increase in cash and cash equivalents
(3,934,843)
3,150,548
Cash and cash equivalents at beginning of period
4,164,691
1,014,143
Cash and cash equivalents at end of period
229,848
4,164,691
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 AUGUST 2023
- 13 -
1
Accounting policies
Company information
Great Leighs Estates Limited is a private company limited by shares incorporated in England and Wales. The registered office is Moulsham Hall Mews, Moulsham Hall Lane, Great Leighs, Chelmsford, Essex, CM3 1PZ.
1.1
Reporting period
These financial statements present the 17-month period from 1 April 2022 to 30 August 2023, whereas the comparative amounts presented cover the year from 1 April 2021 to 31 March 2022. The comparative amounts presented (including the related notes) are therefore 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.
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.
1.3
Going concern
The financial statements have been prepared on a going concern basis. The directors are however aware of the existence of material uncertainties at the reporting date. Further detail in respect of these conditions are set out below.true
The company made a loss for the period of £11,859,401 and has reported a balance sheet deficit amounting to £20,288,670. The company has made a further loss in the subsequent period to 31 August 2024 and at that date continued to reflect a balance sheet deficit.
The directors believe that the business is viable following the restructure and sale of the racecourse assets for £35m in the post balance sheet period, and the associated transfer of liabilities to the Moulsham Hall Estates Group. In addition there has been a restructuring of overall debt in the post balance sheet period which, alongside this sale of assets, has allowed intercompany debts to be cleared. The directors consider that the value of land retained by the company is significantly in excess of the associated remaining finance liabilities attached to it. Should the company not be able to realise that value then that would cast significant doubt over the company's ability to continue as a going concern and would represent a material uncertainty, however the directors are confident that this value will be realised in an appropriate timeframe.
Following these transactions in September 2024 the company is projecting profitability to continue to operate. The simplification of the business will also mean that many of the risks associated with the business are removed and most importantly it does not have a high cost base or such significant liabilities. Should the company not
Following the transfer of the racecourse assets the company continues to have use of the track facilities to accommodate racing activity. This racing activity is supported by the existence of the company's racing licence with the British Horseracing Authority (BHA). Should the company not have such access nor their licence then this would cast doubt over the company's ability to continue to trade as a going concern. However, the directors are not aware of any reason why their licence would be withdrawn.
The directors have a reasonable expectation that the company has sufficient resources to continue to trade for at least the next 12 months from the date these financial statements are signed. This is supported by the existence of further support, when required, from an indirect shareholder in the business.
It is on this basis that the directors consider it appropriate to prepare the financial statements on the going concern basis.
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Turnover
Turnover represents all income arising from the activities of the company, net of VAT and other sales related taxes. The main categories within turnover are ticket income, media income and bar & catering income.
Ticket income, bar & catering income and other race day income is recognised on the date of the race or event. Media income is invoiced monthly in advance at a pre-agreed fixed amount per race scheduled for the month. A "true-up" exercise is then subsequently performed to correctly recognise the actual income earned in the month over and above the fixed amount, based upon the races that have been run and the associated actual income due to the company based on each individual race performance.
1.5
Tangible fixed assets
Tangible fixed assets, including biological 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 land and buildings
4% reducing balance
Plant and equipment
20% reducing balance
Computers
20% reducing balance
Racecourse and grounds
4% reducing balance
Racehorses
Over 3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company 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.
1.7
Stocks
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.
1.8
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.
1.9
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.
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
1
Accounting policies
(Continued)
- 15 -
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.
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 company 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 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.
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
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.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Determination of whether there are indicators of impairment of the company's tangible fixed assets
Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset, or transfer value.
Determination of whether leases entered into by the company as lessee are operating or finance leases
These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Determination of whether other debtors are recoverable
Factors taken into consideration in reaching such a decision include the extent of settlement of the debts subsequent to the year end, and an assessment of the other party's ability to repay based on a review of its financial statements.
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.
Depreciation of tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Present value calculations
The directors have considered the present value of future cash-flows in connection with the acquisition of fixed assets with deferred payments outside of "normal" credit terms. In doing so the directors have used their judgement in respect of a reasonable discounted rate to apply and have based this upon existing rates on borrowings.
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
- 18 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Racing events & associated activity
5,292,534
2,851,948
Media and betting income
5,881,707
4,764,065
Bar, catering and hospitality
3,863,513
2,789,902
All other income
923,682
666,750
15,961,436
11,072,665
2023
2022
£
£
Other revenue
Interest income
150
578
Grants received
-
48,733
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
4
Operating loss
2023
2022
Operating loss for the period is stated after charging/(crediting):
£
£
Exchange losses
1,364
186
Government grants
-
(48,733)
Depreciation of owned tangible fixed assets
2,008,502
883,477
Depreciation of tangible fixed assets held under finance leases
78,691
36,640
Profit on disposal of tangible fixed assets
(27,026)
-
Bad and doubtful debts
-
(204,498)
Operating lease charges
393,592
100,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
2022
Number
Number
Administrative staff
213
151
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
5
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,725,931
1,710,497
Social security costs
239,533
116,478
Pension costs
44,908
36,274
5,010,372
1,863,249
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
56,395
23,952
Company pension contributions to defined contribution schemes
1,871
-
58,266
23,952
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
3,852,976
568,133
Other finance costs:
Interest on finance leases and hire purchase contracts
452,602
-
4,305,578
568,133
8
Taxation
On the 1st of April 2023 the rate of corporation tax in the UK increased to 25% from 19%.
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
8
Taxation
(Continued)
- 20 -
The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(11,859,401)
(1,983,103)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(2,964,850)
(376,790)
Tax effect of expenses that are not deductible in determining taxable profit
532,639
260,896
Unutilised tax losses carried forward
2,432,211
115,894
Taxation charge for the period
-
-
Deferred tax is not recognised in respect of tax losses of approximately £19.9m as there is no certainty at the balance sheet date that they will be recovered against the reversal of deferred tax liabilities or future taxable profits. There is no expiry date for the unused tax losses.
9
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Computers
Racecourse and grounds
Racehorses
Total
£
£
£
£
£
£
Cost
At 1 April 2022
19,003,368
5,211,355
213,806
3,287,552
27,716,081
Additions
1,530,301
2,962,223
194,927
152,156
410,550
5,250,157
Disposals
(56,500)
(56,500)
Transfers
(1,994,465)
1,994,465
At 30 August 2023
20,533,669
6,122,613
408,733
5,434,173
410,550
32,909,738
Depreciation and impairment
At 1 April 2022
4,663,497
1,497,232
154,190
863,210
7,178,129
Depreciation charged in the period
739,589
1,046,485
38,343
138,380
124,396
2,087,193
Eliminated in respect of disposals
(37,986)
(37,986)
At 30 August 2023
5,403,086
2,505,731
192,533
1,001,590
124,396
9,227,336
Carrying amount
At 30 August 2023
15,130,583
3,616,882
216,200
4,432,583
286,154
23,682,402
At 31 March 2022
14,339,871
3,714,123
59,616
2,424,342
20,537,952
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
9
Tangible fixed assets
(Continued)
- 21 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
391,613
251,128
The net carrying value of tangible fixed assets includes £286,154 in respect of biological assets. Depreciation charged in the period in respect of these assets amounted to £124,396.
10
Stocks
2023
2022
£
£
Finished goods and goods for resale
106,977
118,230
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
112,663
188,845
Amounts owed by group undertakings
8,022,733
Other debtors
8,385,524
125,048
Prepayments and accrued income
437,995
593,223
16,958,915
907,116
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
157,486
89,698
Trade creditors
2,139,475
1,961,383
Amounts owed to group undertakings
17,653,938
7,854,504
Taxation and social security
60,551
35,242
Other creditors
6,226,339
5,308,544
Accruals and deferred income
757,773
2,576,573
26,995,562
17,825,944
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
12
Creditors: amounts falling due within one year
(Continued)
- 22 -
A fixed and floating security charge is held over the assets of the company and a personal guarantee has been given for the amounts owed to group undertakings balance and other creditors balance.
The amounts due in respect of finance leases and hire purchase contracts are secured on the underlying assets.
Included within creditors is an amount of £2,160,000 due within 1 year which relates to fixed assets held on the balance sheet. Under the terms of purchase a Romalpa clause exists in relation to these assets.
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
30,505,200
Obligations under finance leases
15
162,477
110,135
Trade creditors
14,908,088
Other creditors
3,603,573
1,313,091
34,271,250
16,331,314
Security in relation to the finance leases is disclosed in note 13 of these financial statements.
14
Loans and overdrafts
2023
2022
£
£
Bank loans
30,505,200
Payable after one year
30,505,200
The long-term loans are secured by a first legal charge over all leasehold and freehold property vested in the company, together with all buildings, fixtures and fixed plant and machinery from time to time on that property, a fixed charge over goodwill, intellectual property rights and other assets of the company, a personal guarantee and a debenture.
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
- 23 -
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
180,737
89,698
In two to five years
182,780
122,222
363,517
211,920
Less: future finance charges
(43,554)
(12,087)
319,963
199,833
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
44,908
36,274
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
3,200,000
3,200,000
3,200,000
3,200,000
Ordinary B shares of £1 each
3,200,000
3,200,000
3,200,000
3,200,000
6,400,000
6,400,000
6,400,000
6,400,000
Both share classes rank parri passu and carry no right to fixed income.
18
Events after the reporting date
In September 2024 the company sold its racecourse assets to the Moulsham Hall Estate Group for £35m. Subsequent to this sale the company will continue to operate all racing activity at Chelmsford City Racecourse.
19
Related party transactions
Transactions with related parties
During the period the company entered into the following transactions with related parties:
GREAT LEIGHS ESTATES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 AUGUST 2023
19
Related party transactions
(Continued)
- 24 -
A loan has been advanced by a company in which the directors also hold directorship. At the balance sheet date and amount of £4,076,073 (2022: £3,742,167) was outstanding. During the period media income of £5,149,856 (2022: £4,539,365) has also been received from this company.
At the balance sheet date an amount of £4,537,554 (2022: £3,712,576) was owed to an individual with an indirect shareholding interest in the company. The company was owed £212,786 by a company controlled by this individual.
At balance sheet date an amount of £7,444,637 was owed by a company which owns 50% of the shares in this company (2022: £12,163,829 owed to).
At the balance sheet date the company was owed £578,096 (2022: £nil) by a company controlled by one of the entities holding 50% of the shares of this company.
20
Cash (absorbed by)/generated from operations
2023
2022
£
£
Loss after taxation
(11,859,401)
(1,983,103)
Adjustments for:
Finance costs
4,305,578
568,133
Investment income
(150)
(578)
Gain on disposal of tangible fixed assets
(27,026)
-
Depreciation and impairment of tangible fixed assets
2,087,193
920,117
Movements in working capital:
Decrease/(increase) in stocks
11,253
(99,415)
Increase in debtors
(16,051,799)
(173,949)
(Decrease)/increase in creditors
(3,515,776)
6,424,207
Cash (absorbed by)/generated from operations
(25,050,128)
5,655,412
21
Analysis of changes in net funds/(debt)
1 April 2022
Cash flows
New finance leases
30 August 2023
£
£
£
£
Cash at bank and in hand
4,164,691
(3,934,843)
-
229,848
Borrowings excluding overdrafts
-
(30,505,200)
-
(30,505,200)
Obligations under finance leases
(199,833)
241,515
(361,645)
(319,963)
3,964,858
(34,198,528)
(361,645)
(30,595,315)
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