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COMPANY REGISTRATION NUMBER: 09896267
Dolphin Hotel Property Limited
Filleted Financial Statements
31 March 2024
Dolphin Hotel Property Limited
Financial Statements
Year ended 31 March 2024
Contents
Pages
Officers and professional advisers
1
Statement of financial position
2 to 3
Notes to the financial statements
4 to 11
Dolphin Hotel Property Limited
Officers and Professional Advisers
The board of directors
Mr N Burgin (Resigned 31 October 2024)
Mr G Dyke
Ms S Howes
Mr G J Davies
Registered office
C/O Director of Finance
Kenwood Hall Hotel
Kenwood Road
Sheffield
S7 1NQ
Auditor
Hebblethwaites
Chartered Accountants & Statutory Auditors
2 Westbrook Court
Sharrow Vale Road
Sheffield
S11 8YZ
Dolphin Hotel Property Limited
Statement of Financial Position
31 March 2024
2024
2023
Note
£
£
Fixed assets
Tangible assets
4
2,900,000
3,600,000
Investments
5
142,601
142,601
------------
------------
3,042,601
3,742,601
Current assets
Debtors: due within one year
6
460,744
446,325
Debtors: due after more than one year
6
3,006,289
3,024,399
Cash at bank and in hand
39,638
38,491
------------
------------
3,506,671
3,509,215
Creditors: amounts falling due within one year
7
4,221,431
4,313,339
------------
------------
Net current liabilities
714,760
804,124
------------
------------
Total assets less current liabilities
2,327,841
2,938,477
Creditors: amounts falling due after more than one year
8
1,912,322
1,923,842
------------
------------
Net assets
415,519
1,014,635
------------
------------
Capital and reserves
Called up share capital
1
1
Non-distributable revaluation reserve
756,955
1,456,955
Profit and loss account
( 341,437)
( 442,321)
---------
------------
Shareholders funds
415,519
1,014,635
---------
------------
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with Section 1A of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
In accordance with section 444 of the Companies Act 2006, the statement of comprehensive income has not been delivered.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
Dolphin Hotel Property Limited
Statement of Financial Position (continued)
31 March 2024
These financial statements were approved by the board of directors and authorised for issue on 2 December 2024 , and are signed on behalf of the board by:
Mr G J Davies
Director
Company registration number: 09896267
Dolphin Hotel Property Limited
Notes to the Financial Statements
Year ended 31 March 2024
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is C/O Director of Finance, Kenwood Hall Hotel, Kenwood Road, Sheffield, S7 1NQ.
2. Statement of compliance
These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
Management have determined that a material uncertainty exists which may cast doubt on the company's ability to continue as a going concern. Given the then market conditions in the post pandemic era, a valuation of the company property was undertaken in March 2022 which resulted in a reduction in the value of the long leasehold property assets in the subsequent financial statements. In order to update the position and to satisfy the requirements of the company bankers in relation to the group funding, a further property valuation has been undertaken during this latest year, in addition to which the group has undertaken a value in use appraisal and valuation. As a result, the carrying value of the company property has again been re-assessed and reduced, this reflected in both the Statement of Comprehensive Income as a revaluation deficit and in the Statement of Financial Position in terms of the carrying value of the tangible assets and the related revaluation reserve. Despite this downward movement, there remains a net positive revaluation reserve in relation to the company property, this as a result of earlier upward valuation movements, with the current carrying value of the property, as revalued, being in excess of cost. The nature of the company property assets is such that the valuation is very much structured around the earning capacity of those assets which itself has been substantially impacted by the effect of world events and macro-economic factors which have significantly affected the financial results recorded during this difficult period. As a result of the reduction in value, there has been a historic technical breach of the 'loan to value' financial covenant applicable to the bank debt secured as against the property. Management have subsequently re-negotiated variations to the terms of the loan finance which will address the subject covenant going forward and negate the breach. This re-negotiation is also indicative of the ongoing support being provided by the funding provider. As a result of the technical breach during the accounting period, management have determined that the long term portion of the debt be presented as a current liability in the Statement of Financial Position at the period end date which presentation exacerbates the net current liability position and, whilst the entity is still considered to be a going concern, a material uncertainty inevitably exists.
Consolidation
The entity has taken advantage of the exemption from preparing consolidated financial statements contained in Section 400 of the Companies Act 2006 on the basis that it is a subsidiary undertaking and its immediate parent undertaking is established under the law of an EEA State.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the opinion of management, there are no areas of judgement or key sources of estimation uncertainty that have a significant effect on the financial statements.
Revenue recognition
The turnover shown in the profit and loss account represents amounts invoiced during the year, by way of rent charges, net of VAT.
Deferred tax
Deferred tax is not provided on property sold subject to a sale and leaseback arrangement. The long length of the lease connected to the property and the associated discount effect would mean any deferred tax charge would be trivial.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Investment property
Investment property is initially recorded at cost, which includes purchase price and any directly attributable expenditure. Investment property is revalued to its fair value at each reporting date and any changes in fair value are recognised in profit or loss.
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
4. Tangible assets
Long leasehold investment property
£
Cost or valuation
At 1 April 2023
3,600,000
Revaluations
( 700,000)
------------
At 31 March 2024
2,900,000
------------
Depreciation
At 1 April 2023 and 31 March 2024
------------
Carrying amount
At 31 March 2024
2,900,000
------------
At 31 March 2023
3,600,000
------------
The leasehold investment property comprises hotel property, being the land, buildings and integral fixtures and fittings contained therein. The company property was freehold until March 2016 when the company sold the freehold and entered a sale and leaseback arrangement. The directors obtained a formal valuation with the sale and leaseback arrangement in place in March 2016 and have used this as the basis for arriving at the fair value now being carried in the accounts. At the behest of the company bankers, a further professional valuation was undertaken during the financial period, this resulting in the directors revaluing the property at 31 March 2024 to £2,900,000, a decrease in value of £900,000. Investment properties are not depreciated. Deferred tax is not provided on property sold subject to a sale and leaseback arrangement. The long length of the lease connected to the property and the associated discount effect would mean any deferred tax charge would be trivial.
Tangible assets held at valuation
In respect of tangible assets held at valuation, the aggregate cost, depreciation and comparable carrying amount that would have been recognised if the assets had been carried under the historical cost model are as follows:
Long leasehold investment property
£
At 31 March 2024
Aggregate cost
2,143,045
Aggregate depreciation
------------
Carrying value
2,143,045
------------
At 31 March 2023
Aggregate cost
2,143,045
Aggregate depreciation
------------
Carrying value
2,143,045
------------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Long leasehold investment property
£
At 31 March 2024
2,900,000
------------
At 31 March 2023
3,600,000
------------
5. Investments
Shares in group undertakings
£
Cost
At 1 April 2023 and 31 March 2024
142,601
---------
Impairment
At 1 April 2023 and 31 March 2024
---------
Carrying amount
At 31 March 2024
142,601
---------
At 31 March 2023
142,601
---------
6. Debtors
Debtors falling due within one year are as follows:
2024
2023
£
£
Amounts owed by group undertakings and undertakings in which the company has a participating interest
410,752
392,489
Other debtors
49,992
53,836
---------
---------
460,744
446,325
---------
---------
Debtors falling due after one year are as follows:
2024
2023
£
£
Other debtors
3,006,289
3,024,399
------------
------------
Other debtors includes a total figure of £3,024,399 (2023: £3,042,509), including both current and non-current portions, relating to the loss on disposal of a freehold property in March 2016. The property in question had a book cost of £5,191,454 and was sold for £2,357,000 (with £331,000 of this being returned by the company in 2019) as part of a sale and leaseback arrangement. Sale and leaseback accounting treatment requires the loss on disposal to be taken to the balance sheet as a debtor and this will be amortised at a rate of £18,110 per annum for the remaining 171 years of the leaseback period. The figure of £3,006,289 (2023: £3,024,399) shown as debtors due after more than one year relates entirely to this transaction.
7. Creditors: amounts falling due within one year
2024
2023
£
£
Bank loans and overdrafts
1,701,780
1,802,192
Amounts owed to group undertakings and undertakings in which the company has a participating interest
2,491,131
1,789,043
Other creditors
28,520
722,104
------------
------------
4,221,431
4,313,339
------------
------------
The bank loan is secured upon all assets of the company and also by a debenture from each of (i) Vine Hotels Limited and (ii) Vine Kenwood Limited over all of their assets and undertakings. There is also a cross guarantee from the following companies in respect of the obligations of Dolphin Hotel Property Limited : Vine Hotels Limited Sheffield Park Hotel Property Limited Sheffield Park Hotel Limited Dolphin Hotel (Hampshire) Limited Vine Kenwood Limited Kenwood Hotel Property Limited Venice Regal Sheffield Limited Cresta Court Hotel Holdings Limited Cresta Court Hotel Property Limited Harrop Hotels Limited In addition, there is an inter-creditor deed between Santander Bank, each obligor above, Greg Dyke, Susan Howes and Garin Davies.
8. Creditors: amounts falling due after more than one year
2024
2023
£
£
Other creditors
1,912,322
1,923,842
------------
------------
The bank loan is due from February 2021, with minimum quarterly capital repayments of £25,103 per quarter. Interest is payable at Base or LIBOR plus 3.5% per annum. Other creditors relates to monies received by the company as part of the freehold property sale and leaseback agreement. The amount advanced to the company in March 2016 in respect of this was £2,357,000 (with £331,000 of this being returned by the company during this year) and a lease for 175 years was entered into for an amended initial rent of £86,700 per annum; this sum will increase by RPI each year. Sale and leaseback accounting treatment requires the adjusted sum of £2,026,000 received for the property to be taken to the balance sheet as a creditor and payments of the lease element to be apportioned between capital repayments and interest over the term of the lease. The element repayable over five years from the balance sheet date is £1,866,242 (2023: £1,877,762).
9. Financial risk management objectives and policies
The exposure of the company to price risk, credit risk, liquidity risk and cash flow risk is not considered material for the assessment of the assets, liabilities, financial position and income or expenditure of the company.
10. Summary audit opinion
The auditor's report dated 3 December 2024 was unqualified .
The senior statutory auditor was Andrew Throssell FCA , for and on behalf of Hebblethwaites .
11. Directors' advances, credits and guarantees
The company has entered into a deed of guarantee and indemnity made between two of its directors and the following members of the Vine Hotels Group: Vine Hotels Limited Dolphin Hotel (Hampshire) Limited Sheffield Park Hotel Property Limited Sheffield Park Hotel Limited The guarantee covers loans totalling £1.495 million (2023: £1.495 million), advanced to the holding company, Vine Hotels Limited, by Mr G Dyke and Mrs S Howes. The loans attract interest of 10% per annum and are secured by a fixed and floating charge over all assets of the group companies.
12. Related party transactions
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102, not to disclose related party transactions with fellow 100% group companies.
13. Controlling party
The ultimate parent company of Dolphin Hotel Property Limited is Vine Hotels Limited, which is ultimately controlled by Mrs S Howes. Vine Hotels Limited will be preparing consolidated group accounts, which include the accounts of Dolphin Hotel Property Limited and its subsidiary, Dolphin Hotel (Hampshire) Limited.