The directors present the strategic report for the year ended 30 June 2024.
Through its related undertakings, the Ark group of companies owns and operates data centre campuses at Cody Park, Spring Park and Meridian Park:
Ark Estates Cody Park Limited owns the Cody Park site, which had 48.78 MW (2023: 48.78 MW) of built capacity as of 30 June 2024, split across 5 buildings. In addition, 800kW of further capacity is under construction.
Ark Estates Spring Park Limited owns the Spring Park site, which had 41.68 MW (2023: 41.68 MW) of built capacity as of 30 June 2024, split across 5 buildings, with a further 13.5MW under construction.
Ark A9 GP Limited owns the A9 building, which has a built capacity of 1.6MW (2023: 1.6MW).
Ark Estates Enfield Limited owns Meridian Park, which has a built capacity of 16.36 MW (2023: 16.36 MW).
Financial indicators
The Board of Directors are therefore pleased to report the following financial results:
| 2024 (£) | 2023 (£) | Change (£) | % Change |
Turnover | 226,537,929 | 195,881,114 | 30,656,815 | +15.65% |
Gross Profit | 23,503,132 | 25,378,410 | (1,875,278) | -7.39% |
Operating (Loss)/Profit | (9,250,909) | 1,652,332 | (10,903,241) | -659.87% |
Loss for Year | (7,347,618) | (781,502) | (6,566,116) | -840.19% |
Net Assets | 17,909,737 | 25,257,355 | (7,347,618) | -29.09% |
Ark Data Centres Limited (“Ark”) owns 74.9% of the ordinary share capital of Crown Hosting Data Centres Limited (“Crown Hosting”). Crown Hosting is a joint venture between Ark and The Minister for the Cabinet Office and operates a public sector framework for the procurement of data centre services.
Non-financial indicators
Alongside the financial performance, the key performance indicators of the Company include:
MW capacity (built, contracted and available)
contract term
build costs
delivering in accordance with build programmes
maintaining operational excellence
stakeholder (customer and suppler) satisfaction scores
In addition, the group will continue to build out new facilities on its existing sites, and through its related undertakings at additional sites in and around London – Union Park, Longcross Park and Alliance Park – to meet the growing demand for colocation and cloud data centres.
The business plan of Ark is built around a long-term strategy and significant progress has been made during the year to 30 June 2024. During the current reporting period the group has secured new long-term contracts with customers from both public and private sectors across multiple industries including UK Government, Financial Services, Telecommunications, Cloud Providers and IT. The sales pipeline remains strong and further growth is expected through Ark’s existing customers, framework agreements and new customers. The Board of Directors believe that the Company’s position within the marketplace remains strong, and we look forward to further expansion in 2025.
Principal risks faced by the Company are identified and monitored through a regular process that is reviewed by the Senior Leadership Team and presented to the Board of Directors. Principal risks include, but are not limited to:
Operational risks from a power or cooling outage or a security breach. The Company places a primary focus on preventative measures and controls to address these risks through its design and construction of the facilities and operation of robust accredited processes and regular maintenance programmes. Additionally, the Company undertakes regular exercises, involving our employees, customers and supply chain, across multiple scenarios to test the application and robustness of its procedures.
Performance in an increasingly competitive marketplace is continually monitored. The Company engages proactively with its customers, both existing and prospective, to understand their requirements and has continuously progressed innovation in data centre design and construction to meet those needs and drive efficiencies.
Uncertainty of current economic conditions may impact supply and/or development arrangements, although this is largely mitigated by entering into fixed priced contracts for the construction of the data centres and ensuring critical supplies are available when needed.
The Company manages these risks on an ongoing basis, and the Board of Directors believe that the Company’s offering within the marketplace remains strong, and that it is well positioned to continue its growth.
No events have occurred since the balance sheet date which significantly affect the Company.
The Directors are required to make a statement which describes how they have acted in accordance with their duties to promote the success of the company for the benefits of the members as a whole. These duties are set out in Section 172(1) of the Companies Act 2006 and are summarised below along with the actions undertaken by the Board.
The likely consequences of any decision in the long-term
The Directors insist on high operating standards and fiscal discipline and routinely engage with management and employees of the company to understand the underlying issues within the organisation. Additionally, the Board looks outside the organisation at macro factors affecting the business. The Directors consider all known facts when developing strategic decisions and long-term plans, taking into account their likely consequences for the Company. The Group has a well-established governance structure, and all key decisions are made in accordance with that process and, where required, are approved by the ultimate controlling party (Note 24).
The interests of the company’s employees
The Directors and management are committed to the interests and well-being of its employees and undertakes frequent dialogue with all employees to ensure transparency and inclusion. In August 2023, Ark was awarded platinum accreditation, for the third time, against the Investors in People Standard, demonstrating their commitment to high performance through good people management. Investors in People is the international standard for people management, defining what it takes to lead, support and manage people effectively to achieve sustainable results.
The need to foster the company’s business relationships with suppliers, customers, and others
Ark’s relationships with its customers is fundamental to the success of the business. We develop long-term relationships with our customers, engaging in frequent dialogue to discuss performance against our obligations and listen to their needs and plans to deliver world class services for their critical infrastructure.
Ark has developed strong partnerships with its suppliers to maintain relationships that are collaborative and mutually beneficial to all parties. We continue to work with partners who can deliver market leading products and services at high standards whilst developing innovation and efficiencies.
Engagement with debt holders and shareholders occur on an ongoing basis and as questions arise to ensure they are provided with timely and informative communications.
The impact of the company’s operations on the community and the environment
The availability and resilience of the data centres is fundamental to delivering services to customers. The operations team work closely with customers and partners to define, document, test and implement best practice to enhance the efficiency and operations of the data centre facilities. Operational excellence is pivotal to the business and the data centres are certified by the British Standards Institute for Quality Management, Business Continuity, Information Security, Environmental Management and Energy Management Systems.
Ark’s core values are fundamental to the success of the business and are at the heart of everything we do. Ark considers the impact of its business operations and decisions on the community and the environment and directly engages with relevant parties where appropriate.
The desirability of the company maintaining a reputation for high standard of business conduct
Integrity is a core value for Ark’s Directors and employees. We support and provide guidance to all staff so that they do the right thing, behave in an ethical manner and comply with all applicable legal or regulatory requirements in accordance with Ark’s policies including, but not limited to, Anti-bribery and Corruption, Modern Slavery, Environmental and Energy Management. We also ensure that Ark’s ISO management systems are fit for purpose, well maintained and appropriately controlled, audited, and improved to enable Ark to meet its contractual, certification, regulatory and legislative requirements.
The need to act fairly between members of the company
The Board recognises its responsibilities under section 172 as outlined above and has acted at all times in a way consistent with promoting the success of the Company with regard to all stakeholders.
On behalf of the board
The directors present their annual report and audited financial statements for the year ended 30 June 2024.
The results for the year are set out on page 14.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
In accordance with the company's articles, a resolution proposing that PricewaterhouseCoopers CI LLP be reappointed as auditors of the company will be put at a General Meeting.
Ark recognises the impact of climate change, and our focus has always been on sustainable data centre development without any compromise to the availability or security required by our customers.
Our commitment to sustainable stewardship is demonstrated by:
Continuing the "Lessons Learned" process and new technology review after all major projects.
Working with Climate Neutral Data Centre Pact (CNDCP), Tech UK and the Major Energy Users Council to promote best practice and appropriate target setting to achieve the appropriate UN Sustainable Development Goals.
Complying with all legal and other requirements appropriate to Ark's resource consumption, efficiency targets and reporting requirements (Energy Efficiency Directive (EED), Climate Change Agreements (CCA) etc).
Procuring 100% Renewable Energy - REGO backed up to 3 years ahead or via appropriate PPAs.
Measuring and reporting our Power Usage Effectiveness improvements (PUE) against defined targets in line with CNDCP proposals and Green Loans, in accordance with BS EN 50600 and certified under ISO 50001.
Measuring and reporting our Carbon Usage Effectiveness improvements (CUE) in line with GHG and SECR protocols, in accordance with BS EN 50600 and certified under ISO 14001. Reporting carbon emissions in our Carbon Reduction Plan in compliance with PPN 06/21.
Maintaining our existing ISO 14001 (Environmental Management System) certification. The ISO 14001 Certificate and supporting Environmental Policy are published on the Ark website.
Maintaining our existing ISO 50001 (Energy Management System) certification. The ISO 50001 Certificate and supporting Energy Management Policy are published on the Ark website.
Ark reports its annual operating energy and carbon usage by calendar year to align with the reporting requirements of our CCA, UKETS, Planning Obligations and EA Operating Permits. The information provided below is therefore for the years ended 31 December 2023 and 31 December 2022.
In line with best practice Ark measures data centre performance in terms of PUE as the measure of energy effectiveness and CUE as the measure of carbon effectiveness in accordance with BS EN 50600. These relate to the Annual IT energy consumption (MWh) of our customers’ equipment.
Carbon covering Scope 1, Scope 2 and Scope 3 operating emissions are measured, monitored and reported to comply with PPN06/21 in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, GHG Protocol Scope 2 Guidance and GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Targets for these metrics are set annually in advance; performance against them is measured, managed and reported all in accordance with the Ark Environmental Management System (certified to ISO 14001) and the Ark Energy Management System (certified to ISO 50001). The performance results are published annually.
Power Usage Effectiveness ("PUE")
Ark has measured and calculated PUE as recommended by the Green Grid since 2014 and now in accordance with BS EN 50600-4-2. Annual PUE targets for each campus have been set as part of our CCA and Green Loan Agreements. Ark continues to meet its PUE performance targets, however the current figures reflect the low IT loads (20-40%) currently operating at campus level, despite the high contracted capacities on them.
Carbon Emissions
Ark has measured Scope 1 and Scope 2 emissions since 2014, Scope 3 operating emissions have been measured since 2019. 2019 is the baseline year for the Carbon Reduction Plan (CRP) that Ark has implemented and reported on to meet the requirements of PPN06/21. Full details on carbon emissions are provided in the Ark Carbon Reduction Plan, which is published on the website (https://arkdatacentres.co.uk/policies/Ark_Carbon_Reduction_Plan.pdf).
In 2019 Ark extended the scope of CO2e emissions reporting to include:
Scope 1 – All operational direct emissions from standby generation and refrigerant (F-Gas) losses.
Scope 2 - Operational indirect emissions from purchased electricity, steam, heating and cooling.
The following Scope 3 operational emissions:
Upstream transportation and distribution.
Waste generated in operations.
Business travel.
Employee commuting and homeworking.
Downstream transportation and distribution.
In 2023 Ark started measuring emissions from three additional Scope 3 categories:
Purchased goods and services – water.
Fuel- and energy-related activities (not included in Scope 1 or Scope 2).
Upstream leased assets.
Measuring these additional categories was carried out for two main reasons:
To assess the impact of additional categories on the current baseline plan.
As the first step towards revising the baseline plan to include additional Scope 3 categories and additional data centre facilities when they become operational in 2024/2025.
These three additional categories combined, currently account for <3% of Ark’s currently reported emissions. This is not considered sufficiently significant to warrant changing baseline boundaries for reporting and therefore these categories are not included in this report. This position will be reconsidered for 2024 when additional facilities become operational.
The greenhouse gas emissions inventory and data presented on page 5 have been prepared following the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, GHG Protocol Scope 2 Guidance and GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
Reference has also been made to the UK Government Environmental reporting guidelines and GHG conversions have been prepared using the UK Government conversion factors for company reporting of greenhouse gas emissions.
Scope 1, operational direct emissions on Ark campuses arise from two sources:
Gas Oil (diesel)/Hydrotreated Vegetable Oil (HVO) for standby generators. In a normal year, gasoil GHG emissions arise solely from the maintenance and testing of standby generators. Under normal maintenance operations, GHG emissions from the standby generators are low; however, if the backup generation was required, in an emergency, for an extended period (e.g. a long-term electricity power failure) then associated GHG emissions would accumulate rapidly at the rate reflected by the fuel (HVO) used.
F-Gas losses. These are fugitive emissions from F-Gas containing equipment such as air conditioning, caused by the unintended leakage of the refrigerant gas from the equipment. This is quantified by the amount of F-Gas refilled during equipment maintenance or replacement.
Scope 2, indirect emissions from purchased electricity on Ark campuses arise from two sources:
Utility supplied electricity. Ark Data Centres procures 100% REGO (Renewable Energy Guarantees of Origin) certificate-backed renewable electricity from their energy supplier.
Direct wire Power Purchase Agreement (PPA) supplied electricity. From 2021, Meridian Park has benefitted from a direct wire PPA for electricity from the neighbouring Energy from Waste (EfW) plant operated by London Energy. As an EfW plant, the GHG emissions intensity of the purchased electricity is dependent on and varies with its waste fuel supply, for which an annual average tonnesCO2e is calculated.
Scope 3, indirect operational emissions on Ark campuses are currently measured and reported annually from the following GHG emissions categories:
Upstream transportation and distribution.
Waste generated in operations.
Business travel.
Employee commuting and homeworking.
Downstream transportation and distribution.
Sustainability/energy efficient initiatives
Sustainability achievements
Security, Availability, Sustainability (SAS) has been Ark's mantra since 2008. In 2024 it is still SAS, but updated to Sustainability, Availability, Security. Sustainability is inherent in Ark’s DNA with its commitment to continuous design development to improve operating efficiencies as reflected by the following achievements:
Energy efficient plant (light fittings, fans, pumps, compressors, UPS systems, on site PV etc) specified and procured as standard.
Use of distributed fuel storage system for standby generators reducing the volume of fuel stored on site by 30% over conventional bulk storage systems.
First data centre company to deploy direct air free cooling at scale in the UK in 2011, driving design PUE from >1.65 to ~ 1.2 and continuing to evolve the technology.
Procurement of 100% Renewable REGO backed electricity for operating facilities up to 3 years ahead through fully flexible supply contracts since 2017. Driving the continued installation of new renewable generation plant by the suppliers onto the national network for the benefit of all. Strategy extended to cover construction at Union Park in 2023.
Moving from LV standby generation to centralised HV standby generation in 2018, reducing installed standby generation capacity by 31% compared to equivalent LV systems.
First data centre company in UK to completely replace all diesel for standby generators with Hydrotreated Vegetable Oil (HVO) in 2022, reducing fossil CO2e emissions by >95%, NOx emissions by ~ 11% and particulate emissions by ~ 29%.
Baseline GHG Emissions (Scope 1, Scope 2 & Scope 3) reporting in 2019, identified FGas losses from standby cooling plant as Ark's biggest CO2e emissions, by far. Based on this Ark replaced single port valves with dual port valves on all compressors in 2021 and 2022, reducing FGas losses in 2023 by 54% compared to the 2019 baseline, despite IT capacity more than doubling over the same period.
BREEAM Certification across all Ark data centre sites.
Ark's focus on sustainable development from the beginning means there is little low hanging fruit for major improvements in how we operate. However, there is always scope to do better and Ark has a number of process improvements and projects underway that could lead to further sustainability improvements and carbon reductions in future, as identified in each year's sustainability initiatives.
Progress against 2023 initiatives
Progress against Ark's 2023 Sustainability initiatives is summarised below:
Reviewing customer SLA requirements against customer ESG goals to assess whether their IT can be operated more efficiently. Achieved - The introduction of the Air Flow Management Policy and Airflow Usage Effectiveness Metric (AUE) has enabled the Technical Operations team to demonstrate how improved airflow management drives higher delta T across the servers and so improves cooling efficiency, thereby lowering PUE and improving overall efficiency within a data room. This is now business as usual.
Progressing a feasibility study to replace the refrigerant (F-Gas) in older cooling plant with a newer refrigerant that has a significantly lower Global Warming Potential (GWP). If the feasibility study demonstrates that the proposal is technically feasible and commercially viable, it will be implemented. The feasibility study demonstrated the proposal was not commercially viable. An alternative solution to improve efficiency and lower the volume of FGas stored is now in process.
Where refrigerant is required, that with the lowest GWP is being specified. Achieved - Current air-cooled designs have eliminated the need for back-up mechanical cooling systems removing the need for FGas in data centre cooling and this requirement is now included in the Ark Design Standard.
The installation of EV charging points on Ark campuses. At present there are four EV chargers at Spring Park, two EV chargers at Cody Park and four EV chargers at Meridian Park. Each campus has plans to install EV chargers to 20% of the car parking spaces, as the additional chargers are rolled out the impact on employee commuting and business travel will be monitored. Achieved - 16 car charging points installed at Spring Park, 28 car charging points installed at Cody Park, 8 car charging ports installed at Meridian Park, analysis of use to be carried out in 2024.
Developing our Carbon Offset Strategy. Although, as reported in the Carbon Reduction Plan (published on the Ark website), there was an increase in Scope 1 emissions in 2023, relative to 2022, the actual emissions are 54% lower than the 2019 emissions and 40% lower than the 2023 target of 3,943tCO2e. Procuring carbon offsets to meet the baseline target in 2024 will not be necessary. Initiative postponed to 2024.
Transparently reporting our annual progress towards Carbon Net Zero in line with GHG Protocols and SECR requirements. Achieved - See the Carbon Reduction Plan, which was published in May 2024 and is available on the Ark website.
In addition to the above, a new Energy Measurement, Monitoring and Reporting Plan (EMMRP) has been implemented with many automated processes enabling the early identification and rectification of unexpected electrical losses between system components. The benefits of this will be demonstrated in future years.
Ark’s commitments to sustainability 2024
Ark's ongoing commitment to Sustainability in 2024 will be demonstrated by:
Achieving the environmental management objectives (including CUE and Carbon Reduction) identified in our ISO 14001 Environmental Management System.
Achieving the energy management objectives (including PUE) identified in our ISO 50001 Energy Management System.
lnvestigating and reducing unexpected energy losses identified by the EMMRP, in particular regularising and reducing the standby generator engine temperatures and the standby cooling system jacket heaters.
Analysing the use of EV charging points, reviewing the pricing strategy for on-site charging and investigating opportunities/interest in EV salary sacrifice schemes, all aimed at reducing Scope 3 commuting emissions.
Developing our Carbon Offset Strategy in anticipation that Offsets to achieve the Carbon Reduction Plan may be required from 2025 onwards.
Basis for opinion
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' Report for the year ended 30 June 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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.
Auditors’ 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 auditors’ 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.
Based on our understanding of the company and industry, we considered the principal risks of non-compliance with laws and regulations, including those that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, and the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue.
Audit procedures performed by the engagement team included:
enquiring with the management of the company and the directors as to any actual or suspected instances of fraud or non-compliance with laws and regulations;
checking the minutes of meetings of the board of directors for matters relevant to the audit;
testing the disclosures made in the financial statements, as well as in the Directors' report, for compliance with the requirements of the Companies Act 2006;
performing audit procedures to incorporate unpredictability around the nature, timing and extent of our testing;
identifying and testing journal entries considered to be of higher fraud risk; and
evaluating the business rationale for any significant or unusual transactions identified as being outside the normal course of business.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
certain disclosures of directors’ remuneration specified by law are not made; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
The notes on pages 18 to 30 form part of these financial statements.
The notes on pages 18 to 30 form part of these financial statements.
The notes on pages 18 to 30 form part of these financial statements.
The notes on pages 18 to 30 form part of these financial statements.
Ark Data Centres Limited is a private company limited by shares incorporated in England and Wales. The registered office is Spring Park, Westwells Road, Hawthorn, Corsham, Wiltshire, SN13 9GB.
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 £.
Cost of sales
Cost of sales includes two distinctive elements, namely:
costs directly attributable to the maintenance, security, operation and fit out of the data centres at Spring Park, Cody Park and Meridian Park
operating lease charges payable to the related undertakings who own the underlying campuses and data centres operated by the Company
All costs are recognised in the period to which they relate, exclusive of VAT.
Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances. The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired. Costs associated with maintaining computer software are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the company are recognised as intangible assets when the following criteria are met:
It is technically feasible to complete the software so that it will be available for use.
Management intends to complete the software and use or sell it.
There is an ability to use or sell the software.
It can be demonstrated how the software will generate probable future economic benefits.
Adequate technical, financial and other resources to complete the development and to use or sell the software are available.
The expenditure attributable to the software during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
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.
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.
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.
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, including creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
Investment income
Income from the company's investments in limited companies is included in the statement of comprehensive income when, and to the extent that, dividends have been declared and are payable and are included in debtors until they are received.
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.
No material judgements, estimates or assumptions have been made in the application of the company's accounting policies for the year ended 30 June 2024.
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
Of the above costs, £12,251,575 (2023: £10,383,626) are included in administrative expenses and £846,272 (2023: £Nil) are included in cost of sales.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 2).
During the year a provision of £Nil (2023: £2,552,855) was made against amounts owed by a customer who has gone into liquidation and costs of £Nil (2023: £1,890,399) were incurred in connection with the potential sale of part of the Ark group which didn't come to fruition.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
No deferred tax has been recognised at either 30 June 2024 or 30 June 2023 in relation to carried forward losses or capital allowances. This is due to the uncertainty and judgement associated with both the estimation of the financial value, as well as uncertainty around the timing of when such assets would be utilised.
The directors believe that the carrying value of the investments is supported by the underlying assets.
The Company holds 74.9% of the issued share capital of Crown Hosting Data Centres Limited, a company incorporated in England and Wales with the principal activity of the sale of data centre space and the provision of related services. The joint venture is managed jointly through management boards on which other joint venture partners are represented in accordance with their respective interests held in the joint venture.
Amounts owed by related undertakings are unsecured, have no fixed date of repayment and are repayable on demand. Interest is charged at 5% (2023: 5%) per annum (see note 8).
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand
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.
At the year end, contributions of £49,836 (2023: £Nil) were outstanding.
The assets leased by the Company from related undertakings have been pledged as security against a bank loan held by Ark Estates Holdings Limited, a related undertaking also controlled by Ark Capital Partners I LP Inc. For full details of the bank loan, please refer to the financial statements of Ark Estates Holdings Limited available at Companies House.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
There have been no post balance sheet events requiring disclosure in the notes to the financial statements.
During the year the company charged its joint venture, Crown Hosting Data Centres Limited, £64,839,960 (2023: £54,038,211) for data centre running costs, £363,080 (2023: £317,496) for account management services and £5,369 (2023: £1,246) for sales and marketing activities. Included in trade debtors at the year end is £6,126,285 (2023: £4,680,354) owed by Crown Hosting Data Centres Limited in respect of these charges.
At the year end the company was owed £48,137 (2023: £48,137) by a director. No interest is charged on this loan.
Three are no other related party transactions requiring disclosure other than those disclosed in notes 3,7, 8, 16 and 17 to the financial statements.