The director presents the strategic report for the year ended 31 July 2024.
The company is engaged in the representation and provision of ‘front-of-camera’ filming locations and ‘behind-the- camera’ production space to the film, television and advertising sectors under an agency model. It also long-term leases large warehouse buildings and refurbishes these properties into high specification film studios. These are hired out to film, television and advertising productions.
The company regularly provides its services to the major studio and streaming companies including Apple, Netflix, Amazon, Warner Bros, Sony, NBC Universal, Lionsgate, Paramount, and Disney, as well as leading US and UK production companies and content channels.
Under its agency model, the company exclusively represents some of the largest and highest profile landlords, developers and organisations in the UK including British Land, LandSec, Grosvenor Estate, Portman Estate, Delancey, Telereal Trillium Galliard Homes, Berkeley Homes, Greystar, Arora Group and RER London as well as flagship individual assets of high filmic value including Wembley Stadium, London Stadium, ExCeL London, Tottenham Hotspur Stadium, 55 Broadway, Langleybury Mansion and Battersea Power Station.
The directors are broadly satisfied with the performance of the company during the year given the challenging industry context outlined further below.
During the year, turnover saw a modest decline vs FY23, delivering a less than 3% reduction from £17,029,974 to £16,572,613. Agency turnover reduced from £2,517k to £1,483k. This was primarily due to flowthrough of a decline in billings by £4,882k (42%), and a slight decrease in revenue per hire, which decreased the overall margin on hire fees by 0.22%. Studio turnover improved by £688k with OMA One, OMA X and OMA Store fully occupied.
Adjusted EBITDA of £3,685k saw the impact of an industry wide increase in business rates for film studios, and included rent payments for the company’s newest venture OMA V Film Studios during refurbishment. Adjusted EBITDA did, however, benefit from tighter cost control.
As at the balance sheet date, the group showed a positive cash position of £2,689k, an improvement of £1,076k. Net assets remained stable at £6,064k vs £6,396k.
Relationships with property owner clients and production customers remained strong throughout the period, notwithstanding the pressures faced by the industry.
FY24 provided a challenging climate for all supply chain businesses within the film and television sector. The combined effects of the WGA writers’ and SAG-AFTRA actors’ strikes caused huge disruption to the production of film and television worldwide, with the UK (and particularly London) based productions significantly impacted due to the attachment of WGA and/or SAG-AFTRA members to the majority of London based TV and film projects.
The post strike period was widely anticipated to see a bounce back in production activity similar to the post-Covid boom in film and TV production in 2021-22. In reality, the strike period caused significant disruption to scheduling with talent, and a shortage of ‘ready-to-go’ scripts, which impacted throughout 2024 (despite the strikes officially ending in November 2023).
The post strike period also saw a shift in studios and streamers universally becoming more cost conscious, with a new emphasis on scrutinising production budgets and increased focus on analysing tax reliefs offered in various markets viable as a production base. This further contributed to the sluggish re-start in production activity during 2024.
The outlook for 2025 is looking significantly more positive, with major London studio campuses including Pinewood, Leavsden and Sky Elstree - which experienced significant levels of vacancy during 2023 and 2024 - now significantly busier. Within the company’s own studio portfolio, OMA One and OMA V are expected to be fully occupied until late 2025, with 85% occupancy projected at OMA X. With studio space at high occupancy levels, there is a natural flow-through to the use of filming locations and alternative production use space (the specialism of the company’s agency business).
With studios and streamers becoming more cost conscious and continuing to scrutinise budgets, the UK’s tax relief continues to remain highly beneficial and provide competitive advantages. Within the attractive overall proposition that the UK provides as a base for production, the company’s studio portfolio continues to operate as a value proposition in the market. In the new climate, the company has enhanced its marketing focus on OMA Studio Group as ‘London’s all-round best-value film studios’.
One direct result of the turbulence of 2023 and 2024 has been an increasing hesitancy around new studio operators entering the market. A number of new studio projects conceptualised during post-Covid boom times have failed to come to fruition, limiting the supply of studio space in the market, at least in the mid-term. This is positive for ensuring occupancy levels at the company’s studios remain high, and for alternative production space occupancy within the agency business.
One area around which there remains some uncertainty is the business rates reforms announced in the Government’s Spring Budget 2024, which introduced a 40% relief on business rates for film studio operators for the next decade. This reform has been slow to fully crystalise, with the change in administration further slowing the process. However, a resolution is expected in the coming months, with local authorities then instructed on implementing the tax relief with studio operators. The reforms announced in the Government’s 2024 Spring Budget also included a new 40% tax relief for films budgeted up to £15m to invigorate homegrown production. Both reforms (which have continued to remain in place under the new administration) indicate the UK Government’s continued commitment to film and TV production in the UK, and an acknowledgement of the important role played by tax credits. The company’s Studio business is already feeling the impact of this measure, with multiple sub-£15m budget projects requesting quotes for studio space across 2025 hire dates.
The board of directors see the following key priorities to develop and drive business performance:
A continued focus on expanding the company’s network of property owner clients on the agency side of the business, to bring new sites into the filming location and production space marketplace.
A continued focus on evolving the company’s offering on the agency side of the business. In particular, the introduction of ‘on the ground’ filming operations support to supervise filming has been very well received by both property owner clients and production customers, leading to plans to expand the filming operations team within the agency imminently.
Continued exploration of opportunities to expand the company’s studio portfolio under an operating model, or to lease/purchase properties viable for conversion, including the exploration of opportunities to expand outside of London and the South East as the UK film and television industry evolves.
A continued focus on maintaining high occupancy levels across all facilities within the OMA Studio Group portfolio: OMA One, OMA X, OMA V, OMA Store and OMA House.
A continued focus on optimising service levels across the OMA Studio Group portfolio, in line with the company’s positioning as London’s largest fully independent, customer-service oriented studio operator.
During the financial year ended 31st July 2023, the company made a significant one-off investment in exploring future strategic partnership and investment opportunities to help facilitate future growth aspirations. This investment was reported as part of the administrative expenses.
The company is financially committed to continuing development of its bespoke enquiry management system. A major upgrade incorporating financial modules launched 1st March 2024, with further phases including system upgrades and optimisation of functionality ongoing.
The board monitors and reviews all aspects of the business as a matter of course through monthly board meetings.
Billings, Turnover, Agency Gross Margin over Billings, Adjusted EBITDA, Loss after Tax, Cash Position and Net Assets are the key financial performance indicators reviewed by the business.
Further analysis is undertaken on new revenue / profit stream growth, services trends and cost base analysis. 2024 performance can be summarised as follows:
KPIs | FY23 £k | FY24 £k | Variance (£k/%) | Description |
Billings | 26,278 | 21,857 | (4,421) / (17%) | Agency billings decreased due to strike impacts. |
Turnover | 17,030 | 16,573 | (457) / (3%) | Agency turnover declined due to the reduction in billings, but Studio turnover increased. |
Agency Gross Margin (*) % | 19.57% | 19.35% | (0.22%) | WGA writers’ and SAG-AFTRA actors’ strike action. |
Adjusted EBITDA | 4,336 | 3,685 | (651) / (15%) | Flowthrough of billing reduction and investment in future growth, but offset by improved operational efficiency. |
Loss after tax | (199) | (92) | 107 / 54% | Flowthrough of adjusted EBITDA, one-off exceptional cost in 2023 and investment in future growth |
Year End Cash Position | 1,613 | 2,689 | 1,076 / 67% | Healthy year end balance. |
Net Assets | 6,396 | 6,064 | (332) / (5%) | Stable net assets. |
Note: (*) Agency Gross Margin is calculated as Agency Gross Profit / Agency Billings, excluding the Studio business
On behalf of the board
The director presents their annual report and financial statements for the year ended 31 July 2024.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £240,000. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The auditor, Shaw Gibbs (Audit) Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the director's business review, principal risks and uncertainties faced by the group and future developments.
In drawing his conclusion on the appropriateness of the going concern assumption, the director has been mindful that the group recorded a loss after tax for the year of £91,792 (2023: £627,189) and reported net current liabilities of £18,446,006 (2023: £13,242,024). The loss in the year is largely attributable to the combined effects of the WGA writers' and SAG-AFTRA actors' strikes, despite being resolved in the year, affected the company and group for a significant period during the financial year.
Taking the above into consideration along with the current and forecasted performance and position of the company and group and having reviewed the detailed cashflow forecasts prepared for a period of not less than 12 months from the date that these financial statements are signed, the director has a reasonable expectation that the company and group have adequate resources and support to continue in operational existence for the foreseeable future. Therefore, the director continues to adopt the going concern basis of accounting in preparing the financial statements.
We have audited the financial statements of The Location Collective Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
At the planning stage of the audit we gain an understanding of the laws and regulations which apply to the company and group and how the management seek to comply with those laws and regulations. This helps us to plan appropriate risk assessments.
During the audit we focus on relevant risk areas and review the compliance with the laws and regulations by making relevant enquiries and undertaking corroboration, for example by reviewing Board Minutes and other documentation.
We assess the risk of material misstatement in the financial statements including as a result of fraud and undertake procedures including:
Reviewing the controls set in place by management;
Making enquiries of management as to whether they consider fraud or other irregularities may have taken place, or where such opportunity might exist;
Challenging management assumptions with regard to accounting estimates; and
Identifying and testing journal entries, particularly those which appear to be unusual by size or nature.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulations. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The group statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £109,085 (2023 - loss of £448,761).
The Location Collective Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 264 Banbury Road, Oxford, OX2 7DY.
The group consists of The Location Collective Limited and all of its subsidiaries.
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, modified to include freehold properties and artwork at fair value. The principal accounting policies adopted are set out below.
As permitted by Section 408 Companies Act 2006, the company has not presented its own statement of total comprehensive income and related notes. The profit for the financial year of the parent undertaking is disclosed on the company balance sheet.
The company is qualifying entity for the purposes of FRS102, being a member of a group where the parent (being this company) of that group prepares publically available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 'Statement of Cash Flows'; Presentation of a statement of cash flow and related notes and disclosures;
Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues': Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income.
Section 33 'Related Party Disclosures': Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company, The Location Collective Limited, together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 July 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
In drawing his conclusion on the appropriateness of the going concern assumption, the director has been mindful that the group recorded a loss after tax for the year of £91,792 (2023: £627,189) and reported net current liabilities of £18,446,006 (2023: £13,242,024). The loss in the year is largely attributable to the combined effects of the WGA writers' and SAG-AFTRA actors' strikes, despite being resolved in the year, affected the company and group for a significant period during the financial year.
Taking the above into consideration along with the current and forecasted performance and position of the company and group and having reviewed the detailed cashflow forecasts prepared for a period of not less than 12 months from the date that these financial statements are signed, the director has a reasonable expectation that the company and group have adequate resources and support to continue in operational existence for the foreseeable future. Therefore, the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Gross revenue / billings recognised represents the gross hire value we invoice and collect from production companies, which includes our commissions and amounts passed on to location owners.
Owner costs comprises costs we pass on to the location owners.
Turnover / net revenue recognised represents the commission and fees Location Collective earns from bringing the parties together and providing services between the two. Where Location Collective act as an agent, owner costs are excluded from turnover.
Billings, owner costs and net revenue are stated exclusive of VAT. Billings, owner costs and net revenue are recognised when the hire occurs in accordance with the signed contractual agreement. Location Collective generally invoice and requires payment in advance of hires. Where payments are received from customers in advance of the relevant hire period the amounts are recorded in deferred income and included within creditors falling due within one year.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The company and group operate two share based payment schemes with respect to some employees. Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes methodology. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity. Given that the relevant adjustments have so far been immaterial to the financial statements, they were not processed.
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 leased asset are consumed.
Amounts due from lessees under finance leases are recognised as receivables at the amount of the group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the group’s net investment outstanding in respect of leases.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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.
The useful economic lives of non-current assets have been derived from the judgement of the director using his best estimate of the write-down period.
Land, which has been estimated by the director to be 30% of the cost of OMA House, is not depreciated.
The fair value of the freehold property has been arrived at on the basis of a valuation carried out by a firm of RICS Chartered Surveyors, as at 10 March 2023. The valuation was carried out on the basis of market value (which is considered to be a true reflection of the fair value) in accordance with the Royal Institute of Chartered Surveyors Valuation - Global Standards 2022. The director does not believe that there has been a material change in the fair value of the property between the valuation date and the year end.
The group has opted to capitalise relevant expenses incurred relating to the development of its internally generated software. Included in these expenses is an estimation for employee time. The director makes this estimate based on each employee role and the expected time spent on the development of the software.
All turnover was generated in the United Kingdom
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
Assets under construction as disclosed in the prior year accounts have been renamed in the current year to OMA V - leasehold improvements as it is no longer under construction.
Revaluation
The fair value of the freehold property has been arrived at on the basis of a valuation carried out by a firm of RICS Chartered Surveyors, as at 10 March 2023. The valuation was carried out on the basis of market value (which is considered to be a true reflection of the fair value) in accordance with the Royal Institute of Chartered Surveyors Valuation - Global Standards 2022. The director does not believe that there has been a material change in the fair value of the property between the valuation date and the year end.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Details of the company's subsidiaries at 31 July 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
On 6 November 2023, Westbrooke Alternative Asset Management UK Limited created a fixed and floating charge covering all property and undertaking of the company.
On 16 February 2023, Westbrooke Private Capital S.A.R.L. created a fixed and floating charge over all property and undertakings of EDTC PC Limited.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
As at the year end, the company was committed to pay £853K to one of its landlords to top up the rent deposit following a reduction as a result of offsetting a rent invoice against the deposit.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Company
In August 2024, The Location Collective Limited entered into an extension of the full-site takeover master license at OMA One, one of the film studios operated by the company. The extension was for a duration of 46.5 weeks, committing to further income over this period of £4.9m.
In August 2024, The Location Collective Limited entered into two new hire agreements for the hire of space at OMA X, one of film studios operated by the company. One of these hire agreements was for a period of 35 weeks, committing to further income over this period of £2.3m. The other hire agreement was for a period of 25 weeks, committing to further income over this period of £1.1m.
In September 2024, The Location Collective Limited entered into a new full-site takeover hire agreement at OMA V, one of the film studios operated by the company. The hire agreement was for a duration of 42 weeks, committing to further income over this period of £3.1m.
Group
In addition to the above, in September 2024, EDTC PC Limited extended the period of their loan held with Westbrooke Private Capital S.A.R.L. extending the repayment date to November 2026.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
Canvas Events Limited is a related party by virtue of a common director with the group. The relevant balance has been provided for in full.
The following amounts were outstanding at the reporting end date:
Canvas Events Limited is a related party by virtue of a common director with the group. The relevant balance has been provided for in full.
The company has taken advantage of the exemption provided by FRS 102 Section 33, not to disclose transactions and outstanding balances with its wholly owned subsidiary undertaking EDTC PC Limited.
As at the year end the director owed the company £5,912 (2023: the director was owed £46,887).
Remuneration of £325,045 (2023: £666,684) was paid to key management personnel.