Registered number:
For the Period Ended 26 May 2024
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Admiral Taverns (Portfolio No 2) Limited
Company Information
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Admiral Taverns (Portfolio No 2) Limited
Contents
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Admiral Taverns (Portfolio No 2) Limited
Directors' report
For the Period Ended 26 May 2024
The directors present their report and the financial statements for the period ended 26 May 2024.
The directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies for the Company's financial statements and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
At the period end the Company held 2 pubs (2023 - 2).
A comprehensive review of the state of affairs of the Group into which the Company is consolidated, including key performance indicators and key risks and uncertainties is contained in the report and financial statements of PSSF Brady Holdco (UK) Limited.
The loss for the period, after taxation, amounted to £367,000 (2023 - loss £306,000).
The directors do not recommend a final dividend (2023 - £nil).
The directors who served during the period were:
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Admiral Taverns (Portfolio No 2) Limited
Directors' report (continued)
For the Period Ended 26 May 2024
The Company is a member of the Admiral Taverns group of companies (the Group). A full list of the Group can be found in the accounts of PSSF Brady Holdco (UK) Limited as referred to in note 23. The Company relies on the Group for financing and therefore the position of the Group is relevant.
Although the Company is in net liabilities the Admiral group will provide support to November 2025 as necessary to allow the Company to be considered a going concern. In assessing Going Concern the Directors have considered the limiting factors that may prevent them from supporting a going concern assumption for the Group. These are:
∙insufficient cash resources to pay creditors as and when they become due; and
∙an inability to meet certain financial covenants (the Leverage Test) in the Group’s amended loan facilities agreement with ICG, which could lead to an event of default which would trigger a demand for repayment of the Facility.
Cash Resources As of 22nd November 2024, the Group had £20.8m of free cash and undrawn, committed credit facilities of £12.0m. The pub estates continue to trade well meeting management’s expectations and generating cash. Pub disposals remain on track and Management have yet to see any impact on pub values as a result of the UK’s Financial Crisis. The Group has hedged its own utility costs and over half its interest rate exposure under its debt facilities. The robust cash position is also supported by the large freehold asset base. Leverage Test The Leverage Test (a quarterly covenant test of the ratio of net debt to EBITDA over the preceding 12 month period) was reset in August 2021 as part of the extension of the existing facilities to fund the Hawthorn Acquisition. This included raised levels of covenant headroom and the addition of certain Pandemic Protection clauses, suspending the leverage test in the event of further large scale, Government mandated closures of pubs and replacing it with a minimum liquidly requirement or maintaining at least £5m of liquid cash resources during the impacted period. The Group's forecasts show the Leverage Test is met.
Conclusion
The Directors have concluded that sufficient resources exist for the Group to meet its liabilities as they fall due for the twelve months from the date of approval of the accounts. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.
The auditor, BDO LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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Admiral Taverns (Portfolio No 2) Limited
Directors' report (continued)
For the Period Ended 26 May 2024
This report was approved by the board on
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Independent auditor's report to the members of Admiral Taverns (Portfolio No 2) Limited
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
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.
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.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
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Independent auditor's report to the members of Admiral Taverns (Portfolio No 2) Limited (continued)
The Directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. 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.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Directors' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' report.
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Independent auditor's report to the members of Admiral Taverns (Portfolio No 2) Limited (continued)
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.
Extent to which the audit was capable of detecting irregularities, including fraud
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:
Non-compliance with laws and regulations
Based on:
∙Our understanding of the Company and the industry in which it operates;
∙Discussion with management and those charged with governance; and
∙Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be the applicable accounting framework, UK tax legislation.
Our procedures in respect of the above included:
∙Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;
∙Review of correspondence with tax authorities for any instances of non-compliance with laws and regulations;
∙Review of financial statement disclosures and agreeing to supporting documentation.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
∙Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
∙Obtaining an understanding of the Company’s policies and procedures relating to:
∙Detecting and responding to the risks of fraud; and
∙Internal controls established to mitigate risks related to fraud.
∙Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
∙Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
∙Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
∙Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be Management override of controls and Manual journal postings to revenue.
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Independent auditor's report to the members of Admiral Taverns (Portfolio No 2) Limited (continued)
Our procedures in respect of the above included:
∙Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;
∙Testing a sample of journal entries posted to revenue for any unusual journals or unusual user postings; and
∙Assessing significant estimates made by management for bias by challenging the assumptions and judgements made by management in their significant accounting estimates and judgements including, impairment testing, measurement of provisions and going concern.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's 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.
for and on behalf of
55 Baker Street
W1U 7EU
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Admiral Taverns (Portfolio No 2) Limited
Profit and loss account
For the Period Ended 26 May 2024
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Admiral Taverns (Portfolio No 2) Limited
Registered number: 05072654
Balance sheet
As at 26 May 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 11 to 24 form part of these financial statements.
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Admiral Taverns (Portfolio No 2) Limited
Statement of changes in equity
For the Period Ended 26 May 2024
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
Admiral Taverns (Portfolio No 2) Limited is a limited liability company incorporated in England. The Registered Office is Milton Gate, 60 Chiswell Street, London EC1Y 4AG.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company is a member of the Admiral Taverns group of companies (the Group). A full list of the Group can be found in the consolidated accounts of PSSF Brady Holdco (UK) Limited as referred to in note 23. The Company relies on the Group for financing and therefore the position of the Group is relevant.
Although the Company is in net liabilities the Admiral group will provide support to November 2025 as necessary to allow the Company to be considered a going concern. In assessing Going Concern the Directors have considered the limiting factors that may prevent them from supporting a going concern assumption for the Group. These are:
∙insufficient cash resources to pay creditors as and when they become due; and
∙an inability to meet certain financial covenants (the Leverage Test) in the Group’s amended loan facilities agreement with ICG, which could lead to an event of default which could trigger a demand for repayment of the Facility.
Cash Resources As of 22nd November 2024, the Group had £20.8m of free cash and undrawn, committed credit facilities of £12.0m. The pub estates continue to trade well meeting management’s expectations and generating cash. Pub disposals remain on track and Management have yet to see any impact on pub values as a result of the UK’s Financial Crisis. The Group has hedged its own utility costs and over half its interest rate exposure under its debt facilities. The robust cash position is also supported by the large freehold asset base. Leverage Test The Leverage Test (a quarterly covenant test of the ratio of net debt to EBITDA over the preceding 12 month period) was reset in August 2021 as part of the extension of the existing facilities to fund the Hawthorn Acquisition. This included raised levels of covenant headroom and the addition of certain Pandemic Protection clauses, suspending the leverage test in the event of further large scale, Government mandated closures of pubs and replacing it with a minimum liquidly requirement or maintaining at least £5m of liquid cash resources during the impacted period. The Group's forecasts show the Leverage Test is met.
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
2.Accounting policies (continued)
Conclusion The Directors have concluded that sufficient resources exist for the Group to meet its liabilities as they fall due for the twelve months from the date of approval of the accounts. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.
The Company, being a qualifying entity which has been included in the Group’s consolidated financial statements that are publicly available, is exempt from the requirement to draw up a cash flow statement under FRS102.
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
2.Accounting policies (continued)
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
2.Accounting policies (continued)
All fixed assets are initially recorded at cost or fair value if acquired through a business combination. Thereafter, property fixed assets are recorded at valuation, all other assets are recorded at depreciated cost. All assets are subject to depreciation and, in the event that indications of impairment exist, impairment review.
Property assets are revalued annually by the directors. Valuation movements arising as a result of the annual revaluation above depreciated historic cost are reflected through the Other Comprehensive Income, whereas valuation movements below depreciated historic cost are reflected through the Profit and Loss Account in arriving at operating loss. The carrying value of properties held under lease agreements is derived after taking into account the cost of the head lease. In the event that the cost of the head lease exceeds the gross value of the leased asset, the corresponding net credit balance is recorded within provisions. Expenditure on additions and improvements to the licensed estate is capitalised at cost as the expenditure is incurred. Such expenditure is then subject to depreciation over an expected average useful life of 7 years. Fixtures and fittings which are to be retained by the Group are depreciated on a straight line basis over 3 years. Fixtures and fitting which the Group aims to sell to licensee are depreciated on a straight line basis over 4 years. The carrying values of tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. Where a property is earmarked for disposal at the balance sheet date, and the carrying value exceeds the anticipated net proceeds on disposal, a provision for the anticipated loss on disposal is recorded. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the profit and loss account.
Where the unavoidable costs of a lease exceed the economic benefit expected to be received from it, a provision is made for the present value of the obligations under the lease.
The Company has made Dilapidations provision in anticipation of the cost of future repairs and renovations that will need to be made in line with the lease obligations.
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
2.Accounting policies (continued)
Taxation The Company establishes provisions based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies. Further details are contained in note 20. Fixed assets The valuation was prepared using the open market value on an existing use basis. Pubs on the market or with a deal progressing are valued at the appropriate sales price. Most other pubs are valued on an income multiple basis. Income multiples take into account the geographical location of the pub and the tenure. Further details are contained in note 13.
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
All staff members are employed and remunerated by Admiral Taverns (Chester) Limited or Hawthorn Leisure Management Limited, fellow group companies.
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
11.Taxation (continued)
The standard rate of Corporation Tax in the UK is currently 25% (2023 - 25%). Accordingly, the company’s loss for this accounting period are taxed at an effective rate of 25% (2023 - 20%). The increase of the main rate of corporation tax from 19% to 25% from 1 April 2023 was announced in the Finance Bill 2021, which was substantively enacted on 24 May 2021.
Any future profits will be taxed at the appropriate rate. Deferred tax as at 26 May 2024 has been calculated at 25%; being the substantively enacted rate at which the deferred tax is expected to reverse.
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
13.Tangible fixed assets (continued)
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
19.Share capital (continued)
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Admiral Taverns (Portfolio No 2) Limited
Notes to the financial statements
For the Period Ended 26 May 2024
The immediate parent undertaking is
The Company’s ultimate parent undertaking is The group financial statements of the The group financial statements of the PSSF Brady Holdco (UK) Limited group, incorporated in the United Kingdom, being the largest consolidated financial statements including the results of the Company, will be available to the public and may be obtained from the registered office of PSSF Brady Holdco (UK) Limited t One St. Peters Square, Manchester, United Kingdom, M2 3DE.
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