Company registration number 03310912 (England and Wales)
BOWLAND INNS & HOTELS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
BOWLAND INNS & HOTELS LIMITED
COMPANY INFORMATION
Directors
Mr J P Warburton
Mrs H L Warburton
Secretary
Mr J P Warburton
Company number
03310912
Registered office
The Emporium
Moor Lane
Clitheroe
BB7 1BE
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
BOWLAND INNS & HOTELS LIMITED
CONTENTS
Page
Strategic report
1 - 5
Directors' report
6 - 8
Directors' responsibilities statement
9
Independent auditor's report
10 - 12
Profit and loss account
13
Group statement of comprehensive income
14
Group balance sheet
15 - 16
Company balance sheet
17 - 18
Group statement of changes in equity
19
Company statement of changes in equity
20
Group statement of cash flows
21
Notes to the financial statements
22 - 47
BOWLAND INNS & HOTELS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -
The directors present the strategic report for the year ended 31 May 2024.
Review of the business
The group operates fourteen trading businesses and contains a holding property company and a management company. The trading businesses are a collection of hotels, inns, wedding venues, a food hall and a brewery, mainly in or close to the Ribble Valley in Lancashire.
Bowland Brewery, based at Holmes Mill in Clitheroe was acquired by the group in August 2022. The brewery supplies to group businesses and also sells to external retailers such as Booths and Spar. The Assheton Arms was added to the group in February 2023 and is a village pub in Downham, Clitheroe providing food and 12 room accommodation in Ashtree Cottage and the former Post Office. Both businesses are already contributing positively to our group results and complement our existing estate portfolio.
In October 2023, the group acquired Wennington Hall, which is a stone built, Grade II listed, two storey with towers, former school and country house. It stands in extensive grounds and is perfectly positioned to serve the Lakes, Yorkshire Dales and the Ribble Valley. As a jewel in the crown of our Dream Venues wedding collection, it will comprise 22 bedrooms with an opportunity for further expansion, wellness centre and a dedicated event space. Following extensive refurbishment and repositioning in the market, Wennington Hall was launched early 2024.
We achieved revenue of 12% higher than those achieved in the year to 31 May 2023. Our businesses have continued to be impacted by staffing challenges, particularly a heavy reliance on agency staff, leading to an inflated payroll cost. This combined with higher costs, most notably food, have had an impact on margins leading to a 16% increase in the administrative costs reducing overall operating profit down to £1,061k from £1,446k in 2023.
The group has refinanced the loan facility in the year with OakNorth Bank, the increased facility to bring Wennington Hall into the group, plus an increase in the interest charge over the base rate lead to a 112% increase in interest costs in the year contributing to an overall loss before tax of £1,000k compared to a profit of £547k in 2023.
The company incurred exceptional costs in the year of £1,103k. This included Wennington Hall pre-opening costs (£458k) and refinancing and acquisition costs (£528k).
The board are extremely pleased with the refurbishment project at Wennington Hall and the positive contribution this will provide over the coming years.
We summarise below the first two 12-month period results:
*Earnings Before Interest, Tax, Depreciation and Amortisation, calculated as profit for the financial year, adding back interest receivable, interest payable, tax, depreciation and amortisation expense and exceptional costs.
At the date of these financial statements, net assets of £17.3m compared to £17.4m at May 2023.
BOWLAND INNS & HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Funding
The group currently has a £25m term loan facility with OakNorth Bank. This new partnership with OakNorth allowed the purchase of Wennington Hall and alongside the core facility, an additional £12.5m uncommitted of funds will assist with the group’s future acquisitions and growth plans.
Our immediate priority continues to be consolidation and maximising profitability from the existing estate, but the board is confident that the group can pursue its pre-pandemic growth strategy through a combination of operational cashflow and accordion in the near future.
Principal risks and uncertainties
The group's revenues and activity levels are affected by a number of factors, the principal ones of which are:
Competition
The group operates in an extremely competitive market and addresses this by offering a high-quality product tailored around the customer, with a variety of offerings across the estate. The group has “something for everyone”.
Economic
The group has shown great resilience and has continued delivering strong results for both revenue and EBITDA, in the face of the much discussed post pandemic ‘cost of living’ crisis and the interest rate increases throughout the period. We remain watchful of both of these influences and continue to be positive that our business is robust and is organised and operationally managed in such a way as to ensure significant negative effects will not be experienced.
For our non-wedding businesses in particular, the macroeconomic climate and localised factors such as tourist footfall and business occupancy, all impact demand for bedrooms, food and beverage. That being said, this business area has also continued to demonstrate significant resilience.
Rising input costs, particularly food, labour and business rates, all have an impact on the group and can squeeze operating margins. We are grateful to be protected from gas and electricity price increases across all its sites with contracts signed in 2019 and 2020 protecting us up to October 2025, with some protected until March 2026. We have projected the effect on group businesses of the new National Minimum Wage, effective from 1 April 2025, and are satisfied that the resultant increased cost will be of mitigated by a combination of cost efficiencies and pricing increase across the group.
Financial
The Board must always maintain appropriate levels of funding for the group, and we have maintained positive cash balances throughout the period with the help of short term finance and secondary funding providers
On 8 October 2024 the company and group renegotiated the long term loan facility following the breach of the covenants during the year. The amended covenants continue to be monitored as part of the monthly management information along with the cash headroom.
BOWLAND INNS & HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
Operational
Delivery of the highest possible standards to our customers is of paramount importance. The group invests heavily in its staff, whilst inviting and responding to customer feedback. The group is particularly susceptible to any fluctuations in staff availability within the sector, with reduced availability at busy times having an adverse impact on turnover. A further impact of any reduction in staff availability is the increased use of agency staff, which is an expensive commodity and further adversely affects profitability.
We are reliant on technology and information systems for all areas of the business which can adversely affect operations if they were to fail for any length of time. We work closely with our IT providers to ensure that systems are updated and tested regularly and have maintenance agreements in place for all key systems. We have implemented a new PMS system across group businesses and built 13 new websites, which provide greater operational flexibility and efficiency, e.g. allowing wedding guests to directly book their rooms using a group code, thus reducing the need for staff time on emailing guests, manually tracking and reserving rooms.
Health and safety
To assist with the pro-active management of health and safety compliance throughout our business, we use Shield Safety Group. Shield provide bespoke safety management systems for each of our properties, which are monitored via the use of compliance diaries and check sheets, completed by the management team on a daily basis. Shield then carry out quarterly audits at all of our sites, to ensure the onsite management team are effectively managing health and safety to the required standard.
The management team also have the support of the advice line, should they need to seek further assistance with any health and safety matter, risk assessments, food safety management, EHO visits and accident reporting.
We also utilise the online compliance centre, provided by Shield, for storing certification and monitoring, through use of the digital traffic light system, when certificates are due for renewal or when regular cleaning operations should be carried out.
Regulation
The group operates in an industry subject to extensive regulation. A failure to comply with health & safety regulation (including food safety and fire legislation) or licensing obligations could lead to customers or employees being adversely affected, with a resulting reputational impact. The board is confident that the group has adequate procedures in place. Regular health and safety assessments are completed at all venues to ensure safety of our employees and customers, and all new employees are provided with our health and safety policy.
Other regulatory factors such as national minimum wage, licensing laws, duty and taxation can all have an impact on demand and margins.
Future developments
We have prepared forward forecasts which shows the group can achieve a break even position by May 2025 and return to profitability by May 2026. This will be achieved by the maturity of the Wennington Hall site, efficiencies across the group and a reduction in the Bank of England Base Rate.
We will continue to invest in our existing estate to improve our guest experience of our overall offering, with particular further investment opportunities at Wennington Hall. We will also continue to monitor the market, looking for opportunities to acquire sites which we feel compliment the offering of our other sites.
BOWLAND INNS & HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
Promoting the success of the company
The directors of the group act in accordance with s172 of the UK Companies Act 2006 which is summarised as follows (with reference to the companies within the group):
A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its stakeholders as a whole and, in doing so have regard (amongst other matters) to:
The likely consequences of any decisions in the long-term.
The interests of the company's employees.
The need to foster the company's business relationships with suppliers, customers and others.
The impact of the company's operations on the community and environment.
The desirability of the company maintaining a reputation for high standards of business conduct.
The need to act fairly as between members of the company.
The following paragraphs summarise how the directors fulfil their duty to promote the success of the company:
Employees
Our employees are our most important asset and are fundamental to our success. We invest in systems and offerings to improve and enhance the welfare and experience of our employees, such as:
Maintaining a private mental health policy for all employees, where they can access counselling or emergency advice at any time.
Ensuring salaried employees are paid for overtime during particularly busy periods and paying increased hourly rates on major public holidays.
Providing additional incentives such as “employee of the month” awards across our venues.
Introduction of an early pay system for employees who wish to draw a portion of their salary before pay day.
Providing staff and ‘friends and family’ discounts across our sites.
Introduction of Neuro-Diversity Awareness training around equality, diversity and inclusion.
We support several Apprentice Training Programmes in a various areas throughout the business, eg. marketing, brewery, management and cookery.
Business relationships
As a customer-focused group of businesses, it is important our guests remain our strongest advocates and we continue to work hard to build their trust through the excellent hospitality delivered by our teams. It is equally as important that wedding guests have as positive an experience as our brides and grooms themselves.
The board value the strong relationships we have with our suppliers. Where possible, we choose local suppliers, many of whom we have worked in partnership with for several years. Our suppliers are often family owned and run businesses and we are mindful of agreeing equitable prices and adhering to payment terms to ensure goodwill and support of our local community.
Community and environment
All our venues are integral to and in the heart of their local communities. and we always try and source local produce wherever possible.
The directors are mindful of the impact our business can have on the environment and the year has seen us continue to invest in low energy solutions where possible with participation in local recycling schemes and asset investments that target improvements in the energy efficiency and reduction of the business' carbon footprint.
BOWLAND INNS & HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 5 -
Mr J P Warburton
Director
27 February 2025
BOWLAND INNS & HOTELS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 6 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Principal activities
The principal activity of the group and company is wedding functions and hotels along with other interests such as public houses, restaurants, cafes, bars and an interior design retail shop.
Results and dividends
The results for the year are set out on page 13.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J P Warburton
Mrs H L Warburton
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Financial instruments
The group and company finance their operations through a mixture of retained profits and where necessary to fund expansion or capital expenditure programmes, through bank facilities, hire purchase finance and other loans. The management objectives are to:
retain sufficient liquid funds to enable it to meet its day to day obligations as they fall due whilst maximising returns on surplus funds;
minimise the group and company's exposure to fluctuating interest rates when seeking new borrowings; and
match the repayment schedule of any external borrowings or overdrafts with the expected future cash flows expected to arise from the group and company's trading activities.
Hedge accounting is not used by the group or company.
As all the group and company’s funds are invested in bank deposit accounts in the UK and its borrowings are all obtained from standard facilities there is no price risk exposure.
Disabled persons
The group's policy is to recruit disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training is given. Once employed, a career plan is developed to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled to enable them to perform work identified as appropriate to their aptitudes and abilities.
BOWLAND INNS & HOTELS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 7 -
Employee involvement
The group is committed to involving all employees in its performance and development. Its approach to employee development offers continual challenges in the job, learning opportunities and personal development. There is monthly email communication with employees in the form of the “JP Journal” which informs them of all the key news from our estate in that period. The monthly emails are supplemented with additional ad-hoc communications where appropriate.
The directors are constantly mindful of the impact of their decisions on our employees, and employee welfare is of paramount importance. This is illustrated by the introduction of a free counselling and advisory service which is now provided to all employees.
The group also provides staff discount across all our venues, and “friends and family” discounts across our hotels and inns.
Post reporting date events
As disclosed in note 29, post year end the bank amended the covenants for the loans. Additional capital injections from Directors and Short Term finance were made to keep cash balances positive.
Auditor
Following the merger of MHA Moore & Smalley with MHA, the company's independent auditor has now become MHA.
Energy and carbon report
The subsidiary companies do not meet the size requirements that would result in a need to report, accordingly the reporting is for the company only.
2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
434,054
469,584
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 2 - indirect emissions
- Electricity purchased
101.20
109.48
Total gross emissions
101.20
109.48
Intensity ratio
Kg CO2 / Sq footage of office per 12 month equivalent period
18.20
19.69
Quantification and reporting methodology
The following standards have been used in the calculation of the disclosure:
Latest UK Government Environmental Reporting Guidelines and Conversion Factors for Group Reporting.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in kilograms of CO2 per square footage of office space.
BOWLAND INNS & HOTELS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 8 -
Measures taken to improve energy efficiency
We care passionately about the environment and strive to limit the impact of our activities. We are committed to meeting and exceeding current legislation and regulations. We try to maximize recycling of bins, oil and glass, and influence employee behaviour with the aim of reducing our carbon footprint.
Most of our venues are old, historic buildings but despite this, we look to reduce our energy consumption by purchasing the most fuel effective appliances and systems, investing in LED lighting, efficient heating, and energy efficient induction kitchen equipment; we have a biomass boiler at Mitton Hall.
We aspire to keep reducing our emission of greenhouse gases from our venues and within our supply chain.
Wherever possible we deliver parcels and equipment from our Head Office as part of a planned visit by one of the team, again to limit our carbon footprint.
Our plan is to ensure that everything possible will be done to improve both our energy efficiency and waste procedures and also continue to reduce our carbon emissions.
Our policy is to follow the Hierarchy of Waste model and reuse technical equipment and furniture in different ways to reduce landfill and we also utilise free recycling opportunities locally if items are to be discarded.
Strategic report
The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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 engagement with others and future developments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.
Engagement with suppliers, customers and others
Please refer to the strategic report, where the group’s engagement with suppliers, customers and other stakeholders has been discussed.
Going concern
The directors of a limited company must ensure they are confident that the group satisfies all the criteria of a going concern in order for accounts to be prepared on that basis. We have numerous monitoring procedures in place, namely the preparation and regular updating of a weekly cashflow forecast, in addition to a monthly P&L, balance sheet and cashflow forecast for a period of at least 12 months from the approval of these financial statements.
Further details regarding the adoption of the going concern basis can be found in note 1.3 to the financial statements.
On behalf of the board
Mr J P Warburton
Director
27 February 2025
BOWLAND INNS & HOTELS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
BOWLAND INNS & HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BOWLAND INNS & HOTELS LIMITED
- 10 -
Opinion
We have audited the financial statements of Bowland Inns & Hotels Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 which comprise the group profit and loss account, 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).
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 31 May 2024 and of the group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor 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 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 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 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 directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
BOWLAND INNS & HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BOWLAND INNS & HOTELS LIMITED
- 11 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
Matters on which we are required to report by exception
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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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 directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;
Enquires with management about any known or suspected instances of fraud;
Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls;
Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;
Auditing the risk of fraud in revenue, including through the testing of income cut off at the period end and through sales transaction testing to provide comfort that revenue occurrence is as stated in the financial statements.
BOWLAND INNS & HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BOWLAND INNS & HOTELS LIMITED
- 12 -
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 regulation. 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.
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.
Paul Locker BSc(Hons) FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
27 February 2025
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
BOWLAND INNS & HOTELS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
2024
2023
Notes
£
£
Turnover
3
24,716,196
22,019,893
Cost of sales
(6,892,294)
(6,202,523)
Gross profit
17,823,902
15,817,370
Administrative expenses
(15,664,083)
(14,329,786)
Other operating income
4,771
234,514
Exceptional items
4
(1,103,091)
(275,575)
Operating profit
5
1,061,499
1,446,523
Interest payable and similar expenses
9
(2,061,624)
(970,983)
Amounts written off investments
10
-
72,292
(Loss)/profit before taxation
(1,000,125)
547,832
Tax on (loss)/profit
11
(452,498)
(184,903)
(Loss)/profit for the financial year
25
(1,452,623)
362,929
(Loss)/profit for the financial year is all attributable to the owners of the parent company.
BOWLAND INNS & HOTELS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 14 -
2024
2023
£
£
(Loss)/profit for the year
(1,452,623)
362,929
Other comprehensive income
Revaluation of tangible fixed assets
1,114,973
Tax relating to other comprehensive income
192,387
Other comprehensive income for the year
1,307,360
Total comprehensive income for the year
(145,263)
362,929
Total comprehensive income for the year is all attributable to the owners of the parent company.
BOWLAND INNS & HOTELS LIMITED
GROUP BALANCE SHEET
- 15 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
12
1,429,199
1,645,414
Negative goodwill
12
(104,708)
Net goodwill
1,324,491
1,645,414
Other intangible assets
12
250,909
284,896
Total intangible assets
1,575,400
1,930,310
Tangible assets
13
47,895,588
41,187,601
49,470,988
43,117,911
Current assets
Stocks
16
818,975
723,648
Debtors
17
2,980,993
2,117,037
Cash at bank and in hand
449,649
589,336
4,249,617
3,430,021
Creditors: amounts falling due within one year
18
(8,769,718)
(8,055,123)
Net current liabilities
(4,520,101)
(4,625,102)
Total assets less current liabilities
44,950,887
38,492,809
Creditors: amounts falling due after more than one year
19
(22,744,860)
(16,539,057)
Provisions for liabilities
Deferred tax liability
22
4,946,168
4,548,630
(4,946,168)
(4,548,630)
Net assets
17,259,859
17,405,122
Capital and reserves
Called up share capital
24
1,173
1,173
Share premium account
25
68,599
68,599
Revaluation reserve
25
15,698,241
14,683,045
Capital redemption reserve
25
25
25
Other reserves
25
2,561,913
2,561,913
Profit and loss reserves
25
(1,070,092)
90,367
Total equity
17,259,859
17,405,122
BOWLAND INNS & HOTELS LIMITED
GROUP BALANCE SHEET (CONTINUED)
- 16 -
The financial statements were approved by the board of directors and authorised for issue on 27 February 2025 and are signed on its behalf by:
27 February 2025
Mr J P Warburton
Director
Company registration number 03310912 (England and Wales)
BOWLAND INNS & HOTELS LIMITED
COMPANY BALANCE SHEET
AS AT 31 MAY 2024
31 May 2024
- 17 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
12
1,000
2,001
Other intangible assets
12
2,069
4,146
Total intangible assets
3,069
6,147
Tangible assets
13
38,410,137
37,907,943
Investments
14
2,000,013
2,000,013
40,413,219
39,914,103
Current assets
Stocks
16
3,486
8,929
Debtors
17
12,122,843
6,690,460
Cash at bank and in hand
20,190
33,770
12,146,519
6,733,159
Creditors: amounts falling due within one year
18
(7,510,143)
(6,573,652)
Net current assets
4,636,376
159,507
Total assets less current liabilities
45,049,595
40,073,610
Creditors: amounts falling due after more than one year
19
(22,621,276)
(16,415,863)
Provisions for liabilities
Deferred tax liability
22
4,461,729
4,214,841
(4,461,729)
(4,214,841)
Net assets
17,966,590
19,442,906
Capital and reserves
Called up share capital
24
1,173
1,173
Share premium account
25
68,599
68,599
Revaluation reserve
25
15,728,729
14,683,045
Capital redemption reserve
25
25
25
Other reserves
25
2,561,913
2,561,913
Profit and loss reserves
25
(393,849)
2,128,151
Total equity
17,966,590
19,442,906
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £2,814,164 (2023 - £776,321 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
BOWLAND INNS & HOTELS LIMITED
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2024
31 May 2024
- 18 -
The financial statements were approved by the board of directors and authorised for issue on 27 February 2025 and are signed on its behalf by:
27 February 2025
Mr J P Warburton
Director
Company registration number 03310912 (England and Wales)
BOWLAND INNS & HOTELS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
£
Balance at 1 June 2022
1,123
14,975,209
2,561,913
(541,835)
16,996,410
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
-
-
-
362,929
362,929
Issue of share capital
24
75
68,599
-
-
-
-
68,674
Own shares acquired
-
-
-
-
-
(22,891)
(22,891)
Cancellation of shares
24
(25)
-
-
25
-
-
Transfers
-
-
(292,164)
-
-
292,164
-
Balance at 31 May 2023
1,173
68,599
14,683,045
25
2,561,913
90,367
17,405,122
Year ended 31 May 2024:
Loss for the year
-
-
-
-
-
(1,452,623)
(1,452,623)
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
1,114,973
-
-
-
1,114,973
Tax relating to other comprehensive income
-
-
192,387
-
-
192,387
Total comprehensive income
-
-
1,307,360
-
-
(1,452,623)
(145,263)
Transfers
-
-
(292,164)
-
-
292,164
-
Balance at 31 May 2024
1,173
68,599
15,698,241
25
2,561,913
(1,070,092)
17,259,859
BOWLAND INNS & HOTELS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
£
Balance at 1 June 2022
1,123
14,975,209
2,561,913
2,635,200
20,173,445
Year ended 31 May 2023:
Loss and total comprehensive income for the year
-
-
-
-
-
(776,322)
(776,322)
Issue of share capital
24
75
68,599
-
-
-
-
68,674
Own shares acquired
-
-
-
-
-
(22,891)
(22,891)
Cancellation of shares
24
(25)
-
-
25
-
-
Transfers
-
-
(292,164)
-
-
292,164
-
Balance at 31 May 2023
1,173
68,599
14,683,045
25
2,561,913
2,128,151
19,442,906
Year ended 31 May 2024:
Profit for the year
-
-
-
-
-
(2,814,164)
(2,814,164)
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
1,155,623
-
-
-
1,155,623
Tax relating to other comprehensive income
-
-
182,225
-
-
182,225
Total comprehensive income
-
-
1,337,848
-
-
(2,814,164)
(1,476,316)
Transfers
-
-
(292,164)
-
-
292,164
-
Balance at 31 May 2024
1,173
68,599
15,728,729
25
2,561,913
(393,849)
17,966,590
BOWLAND INNS & HOTELS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 21 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
1,802,666
937,090
Interest paid
(2,061,624)
(970,983)
Income taxes paid
(397,423)
(32,756)
Net cash outflow from operating activities
(656,381)
(66,649)
Investing activities
Purchase of business
9,185
(47,688)
Proceeds from disposal of business
-
(3,199)
Purchase of intangible assets
(44,670)
(95,000)
Purchase of tangible fixed assets
(3,256,300)
(1,451,480)
Proceeds from disposal of tangible fixed assets
72
126,730
Repayment of loans
132,511
(96,095)
Net cash used in investing activities
(3,159,202)
(1,566,732)
Financing activities
Proceeds from issue of shares
-
68,674
Purchase of treasury shares
(22,891)
Repayment of borrowings
-
(296,277)
Proceeds from new bank loans
23,801,552
-
Repayment of bank loans
(20,045,068)
(488,241)
Payment of finance leases obligations
(84,036)
(154,990)
Net cash generated from/(used in) financing activities
3,672,448
(893,725)
Net decrease in cash and cash equivalents
(143,135)
(2,527,106)
Cash and cash equivalents at beginning of year
589,336
3,116,442
Cash and cash equivalents at end of year
446,201
589,336
Relating to:
Cash at bank and in hand
449,649
589,336
Bank overdrafts included in creditors payable within one year
(3,448)
-
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
1
Accounting policies
Company information
Bowland Inns & Hotels Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Emporium, Moor Lane, Clitheroe, BB7 1BE.
The group consists of Bowland Inns & Hotels Limited and all of its subsidiaries.
The company's and group's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly 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:
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 23 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Bowland Inns & Hotels Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 May 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.
1.4
Going concern
The directors of a limited company must ensure they are confident that the group satisfies all the criteria of a going concern in order for accounts to be prepared on that basis. We have numerous monitoring procedures in place, namely the preparation and regular updating of a weekly cashflow forecast, in addition to a monthly profit and loss, balance sheet and cashflow forecast for a period of at least 12 months from the approval of these financial statements.
The directors have prepared detailed forecasts including cashflow projections which indicate that the company will have sufficient funds as they fall due for the foreseeable future. The group breached its financial covenants in the year. On 8 October 2024 the covenants were amended so they were no longer breached.
The directors have considered the following factors in assessing going concern:
Current year performance to date;
Current and future cash resources including the structure of the balance sheet;
Amended covenant compliance
Future prospects for the business;
Future financial commitments; and
Existing bank facilities.
The Directors have produced future cash flow forecasts including a downside sensitised base case scenario. In order to have sufficient funds to meet all liabilities, the company has included the following mitigants:
Short term finance available
Time to pay arrangement with HMRC
Monies pledged from Directors
Taken together the directors have concluded that there are no material uncertainties over adopting the going concern basis at the time of signing the financial statements.
At the time of signing the accounts the directors have a reasonable expectation that the company has adequate resources to continue its operational existence for the foreseeable future. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 24 -
1.5
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on transfer of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Specifically for food and drink sales, revenue is recognised when the goods are supplied and the bill is paid.
Revenue from contracts for the provision of weddings is recognised by reference to the stage of completion. A proportion of revenue is recognised on commencement of the contract to cover the preparation and planning costs related to the contract. The remaining revenue is then recognised on completion.
Revenue from rental of rooms or function spaces, including hotel rooms and office space, is recognised at the point at which the company has fulfilled its contractual obligations and the risks and rewards attaching to the services have been transferred to the customer, which is at the point the customer has occupancy of the space.
1.6
Research and development expenditure
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.
1.7
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 4 to 10 years.
1.8
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Software
3 - 7 years straight line basis
Development costs
4 - 7 years straight line basis
1.9
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 25 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% - 10% straight line basis (except land)
Leasehold improvements
10% straight line basis
Plant and equipment
10 - 33.33% straight line basis or 15% - 33.33% reducing balance basis
Fixtures and fittings
10% straight line basis or 15% - 25% reducing balance basis
Motor vehicles
25% reducing balance basis
Freehold land is not depreciated.
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.
1.10
Fixed asset investments
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.
1.11
Impairment of fixed assets
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.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 26 -
1.12
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises the purchase price of direct materials.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.13
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.14
Financial instruments
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
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Other financial assets
All of the group's financial assets are basic financial instruments.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 27 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans andloans from fellow group companies, are initially recognised at transaction price. 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. Trade creditors are recognised initially at transaction price.
Other financial liabilities
All of the group's financial liabilities are basic financial instruments.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.15
Equity instruments
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.
1.16
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 28 -
Deferred tax
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.
1.17
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.18
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.19
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.20
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 29 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
Treatment of land and buildings
The land and buildings are predominantly used by subsidiary companies. The directors do not consider that these properties constitute investment properties as the value in the parent company is intrinsically linked to the trading performance of the subsidiary entities operating from these properties.
Key sources of estimation uncertainty
Valuation of land and buildings
The directors have made estimates in respect of land and buildings that are held at valuation. There is a degree of estimation involved in the valuation of land and buildings. However, the Directors have based the period end carrying values on independent valuations, as described in note 13. The land and buildings are valued as trading properties, as such the trading assets of the land and buildings are included in the valuation. The carrying value of the tangible fixed assets associated with the trading properties is included in note 13.
Wedding revenue recognised on booking
The directors have made estimations in respect of wedding revenue recognised on the initial booking. The amount recognised on the initial booking is linked to an estimation of the costs to be incurred to set up the wedding, prior to the wedding taking place. The remaining revenue is recognised on completion.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
19,544,115
17,591,483
Sale of services
4,334,420
3,655,994
Other income
837,661
772,416
24,716,196
22,019,893
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
24,716,196
22,019,893
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
3
Turnover and other revenue
(Continued)
- 30 -
2024
2023
£
£
Other revenue
Grants received
-
86,370
4
Exceptional item
2024
2023
£
£
Expenditure
Refinancing and acquisition costs
528,290
191,538
Beer duty costs
-
34,773
Stock write offs
64,000
-
One-off employee related costs
33,730
49,264
One-off specialist consultancy fees
18,578
-
Pre-opening costs
458,493
-
1,103,091
275,575
The refinancing and acquisition costs incurred during the current and previous years relate to the group changing finance facilities and exploring potential acquisitions and investments. These costs are being presented as exceptional as they are one off costs that are not expected to reoccur.
The beer duty costs incurred during the previous year relate to one-off costs linked to the Brewery that are not expected to reoccur.
The stock write offs incurred during the current year relate to stock written off due to a change in positioning for one site along with stock losses due to power failure at another.
The one-off employee related costs incurred during the current and previous years relate to one-off costs in respect of staff terminations and the advice around this.
The one-off specialist consultancy fees incurred during the current year relate to costs incurred in respect of fees charged for reviewing and challenging utility billings.
The pre-opening costs incurred during the current year relate to costs incurred prior to opening Wennginton Hall.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 31 -
5
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging/(crediting):
Research and development costs
-
1,236
Government grants
-
(86,370)
Depreciation of owned tangible fixed assets
1,717,541
1,658,005
Depreciation of tangible fixed assets held under finance leases
43,416
45,435
Loss on disposal of tangible fixed assets
1,809
1,881
Amortisation of intangible assets
294,872
259,320
Release of negative goodwill
(7,477)
-
Operating lease charges
466,361
372,178
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
50,485
39,800
For other services
Other assurance services
1,167
-
Taxation compliance services
18,550
14,200
Other taxation services
-
1,875
All other non-audit services
73,064
49,500
92,781
65,575
7
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Management
47
53
2
2
Admin
20
19
-
-
Front of house staff
360
348
-
-
Total
427
420
2
2
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
7
Employees
(Continued)
- 32 -
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
7,849,428
6,888,814
102,237
198,032
Social security costs
584,421
579,852
36,175
58,045
Pension costs
117,751
102,105
5,718
1,144
8,551,600
7,570,771
144,130
257,221
8
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
2,338
47,770
Company pension contributions to defined contribution schemes
-
306
2,338
48,076
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
9
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
1,969,182
929,497
Interest on finance leases and hire purchase contracts
92,442
41,486
Total finance costs
2,061,624
970,983
10
Amounts written off investments
2024
2023
£
£
Other gains and losses
-
72,292
11
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
44,659
279,786
Adjustments in respect of prior periods
386
Total current tax
45,045
279,786
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
11
Taxation
2024
2023
£
£
(Continued)
- 33 -
Deferred tax
Origination and reversal of timing differences
(13,160)
(92,568)
Changes in tax rates
1,448
Adjustment in respect of prior periods
420,613
(3,763)
Total deferred tax
407,453
(94,883)
Total tax charge
452,498
184,903
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(1,000,125)
547,832
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.00%)
(250,031)
109,581
Tax effect of expenses that are not deductible in determining taxable profit
94,820
21,084
Gains not taxable
(14,461)
Tax effect of utilisation of tax losses not previously recognised
(116,024)
Adjustments in respect of prior years
386
Effect of change in corporation tax rate
-
1,448
Permanent capital allowances in excess of depreciation
(2,874)
(33,234)
Depreciation on assets not qualifying for tax allowances
253,595
70,496
Amortisation on assets not qualifying for tax allowances
52,185
33,776
Deferred tax adjustments in respect of prior years
420,613
(3,763)
Tax at marginal rate
(172)
(24)
Taxation charge
452,498
184,903
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:
2024
2023
£
£
Deferred tax arising on:
Revaluation of property
(192,387)
-
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
11
Taxation
(Continued)
- 34 -
The Chancellor announced his intention to increase the headline rate of corporation tax to 25% from 1 April 2023. This policy was substantively enacted on 25 May 2021.
12
Intangible fixed assets
Group
Goodwill
Negative goodwill
Software
Development costs
Total
£
£
£
£
£
Cost
At 1 June 2023
3,087,281
2,050
1,049,159
4,138,490
Additions - internally developed
20,344
7,286
27,630
Additions - separately acquired
14,093
2,947
17,040
Additions - business combinations
(112,185)
(112,185)
At 31 May 2024
3,087,281
(112,185)
36,487
1,059,392
4,070,975
Amortisation and impairment
At 1 June 2023
1,441,867
2,050
764,263
2,208,180
Amortisation charged for the year
216,215
(7,477)
2,197
76,460
287,395
At 31 May 2024
1,658,082
(7,477)
4,247
840,723
2,495,575
Carrying amount
At 31 May 2024
1,429,199
(104,708)
32,240
218,669
1,575,400
At 31 May 2023
1,645,414
284,896
1,930,310
Company
Goodwill
Development costs
Total
£
£
£
Cost
At 1 June 2023 and 31 May 2024
10,000
239,003
249,003
Amortisation and impairment
At 1 June 2023
7,999
234,857
242,856
Amortisation charged for the year
1,001
2,077
3,078
At 31 May 2024
9,000
236,934
245,934
Carrying amount
At 31 May 2024
1,000
2,069
3,069
At 31 May 2023
2,001
4,146
6,147
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 35 -
13
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 June 2023
39,382,134
224,692
2,329,585
5,873,333
441,414
48,251,158
Additions
6,421,229
8,039
228,395
698,189
7,355,852
Disposals
(6,480)
(6,480)
Revaluation
(769,549)
(769,549)
At 31 May 2024
45,033,814
232,731
2,551,500
6,571,522
441,414
54,830,981
Depreciation and impairment
At 1 June 2023
2,074,339
6,185
1,613,225
3,166,612
203,196
7,063,557
Depreciation charged in the year
1,087,640
22,809
150,156
461,776
38,576
1,760,957
Eliminated in respect of disposals
(4,599)
(4,599)
Revaluation
(1,884,522)
(1,884,522)
At 31 May 2024
1,277,457
28,994
1,758,782
3,628,388
241,772
6,935,393
Carrying amount
At 31 May 2024
43,756,357
203,737
792,718
2,943,134
199,642
47,895,588
At 31 May 2023
37,307,795
218,507
716,360
2,706,721
238,218
41,187,601
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
13
Tangible fixed assets
(Continued)
- 36 -
Company
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 June 2023
37,211,540
583,316
3,168,222
304,798
41,267,876
Additions
300,000
9,096
105,228
414,324
Revaluation
(728,899)
(728,899)
At 31 May 2024
36,782,641
592,412
3,273,450
304,798
40,953,301
Depreciation and impairment
At 1 June 2023
1,114,425
546,449
1,494,987
204,072
3,359,933
Depreciation charged in the year
773,827
19,744
254,869
19,313
1,067,753
Revaluation
(1,884,522)
(1,884,522)
At 31 May 2024
3,730
566,193
1,749,856
223,385
2,543,164
Carrying amount
At 31 May 2024
36,778,911
26,219
1,523,594
81,413
38,410,137
At 31 May 2023
36,097,115
36,867
1,673,235
100,726
37,907,943
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2024
2023
2024
2023
£
£
£
£
Plant and equipment
36,768
42,758
Fixtures and fittings
179,264
115,917
179,264
115,917
Motor vehicles
118,478
153,222
73,274
100,653
334,510
311,897
252,538
216,570
The valuation of the land and buildings in the current period has been arrived at by a firm of independent valuers not connected with the group, The independent valuers are Chartered Surveyors and valued the assets in accordance with the Guidance Notes of the Royal Institution of Chartered Surveyors. The valuations were made on a fair value basis by reference to market evidence of transaction prices for similar properties and the trading performance of the properties.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
13
Tangible fixed assets
(Continued)
- 37 -
2024
2023
£
£
Group
Cost
27,350,538
22,597,703
Accumulated depreciation
(4,857,090)
(4,405,136)
Carrying value
22,493,448
18,192,567
Company
Cost
22,597,703
22,597,703
Accumulated depreciation
(4,857,090)
(4,405,136)
Carrying value
17,740,613
18,192,567
14
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
15
2,000,013
2,000,013
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 June 2023 and 31 May 2024
2,000,013
Carrying amount
At 31 May 2024
2,000,013
At 31 May 2023
2,000,013
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 38 -
15
Subsidiaries
Details of the company's subsidiaries at 31 May 2024 are as follows:
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Bowland Beer Hall Limited*
1
Public bar
Ordinary
100.00
-
Bowland Food Hall Limited*
1
Food retailer
Ordinary
100.00
-
Bowland Speciality Foods Limited
1
Dormant
Ordinary
100.00
-
Cafe Emporia Limited*
1
Licenced restaurant
Ordinary
100.00
-
Eaves Hall Hotel Limited*
1
Wedding venue and licenced restaurant
Ordinary
100.00
-
Emporia (Kirkby Lonsdale) Limited*
1
Wedding venue and licenced restaurant
Ordinary
100.00
-
Emporia Limited*
1
Wedding venue and licenced restaurant
Ordinary
100.00
-
James' Places (Northwest) limited*
1
Management company
Ordinary
100.00
-
Spinning Block Ltd*
1
Hotel
Ordinary
100.00
-
The Falcon Manor Hotel Limited*
1
Wedding venue and licenced restaurant
Ordinary
100.00
-
The Shireburn Arms Limited*
1
Wedding venue and licenced restaurant
Ordinary
100.00
-
The Shop at the Emporium Limited*
1
Furniture and household items retailer
Ordinary
100.00
-
Waddington Arms Limited*
1
Public house
Ordinary
100.00
-
The Assheton Arms Limited*
1
Licenced restaurant and public house
Ordinary
100.00
-
Bowland Enterprises Limited
1
Dormant holding company
Ordinary
100.00
-
The Bowland Beer Company Limited*
1
Brewery
Ordinary
-
100.00
Holmes Mill Properties Limited*
1
Wedding venue
Ordinary
100.00
-
Wennington Hall Limited
1
Dormant
Ordinary
100.00
-
Registered office addresses (all UK):
1
The Emporium, Moor Lane, Clitheroe, BB7 1BE
*Exempt from audit (note 27). The guarantee given by the company under section 479A of the Companies Act is disclosed in note 27.
The financial statements of all subsidiaries are prepared to 31 May 2024.
16
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
142,147
126,447
-
-
Finished goods and goods for resale
676,828
597,201
3,486
8,929
818,975
723,648
3,486
8,929
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 39 -
17
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
276,792
213,017
63,144
32,474
Corporation tax recoverable
84,084
Amounts owed by group undertakings
-
-
11,440,035
6,313,630
Other debtors
773,024
836,979
98,840
192,812
Prepayments and accrued income
1,847,093
1,067,041
520,824
151,544
2,980,993
2,117,037
12,122,843
6,690,460
18
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
20
1,108,013
1,295,443
999,996
1,241,380
Obligations under finance leases
21
76,436
82,134
51,398
57,726
Other borrowings
20
11,051
11,051
11,051
11,051
Payments received on account
3,011,197
2,953,889
Trade creditors
1,570,146
1,447,845
288,868
232,580
Amounts owed to group undertakings
4,120,730
3,800,762
Corporation tax payable
11,492
279,786
Other taxation and social security
890,050
839,312
729,849
665,012
Other creditors
1,366,208
605,455
1,135,295
478,761
Accruals and deferred income
725,125
540,208
172,956
86,380
8,769,718
8,055,123
7,510,143
6,573,652
19
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
20
22,538,405
16,216,316
22,434,890
16,137,930
Obligations under finance leases
21
206,455
185,241
186,386
140,433
Other creditors
137,500
137,500
22,744,860
16,539,057
22,621,276
16,415,863
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 40 -
20
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
23,642,970
17,511,759
23,434,886
17,379,310
Bank overdrafts
3,448
Other loans
11,051
11,051
11,051
11,051
23,657,469
17,522,810
23,445,937
17,390,361
Payable within one year
1,119,064
1,306,494
1,011,047
1,252,431
Payable after one year
22,538,405
16,216,316
22,434,890
16,137,930
Included within bank loans is a long-term loan of £23,434,886 (2023: £17,379,310) which is secured by way of a debenture, being a fixed and floating charge over the company and a number of its subsidiaries, as noted in note 27, along with a charge over the properties owned by the group. Interest is charged on the bank loan of 4.75% (2023: 2.15%) over Bank of England base rate.
21
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
115,166
97,866
83,578
66,278
In two to five years
214,296
227,519
192,551
174,186
329,462
325,385
276,129
240,464
Less: future finance charges
(46,571)
(58,010)
(38,345)
(42,305)
282,891
267,375
237,784
198,159
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Obligations under finance leases are secured on the assets to which they relate.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 41 -
22
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
799,040
156,249
Tax losses
(272,847)
(35,616)
Revaluations
4,422,764
4,432,679
Short term timing differences
(2,789)
(4,682)
4,946,168
4,548,630
Liabilities
Liabilities
2024
2023
Company
£
£
Accelerated capital allowances
211,275
(217,838)
Revaluations
4,250,454
4,432,679
4,461,729
4,214,841
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 June 2023
4,548,630
4,214,841
Credit to profit or loss
(13,160)
(26,697)
Credit to other comprehensive income
(192,387)
(182,225)
Other
603,085
455,810
Liability at 31 May 2024
4,946,168
4,461,729
As the group has not finalised its capital expenditure plans for the next financial year, it is not possible to clarify the unwinding of the net deferred tax liability over the next 12 months.
Included in other is the deferred tax of £182,472 acquired during the year on the acquisition of subsidiaries.
23
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
117,751
102,105
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
23
Retirement benefit schemes
(Continued)
- 42 -
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.
24
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
1,073
1,073
1,073
1,073
Ordinary B shares of £1 each
50
50
50
50
Ordinary C shares of £1 each
50
50
50
50
1,173
1,173
1,173
1,173
All shares rank pari passu, with the exception that Ordinary B shares do not hold voting rights and Ordinary C shares do not have any dividend or voting rights.
25
Reserves
Share premium
The excess amount paid on issue of shares compared to the nominal value.
Revaluation reserve
Cumulative revaluation gains and losses in respect of land and buildings, except revaluation gains and losses recognised in profit or loss.
Capital redemption reserve
The nominal value of shares that have been repurchased by the company.
Other reserves
The merger reserve has arisen due to merger relief on a share for share transaction.
Profit and loss reserves
Cumulative profit and loss net of distributions to owners.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 43 -
26
Acquisition of a business
On 2 October 2023 the group acquired 100% percent of the issued capital of Holmes Mill Properties Limited. On 30 November 2023, the group acquired 100% of the issued capital of Wennington Hall Limited.
Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
4,000,000
-
4,000,000
Trade and other receivables
60,340
-
60,340
Cash and cash equivalents
9,185
-
9,185
Borrowings
(2,374,727)
-
(2,374,727)
Trade and other payables
(1,400,141)
-
(1,400,141)
Deferred tax
(182,472)
-
(182,472)
Total identifiable net assets
112,185
-
112,185
Goodwill
(112,185)
Total consideration
-
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
96,819
Loss after tax
(243,845)
27
Financial commitments, guarantees and contingent liabilities
There is an unlimited intercompany debenture, which incorporates a fixed and floating charge over all assets, dated 2 October 2023 given by Bowland Inns & Hotels Limited, The Falcon Manor Hotel Limited, The Shireburn Arms Limited, Eaves Hall Hotel Limited, Emporia (Kirkby Lonsdale) Limited, Emporia Limited, Waddington Arms Limited, Café Emporia Limited, The Shop at The Emporium Limited, James’ Places (Northwest) Limited, Bowland Food Hall Limited, Bowland Beer Hall Limited, Spinning Block Ltd, Holmes Mill Properties Limited, The Assheton Arms Limited, Bowland Enterprises Limited, The Bowland Beer Company Limited and Wennginton Hall Limited. These are all companies from within the group.
Amounts due that are covered by this security totalled £23,434,886 in both the company and the group.
The Falcon Manor Hotel Limited, The Shireburn Arms Limited, Eaves Hall Hotel Limited, Emporia (Kirkby Lonsdale) Limited, Emporia Limited, Waddington Arms Limited, Café Emporia Limited, The Shop at The Emporium Limited, Bowland Food Hall Limited, Bowland Beer Hall Limited, Spinning Block Ltd, James’ Places (Northwest) Limited, Holmes Mill Properties Limited, The Assheton Arms Limited and The Bowland Beer Company Limited, all subsidiary undertakings, have applied the exemption from audit under section 479A of the Companies Act 2006. As such the parent undertaking guarantees all outstanding liabilities to which the companies are subject to at the end of the financial year, until they are satisfied in full, and the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary companies are liable in respect of those liabilities.
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 44 -
28
Operating lease commitments
Lessee
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:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
284,500
281,875
284,500
281,875
Between two and five years
1,139,931
1,138,000
1,139,931
1,138,000
In over five years
26,297,206
26,583,637
26,297,206
26,583,637
27,721,637
28,003,512
27,721,637
28,003,512
Lessor
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
236,658
264,021
876,658
904,021
Between two and five years
733,088
523,229
3,293,088
3,083,229
In over five years
1,362,275
1,476,250
4,316,942
5,070,917
2,332,021
2,263,500
8,486,688
9,058,167
Company amounts include property rentals from the trading entities to the group.
29
Events after the reporting date
On 8 October 2024 the company and group renegotiated the long term loan facility following the breach of the covenants during the year.
30
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2023
£
£
Aggregate compensation
233,348
387,104
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
30
Related party transactions
(Continued)
- 45 -
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
£
£
£
£
Group
Entities under common control
-
13,941
-
87,808
Company
Entities under common control
-
13,014
-
20,847
Rent paid
Management charges sales
2024
2023
2024
2023
£
£
£
£
Group
Entities under common control
-
-
60,000
112,000
Key management personnel
-
1,900
-
-
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2024
2023
£
£
Group
Entities under common control
-
30,548
Key management personnel
760,644
-
Company
Key management personnel
760,644
-
The following amounts were outstanding at the reporting end date:
Amounts due from related parties
2024
2023
Balance
Balance
£
£
Group
Entities under common control
373,857
359,140
Key management personnel
-
132,510
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
30
Related party transactions
(Continued)
- 46 -
Company
Entities under common control
48,057
1,776
Key management personnel
-
92,196
31
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Advance 1
-
132,510
399,332
(531,842)
-
Advance 2
-
-
566,854
(566,854)
-
132,510
966,186
(1,098,696)
-
The advances were unsecured and repayable on demand.
32
Controlling party
The ultimate controlling party of the company and group is Mr J P Warburton by virtue of his majority shareholding.
33
Cash generated from group operations
2024
2023
£
£
(Loss)/profit for the year after tax
(1,452,623)
362,929
Adjustments for:
Taxation charged
452,498
184,903
Finance costs
2,061,624
970,983
Loss on disposal of tangible fixed assets
1,809
1,881
Amortisation and impairment of intangible assets
287,395
259,320
Depreciation and impairment of tangible fixed assets
1,760,957
1,703,440
Other gains and losses
-
(72,292)
Movements in working capital:
Increase in stocks
(95,327)
(32,260)
Increase in debtors
(852,043)
(640,432)
Decrease in creditors
(361,624)
(1,801,382)
Cash generated from operations
1,802,666
937,090
BOWLAND INNS & HOTELS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 47 -
34
Analysis of changes in net debt - group
1 June 2023
Cash flows
Acquisitions and disposals
New finance leases
31 May 2024
£
£
£
£
£
Cash at bank and in hand
589,336
(148,872)
9,185
-
449,649
Bank overdrafts
(3,448)
-
-
(3,448)
589,336
(152,320)
9,185
-
446,201
Borrowings excluding overdrafts
(17,522,810)
(6,131,211)
-
-
(23,654,021)
Obligations under finance leases
(267,375)
84,036
-
(99,552)
(282,891)
(17,200,849)
(6,199,495)
9,185
(99,552)
(23,490,711)
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