Z Hotels OS Ltd
Financial Statements
For the year ended 31 March 2024
Pages for Filing with Registrar
Company Registration No. 08425071 (England and Wales)
Z Hotels OS Ltd
Company Information
Directors
B King
R Meehan
P Leighton
Company number
08425071
Registered office
53-59 Chandos Place
London
WC2N 4HS
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Z Hotels OS Ltd
Contents
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 11
Z Hotels OS Ltd
Balance Sheet
As at 31 March 2024
Page 1
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
3
13,727,954
15,296,030
Current assets
Stock
4
55,271
51,153
Debtors
5
2,448,608
3,704,517
Cash at bank and in hand
24,788
14,636
2,528,667
3,770,306
Creditors: amounts falling due within one year
6
(6,874,272)
(7,486,541)
Net current liabilities
(4,345,605)
(3,716,235)
Total assets less current liabilities
9,382,349
11,579,795
Provisions for liabilities
7
(1,907,542)
(2,808,970)
Net assets
7,474,807
8,770,825
Capital and reserves
Called up share capital
8
2,450,500
2,450,500
Revaluation reserve
6,352,707
7,931,561
Profit and loss reserves
(1,328,400)
(1,611,236)
Total equity
7,474,807
8,770,825
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 28 February 2025 and are signed on its behalf by:
R Meehan
Director
Company Registration No. 08425071
Z Hotels OS Ltd
Statement of Changes in Equity
For the year ended 31 March 2024
Page 2
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2022
2,450,500
8,174,414
(2,294,695)
8,330,219
Year ended 31 March 2023:
Profit for the year
-
-
136,978
136,978
Other comprehensive income:
Revaluation of tangible fixed assets
-
303,628
-
303,628
Total comprehensive income for the year
-
303,628
136,978
440,606
Transfers
-
(546,481)
546,481
-
Balance at 31 March 2023
2,450,500
7,931,561
(1,611,236)
8,770,825
Year ended 31 March 2024:
Profit for the year
-
-
348,596
348,596
Other comprehensive income:
Revaluation of tangible fixed assets
-
(1,644,614)
-
(1,644,614)
Total comprehensive income for the year
-
(1,644,614)
348,596
(1,296,018)
Transfers
-
65,760
(65,760)
-
Balance at 31 March 2024
2,450,500
6,352,707
(1,328,400)
7,474,807
Z Hotels OS Ltd
Notes to the Financial Statements
For the year ended 31 March 2024
Page 3
1
Accounting policies
Company information
Z Hotels OS Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 53-59 Chandos Place, London, WC2N 4HS.
1.1
Accounting convention
These financial statements have been prepared in accordance with Section 1A of FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.
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 leasehold properties at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The Company made a profit for the year of £348,596 (2023: £136,978) and had net assets at the reporting date of £7,474,807 (2023: £8,770,825).
The Company and Group has continued to trade at exceptionally high levels of occupancy with the annual rate of occupancy running at 99% at the balance sheet date. ARR continues on a growth trajectory and measures to control costs have taken an annualised £2m out of the cost base. Upgrades to core systems and revenue management improvements are contributing towards increases in ARR, whilst discussions over refinancing and asset optimisation are progressing positively.
The Group has loans totalling £104.1m of which £4.3m is repayable on demand at the balance sheet date and £82m is repayable within 12 months of the date of approval of these financial statements. Of the remaining amounts, £14.3m is repayable in May 2028 and £4m repayable in July 2027. The Group has obtained a letter confirming that £4m of the amounts repayable on demand will not be recalled within at least 12 months of the date of approval of these financial statements.
The directors have drawn up cash flow forecasts for the Group which extend to March 2026 to assess its ability to continue as a going concern. Should the Group loans of £86.3m be called for repayment, there is unlikely to be sufficient headroom available without either refinancing the loans or renegotiating the terms and conditions of the loans.
These factors indicate the existence of material uncertainties which may cast significant doubt on the Group and therefore the Company’s ability to continue as a going concern. While there can be no certainty over the assumptions made in preparing the cash flow forecast, the directors have prepared the financial statements on going concern basis as they have a reasonable expectation that, if required, either refinancing will be available to the group or that the terms of the group’s loans can be renegotiated such that repayments can be managed in a reasonable way.
The financial statements do not contain any adjustments that would arise if the company were unable to continue as a going concern.
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
1
Accounting policies
(Continued)
Page 4
1.3
Turnover
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and revenue can be reliably measured.
Turnover comprises revenue recognised by the company in respect of goods and services supplied during the year, exclusive of Value Added Tax and trade discounts. Turnover in respect of accommodation is recognised at the point of the customers' stay whilst other sales, including food and beverage revenues, are recognised at the point of purchase. Payments made at the time of booking are recognised in creditors and released to turnover during the customer's stay.
1.4
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.
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:
Leasehold land and buildings
Period of the lease
Fixtures and fittings
3 years straight line
Computer equipment
3 years straight line
Food and beverage equipment
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
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.
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
1
Accounting policies
(Continued)
Page 5
1.6
Stock
Stock is stated at the lower of cost and estimated selling price less costs to complete and sell. Where stock is held for distribution at no consideration it is measured at the lower of cost and replacement cost.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stock 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.
1.7
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company only has basic financial instruments measured at amortised cost, with no financial instruments classified as other or basic instruments at fair value.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 when the company has 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.
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
1
Accounting policies
(Continued)
Page 6
1.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Valuation of leasehold properties
The leasehold properties are held at valuation which the directors reassess at each year end for any changes in value, guided by an external valuation obtained from an external firm of professional valuers.
Depreciation of tangible fixed assets
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 7
3
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Computer equipment
Food and beverage equipment
Total
£
£
£
£
£
Cost or valuation
At 1 April 2023
15,000,000
942,873
85,045
27,228
16,055,146
Additions
665,614
413,406
9,214
1,088,234
Revaluation
(2,269,614)
(2,269,614)
At 31 March 2024
13,396,000
1,356,279
94,259
27,228
14,873,766
Depreciation and impairment
At 1 April 2023
686,508
45,380
27,228
759,116
Depreciation charged in the year
625,000
356,528
30,168
1,011,696
Revaluation
(625,000)
(625,000)
At 31 March 2024
1,043,036
75,548
27,228
1,145,812
Carrying amount
At 31 March 2024
13,396,000
313,243
18,711
13,727,954
At 31 March 2023
15,000,000
256,365
39,665
15,296,030
The leasehold property was valued on an open market basis by the directors as at 31 March 2024, guided by an external valuation obtained from an external firm of professional valuers in March 2023.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2024
2023
£
£
Cost
6,805,186
5,732,422
Accumulated depreciation
(1,586,596)
(1,400,830)
Carrying value
5,218,590
4,331,592
4
Stock
2024
2023
£
£
Stock
55,271
51,153
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 8
5
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
773
25,282
Amounts owed by group undertakings
909,237
2,124,396
Other debtors
191,022
75,383
Prepayments and accrued income
744,156
782,083
1,845,188
3,007,144
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset
603,420
697,373
Total debtors
2,448,608
3,704,517
6
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
759,239
816,973
Amounts owed to group undertakings
3,744,160
4,786,447
Corporation tax
150
Other taxation and social security
371,406
326,370
Other creditors
1,089,434
1,164,601
Accruals and deferred income
910,033
392,000
6,874,272
7,486,541
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 9
7
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Accelerated capital allowances
249,243
301,578
-
-
Tax losses
-
-
603,420
697,373
Revaluations
1,658,299
2,507,392
-
-
1,907,542
2,808,970
603,420
697,373
2024
Movements in the year:
£
Liability at 1 April 2023
2,111,597
Credit to profit or loss
(807,475)
Liability at 31 March 2024
1,304,122
The deferred tax liability principally arises on the difference between the valuation of the company's property and its acquisition cost. The directors consider the likelihood of this tax liability crystallising to be remote because of the significant tax losses available within the group to offset any charge arising.
8
Called up share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
500 Ordinary shares of £1 each
500
500
490 Ordinary B shares of £5,000 each
2,450,000
2,450,000
2,450,500
2,450,500
The rights of the Ordinary shares of £1 each and the Ordinary B shares of £5,000 each rank pari passu in all respects except for the following:
The Ordinary B shares of £5,000 each did not have voting rights up to 30 August 2023 when each holder of the Ordinary B shares of £5,000 became entitled to one vote per share.
In addition, the Ordinary B shares of £5,000 each were not entitled to any dividends before 30 August 2018.
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 10
9
Financial commitments
A composite cross guarantee structure exists between Z Hotels Trading WB Limited, Z Hotels Holborn Ltd, Z Hotels ZHT Ltd, Z CHA Holdco Ltd, Z Propco II Ltd, Z Hotels Trafalgar Ltd, Z Hotels Green Mgt Ltd, Z Hotels OCS Limited, Z Hotels OS Limited, Z Hotels LBS Limited, Z Hotels Bath Limited, Z Hotels Operations Limited, Z Hotels Management Contracts Limited, Z Hotels Operations Ltd and Z Hotels Management Limited. The aggregate amount outstanding under these agreements at the balance sheet date was £14,250,000 (2023: £4,056,549).
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Katherine Edwards
Statutory Auditor:
Moore Kingston Smith LLP
11
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2024
2023
£
£
Within one year
2,225,508
2,065,483
Between two and five years
9,249,481
8,994,420
In over five years
56,982,532
59,631,253
68,457,521
70,691,156
12
Related party transactions
As a wholly owned subsidiary of Z Group Topco Ltd, advantage has been taken of the exemption in FRS 102 (section 33) "Related Party Disclosure" in respect of the disclosures of transactions and balances with other wholly owned group undertakings as consolidated financial statements including the company are prepared.
Included within creditors is an amount of £563,268 (2023: £1,224) due to companies under common control. During the year the company purchased assets amounting to £1,018,947 (2023: £255,370) from companies under common control.
Included within debtors is an amount of £nil (2023: £1,568) due from companies under common control.
No key management received remuneration from the company during the year or the prior year.
Z Hotels OS Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 11
13
Parent company
The immediate parent company is Z Hotels Trading WB Limited. The ultimate controlling party is Z Group Topco Ltd.
The smallest and largest group of undertakings for which group accounts have been drawn up is headed by Z Group Topco Ltd. Copies can be obtained from Companies House.
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