Z Propco II Ltd
Financial Statements
For the year ended 31 March 2024
Pages for Filing with Registrar
Company Registration No. 10734509 (England and Wales)
Z Propco II Ltd
Contents
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 10
Z Propco II Ltd
Balance Sheet
As at 31 March 2024
Page 1
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Investment properties
5
37,144,669
37,142,857
Current assets
Debtors
6
7,269,109
7,592,848
Cash at bank and in hand
10,806
1,729
7,279,915
7,594,577
Creditors: amounts falling due within one year
7
(38,118,850)
(37,633,103)
Net current liabilities
(30,838,935)
(30,038,526)
Total assets less current liabilities
6,305,734
7,104,331
Provisions for liabilities
(2,764,631)
(2,603,828)
Net assets
3,541,103
4,500,503
Capital and reserves
Called up share capital
9
100
100
Profit and loss reserves
3,541,003
4,500,403
Total equity
3,541,103
4,500,503
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. 10734509
Z Propco II Ltd
Statement of Changes in Equity
For the year ended 31 March 2024
Page 2
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 March 2023:
Balance at 1 April 2022
100
(4,090,737)
(4,090,637)
Effect of prior year restatements
-
9,003,214
9,003,214
As restated
100
4,912,477
4,912,577
Year ended 31 March 2023:
Loss and total comprehensive income for the year
-
(412,074)
(412,074)
Balance at 31 March 2023
100
4,500,403
4,500,503
Year ended 31 March 2024:
Loss and total comprehensive income for the year
-
(959,400)
(959,400)
Balance at 31 March 2024
100
3,541,003
3,541,103
Z Propco II Ltd
Notes to the Financial Statements
For the year ended 31 March 2024
Page 3
1
Accounting policies
Company information
Z Propco II Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 53-59 Chandos Place, London, United Kingdom, 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 investment properties. The principal accounting policies adopted are set out below.
1.2
Going concern
The Company made a loss for the year of £959,400 (2023: restated loss of £412,074) and had net assets at the reporting date of £3,541,103 (2023: restated £4,500,503). true
The Group, of which this Company, 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's 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 a 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.
1.3
Turnover
Turnover is recognised at the fair value of the consideration receivable for rental income provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Z Propco II Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
1
Accounting policies
(Continued)
Page 4
1.4
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.5
Cash at bank and in hand
Cash at bank and in hand are basic financial assets and include cash in hand.
1.6
Financial instruments
The company only has financial instruments classified as basic and measured at amortised cost. The company has no financial instruments that are classified as 'other' or financial instruments measured at fair value.
1.7
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.
1.8
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.
1.9
Leases
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Z Propco II Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 5
2
Change in accounting policy
The company has made a change in accounting policy with regards to the treatment of the owned property being leased to a group company. The property was previously carried as a leasehold property. The directors believe this presentation is more appropriate to reflect this company holding the property for investment purposes by way of receiving rental income. A prior period restatement has been posted to reflect the reclassification at 31 March 2023 and its impact on equity.
3
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 investment property
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.
4
Employees
The average monthly number of persons (excluding directors) employed by the company during the year was:
2024
2023
Number
Number
Total
5
Investment property
2024
as restated
£
Fair value
At 1 April 2023
37,142,857
Additions
1,812
At 31 March 2024
37,144,669
Z Propco II Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
5
Investment property
(Continued)
Page 6
The fair value of the investment property has been arrived at on the basis of a valuation carried out at March 2024. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
6
Debtors
2024
2023
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
6,123,183
6,355,462
Prepayments and accrued income
1,145,926
1,174,815
7,269,109
7,530,277
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset
62,571
Total debtors
7,269,109
7,592,848
7
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
21,109
27,865
Amounts owed to group undertakings
37,824,906
37,302,698
Taxation and social security
268,085
270,096
Accruals and deferred income
4,750
32,444
38,118,850
37,633,103
Z Propco II Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 7
8
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:
£
£
£
£
Tax losses
-
-
-
62,571
Revaluations
2,764,631
2,603,828
-
-
2,764,631
2,603,828
-
62,571
2024
Movements in the year:
£
Liability at 1 April 2023
2,541,257
Charge to profit or loss
223,374
Liability at 31 March 2024
2,764,631
The deferred tax asset set out above is expected to reverse in more than 12 months and relates to the revaluation of tangible fixed assets.
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.
9
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
10
Operating lease commitments
Lessor
Z Propco II Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
10
Operating lease commitments
(Continued)
Page 8
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2024
2023
£
£
Within one year
1,300,000
1,300,000
Between two and five years
5,200,000
5,200,000
In over five years
45,066,667
46,366,667
51,566,667
52,866,667
11
Financial commitments, guarantees and contingent liabilities
A composite cross guarantee structure exists between Z CHA HoldCo Limited, Z Hotels Trafalgar Limited, Z OpCo Limited, Z PropCo II Limited, Z Hotels Green MGT Limited and Z Chandos Place Limited. The aggregate amount outstanding under these agreements at the balance sheet date was £38,782,897 (2023: £39,604,243).
Z Propco II Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
Page 9
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.
13
Controlling party
The immediate parent company is Z CHA Holdco limited. The ultimate parent and 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.
14
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.
The senior statutory auditor was Katherine Edwards.
The auditor was Moore Kingston Smith LLP.
15
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Mar 2023
£
£
£
Fixed assets
Tangible assets
34,666,666
(34,666,666)
Investment properties
-
37,142,857
37,142,857
Provisions for liabilities
Deferred tax
(1,984,780)
(619,048)
(2,603,828)
Net assets
2,643,360
1,857,143
4,500,503
Capital and reserves
Revaluation reserve
7,590,463
(7,590,463)
Profit and loss reserves
(4,947,203)
9,447,606
4,500,403
Total equity
2,643,360
1,857,143
4,500,503
Z Propco II Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 March 2024
15
Prior period adjustment
(Continued)
Page 10
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 March 2023
£
£
£
Administrative expenses
(831,146)
825,397
(5,749)
Taxation
441,101
(619,048)
(177,947)
Loss for the financial period
(618,423)
206,349
(412,074)
The prior year adjustment relates to the reclassification of the property from tangible fixed assets to investment property in order to correctly reflect the substance of the property and its use for the company. This adjustment has resulted in the reversal of depreciation previously charged on the property and reclassification of the revaluation reserve previously recognised on fair value gains in valuation of the property to the profit and loss reserve.
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