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Registration number: 10443180

Fortress Operations Limited

Annual Report and Financial Statements

for the Year Ended 31 March 2024

 

Fortress Operations Limited

Contents

Company Information

1

Strategic Report

2 to 5

Directors' Report

6 to 10

Statement of Directors' Responsibilities

11

Independent Auditor's Report

12 to 15

Profit and Loss Account

16

Balance Sheet

17

Statement of Changes in Equity

18

Statement of Cash Flows

19

Notes to the Financial Statements

20 to 32

 

Fortress Operations Limited

Company Information

Directors

R P Forte

S L Forte

Registered office

32 High Street
Wall Heath
Kingswinford
West Midlands
DY6 0HB

Solicitors

Talbots Law Ltd
Morgan House
25-27 Hagley Road
Stourbridge
West Midlands
DY8 1QH

Accountants

Munslows Accountants Ltd
32 High Street
Wall Heath
Kingswinford
West Midlands
DY6 0HB

Auditors

Manex Accountants Ltd
9 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RD

 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2024

The directors present their strategic report for the year ended 31 March 2024.

Principal activity

The principal activity of the company is a franchise operator of a group of McDonald's restaurants.

Fair review of the business

The results for the year and the financial position at the end of the year are shown in the annexed financial statements. The directors aim to present a fair review of the development and performance of the company during the year under review and of its position at the end of the year.

The principal activity of the company during the year continued to be a franchise operator of a group of McDonald’s restaurants.

The company continued its investment in the McDonald’s restaurant refurbishment project, with six restaurants undergoing the “Convenience of the Future” and “Re-image” upgrade programmes, which aim to increase both choice and speed of service when ordering meals. In addition, digital sales via McDelivery, mobile apps and self-order kiosks have continued to increase as the company seeks to make the food ordering process ever more customer friendly. The company has continued to invest in the business and in the development and training of its employees, as well as continued investment in IT and store equipment.

As an operator of a group of McDonald's restaurants the directors consider the company's key performance indicators to be turnover and gross profit. Turnover for the year increased by 9%. Although food and labour costs increased significantly during the year, gross profit increased by 19% compared to the previous year. In common with many other similar businesses and industries, fuel and utility costs also increased, although the company still recorded a net profit before taxation of £2,647,568 for the year, compared to a loss of £2,669,537 in the previous year.

During the year one of the company's restaurants suffered extensive building damage due to a fire in an adjacent property which necessitated its closure whilst it was being completely refurbished. The company received an insurance claim to meet the costs of the reinstatement.

The directors believe that the trading environment in which the company operates will continue to be challenging but remain optimistic regarding future trading and are committed to increasing both future turnover and profitability and to continuing the company’s reinvestment program.

 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2024

Principal risks and uncertainties

The company operates in a highly competitive market with high levels of price sensitivity. Consumer behaviour can impact the company's turnover and profitability. The company continually assesses these risks and mitigates them by adopting a policy of constantly reviewing its pricing strategy with ongoing market research.

The company remains exposed to periods of food cost inflation together with the variability of commodity prices, both of which impact on profitability and which have been significantly affected by the war in Ukraine. The company continually assesses any risks identified, with the aim of mitigating the threats these may have on the company's operations and profitability. The company's supply chain is closely overseen and supported by McDonald's, who endeavour to negotiate effectively on behalf of all franchisees to ensure better purchasing terms. This helps as much as possible to protect the company from risks associated with fluctuating food costs.

The company is also inherently exposed to pressures within the labour market and to wage cost inflation. The company mitigates this risk by a policy of adopting remuneration and benefits packages designed to be competitive within the market as well as ensuring full compliance with labour market regulations, with employment policies to allow fulfilling career opportunities for all employees.

The company’s operations demand a high level of compliance within a wide range of regulatory requirements, in particular –
- health and safety
- hygiene procedures
- employment laws
- licensing

The above, in common with various other areas, are monitored in detail by McDonald’s with assistance being given to all franchisees to help meet the various requirements.

By its very nature, the quick service restaurant market is extremely competitive, with large numbers of companies operating in the sector. In order to remain at the forefront of the industry, McDonald’s have developed dedicated teams whose focus is to ensure that they remain the leading brand in the market.



 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2024

Section 172(1) statement

The success of the Company is the driving factor behind all decisions made by the Director. Decision making processes are structured to enable the Director to evaluate the merit of proposed business activities and the likely consequences of decisions taken over the short, medium and long term. The director remains mindful that any strategic decisions taken can have long term implications for the business and its stakeholders, and these implications are carefully assessed. An example of this is in decisions taken relating to capital investment in terms of possible new store acquisitions and equipment upgrades.

Our people are key to our success. That is why we endeavour to create jobs and opportunities for all our people, regardless of gender, age, or life stage that enhance their work experience. Understanding how our people feel about McDonald’s is vital. The director takes active steps to ensure that the suggestions, views and interests of the workforce are incorporated and considered as part of any decision-making process, helping to ensure that our employees are given the right support to help achieve their potential. We have developed various employee communication channels such as Workplace by Meta, MyStuff and the McDonald’s UK Intranet, which provide weekly operations updates, employee assistance programs and a means for employees to share ideas and feedback. We also conduct regular surveys into our employee’s job satisfaction and how they feel about their role in the company. We encourage and provide access to online learning and development, as well as providing our people with a mobile friendly platform to manage their own data, holidays, time off and access to view their wage slips.

Our customers are the reason for our existence and we therefore strive to provide high quality food with superior service in a clean and welcoming environment, all at an exceptional value. Long-term commitment to supply McDonald’s UK, has enabled our suppliers to grow with us and drive positive change within their own businesses.

The director carefully considers the impact of the business on communities and the environments in which the company operates. We arrange regular litter collections in the local area around our restaurants. Recycling units are installed around our restaurants and our paper cups are sent to specialist recycling centres in the UK. We endeavour to help our customers build communities, support charitable organisations, and use our size, scope and resources to help make local communities and the environment a better place.

In all our activities the director requires that employees and suppliers conduct business with the highest ethical and professional standards by adhering to our Standards of Business Conduct set by McDonald’s Corporation.

Engagement with employees

Our workforce is our most valuable asset and is one of the main reasons for the success of the company and brand. The company invests strongly in training, coaching, and skills acquisition. The personal development and improvement of our employees is a key aim of the Company’s strategy. We strive to be a responsible employer in our approach to the pay and benefits of employees and the health, safety and wellbeing of our employees is one of the primary considerations in the way we do business.

Engagement with suppliers, customers and other relationships

As a company we endeavour to build long-term commitments with our suppliers which has enabled them to grow with us and drive positive change within their own businesses. The company recognises that relationships with suppliers are important to its long-term success and is briefed on supplier feedback and issues on a regular basis.

We also endeavour to forge positive relationships with our customers by providing high quality food and an excellent service in a clean and welcoming environment at a competitive price.

 

Fortress Operations Limited

Strategic Report for the Year Ended 31 March 2024

Approved and authorised by the Board on 14 March 2025 and signed on its behalf by:
 

.........................................
R P Forte
Director

 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2024

The directors present their report and the financial statements for the year ended 31 March 2024.

Directors of the company

The directors who held office during the year were as follows:

R P Forte

S L Forte

Financial instruments

Objectives and policies

The company’s principle financial instruments comprise bank balances, trade creditors and bank loans. The main purpose of these instruments is to finance the company’s operations and to ensure the smooth running of the company’s operations.

Due to the nature of the financial instruments used by the company there is no exposure to price risk.

In respect of bank balances, the liquidity risk is managed by maintaining a balance to ensure the continuity of trading, through the use of detailed cash flow analysis, forecasts and projections which are regularly updated. In addition, the company has access to overdraft facilities from its bankers which are repayable on demand, should the business require them.

In respect of bank loans, these are provided by financial institutions. The interest rate on these loans is variable, although usually the monthly repayments are fixed. The company manages the liquidity risk by ensuring that there are sufficient funds to meet the payments through the constant review and updating of cashflow forecasts. The interest rate is managed through regular reviews of current and expected future interest rates.

Trade creditor liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Price risk, credit risk, liquidity risk and cash flow risk

The main risks arising from the company’s financial instruments are interest risk and liquidity risk. The board reviews and agrees policies for managing each of these risks as summarised below –

Interest rate risk – the company’s exposure to market risk for changes in interest rates is limited to bank loans. Additional requirements for medium to long term debt are reviewed by the directors based on the company’s forecast requirements

Liquidity risk – the company’s objective is to maintain a balance between continuity of funding and flexibility, by the utilisation of cash and bank loans.


 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2024

Employment of disabled persons

The company operates an equal opportunities policy in all areas of recruitment and seeks to offer suitable work and training wherever practicable to persons with disabilities. The policy of the company is to ensure that disabled applicants are given full and fair consideration having regards to their particular aptitudes and abilities. Existing disabled employees are given equal access to appropriate training, career development and promotion opportunities within the company. In the event of employees becoming disabled while in the employment of the company, all reasonable means are explored to achieve retention in employment in the same or an alternative capacity.

Employee involvement

The company aims to promote a working environment free from harassment, victimisation, bullying and discrimination. The company regards all employees as members of a team, where opinions are valued, and everyone is regarded as equal in status and treated with fairness and respect.

The company's recruitment procedures are intended to ensure that employees are selected, promoted, and treated according to their ability and that everyone has an equal opportunity to receive training and development.

The company communicates regularly with all employees on matters relating to its performance, with employees encouraged to contribute to the decision-making process through regular staff meetings and quarterly surveys. In addition there are bulletin boards in each restaurant and Workplace by Meta is used to communicate memoranda relating to company policy. There is also an online portal known as MyStuff, which contains news and information for McDonald's employees.

Streamlined Energy and Carbon Reporting

In line with the government's streamlined energy and carbon reporting requirements we are required to report our organisation's carbon emissions for the financial year. As data is not available for the year ended 31st March 2024, we have reported instead for the period 1st January 2023 to 31st December 2023.

The McDonald’s franchises attributed to Fortress Operations Ltd greenhouse gas emissions, reportable under SECR from 1st January 2023 – 31st December 2023, were 4,188 tonnes of carbon dioxide equivalent (tCO2e). These include emissions associated with electricity and natural gas consumption and transport consumption. The number of sites contributing to this report has increased from 30 in 2022 to 31 in 2023. The company’s total greenhouse gas emissions increased by 20% compared to revised 2022 figures, because purchased electricity energy consumption (kWh) has increased by 6% and natural gas energy consumption (kWh) has increased by 410%, from 2022 to 2023.

Notable factors that could have contributed to the movement in emissions are as follows:
• Increase in productivity (11% increase in revenue) which translated to an increase in total energy consumption.
• The number of sites reporting on their emissions changed from 2022 to 2023.
• Revision of methodology to align consumption to McDonald’s AI Track energy consumption figures for FY 2023.
• The carbon intensity of the grid electricity increased in 2023 for the first time in a few years, by 7%.
• The methodology for calculating electricity emissions was adjusted to reflect good practice for the inclusion of electrical transport and distribution of losses (T&D losses) (link) under the SECR regulations.

 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2024

Risk management

The following approaches to energy efficiency are being undertaken by the company and will be expanded over the following years:

- Systematic replacement of boilers on fail with ASHP-augmented hot water systems
- Replacement of one gas HVAC system with ASHP technology
- Participation with McDonald’s energy reduction test including Solar PV

Metrics and targets

As per SECR guidelines, the company's emission intensity is calculated as the ratio of annual emissions (tCO2e) to the turnover (in £million). For FY 2023, this resulted in an emission intensity of 30.11 tCO2e per £million, which represents a 8% increase compared to the previous year (27.85 tCO2e per £million).

Energy efficiency initiatives -
The company has continued to seek and progress energy efficiency measures, within both the work processes and the use of work equipment. McDonald’s are actively taking part in mandatory compliance schemes, such as the Energy Savings Opportunity Scheme, TCFD and considering the implementation of recommendations outlined in the ESOS audit reports.

The following approaches to energy efficiency are being undertaken by McDonald’s Restaurants Limited and will be expanded over the following years:

- Baselining resource use by bringing online increased effort to collate the data on a range of resources
- Implementation Strategy being developed and deployed to create significant energy and carbon reduction
- Engagement Strategy with the Supply chain to reduce the associated emissions further
- Developing Metrics and Targets to reflect performance across our portfolio at the most granular level and more in depth data tracking of the use of resources
- Governance including Board oversight, culture, training and incentives being developed

McDonalds uses annual turnover (tCO2e/£) to normalise and compare its emissions over time. McDonalds also uses an average cheque per site for an intensity metric figure.

 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2024

Emissions and energy consumption

Summary of greenhouse gas emissions and energy consumption for the year ended 31 March 2024:

Emissions source

2022

2023

% share

% change

Electricity

3,364

3,493

83%

4%

Electricity

302

7%

100%

Natural Gas

68

347

8%

410%

Transportation - direct

12

6

15%

-50%

Transportation - indirect

35

40

1%

14%

Total Emissions (tCO2e)

3,497

4,188

100%

20%

Turnover (£m)

125

139

11%

Intensity (tCO2e per £m)

27.85

30.11

8%

Energy consumption (kWh) -

Electricity

15,935,701

16,867,155,

89%

6%

Natural Gas

372,228

1,896,789

10%

410%

Transportation - direct

48,372

24,286

0.1%

-50%

Transporation - indirect

138,459

164,495

0.9%

19%

Total

16,494,760

18,952,725

100%

15%

Future developments

Trading conditions are expected to remain competitive. The company does however anticipate continued expansion and increased revenues, both through increased turnover and profitability and by the acquisition of further restaurants.


The directors are constantly assessing potential risks to the business and the impact these may have on going concern. Although it is not possible to estimate with any certainty the overall impact these risks may have on the business, the directors are confident that the company is in a strong position to overcome any unforeseen issues that may arise.


The company is committed to continuing to invest in its restaurants to upgrade both their appearance and the equipment used within them, in order to improve both the customers and employees experience.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

 

Fortress Operations Limited

Directors' Report for the Year Ended 31 March 2024

Reappointment of auditors

The auditors Manex Accountants Ltd are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 14 March 2025 and signed on its behalf by:
 

.........................................
R P Forte
Director

 

Fortress Operations Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006 and in accordance with FRS 102. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

Opinion

We have audited the financial statements of Fortress Operations Limited (the 'company') for the year ended 31 March 2024, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of 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 company's affairs as at 31 March 2024 and of its profit 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the 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 Statement of Directors' Responsibilities [set out on page 11], 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 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

We obtained an understanding of the legal and regulatory frameworks applicable to the company and the industry in which it operates. We determined that the following laws and regulations were most significant: The Companies Act 2006/FRS 102, Employment Law and Waste, Health and Safety. We enquired of management and those responsible for legal and compliance procedures to obtain an understanding of how the company is complying with those legal and regulatory frameworks and whether they had any knowledge of actual or suspected fraud. We corroborated the results of our enquiries through our discussions with the directors and management. We did not identify any matters relating to non-compliance with laws and regulations or matters in relation to fraud.

In assessing the potential risks of material misstatements, we obtained an understanding of the company’s operations, including its objectives and strategies to understand the expected financial statement disclosures and business risks that may result in risks of material misstatement;

In assessing the appropriateness of the collective competence and capabilities of the engagement team the engagement partner considered the engagement team’s :
 Understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation,
 The specialist skills required and
 Knowledge of the industry in which the client operates.

We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
 Assessing the design effectiveness of controls management has in place to prevent and detect fraud;
 Challenging assumptions and judgements made by management in its significant accounting estimates;
 Identifying and testing journal entries, in particular manual journal entries made at year end for financial statement preparation; and
 Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Fortress Operations Limited

Independent Auditor's Report to the Members of Fortress Operations Limited

......................................
Clinton Meehan BSc FCA (Senior Statutory Auditor)
For and on behalf of Manex Accountants Ltd, Statutory Auditor

9 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RD

14 March 2025

 

Fortress Operations Limited

Profit and Loss Account for the Year Ended 31 March 2024

Note

2024
£

2023
£

Turnover

3

142,003,836

130,145,204

Cost of sales

 

(80,948,984)

(79,008,165)

Gross profit

 

61,054,852

51,137,039

Administrative expenses

 

(58,712,477)

(53,346,131)

Other operating income

4

1,509,585

9,312

Operating profit/(loss)

6

3,851,960

(2,199,780)

Interest payable and similar expenses

7

(1,204,392)

(469,757)

Profit/(loss) before tax

 

2,647,568

(2,669,537)

Tax on profit/(loss)

11

(1,014,370)

452,781

Profit/(loss) for the financial year

 

1,633,198

(2,216,756)

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

Fortress Operations Limited

(Registration number: 10443180)
Balance Sheet as at 31 March 2024

Note

2024
£

2023
£

Fixed assets

 

Intangible assets

12

18,539,759

15,283,335

Tangible assets

13

12,091,266

8,918,454

Other financial assets

14

38,750

37,500

 

30,669,775

24,239,289

Current assets

 

Stocks

15

609,300

663,683

Debtors

16

1,970,656

970,014

Cash at bank and in hand

17

8,427,701

4,774,720

 

11,007,657

6,408,417

Creditors: Amounts falling due within one year

18

(13,584,092)

(11,148,952)

Net current liabilities

 

(2,576,435)

(4,740,535)

Total assets less current liabilities

 

28,093,340

19,498,754

Creditors: Amounts falling due after more than one year

18

(18,897,561)

(12,483,876)

Provisions for liabilities

19

(1,728,861)

(714,491)

Net assets

 

7,466,918

6,300,387

Capital and reserves

 

Called up share capital

21

932

932

Retained earnings

7,465,986

6,299,455

Shareholders' funds

 

7,466,918

6,300,387

Approved and authorised by the Board on 14 March 2025 and signed on its behalf by:
 

.........................................
R P Forte
Director

 

Fortress Operations Limited

Statement of Changes in Equity for the Year Ended 31 March 2024

Share capital
£

Retained earnings
£

Total
£

At 1 April 2023

932

6,299,455

6,300,387

Profit for the year

-

1,633,198

1,633,198

Dividends

-

(466,667)

(466,667)

At 31 March 2024

932

7,465,986

7,466,918

Share capital
£

Retained earnings
£

Total
£

At 1 April 2022

932

8,968,705

8,969,637

Loss for the year

-

(2,216,756)

(2,216,756)

Dividends

-

(452,494)

(452,494)

At 31 March 2023

932

6,299,455

6,300,387

 

Fortress Operations Limited

Statement of Cash Flows for the Year Ended 31 March 2024

Note

2024
£

2023
£

Cash flows from operating activities

Profit/(loss) for the year

 

1,633,198

(2,216,756)

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

6

4,003,056

3,538,630

Loss on disposal of tangible assets

5

46,537

8,661

Finance costs

7

1,204,392

469,757

Income tax expense

11

1,014,370

(452,781)

 

7,901,553

1,347,511

Working capital adjustments

 

Decrease/(increase) in stocks

15

54,383

(127,558)

(Increase)/decrease in trade debtors

16

(850,642)

57,618

Increase in trade creditors

18

1,262,447

1,951,438

Cash generated from operations

 

8,367,741

3,229,009

Income taxes paid

11

(150,000)

(920,599)

Net cash flow from operating activities

 

8,217,741

2,308,410

Cash flows from investing activities

 

Acquisitions of tangible assets

(6,077,917)

(1,142,241)

Acquisition of intangible assets

12

(4,400,912)

(55,782)

Acquisition of financial investments other than trading investments

 

(1,250)

-

Net cash flows from investing activities

 

(10,480,079)

(1,198,023)

Cash flows from financing activities

 

Interest paid

7

(1,204,392)

(469,757)

Proceeds from bank borrowing draw downs

 

7,586,378

(3,536,733)

Dividends paid

24

(466,667)

(452,494)

Net cash flows from financing activities

 

5,915,319

(4,458,984)

Net increase/(decrease) in cash and cash equivalents

 

3,652,981

(3,348,597)

Cash and cash equivalents at 1 April

 

4,774,720

8,123,317

Cash and cash equivalents at 31 March

17

8,427,701

4,774,720

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

1

General information

The company is a private company limited by share capital, incorporated in England.

The address of its registered office is:
32 High Street
Wall Heath
Kingswinford
West Midlands
DY6 0HB

These financial statements were authorised for issue by the Board on 14 March 2025.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

Judgements

In the application of the company's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 of the revision and future periods if the revision affects both current and future periods.

The following are the critical judgements and key sources of estimation uncertainty that the directors have made in the process of applying the company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Income taxes

The company is subject to the corporation tax laws of the United Kingdom. These laws are complex and subject to different interpretations by taxpayers and tax authorities. When establishing corporation tax provisions, the directors make a number of judgments and interpretations about the application and interaction of these laws. Changes in these tax laws or in their interpretation could affect the company's effective tax rate and the results of operations in a given period

Revenue recognition

The whole of the turnover is attributable to the principle activity of the company wholly undertaken in the United Kingdom.

Tax

The tax expense for the period comprises deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant and equipment

between 3 and 7 years straight line

Computer equipment

between 3 and 4 years straight line

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

Franchise rights

Franchise rights are amortised over there useful life,which shall not exceed twenty years if a reliable estimate of the useful life cannot be made.

Intangible assets

Franchise rights arising on the acquisition of an entity represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Franchise rights are initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Franchise rights are held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.
Licences have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Franchise rights

20 years straight line

Licence fees

Straight line over the remaining life of the licence

Stamp duty

Straight line over the shorter of the remaining life of asset or 20 years

Investments

Investments in unlisted company shares, whose market value can be readily determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historical cost less impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

3

Turnover

The analysis of the company's Turnover for the year from continuing operations is as follows:

2024
£

2023
£

Sales of food and drinks

140,436,070

128,665,050

Sales of non-products

1,567,766

1,480,154

142,003,836

130,145,204

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2024
£

2023
£

Sundry other operating income

14,402

9,312

Insurance claims receivable

1,495,183

-

1,509,585

9,312

5

Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

2024
£

2023
£

Loss on disposal of tangible assets

(46,537)

(8,661)

6

Operating profit/(loss)

Arrived at after charging/(crediting)

2024
£

2023
£

Depreciation expense

2,858,568

2,584,507

Amortisation expense

1,144,488

954,123

Operating lease expense - property

16,341,605

15,118,122

Loss on disposal of property, plant and equipment

46,537

8,661

7

Interest payable and similar expenses

2024
£

2023
£

Interest on bank overdrafts and borrowings

1,196,036

465,668

Interest expense on other finance liabilities

8,356

4,089

1,204,392

469,757

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2024
£

2023
£

Wages and salaries

36,637,465

35,989,905

Social security costs

2,023,378

1,903,114

Pension costs, defined contribution scheme

439,510

406,302

Other employee expense

214,259

174,205

39,314,612

38,473,526

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2024
No.

2023
No.

Crew labour

3,470

3,056

Management labour

100

100

3,570

3,156

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2024
£

2023
£

Remuneration

19,992

19,992

10

Auditors' remuneration

2024
£

2023
£

Audit of the financial statements

7,500

7,500


 

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

11

Taxation

Tax charged/(credited) in the profit and loss account

2024
£

2023
£

Deferred taxation

Arising from origination and reversal of timing differences

1,014,370

(452,781)

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2023 - the same as the standard rate of corporation tax in the UK) of 25% (2023 - 19%).

The differences are reconciled below:

2024
£

2023
£

Profit/(loss) before tax

2,647,568

(2,669,537)

Corporation tax at standard rate

661,892

(507,212)

Tax increase/(decrease) from effect of capital allowances and depreciation

239,206

(287,369)

Decrease from effect of different UK tax rates on some earnings

-

(108,667)

Effect of expense not deductible in determining taxable profit (tax loss)

298,388

188,202

Effect of tax losses

(185,116)

262,265

Total tax charge/(credit)

1,014,370

(452,781)

Deferred tax

Deferred tax assets and liabilities

2024

Asset
£

Liability
£

Accelerated capital allowances

-

1,902,731

Tax losses carried forward

147,438

-

147,438

1,902,731

2023

Asset
£

Liability
£

Accelerated capital allowances

-

1,083,085

Tax losses carried forward

368,593

-

368,593

1,083,085

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

12

Intangible assets

Franchise rights
£

Licence fee
 £

Stamp duty
 £

Total
£

Cost or valuation

At 1 April 2023

17,846,865

300,000

127,391

18,274,256

Additions acquired separately

3,998,614

300,000

102,298

4,400,912

At 31 March 2024

21,845,479

600,000

229,689

22,675,168

Amortisation

At 1 April 2023

2,879,630

59,271

52,020

2,990,921

Amortisation charge

1,112,835

28,500

3,153

1,144,488

At 31 March 2024

3,992,465

87,771

55,173

4,135,409

Carrying amount

At 31 March 2024

17,853,014

512,229

174,516

18,539,759

At 31 March 2023

14,967,235

240,729

75,371

15,283,335

13

Tangible assets

Plant and equipment
£

Office equipment
£

Motor vehicles
 £

Total
£

Cost or valuation

At 1 April 2023

14,748,960

2,321,638

101,354

17,171,952

Additions

5,710,231

367,686

-

6,077,917

Disposals

(395,109)

(151,827)

-

(546,936)

At 31 March 2024

20,064,082

2,537,497

101,354

22,702,933

Depreciation

At 1 April 2023

7,149,194

1,052,901

51,403

8,253,498

Charge for the year

2,283,338

551,847

23,383

2,858,568

Eliminated on disposal

(370,705)

(129,694)

-

(500,399)

At 31 March 2024

9,061,827

1,475,054

74,786

10,611,667

Carrying amount

At 31 March 2024

11,002,255

1,062,443

26,568

12,091,266

At 31 March 2023

7,599,766

1,268,737

49,951

8,918,454

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

14

Other financial assets (current and non-current)

2024
£

2023
£

Non-current financial assets

Financial assets at cost less impairment

38,750

37,500

15

Stocks

2024
£

2023
£

Closing stocks of food, drinks and non-product items

609,300

663,683

16

Debtors

Current

Note

2024
£

2023
£

Trade debtors

 

583,710

447,195

Other debtors

 

499,448

1,333

Prepayments

 

624,998

408,986

Corporation tax asset

11

262,500

112,500

   

1,970,656

970,014

17

Cash and cash equivalents

2024
£

2023
£

Cash on hand

88,500

87,280

Cash at bank

8,339,201

4,687,440

8,427,701

4,774,720

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

18

Creditors

Note

2024
£

2023
£

Due within one year

 

Loans and borrowings

22

2,791,849

1,619,156

Trade creditors

 

5,174,852

3,842,980

Amounts due to related parties

-

496,568

Social security and other taxes

 

2,485,666

3,425,548

Outstanding defined contribution pension costs

 

86,823

54,444

Other payables

 

8,655

19,892

Accruals

 

3,036,247

1,690,364

 

13,584,092

11,148,952

Due after one year

 

Loans and borrowings

22

18,897,561

12,483,876

19

Provisions for liabilities

Deferred tax
£

Total
£

At 1 April 2023

714,491

714,491

Increase (decrease) in existing provisions

1,014,370

1,014,370

At 31 March 2024

1,728,861

1,728,861

20

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £439,510 (2023 - £406,302).

Contributions totalling £86,823 (2023 - £54,444) were payable to the scheme at the end of the year and are included in creditors.

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

21

Share capital

Allotted, called up and fully paid shares

2024

2023

No.

£

No.

£

Ordinary A shares of £1 each

682

682

682

682

Ordinary B shares of £1 each

250

250

250

250

932

932

932

932

Redeemable preference shares

The Cumulative preference shares are redeemable at the option of the holder between 13 November 2024 and 7 November 2029. They are redeemable at £29,412 per share and carry rights to vote only on resolutions for the winding up of the company, to reduce the share capital of the company, to approve the terms of a buy-back agreement by the company or on resolutions that affect the rights attaching to the Preference shares. The shares are redeemable at the holders option and are therefore classed as a financial liability in accordance with FRS 102. On a winding up of the company the holders of the shares have a right to receive notices of the winding up resolution and to vote on that resolution. Winding up value for redeemable preference shares is £2,000,000.

22

Loans and borrowings

Non-current loans and borrowings

2024
£

2023
£

Bank borrowings

16,897,561

10,483,876

Redeemable preference shares

2,000,000

2,000,000

18,897,561

12,483,876

Current loans and borrowings

2024
£

2023
£

Bank borrowings

2,791,849

1,619,156

Bank borrowings

Flexible business loans are denominated in sterling with a nominal interest rate of base plus 1.6%, and the final instalment is due on 30 September 2025. The carrying amount at year end is £19,689,410 (2023 - £24,333,472).

Included in the loans and borrowings are the following amounts due after more than five years:

2024
£

2023
£

After more than five years by instalments

6,115,220

-

-

-

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

23

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2024
£

2023
£

Not later than one year

4,762,248

4,701,948

Later than one year and not later than five years

19,048,992

18,807,792

Later than five years

49,995,257

53,368,297

73,806,497

76,878,037

The amount of non-cancellable operating lease payments recognised as an expense during the year was £16,341,605 (2023 - £15,118,122).

24

Dividends

Interim dividends paid

2024
£

2023
£

Interim dividend of £318.00 (2023 - £297.00) per each Ordinary A shares

216,667

202,494

Interim dividend of £1,000.00 per each Ordinary B shares

250,000

250,000

466,667

452,494

 

Fortress Operations Limited

Notes to the Financial Statements for the Year Ended 31 March 2024

25

Analysis of changes in net debt

At 1 April 2023
£

Financing cash flows
£

At 31 March 2024
£

Cash and cash equivalents

Cash

4,774,720

3,652,981

8,427,701

Borrowings

Long term borrowings

(22,714,316)

5,816,755

(16,897,561)

Short term borrowings

(1,619,156)

(1,172,693)

(2,791,849)

Directors loan

(496,568)

497,400

832

(24,830,040)

5,141,462

(19,688,578)

 

(20,055,320)

8,794,443

(11,260,877)

26

Controlling party

The ultimate controlling party is R P Forte, being the director and majority shareholder.