LONDON THEATRE COMPANY HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The principal activity of the London Theatre Company group ("the Group") is set up to develop and run independent theatres and produce new and distinctive theatrical productions.
The principal activity of the Company is that of a holding company for the London Theatre Company group. The Company is a private company limited by shares and is incorporated in England and Wales. The principal place of business is the Bridge Theatre on 3 Potters Fields Park, London SE1 2SG. The registered office address is C/O Womble Bond Dickinson (UK) LLP, 4 More London Riverside, London, United Kingdom, SE1 2AU.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
The directors have assessed whether the Company and the Group have adequate resources to meet their obligations as they fall due and beyond the 12 months from the date of the approval of these financial statements, considering in particular the challenges that the past three years have posed for the Company and the wider Group's activities.
The Group made a loss for the year of £4,248,182 and had, as at the Statement of Financial Position date, a net asset position of £2,144,827. The Company has an outstanding shareholder loan, advanced pre-pandemic to facilitate cash flow management, as well as £6.5m in debt from the Culture Recovery Fund. The Board undertakes scenario planning and financial cashflow modelling on an ongoing basis, covering at least 12 months from the date of signing of the financial statements, to ensure they keep abreast of the group’s financial position. However, it is still the case that post-pandemic changes in audience booking patterns and increases in the Group’s cost base over the past three years, mean that to meet their obligations as they fall due and beyond the 12 months from the date of approval of these financial statements, the Company and the Group are reliant on the inflow of theatre tax credits (to be received following submission of tax returns after the approval of these financial statements), and the continued support of its investors. In particular, the Group are aware that while these forecasts show the ability of the Company to continue to meet its debts as they fall due, however in order to do this they need to renegotiate the repayment terms of the Cultural Recovery Fund loan, and will be reliant on the Culture Recovery Fund’s continued support, so as not to withdraw this funding. Should the Culture Recovery Fund choose to withdraw the funding, the Company would need to seek alternative sources of funding in order to meet its debts as they fall due. In light of all of the above, the directors have prepared these accounts on a going concern basis.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Revenue from ticket sales is recognised on the date of the performance for which the tickets were purchased. Membership sales Revenue from membership sales accrues evenly over the period of membership. Cinema streaming Revenue from cinema streaming is recognised whilst the shows are being broadcasted. Other income Other income relates to food, beverage and merchandise sales. Revenue is recognised at the point of sale. Other income also relates to management recharges for services incurred on behalf of group companies. Revenue is recognised over the time the service is provided. Other income also relates to co-production income that relates to productions created with other production companies. Revenue is recognised when the performance obligations of the contracts have been met. BBC Production income Income in relation to the BBC production contract is recognised in accordance with the various phases of the project as detailed in the legal agreement. Foreign transmission income Income from the foreign transmission of the Talking Heads productions is recognised on the broadcast date. Theatre commission income Revenue is recognised on a production by production basis, on the date of the press night, as this is when the Company has fulfilled its obligation under the terms of the production commissioning agreement.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Comprehensive Income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Statement of Financial Position, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition. Any premium on acquisition is dealt with in accordance with the goodwill policy.
Production costs, including rehearsal costs, are recognised in the Consolidated Statement of Comprehensive Income on the date of the press night performance, on the assumption that the production income is expected to exceed the costs incurred.
Should costs be incurred in excess of what is expected to be recouped through box office sales, these costs are then expensed immediately to the Consolidated Statement of Comprehensive Income.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
The Group only enters into basic financial instruments and transactions that result in the recognition of financial assets and other debtors and creditors and loans to and from related parties.
(i) Financial assets Basic financial assets, including other debtors, and amounts due from related companies are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the Statement of Income and Retained Earnings. Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. (ii) Financial liabilities Basic financial liabilities, including accruals, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. (iii) Offsetting Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
(i) Share-based payments Certain employees have been granted share options that require a fair value methodology to value the options at the date of grant as detailed in accounting policy 2.10 and note 21. (ii) Useful economic life of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed 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. See note 13 for the carrying amount of the property, plant and equipment and accounting policy 2.13 for the useful economic lives for each class of assets. (iii) Useful economic life of intangible assets The annual amortisation charge for intangible assets is sensitive to technological advances. The useful economic life of the capitalised website costs is reassessed annually and is amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the changing need for the website's offering. See note 12 for the carrying amount of the website costs and accounting policy 2.12 for the useful economic lives for each class of assets. (iv) Recognition of a deferred tax asset A deferred tax asset is recognised in these financial statements arising from accumulated trading losses that will be used against future profits. The extent to which this asset is recognised is based on an estimation of expected future profits, calculated using the most recent cashflow forecasts projections prepared by management. The estimation of these is therefore judgemental by nature. See note 11 for the value of the deferred tax asset recognised and accounting policy 2.11 for the recognition of the asset.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
11.Taxation (continued)
A deferred tax asset in relation to accumulated losses has been recognised in previous years to the extent that future projections and forecasts indicated that it will be used in the foreseeable future, which for the purpose of this estimate is within the next five years. Each year, projections and forecasts are reviewed to ensure any deferred tax asset recognised is reasonable in light of the Company's ability to use this against future profits in the foreseeable future. No deferred tax asset has been recognised for 2024.
Total group losses carried forward amount to £15.6m (2023: £13.7m) that can be offset against future taxable profits.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
In February 2021, the Company drew down £5m from the Culture Recovery Fund. The first repayment of this loan was due in February 2025, and then was subsequently to be repaid in 13 equal instalments. However, the repayment terms are being renegotiated. The balance accrues interest at 2% p.a.
In March 2022, the Company drew down a further £1.5m from the Culture Recovery Fund. The first repayment of this loan was not due until March 2024, and then was to subsequently be repaid in 13 equal instalments. However, the repayment terms are being renegotiated. The balance accrues interest at 3% p.a.
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Share premium account
Other reserves
Profit and loss account
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
21.Share-based payments (continued)
The following prior year adjustment was made in one of the subsidiary companies.
A prior year adjustment has been made to more accurately reflect the cessation of a license in place with regards to an overseas distributor. This was in relation to income and cost of sales recognised in the year ended 30 September 2022. This has resulted in a decrease in 2022 sales of £147,646 and a decrease in cost of sales of £137,311. Therefore there was a decrease in retained earnings of £10,335 impacting the 2023 and 2024 financial accounts. The impact of the above adjustment has resulted in an increase of debtors of £137,311 and an increase of creditors of £147,646, therefore a net impact of £10,335.
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions totalling £44,360 (2023: £41,745) were payable to the fund at the Consolidated Statement of Financial Position date and are included in creditors. The pension cost charge represents contributions payable by the Group and amounted to £78,475 (2023: £158,854).
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LONDON THEATRE COMPANY HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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