Company registration number: 10480894
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COMPANY INFORMATION
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CONTENTS
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report of the company and the group for the year ended 31st December 2023.
London Sky Garden Limited is the holding company for a number of property and visitor attraction ventures located mainly in the UK and Europe together with a growing portfolio based in Asia.
The income for the group amounted to £19.6m for the 12 months trading to 31st December 2023, which compares to £16.8m when looking at the trading performances for the group for the year to 31st December 2022, an increase of 17%. The increase in turnover arises following the easing of restrictions following the COVID 19 pandemic and its effect on the trade of the group in the previous year given forced closures. In particular, this year has seen an increase in rental income coupled with a significant increase in visitors at the attractions as a result of national government imposed lockdowns being lifted. The overall group adjusted EBITDA yielded a surplus of £4.7m (24.4%) (2022: £4.6m (27.3%)). The group liquidity remains strong, with an acid test ratio of 1.52 compared to 1.23 at the end of December 2022. The group has also invested a further £0.7m in its facilities during the year, demonstrating the commitment to delivering a first class experience to visitors of the various sites. At the end of 2023, the group disposed of its interest in the Restaurant de L’Aquarium de Paris SAS as part of a wider strategy to focus more on the core activities of the group. The disposal of the investment follows a significant rebound in trade after the Covid 19 pandemic and ensured that the disposal value was maximised. The current economic outlook remains uncertain in Europe and beyond in the coming years. This arises following the cost of living crisis, the conflict in Ukraine and the central bank interest rate policy globally. The wider geopolitical climate is also unstable given the number of general elections that have taken place, including USA and Germany coupled with weaker economic data and the threat of a trade war from the USA.
Competition in the leisure and entertainment industry together with economic uncertainties that impact directly on visitor numbers represent continuing risks for the group. The directors continually monitor visitor numbers together with the creation of innovative attraction enhancements in order to mitigate these risks.
Challenges faced by our tenants will likely lead to short term support including rent holidays and / or extended credit terms. These measures are expected to ensure ongoing cashflow for the group once these short term economic challenges are mitigated. The outlook for energy costs is expected to present further challenges in the coming year. The directors are taking active steps to mitigate these risks by seeking competitive contractual arrangements with energy providers and brokers as appropriate. Given the size of the group, the directors have not delegated the responsibility of monitoring financial risk management to a sub committee of the board. The policies set by the board of directors are implemented by the groups finance department.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The group continue to invest in each of the existing property assets together with developing new revenue streams to offset the current economic uncertainty. Such investments are now being considered globally so as not to limit the group's economic exposure just to the UK and Europe.
In the coming year, the directors will seek further property acquisitions to enhance the existing portfolio and further increase rental income and long term group capital value. So far, 2024 has brought continued uncertainty following the ongoing Ukrainian crisis and the wider geopolitical climate, not least the threat of trade wars from the USA. In terms of macro economic trends, this has seen less volatility in foreign currency rates together with central bank interest rates being eased gently. This easing of interest rates is expected to continue in the coming year, tapered with the risk of inflation that may arise following any trade wars from the USA. These trends coupled with the threat of higher taxes in the UK economy are expected to see challenges to liquidity in the coming months as suppliers and customers face challenges to their own cashflow. The challenge for the group is to continue to mitigate cost increases being faced given ongoing global instability. Considering the impact on each component entity, the visitor attractions may face a pressure in visitor numbers given the impact of the macro economic factors on household disposable incomes. This is may lead to additional cashflow pressures within the group and in particular our suppliers and customers, who are also faced with the same challenges. Following the restructure of the groups trading activities at the end of 2023, the group is now less exposed to these risks as the day to day operations of the attraction business has been outsourced. Given the nature of the group activities and the proven resilience of the visitor attraction businesses, the directors believe that these short term challenges can be managed. The group has a strong statement of financial position, together with significant cash reserves in order to continue to operate for the longer term.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to £4,530,734 (2022 - £2,215,470).
No dividends will be distributed for the year ended 31st December 2023.
The directors who served during the year were:
The company's operations expose it to a variety of financial risks that include the effects of changes in commodity market prices, exchange rate risk, credit risk, liquidity risk and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the group by monitoring all levels of the related costs.
Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department. The department has a policy and procedures manual that sets out specific guidelines to manage interest rate risk, credit risk and circumstances where it would be appropriate to use financial instruments to manage these.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LONDON SKY GARDEN LTD
We have audited the financial statements of London Sky Garden Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Income and Retained Earnings, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, 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).
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's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LONDON SKY GARDEN LTD (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LONDON SKY GARDEN LTD (CONTINUED)
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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙The Group and Company is subject to laws and regulations that directly affect the financial statements including financial reporting, legislation. We determined that the following laws and regulations were most significant, including UK Companies Act, employment law and tax legislation.
∙We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.We understood how the Group and Company is complying with those legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures.
∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙We assessed the susceptibility of the Companys financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
°Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
°Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process
∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
°Revenue recognition, and;
°Posting of unusual journals and transactions
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LONDON SKY GARDEN LTD (CONTINUED)
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.
for and on behalf of
Chartered Accountants
Statutory Auditor
95 Gresham Street
EC2V 7AB
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CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED INCOME STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 31 form part of these financial statements.
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 31 form part of these financial statements.
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