The directors present the strategic report for the year ended 31 October 2023.
The company continued to trade strongly in revenue streams during 2023. The performance of the company was strong, with turnover increasing significantly at £56,847,500 (2022: £48,804,483).
The company has felt the impact of global inflation pressures in its distribution and shipping expenses for the year, which has in turn reduced the company’s profit margins. Despite this, the directors were satisfied with the financial performance of the company.
The directors continue to explore opportunities to grow the company organically and by targeting new and developing markets. The future continues to look encouraging with interest in the gallery and its represented artists strengthening both domestically and internationally
The directors consider the main threats to the successful implementation of the ongoing business plan to be increasing competition from within the gallery sector. The company has worked hard to minimize the potential threat from a possible slow down in certain geographical art markets and fluctuating currency exchange rates.
The trading results for the year ended 31 October 2023 and the company's financial position at the end of the year are shown in the attached financial statements.
The profit and loss account for the year shows a pre-tax profit of £6,972,684 (2022 - £5,939,088) and EBITDA of £6,043,904 (2022 - £5,994,200).
Current gross profit margin is 23% (2022 - 34%) of turnover. Administrative expenses excluding depreciation, currency gains/losses, and directors remuneration have decreased by 0.5% to £11,689,218 (2022 - £11,747,780).
The Statement of Financial Position as at 31 October 2023 shows an increase in the company's investment in stock during the year by 27% to £19,657,190 (2022 - £15,523,771).
The company's key financial and other performance indicators during the year were as follows:
| Unit | 2023 | 2022 |
Turnover | £ | 56,847,500 | 48,804,483 |
Profit before taxation | £ | 6,972,684 | 5,939,088 |
Increase/(decrease) in profit before taxation | % | 17 | (19) |
Gross Profit Margin | % | 23 | 34 |
Operating Margin | % | 11 | 12 |
Given the straightforward and individual nature of the business, the company directors are of the opinion that KPI analysis is not required to achieve an understanding of the development, performance and position of the business. Rather, the directors and management consider turnover, the net cash balance, gross profit, operating profit as being sufficient indicators as to the true underlying performance and asset position of the company.
The Board is focused on the long term success of the Company and makes decisions to deliver long-term security and commercial performance. The Board considers and balances the needs of its employees, customers and other business contacts. All key decisions are scrutinised by the Board and assessed on the balance of risk, reward and overall strategy in line with the code of corporate governance.
We recognise the importance of the employees providing the service to our customers and are engaged and invested in their continual health and well-being. The Company values diversity and opportunity for our employees and aims to provide a platform for them to flourish within the company.
The company's policy is to consult and discuss with employees, through staff meetings, matters likely to affect employees' interests. Within the individual companies, there are regular briefing sessions with employees and also information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Business relationships
The Company has been built on solid relationships with its customers and professional advisers. Our customers are at the heart of everything we do. We use email and social platforms to update them about new offers and services and regularly review and feedback we receive to understand how we can improve their experience. The Company provides a fair service with no hidden costs or restrictive terms for customers.
We are reliant on external suppliers for a number of key specialist services such as legal, public relations and advisory. The Company believes in fair treatment of suppliers who are all paid within standard terms.
Community and environment
The Company seeks to be as efficient and environmentally friendly as it can be, with regular reviews of how this can be improved.
The Company contributes to charities and other worthy bodies who provide support in the local community. Separately, members of the Board dedicate their time and resources to good causes and employees are encouraged and supported to do the same.
Business conduct
The Company has been built on its impeccable conduct and high business standards. The Board recognise the value in maintaining these vales and the reputation which has been built on them. All employees and Board members are expected to adhere to these standards which are regularly communicated throughout the Company.
Communication, monitoring and review are key to the Company maintaining the high ethical standards and conduct expected. Risks to the business are continually monitored and communicated within the Company to promote high business standards.
Interaction between members
The Board acts in the best interests of all of its members, ensuring a consistent and impartial approach is taken, aiming for a fair outcome for all. The Board is committed to clear and frequent communications with its members.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 October 2023.
The results for the year are set out on page 9.
Ordinary interim dividends were paid amounting to £400,000 (2022: £1,766,100). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Investments of cash surpluses are made through banks which must fulfil credit rating criteria approved by the Board. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Refer to note 27.
The directors aim to continue the principal activity of the company to be that of an art gallery for the foreseeable future.
The directors continue to explore opportunities to grow the company organically and by targeting new and developing markets. The future continues to look encouraging with interest in the gallery and its represented artists strengthening both domestically and internationally.
There was a change in auditor during the period with Gravita Audit II Limited being appointed as auditor following the resignation of Gravita Audit Limited on 11 February 2025. In accordance with section 485 of the Companies Act 2006, a resolution proposing that Gravita Audit II Limited be re-appointed will be put at a General Meeting.
In the year we took the following energy efficiency actions:
| 2023 | 2022 (Revised) |
UK energy use (1) kWh | 149,684 | 178,362 |
Associated Greenhouse gas emission (2) Tonnes C02 equivalent | 29,278 | 33,356 |
Intensity ratio Emission per employee | 523 | 606 |
UK energy use covers gas purchased and electricity across VMG offices/sites.
Total kilowatt hours used from gas and electricity bills x Emission Factor used to calculate the Associated Greenhouse gas emission (2) Tonnes C02 equivalent.
Associated Greenhouse gases have been calculated using the Greenhouse gas conversion file provided on the GOV.UK website.
The figures for 2022 have been revised due to an error in the conversion process, where units were inadvertently converted to kilowatt-hours (kWh) twice. This year, we have conducted a thorough review of our calculations and identified these discrepancies. Moving forward, we have utilized the kWh values directly from the bills, eliminating any conversion issues that contributed to the previous inaccuracies.
The conversion rate used is for UK electricity - Total kg CO2e per unit - 0.207074, Natural gas kWh (Gross CV) - 0.18256.
The intensity ratio is based on 56 employees (2022: 55 employees) working at VMG (source - Bamboo HR People files)
Energy efficiency action taken in 2023 includes turning lights off when gallery is closed, using eco friendly appliances and setting the heating on a timer basis.
Workings | 2023 | 2022 (Revised) |
Gas | 70,060 | 104,754 |
Electric | 79,623 | 73,608 |
Total | 149,684 | 178,362 |
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 then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK 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. 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.
We have audited the financial statements of Victoria Miro Gallery Limited (the 'company') for the year ended 31 October 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including 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).
Basis for opinion
Conclusions relating to going concern
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 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.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the 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 strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the senior statutory auditor ensured the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the creative industry.
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental, health and safety legislation and anti-money laundering regulations.
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
we assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 of the financial statements were indicative of potential bias;
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims;
reviewing correspondence with the company’s legal advisor.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of noncompliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.
The income statement has been prepared on the basis that all operations are continuing operations.
Victoria Miro Gallery Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2 Leman Street, London, United Kingdom, E1W 9US.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
In preparing the financial statement, the directors have made the following judgements and estimates:
Determining whether leases entered into by the company either as a lessor or a lessee are operating lease or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Determining whether there are indicators of impairment of the company's fixed asset investments and tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
Determining the valuation of stock as in the artwork industry, interest on an artist or artwork can change overnight, therefore creation of a provision for an artwork may not simply be determined based on the movement of the artwork. Although in the interest of prudence, the movement of stock is still considered in creating provisions, the perceived popularity of an artist and demand of their artwork also forms a significant basis of in determining this.
In determining whether there are indicators of impairment in the amounts owed by other debtors to the company, factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
The total turnover of the company for the year has been derived solely from sales of artworks in line with its principal activity.
The directors are of the opinion that the disclosure of the geographical turnover of the company would be seriously prejudicial to the company's interest. Such disclosure has therefore been omitted.
During the year, the company transferred part of its business, including the online platform asset, to Vortic VR Limited in exchange for £5.7m worth of equity. This transaction, which involved the sale of an internally generated brand, is considered an exceptional item as it falls outside the company’s normal course of business.
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £726,860 loss (2022 - £1,443,741 gain).
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
In January 2023, the company incorporated a subsidiary called Vortic VR Limited. On 21 February 2023, the company sold its intellectual property in an e-platform asset to Vortic VR Limited for £5.7m worth of 100 equity shares in Vortic VR Limited. Also On 21 February 2023, the company also purchased 877 shares in Vortic Limited for a consideration of £7,132,193 which was settled via a debt for equity swap with Vortic Limited Ltd for a loan totaling £1.4m as well as the sale of the company's entire shareholding in Vortic VR Limited to Vortic Limited.
Details of the company's subsidiaries at 31 October 2023 are as follows:
Registered office addresses:
Stock is stated net of provisions of £4,032,945 (2022 - £4,088,904).
The directors consider that the carrying amount of trade creditors approximates to their fair value.
Amounts owed to group undertakings are unsecured, interest free, and repayable on demand.
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
During FY2023, His Majesty's Revenue & Customs (HMRC) raised an enquiry regarding the R&D claim made by the company for the financial year ending 31 October 2021 thereby creating a contingent liability for the company at the reporting date to reimburse a portion or the entirety of the balance received.
Subsequent to the year end, HMRC raised another enquiry regarding the R&D claim made by the company for the financial year ending 31 October 2022 thereby creating a contingent liability for the company to reimburse a portion or the entirety of the balance received as at the date of approval of these financial statements but not at the reporting date.
In response, the company has proactively sought professional advice, filed an appeal for both years, disclaimed the liabilities, and is actively defending against the action. At the date of approval of the financial statements, the case is still with HMRC's Solicitor's Office and Legal Services (SOLS) team for an independent review. The directors of company, following professional advice, have assessed that it is probable that the judgment in the case will be in the company's favour and have therefore not recognised a provision in these accounts in relation to the FY2021 enquiry. The potential undiscounted amount of the further payments that the company could be required to make, if there was an adverse decision, is estimated to be approximately £266,825 for FY2021 and £363,485 for FY2022. Interest continues to accrue daily until a final judgement is reached.
Called-up share capital – represents the nominal value of shares that have been issued.
Profit and loss account – includes all current and prior period retained profits and losses.
There is an outstanding fixed and floating charge created in July 2013 over the assets of the group and company's subsidiary, Victoria Miro Gallery Limited, in favour of the directors of the company and group.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Except for the matter disclosed in the contingent liability note, the directors have assessed and have concluded that there are no other significant adjusting or non-adjusting events between the 31 October 2023 reporting date and the date of authorisation of these financial statements to disclose.
The following amounts were outstanding at the reporting end date:
Directors' loan balances and other transactions are disclosed in note 29.
At the year end, the company was owed £81,231 (2022 - £66,081) by O Miro, a key management personnel of the company.
At the year end, the company was owed £96,688 (2022 - £93,392) by Hydrachem Limited, a company under control by W P Miro.
At the year end, the company was owed £1,287,332 (2022 - £1,029,820) by Hydrachem Group Limited, acompany under control by W P Miro.
At the year end, the company had recharges to be invoiced of £41,964 (2022 - £14,324) Hydrachem DST Limited, a company under control by W P Miro.
At the year end, the company was owed £750,000 (2022 - £254,810) by Alexandra Miro Limited, a company under control by a family member of the director of the company. The financial statements include a provision of £478,925 (2022 - 252,853) against this balance which was recognised as an expense in the year.
At the year end, the company was owed £203,495 (2022 - £1,184,319) by Vortic Limited, a company under control by a family member of the director of the company. The financial statements include a provision of £124,079 (2022 - £124,079) against this balance was maintained in the year.
During the year, an artwork was sold to Deborah Bass, the spouse of Oliver Miro, for £15,000, with the transaction executed at arm's length.
During the year, the company acted as an agent of a related party and sold two artworks, earning £39,644 in profits.
The company has taken advantage of the exemption provided by FRS 102 Section 33.1A 'Related Party Disclosures' not to disclose transactions entered into between two or more members of the group, where the subsidiaries the company has transacted with are wholly owned members of the group.
Rent paid during the year includes the sum of £428,370 (2022 - £430,000) paid in respect of the gallery jointly owned by V M Miro and W P Miro.
During the year G S Wright was sold an artwork for £304,932 (2022 - £nil), which was at arm's length price.
There were no directors' loans due to the company.
At the year end, the company owed the amounts as tabulated below to both V M Miro and W P Miro and G S Wright, directors of the company.
The interest rate charged to all the Directors' loans 2% from 1 November 2022 to 5 April 2023 and 2.25% from 6 April 2023 to 31 October 2023. The weighted average rate is for the financial year 2.13%. The balances as of the reporting date were settled within nine months following the year-end of December 31, 2023.