The directors present the strategic report for the year ended 30 September 2024.
During the year ended 30 September 2024, Pneuma Group delivered a resilient financial performance in the face of macroeconomic headwinds, underpinned by strategic investments across its property and games divisions. The Group's consolidated turnover for the year was £52,986,110 (2023: £49,465,974), with a gross profit of £13,442,501 (2023: £7,279,075) and an operating profit of £1,570,672 (2023: profit of £8,195,221). Whilst turnover and profitability is predominantly driven by the Games Group, FY24 has paved the way for the overall development of the group, with significant investment in company infrastructure and assets which will set up the group to achieve long term success.
The property division made significant strides, with key acquisitions including the Debenhams building and Dr. Browns pub, both earmarked for transformative developments. These acquisitions serve dual roles in revenue generation and social impact, aligning with our strategy to blend commercial success with community uplift. These developments will commence in 2025, with the completion of “Pitch Sports Bar” within FY26 and the development of our flagship Debenhams planned to commence in 2026. The launch of 'Pitch Sports Bar' and the major collaborative regeneration scheme at Debenhams, exemplify our vision for inclusive urban revitalisation. The development of new group headquarters at the Central Point building signified further investment in our properties and the continued commercialisation of the property group.
Pneuma Business Services, inclusive of commercial cleaning, facilities management and commercial security continue to establish themselves in the market place with a view to securing further external contracts within the next 24 months. The foundations have been laid during the financial year securing the accreditations needed to operate in the commercial market space.
In parallel, within the games group, Double Eleven, continued to outperform despite industry turbulence. Double Eleven has solidified its reputation as a trusted partner in AAA video game development and publishing, with over 430 employees across two continents. Strategic moves, such as the development of a new HQ and the company’s first original IP in almost 15 years, highlight their forward-focused investment philosophy.
The hospitality sector remains volatile with Pneuma Hospitality group closing one entity within the year and focussing on its core offering within Fresh Element. Strategic plans for growth of the division include a stable offering and stable customer base at the SIX restaurant and the opening of Pitch Sports Bar.
While certain investments have weighed on short-term profitability, we are well positioned for future growth with scalable infrastructure and a robust portfolio of projects, including ongoing development of high-profile franchises.
The Group operates across a number of sectors including hospitality, property services, and facilities management. While this diversified model creates opportunity, it also exposes the business to a range of external risks. The principal risks currently facing the Group fall under two broad categories: market risks and legislative and regulatory risks.
Market Risks
The Group is exposed to fluctuations in the wider economic environment, which can impact demand across all business areas. In particular, the hospitality and property improvement sectors are sensitive to changes in consumer confidence, disposable income levels, and broader market sentiment. Inflation, interest rate changes, and supply chain pressures may also affect the cost of goods, materials, and labour.
We seek to mitigate these risks by monitoring our cost structures, and reviewing and diversifying income streams, where possible. The phased development of new commercial service lines, including cleaning and security, allows for cautious market entry based on clear demand signals and operational readiness.
In the games sector diversification of our client base is critical and the continuous development of new partnerships is key in managing the rapid market changes.
In addition, the Group recognises the competitive nature of the markets in which it operates. There is a risk of new entrants or changing customer expectations affecting performance. This is managed through a continued focus on service quality, customer relationships, and brand reputation.
Legislative and Regulatory Risks
Operating across multiple sectors brings exposure to a range of legislative and regulatory frameworks. This includes health and safety regulations, employment law, food safety standards, construction and environmental compliance, and data protection obligations. Changes in legislation or failure to comply may lead to financial penalties, reputational damage, or operational disruption. Additionally in the games sector, further risks in this area include content restrictions, tax compliance and labour laws but domestically and internationally.
The Group actively monitors its compliance obligations and engages professional advisors as needed to ensure awareness of relevant regulatory developments. Internal policies and procedures are regularly reviewed and updated, with staff training provided to support understanding and compliance. Where required, licences, accreditations and insurances are maintained to meet industry standards.
There is also a risk of increased regulatory scrutiny as the Group seeks to expand its operations into external markets. The commercialisation of internal services such as cleaning and security will introduce additional compliance considerations, including sector-specific licensing, training, and data handling protocols. These are being factored into the planning and resourcing of each business unit to ensure readiness and compliance from the outset.
Property Group: The acquisition and redevelopment of landmark properties like Debenhams and Dr. Browns are central to our growth strategy. The Debenhams site will undergo a multi-use transformation featuring retail, hospitality, and community-oriented spaces. A social improvement initiative supported by local partnerships aims to make this project a flagship for urban renewal. In addition to this the launch of the first ‘Pitch’ Sports bar in Middlesbrough. The assets once developed represent strong opportunities for brand growth.
Hospitality: Despite challenges within the hospitality sector, Pneuma group are committed to its goals of achieving success both for the current operations and future operations. Significant changes have been made this year, the benefits of which will be seen in FY25 and beyond. The launch of Pitch within the hospitality company will be a significant landmark for the group with plans for further expansion of this brand.
Games Group (Double Eleven): Despite sector challenges, Double Eleven has continued to thrive. Reduced profitability reflects investment in a 70,000 sq ft HQ and ongoing development costs for new IPs and licensing projects such as "Rust: Console Edition". Headcount has grown, positioning the studio for scale as new projects come online post-year-end.
The Board uses a set of financial and operational KPIs to measure progress against strategic objectives:
KPI | 2024 | 2023 | Commentary |
Group Turnover | £53.0m | £49.5m | Stable revenue despite sectoral volatility |
Operating Profit/(Loss) | £1.6m | £8.2m | Reflects planned investment in HQ, acquisitions, and IP development |
Property Acquisitions | 2 | 0 | Significant additions in Debenhams and Dr. Browns |
Double Eleven Headcount | 459 | 348 | Strategic hiring to support expansion |
We expect these KPIs to strengthen in 2025 as investments begin to yield operational efficiencies and revenue growth.
The Directors of the Company are mindful of their duties under Section 172 of the Companies Act 2006. In performing their duties during the year, the Directors have acted in good faith to promote the success of the Company for the benefit of its members as a whole, and have had regard to the matters set out in section 172(1), summarised below.
The Directors consider the long-term impact of strategic and operational decisions, ensuring they align with the Company’s growth objectives and support the sustainability of each business unit. Investments made during the year—particularly in property, systems, and people—were evaluated with a view to delivering long-term value, strengthening the Group’s core offering, and positioning it for future commercial opportunities.
The Group’s workforce is critical to its success. The Directors are committed to fostering a positive working environment that supports engagement, training, and development. Regular communication, open feedback channels, and structured support have been key in employee satisfaction and retention across all areas of the business. Health, safety, and wellbeing continue to be core priorities.
The Group values strong, long-term relationships with its key stakeholders. Whether in hospitality, construction, or facilities services, our businesses rely on trusted suppliers and customer loyalty. The Directors take care to ensure that the Group acts fairly and responsibly in all dealings, with a focus on reliability, transparency, and professionalism. Feedback from customers and suppliers is routinely considered in decision-making processes.
The Directors are aware of the impact the Group’s activities may have on the local community and environment. Efforts are made to operate responsibly and sustainably, with a focus on reducing waste, sourcing responsibly, and ensuring minimal environmental disruption, particularly in construction and landscaping activities. The restaurant and services teams also seek to support the local economy through local sourcing and employment.
Maintaining a strong reputation is vital for the Group, particularly as it looks to grow its external customer base. The Directors strive to ensure high standards of conduct, professionalism, and compliance across all areas of the business. Staff are expected to act with integrity, and operational procedures are designed to ensure consistent service quality and accountability.
The Directors are committed to treating all shareholders fairly and equitably, ensuring that decisions are made in the interests of the Company as a whole. Transparent financial reporting, regular Board oversight, and strategic planning underpin the Group’s governance approach.
The Board continues to consider the views and interests of stakeholders in shaping the Group’s strategy and believes this approach supports long-term value creation and responsible business practices.
The Directors are confident that the Group remains well-positioned for future growth, supported by a strong asset base, diversified income streams, and a robust innovation pipeline. The year ahead will focus on consolidating gains, delivering flagship developments, and capitalising on opportunities across both core sectors.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 September 2024.
The results for the year are set out on page 11.
Ordinary dividends were paid amounting to £800,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through 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.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
See disclosures within the Strategic Report regarding future developments of the company.
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the group will be put at a General Meeting.
Within the group there is one large subsidiary company which the disclosure requirements apply, Double Eleven Limited. The other subsidiaries within the group are not required to report their own energy and carbon information due to their individual company size. Pneuma Group itself does not consume in excess of 44,000Kwh of energy. The group will look to voluntary adopt further disclosure in future reporting and are committed to behaving responsibly and at high standard.
During the year ended 30 September 2024, Double Eleven Limited has gathered data regrading scope one, two and three carbon emissions (as defined by the GHG protocol) from its UK operations as defined by the requirement of the Streamlined Energy and Carbon Reporting (SECR) legislation.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting
There were no energy efficiency actions reported in 2024.
We have audited the financial statements of Pneuma Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and 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.
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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive); anti-bribery and corruption; and compliance with the UK Companies Act.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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 notes on pages 18 to 40 form part of these financial statements.
The notes on pages 18 to 40 form part of these financial statements.
The notes on pages 18 to 40 form part of these financial statements.
The notes on pages 18 to 40 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the period was £840,644 (2023 - £1,170,768 profit).
The notes on pages 18 to 40 form part of these financial statements.
The notes on pages 18 to 40 form part of these financial statements.
The notes on pages 18 to 40 form part of these financial statements.
Pneuma Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Central Point, 202 - 206 Linthorpe Road, Middlesbrough, England, TS1 3QW.
The group consists of Pneuma Group Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 parent company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.
The parent has applied the exemption contained in section 408 of the Companies Act 2006 and has not included its individual income statement.
The consolidated group financial statements consist of the financial statements of the parent company Pneuma Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 September 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as the proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Full provision is made for losses on all contracts in the year in which they are first foreseen.
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 recognised in the income statement.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Other investments in gold and silver bullion where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss.
Other investments in classic cars where, due to the unique nature of the individual vehicles fair value cannot be measured reliably, are measured at cost less impairment.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
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.
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, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
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 group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
In the application of the group’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.
No key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year have been identified.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual credit 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:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The fair value of the investment property has been arrived at on the basis of initial cost plus renovation expenditure incurred to bring the properties to a state where they can be used to generate rental income. No formal valuation has been carried out as the directors are satisfied that this is a reasonable estimate of the fair value at the reporting date.
Included within other investments are classic cars held as investments at a cost of £11,934,814 (2023 - £11,719,814), a watch held at £25,650 (2023 - £nil) and bullion held at fair value of £444,138 (2023 - £444,138).
The directors consider that the carrying value of the classic cars is an accurate reflection of the market value at 30 September 2024.
Details of the company's subsidiaries at 30 September 2024 are as follows:
For the year ended 30 September 2023 the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:
Pneuma Property Group Limited (company registration number 14721335)
Pneuma Hospitality Group Limited (company registration number 14718517)
Pneuma Commercial Property Limited (company registration number 14729720)
Hit The Space Bar Limited (company registration number 14729979)
Pneuma Games Group Limited (company registration number 15297859)
Pneuma Commercial Security Limited (company registration number 14875883)
Pneuma Commercial Cleaning Limited (company registration number 14872548)
Pneuma Residential Properties Limited (company registration number 14845915)
Fresh Element Limited (company registration number 05099000)
Boho X Hospitality Limited (company registration number 15151250)
Double Eleven Developing Limited (company registration number 14382133)
Double Eleven Development Limited (company registration number 13533413)
Obligations under finance leases are secured against the assets to which they relate.
Obligations under finance leases are secured against the assets to which they relate.
The Coutts bank loan is denominated in sterling with a variable interest rate of 3.75% per annum over the Coutts base rate, and the final instalment is due in October 2038. The carrying amount at the year end is £1,281,356 (2023 - £Nil)
The Lloyds bounce back bank loan is subject to interest at 2.50% per annum and is repayable over 10 years by monthly instalments, with the final instalment due in June 2030. The carrying amount at the year end is £38,682 (2023 - £42,720)
The Coutts bank loan is secured by a mortgage debenture including a fixed and floating charge over all the assets of Pneuma Commercial Property Limited and Double Eleven Limited including the book debts, as well as a first ranking legal charge over the freehold property known as Central Point, Linthorpe Road, Middlesbrough, TS1 3QW.
Finance lease payments represent rentals payable by the company for certain items of fixed assets. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions totalling £59,533 (2023 - £48,282) were payable to the scheme at the end of the year and are included in creditors.
During the prior year and the current year, one of our shareholders granted share options to the company over 1,000 ordinary shares of £0.01 each in the capital of the company, for the company to buy and cancel shares.
On 21 September 2023, the company exercised its option over 100 option shares and on this date the company repurchased and subsequently cancelled 100 £0.01 ordinary shares.
In 17 September 2024, the company exercised its option over a further 100 option shares and on this date the company repurchased and subsequently cancelled 100 £0.01 ordinary shares.
The call option is a financial contract that gives the company the right, but not the obligation to buy these shares. The call option agreement was dated 28 June 2023 and the long stop date falls on the 10th anniversary of this date. Any share repurchase is accounted for once the company has issued an exercise notice to the shareholder.
This reserve records retained earnings and accumulated losses.
Called up share capital
This represents the nominal value of shares that have been issued.
Merger reserve
This reserve records the amount above the nominal value received for shares sold by way of a share-for-share exchange as part of a group re-organisation to make the company the parent of the group.
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements: