Company registration number 11736604 (England and Wales)
ERSKINE HOUSE OPCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
ERSKINE HOUSE OPCO LIMITED
COMPANY INFORMATION
Directors
D Kovacs
(Appointed 19 July 2024)
A Shaw
(Appointed 19 July 2024)
N Chadwick
(Resigned 19 July 2024)
T Tolley
(Resigned 19 July 2024)
Company number
11736604
Registered office
111 Park Street
London
W1K 7JL
Independent auditors
PricewaterhouseCoopers CI LLP
37 Esplanade
St Helier
Jersey
Channel Islands
JE1 4XA
Accountants
BHP LLP
2 Rutland Park
Sheffield
S10 2PD
ERSKINE HOUSE OPCO LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 20
ERSKINE HOUSE OPCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present the strategic report for the year ended 31 December 2024.
Review of the business
In the year under review, Erskine House Opco Limited (“the Company”) made an operating profit of £1.53m (2023: £1.77m) and a profit after tax of £1.08m (2023: £1.22m). The Revenues of the Company of £13.04m (2023: £13.02m) are solely made up of income from Hotel operations, which has continued on a growth trajectory in 2024.
The vast majority of this revenue was from the sale of room nights at the Company’s principal place of business, being that of a hotel in Edinburgh city centre. Ancilliary revenue from food and beverage sales and the sale of event space in the hotel also contributed.
Principal risks and uncertainties
The key challenges facing the Company continue to be the inflationary environment during the year, which although has subsided from the year previous, continues to be a focal point in the market. The hotel faces the risk of losing business to key competitors in the local market which would drive down occupancy and, as a result, Average Daily Rate ("ADR") and operating income for the Company. There is also the risk of market saturation in the local market of Edinburgh City Centre.
The Company manages these risks by providing high quality services to its guest throughout the year, running an efficient operation to alleviate cost pressures and harbouring an effective revenue strategy to ensure the best possible outcome in RevPAR. The Company is also investing to improve the quality of its assets, on a regular basis, particularly around sustainability and reducing energy consumption in a continuation of operations in prior periods. These improvements not only improve the customer experience but also align the hotel with the ethos of the Company, reduce long term Carbon emissions and ultimately reduce costs over the longer term. Further, the director's believe the Yotel brand is a key differentiator in the local market which continues to drive return and loyal customers to the Hotel.
The Company is also effected by wider factors that would effect the hospitality and travel industries as a whole, including seasonality, weather and events in the local economy.
Despite the challenges highlighted, the directors believe the Company is in a strong position to trade well in the current market as it seeks long term profitability.
D Kovacs
Director
30 April 2025
ERSKINE HOUSE OPCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
The Company operates a 276 room hotel in Edinburgh under the Yotel brand (“the Hotel”). The Hotel officially opened for trading on 5 August 2019. The directors do not expect a significant change to the principal activities of the company in the next 12 months of the approval of the accompanied financial statements.
Results and dividends
During the year, total comprehensive income after tax for the Company was £1,075,887 (2023: £1,220,258). This has been charged to retained earnings. No dividends were declared or paid during the year (2023: £nil).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D Kovacs
(Appointed 19 July 2024)
A Shaw
(Appointed 19 July 2024)
N Chadwick
(Resigned 19 July 2024)
T Tolley
(Resigned 19 July 2024)
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 United Kingdom Accounting Standards, have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. 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.
The Directors confirm that they have complied with the above requirements when preparing these financial statements.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
ERSKINE HOUSE OPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
Going Concern
The Company made a profit of £1,075,887 for the year, but it is also in a net current liability position of £356,458, supported by cash in hand of £578,088 and overall net liability position of £827,958.
The Directors believe it is appropriate to prepare the financial statements on a going concern basis, which assumes that the Company will continue its operations for the foreseeable future and for at least 12 months from the date of approval of these financial statements. In formulating this assessment, the Directors have taken into consideration the historic and forecast profitability of the business and the actual and projected balance sheet and have carried out forecasts which have determined that there is no significant risk to their continuation as a financial and operational going concern. This is on the basis of:
The Company’s profitability in 2024 and visible improvement in sales volumes;
The Company’s results in 2025 to date;
The Company’s anticipated ability to maintain profitability in the foreseeable future.
The Directors are confident in the ability and willingness of group companies to continue to provide financial support for at least 12 months from the date of approval of these financial statements, which mitigates the net current liability and overall net liability position of the Company.
Post Balance Sheet Events
To date, the Company has continued to trade in 2025 as it has done across 2024. There has no change to the Company's 2025 forecasts.
Independent Auditors
PricewaterhouseCoopers CI LLP will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
D Kovacs
Director
30 April 2025
ERSKINE HOUSE OPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ERSKINE HOUSE OPCO LIMITED
- 4 -
Opinion
In our opinion, Erskine House Opco Limited’s financial statements:
give a true and fair view of the state of the company’s affairs as at 31 December 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the balance sheet as at 31 December 2024; the statement of comprehensive income and the statement of changes in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
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.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
ERSKINE HOUSE OPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ERSKINE HOUSE OPCO LIMITED (CONTINUED)
- 5 -
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' Report for the year ended 31 December 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
certain disclosures of directors’ remuneration specified by law are not made; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
ERSKINE HOUSE OPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ERSKINE HOUSE OPCO LIMITED (CONTINUED)
- 6 -
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to the Companies Act 2006, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to the posting of inappropriate journal entries and revenue recognition. Audit procedures performed by the engagement team included:
enquiring with management and those charged with governance as to any actual or suspected instances of fraud or non-compliance with laws and regulations;
reviewing the minutes of meetings of the board of directors for matters relevant to the audit;
identifying and testing journal entries considered to be higher fraud risk, including non-standard journal entries posted;
evaluation of the business rationale for any significant or unusual transactions identified as being outside the normal course of business;
testing of controls around daily cash reconciliation and using advanced data integration software to reconcile revenue from the hotel management system to the general ledger system to confirm revenue journals were posted as expected;
matching revenue from the general ledger to receipts in the bank statements using data analytics;
performing audit procedures to incorporate unpredictability around the nature, timing and extent of our testing; and
testing the disclosures made in the financial statements, as well as in the Director's Report for compliance with the requirements of the Companies Act 2006.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Karl Hairon (Senior Statutory Auditor)
For and on behalf of PricewaterhouseCoopers CI LLP, Statutory Auditor
Chartered Accountants
37 Esplanade
St Helier
Jersey
JE1 4XA
Channel Islands
30 April 2025
ERSKINE HOUSE OPCO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
13,042,800
13,016,501
Cost of sales
(3,964,556)
(4,131,046)
Gross profit
9,078,244
8,885,455
Administrative expenses
(7,548,237)
(7,115,867)
Operating profit
4
1,530,007
1,769,588
Interest payable and similar expenses
7
(88,035)
(158,252)
Profit before taxation
1,441,972
1,611,336
Tax on profit
8
(366,085)
(391,078)
Total comprehensive income for the year
1,075,887
1,220,258
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There was no other comprehensive income for 2024 (2023: £nil).
The notes on pages 10 to 20 form part of these financial statements.
ERSKINE HOUSE OPCO LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
9
1,291
Tangible assets
10
257,621
135,210
Deferred tax asset
15
75,803
441,888
333,424
578,389
Current assets
Stocks
19,719
23,439
Debtors
11
529,516
1,039,859
Cash at bank and in hand
578,088
1,386,885
1,127,323
2,450,183
Creditors: amounts falling due within one year
12
(1,483,781)
(4,068,843)
Net current liabilities
(356,458)
(1,618,660)
Total assets less current liabilities
(23,034)
(1,040,271)
Creditors: amounts falling due after more than one year
13
(804,924)
(863,574)
Net liabilities
(827,958)
(1,903,845)
Capital and reserves
Called up share capital
17
1
1
Profit and loss reserves
(827,959)
(1,903,846)
Total equity
(827,958)
(1,903,845)
The notes on pages 10 to 20 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 30 April 2025 and are signed on its behalf by:
D Kovacs
Director
Company registration number 11736604 (England and Wales)
ERSKINE HOUSE OPCO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2023
1
(3,124,104)
(3,124,103)
Year ended 31 December 2023:
Profit and total comprehensive income
-
1,220,258
1,220,258
Balance at 31 December 2023
1
(1,903,846)
(1,903,845)
Year ended 31 December 2024:
Profit and total comprehensive income
-
1,075,887
1,075,887
Balance at 31 December 2024
1
(827,959)
(827,958)
The notes on pages 10 to 20 form part of these financial statements.
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
1
Accounting policies
Company information
Erskine House Opco Limited (the "Company") is a private company limited by shares incorporated in England and Wales. The registered office is 111 Park Street, London, W1K 7JL.
The company was incorporated on 20 December 2018 and operates Yotel Edinburgh hotel since its opening on 5 August 2019.
1.1
Accounting convention
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.
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 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of MM Star Holdco Limited. These consolidated financial statements are available from its registered office, 111 Park Street, London, W1K 7JL.
1.2
Going concern
The Company made a profit of £1,true075,887 for the year, but it is also in a net current liability position of £356,458, supported by cash in hand of £578,088 and overall net liability position of £827,958.
The Directors believe it is appropriate to prepare the financial statements on a going concern basis, which assumes that the Company will continue its operations for the foreseeable future and for at least 12 months from the date of approval of these financial statements. In formulating this assessment, the Directors have taken into consideration the historic and forecast profitability of the business and the actual and projected balance sheet and have carried out forecasts which have determined that there is no significant risk to their continuation as a financial and operational going concern. This is on the basis of:
The Company’s profitability in 2024 and visible improvement in sales volumes;
The Company’s results in 2025 to date;
The Company’s anticipated ability to maintain profitability in the foreseeable future.
The Directors are confident in the ability and willingness of group companies to continue to provide financial support for at least 12 months from the date of approval of these financial statements, which mitigates the net current liability and overall net liability position of the Company.
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 11 -
1.3
Turnover
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. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue is generated through the sale of hotel rooms, restaurant and bar sales, event spaces, and other sundry income related to the company's principal activity.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
3 years straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Furniture, fixtures and fittings
3 years straight line
Computers
3 years straight line
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.
1.6
Impairment of fixed assets
At each reporting period end date, the company 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.
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.
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 12 -
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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the statement of comprehensive income. Reversals of impairment losses are also recognised in the statement of comprehensive income.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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
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
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.
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
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 the statement of comprehensive income.
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 the statement of comprehensive income.
Derecognition of financial assets
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.
Classification of financial liabilities
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
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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.
Other financial liabilities
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.10
Equity instruments
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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 profit and loss account, 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 when the company has 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.
1.12
Employee benefits
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
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 leases asset are consumed.
1.15
All items of expenses are recognised on an accrual basis in the statement of comprehensive income. A provision for expenses is recognised when the Company has a present obligation (legal or constructive) as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 15 -
2
Judgements and key sources of estimation uncertainty
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.
The directors consider the application of depreciation and amortisation rates to be estimates within the financial statements, which are discussed in more detail in notes 1.4 and 1.5 above.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Rooms
11,687,526
11,719,701
Food and beverage
1,290,690
1,199,753
Other
64,584
97,047
13,042,800
13,016,501
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
176,289
98,569
Amortisation of intangible assets
1,291
5,996
Operating lease charges
3,525,880
3,508,724
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
48,250
42,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
86
94
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
6
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,108,091
1,477,027
Social security costs
146,547
126,267
Pension costs
31,584
26,782
2,286,222
1,630,076
7
Interest payable and similar expenses
2024
2023
£
£
Interest payable to group undertakings
85,599
156,148
Exchange differences on financing transactions
2,436
2,104
88,035
158,252
8
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
366,085
391,078
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:
2024
2023
£
£
Profit before taxation
1,441,972
1,611,336
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.50%)
360,493
378,664
Tax effect of expenses that are not deductible in determining taxable profit
1,843
Tax effect of utilisation of tax losses not previously recognised
(392,136)
Unutilised tax losses carried forward
403,096
Other non-reversing timing differences
3,175
Fixed assets differences
2,417
11,629
Accelerated capital allowances
(12,018)
Taxation charge for the year
366,085
391,078
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
9
Intangible fixed assets
Software
£
Cost
At 1 January 2024 and 31 December 2024
17,986
Amortisation and impairment
At 1 January 2024
16,695
Amortisation charged for the year
1,291
At 31 December 2024
17,986
Carrying amount
At 31 December 2024
At 31 December 2023
1,291
10
Tangible fixed assets
Furniture, fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2024
329,109
17,740
346,849
Additions
298,701
298,701
Disposals
(1,944)
(5,511)
(7,455)
At 31 December 2024
625,866
12,229
638,095
Depreciation and impairment
At 1 January 2024
205,188
6,451
211,639
Depreciation charged in the year
171,906
4,383
176,289
Eliminated in respect of disposals
(1,943)
(5,511)
(7,454)
At 31 December 2024
375,151
5,323
380,474
Carrying amount
At 31 December 2024
250,715
6,906
257,621
At 31 December 2023
123,921
11,289
135,210
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,502
1,767
Amounts owed by group undertakings
92,188
427,136
Other debtors
126,645
317,438
Prepayments and accrued income
309,181
293,518
Total debtors
529,516
1,039,859
Amounts owed by group undertakings are interest free and repayable upon demand.
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Other borrowings
14
175,723
2,403,103
Trade creditors
403,230
404,159
Taxation and social security
271,996
208,503
Other creditors
109,863
118,389
Accruals and deferred income
522,969
934,689
1,483,781
4,068,843
13
Creditors: amounts falling due after more than one year
2024
2023
£
£
Other creditors
804,924
863,574
14
Loans and overdrafts
2024
2023
£
£
Loans from group undertakings
175,723
2,403,103
Payable within one year
175,723
2,403,103
On 25 June 2019 the Company entered into a loan agreement with the previous immediate parent company SOF- 11 Erskine House Holdings Lux Sarl with a maximum facility level of £2,000,000. The facility had an interest rate of 8%. During the year, interest of £85,599 (2023: £156,149) was charged to the interest bearing loan. These loans were repaid on 19th July 2024 and a new facility was extended by the immediate Parent Company. The maximum amount that can be drawn on the facility is £500,000. The facility is interest free and is repayable on demand.
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
(58,491)
(24,742)
Tax losses
134,294
466,630
75,803
441,888
2024
Movements in the year:
£
Asset at 1 January 2024
(441,888)
Charge to profit or loss
366,085
Asset at 31 December 2024
(75,803)
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
31,584
26,782
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.
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1
1
1
1
ERSKINE HOUSE OPCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
18
Operating lease commitments
Lessee
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:
2024
2023
£
£
Within one year
2,346,000
2,346,000
Between two and five years
9,384,000
9,384,000
In over five years
21,943,134
24,730,750
33,673,134
36,460,750
19
Events after the reporting date
There have been no significant events since the balance sheet date requiring disclosure in these financial statements.
20
Ultimate controlling party
The company's immediate parent undertaking is MM Star Bidco Limited and the ultimate controlling party is Millemont GP3 LLP. Both entities are registered in the United Kingdom and their registered office is 111 Park Street, London, W1K 7JL.
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