Introduction
The directors present their strategic report of the group for the year ended 31 December 2024.
The principal activity of the group and company continued to be the provision of flexible workspace within London.
The trading performance of the group continues to improve within an evolving post-COVID London office market, with the current year results reflecting increases to revenue and other key performance indicators.
The group's turnover of £11,069,056 for 2024 reflected an 8% uplift when compared to the prior year, driven by increases in both occupancy and average workstation rates in an improving market. Gross profits have increased 36% over the same period, as the group continues to control its costs wherever possible.
The group generated a profit from operations of £341,011, including a £122,315 credit on reversal of prior year impairments for one the group's property assets.
The profit before tax for the year was £62,367. The current year position is driven by the increase in gross profits, and is supplemented by a reduction in net finance costs and revaluation gains on the group's investment properties. Investment property gains were recognised in the year due to upward revisions made for estimated rental values, which now align more closely with rates evidenced in the current market. Net finance costs reduce due to lower fair value losses on the group's interest rate caps coupled with higher interest income on excess cash. During 2024 a new cap was purchased to align with the group's loan extension, this cap, along with an existing cap have better held their value against a backdrop of the expectation that interest rates may remain higher, for longer. Although the implementation of US trade tariffs do not impact the group directly, it certainly increases the risks of a financial downturn impacting the UK property market.
The directors believe that the group is in a solid financial position, with net assets at the year end of £40,776,263 (2023: £40,898,431). During the year the group generated £1,893,921 of cash from its underlying activities, ending 2024 with adequate liquidity reserves of £8,720,357.
The company did not pay any dividends during 2024 (2023: £nil).
Financial risk management objectives and policies
The main risk of the group continues to be a continued financial downturn which could suppress the demand for flexible office space, and lead to interest rates remaining higher, for longer.
The group's bank loan contains covenants related to the operating performance of the property portfolio, if these covenants were to be breached it could materially impact the group's ability to finance its business activities. The directors continuously model the forecast cash flows of the property portfolio in order to identify any risk related to the covenants, which can then be remedied in advance of possible breaches.
Further risks include the group's utilities and other input costs, which remain high following a sustained period of inflation, and result in the group's profitability and cash generation becoming more sensitive to any reductions in revenue. The group is currently exposed to risks regarding business rates, where future and currently unknown legislative changes could impact the group's access to reliefs, which might impact costs of this nature in future periods. The group continues to engage with its advisors in order to assess the impact of any changes in rates legislation.
The group maintains a policy of fixing utility rates in order to reduce its exposure to energy rate rises, and key property contracts are benchmarked and negotiated in order to control expenditure. During the year the group agreed contracts with energy suppliers to fix the majority of its utility costs until the end of 2026.
The directors believe that the group has sufficient resources to be able to withstand these short-term pressures.
Liquidity risk
The group manages its cash and borrowing requirements to ensure it has sufficient liquid resources to meet the operating needs of its business.
Interest rate risk
The group has purchased interest rate caps to reduce its exposure to future interest rate rises.
Principal operational risks and uncertainties
The directors consider the following to be the principal operating risks and uncertainties facing the group:
Changes in the market and demand for office space, which is still evolving as a legacy from the COVID-19 pandemic;
Long term economic environment, including risks of future recession;
High utility costs and high levels of inflation on input costs;
Burdensome investment requirements arising from updates in climate change legislation could result in stranded property assets;
Changes in business rates legislation; and
Competition from new and existing flexible workspace operators.
The directors have taken measures to minimise the group's exposure to these risks, which are reviewed on an ongoing basis.
The key performance indicators for the group improved throughout the year. Average occupancy levels at its properties increased to 67% (2023: 65%) and average rates per workstation rose from £307 to £320 per month.
The directors remain focused on driving occupancy in the existing portfolio and improving the quality of the group's products and services. Despite ongoing market and economic uncertainty, particularly due to evolving working patterns and inflationary pressures; market sentiment is positive and current research suggests that there will be a shift in demand towards more flexible workspace in the UK commercial property sector.
Further to this, the directors continue to explore additional sources of revenue, whether through investment in new properties, or repositioning existing assets. Additionally, the group is reviewing opportunities to enter into agreements to manage flexible workspace operations for third party landlords.
The directors believe that the financial standing of the group, a good portfolio of properties, alongside a rolling program of targeted refurbishments, and the existing business model means the group is well placed to benefit from any increased demand in the longer term.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 8.
No ordinary dividends were paid during the year. The directors do not recommend payment of a final dividend (2023: £nil).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
RSM UK Audit LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
As permitted by s414c(11) of the Companies Act 2006, the directors have elected to disclose information, required to be in the directors' report by Schedule 7 of the 'Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008', in the strategic report.
We have audited the financial statements of Lenta Properties Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, 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.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the group and parent company operate in and how the group and parent company are complying with the legal and regulatory framework;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures and inspecting tax computations.
The group audit engagement team identified the risk of management override of controls and revenue recognition as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing a sample of journal entries and other adjustments utilising data analytics techniques, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and obtaining agreements to ensure revenue recognition is in line with the underlying agreements and FRS102.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
There are no items of other comprehensive income for either the year or the prior year other than the profit/(loss) for the year. Accordingly, no statement of other comprehensive income has been presented.
The notes on pages 14 to 40 form part of these financial statements.
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements. The company’s loss for the year was £525,210 (2023: £1,225,197 loss).
The principal activity of Lenta Properties Limited is the provision of flexible workspace within London. The company is a private company limited by shares and is incorporated in England and Wales. The address of its registered office is CP House, Otterspool Way, Watford, England, WD25 8HR.
The group consists of Lenta Properties Limited and all of its subsidiaries.
The financial statements are presented in Sterling (£).
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 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.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires group management to exercise judgement in applying the company's accounting policies (see note 2).
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The principal accounting policies adopted are set out below.
The consolidated financial statements present the results of the company and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated profit and loss account from the date on which control is obtained. They are deconsolidated from the date control ceases.
Joint ventures
An entity is treated as a joint venture where the group is a party to a contractual agreement with one or more parties from outside the group to undertake an economic activity that is subject to joint control.
In the consolidated financial statements, interests in joint venture undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the joint venture. The consolidated profit and loss account includes the group's share of the profit or loss of such undertakings applying accounting policies consistent with those of the group. In the consolidated balance sheet, the interests in joint venture undertakings are shown as the group's share of the identifiable net assets.
Where entities are jointly controlled by the group but the economic interest in the joint interest differs, the entity is classified as a joint venture but the economic share is accounted for rather than the equity participation.
Having considered the company and group's post year end trading performance, and through forecasting cash reserves on a rolling monthly basis, the directors have a reasonable expectation that the company and group has adequate resources to meet its liabilities as they fall due for a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Revenue is recognised to the extent that it is probable that the future economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, after deducting discounts, rebates, value added tax and other sales taxes.
Revenue comprises licence fee income, rental income, service charges and other recoveries from occupiers of the group's property assets, along with management fees charged to group undertakings.
Licence and rental income is recognised on an accruals basis in the period which it is earned, in accordance with the terms of the licence agreement or lease.
The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided when all of the following conditions are satisfied:
the amount of revenue can be measured reliably; and
it is probable that the group will receive the consideration due under the contract.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'cost of sales' if relating to business centres and 'administrative expenses' for all other assets.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in joint ventures are stated at the group's share of net assets. The group's share of the profits or losses of the joint ventures is included in the consolidated profit and loss account using the equity accounting basis.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
At each reporting period end date, the group reviews the carrying amounts of its tangible 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 balance sheet 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.
The group’s policies for its major classes of financial assets and financial liabilities are set out below.
Basic financial assets, including trade and other debtors, cash and bank balances and intercompany working capital balances are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any 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 trade and other creditors, bank loans, and intercompany working capital balances, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Derivatives, including interest rate caps, 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.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
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 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 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 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 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.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Defined contribution pension plan
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations.
The contributions are recognised as an expense in the consolidated profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.
Group pension plan
Lenta Properties Limited ("the company") participates in a group wide pension scheme administered by CP Holdings Limited providing benefits based on final pensionable pay. The assets of the scheme are held separately from those of the company. There is no contractual agreement or stated policy for charging the net defined benefit costs of the scheme to individual group entities. Therefore, the amounts charged in the consolidated profit and loss account are the contributions payable in the year.
Rentals paid under operating leases are charged to the consolidated profit or loss account on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term.
Finance costs
Finance costs are charged to the consolidated profit or loss account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Interest income
Interest income is recognised in the consolidated profit or loss account using the effective interest method.
Dividends
Equity dividends are recognised when they become legally payable while interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
In the application of the group’s accounting policies, which are described in note 1, the following judgements have been made by the directors:
Impairment of investments and tangible assets
In preparing these financial statements, the directors have exercised judgement in determining whether there are indicators of impairment of the group's investments and tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset.
Classification of property, plant and equipment and investment property
The majority of the Group's properties are used in the business of the Group, with the remainder held for rental income and capital appreciation.
The directors consider the Group's business to be the provision of flexible workspace, which is distinguished from the other property based activities of the Group by shorter, more flexible licence agreements with occupiers, which include a significant range of ancillary services, such as cleaning, utilities and internet. Where properties are occupied under licence agreements, these are considered as the operating assets of the Group and are classified as property, plant and equipment.
Where occupation is by tenants under the terms of leasehold agreements, property assets are determined to be held for rental income and capital appreciation, as such they are classified as investment properties.
Mixed use property
One of the Group's properties is partially used in the business of the Group, and the remainder is held for rental income and capital appreciation. As such, the valuation of the property is split between property, plant and equipment and investment property.
During the year ended 31 December 2024 the proportion of the property used in the business activities of the Group has increased further, and accordingly, a transfer is made between the two components.
The split of the two components is calculated using the total valuation of the property and apportioning this dependent on the use of each floor.
Investment property
The Group engaged both internal and independent valuation specialists to determine the fair value of investment properties at 31 December 2024. Investment properties are valued annually using yield methodology, using market rental values capitalised at market capitalisation rates, but there is an inevitable degree of judgement involved in this approach in that every property is unique and value can only ultimately be reliably tested in the market itself.
The whole of the turnover is attributable to the provision of services.
All turnover arose within the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the year retirement benefits were accruing to 1 director (2023:1) in respect of defined contribution pension schemes (see note 25 for Retirement benefit schemes).
The value of the company's contributions to a defined contribution pension scheme in respect of the highest paid director amounted to £nil (2023: £nil).
A number of directors also received remuneration through a shareholder, CP Holdings Limited.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
Impairments, and reversals thereof, arise due to fluctuations in the market valuation of the property, plant and equipment component of the Group's mixed use asset, which is carried at fair value on the date of transfer from investment property, less accumulated depreciation therefrom.
At each reporting date, the asset is revalued as part of the investment property valuations. Where the valuation indicates the recoverable amount is lower than the carrying amount, an impairment loss is recognised within profit and loss. Where subsequent increases in the valuation occur, impairments are reversed to the extent the asset's value does not exceed the initial measurement less depreciation to date.
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
Interest on bank overdrafts and loans is disclosed net of interest receivable in respect of interest rate caps.
Freehold and leasehold property with a net book value of £43,953,929 (2023: £44,430,760) are pledged as security for bank loans.
At 31 December 2024, one investment property was valued at £1,880,000 and one mixed use property was valued at £4,400,000. Both properties were valued by the directors.
At 31 December 2023, one investment property was valued by the directors at £1,750,000, and one mixed use property was valued by a third party RICS qualified surveyor at £4,100,000.
The mixed use property has been apportioned on a floor space basis, dependent on the use of each floor, with a value of £1,306,809 included within the total at 31 December 2024 (2023: £1,712,928). At 31 December 2024 the balance of £3,093,191 has been transferred to property, plant and equipment within fixed assets (2023: £2,580,088).
Both valuations were made on an open market value for existing use basis.
Investment properties with a valuation of £3,186,813 (2023: £3,462,928) are pledged as security for bank loans.
For the year ended 31 December 2024, the share of the result from joint ventures in the profit and loss account is £355,977 (2023: £398,646).
The provision above represents the group's share of the net liabilities of Lenta Management Limited at 31 December 2024.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Details of joint ventures at 31 December 2024 are as follows:
Co-Work Space Two LLP operated from one set of leased premises, for which the lease expired on the 30 April 2023. The members made the decision to renew this lease from 1 May 2023 within another associated company as part of a restructure. All licences, employees and assets were transferred to the associated company. The members intend for the LLP to be liquidated within the next 6 months.
Lenta Management Limited was incorporated on 16 March 2023 and has not yet commenced trading. The group owns 62.5% of the ordinary share capital, however, the number of shares with voting rights attached equal those of another member. As such, the entity is classified as a joint venture at 31 December 2024.
Financial assets measured at fair value through profit or loss comprise interest rate caps which are valued at the present value of future cash flows estimated and discounted based upon the applicable yield curves derived from quoted interest rates.
Amounts owed by group undertakings are unsecured, interest free and have no fixed date for repayment.
Amounts owed by joint ventures are unsecured, interest free and have no fixed date for repayment.
Amounts owed to group undertakings are unsecured, interest free and have no fixed date for repayment.
The company and its subsidiary have a term loan facility, consisting of a £12m company term loan and £4m subsidiary term loan. The loan facility has a final maturity date of 14 June 2026.
The loans have been secured by fixed charges over certain group properties, and floating charges over certain assets of the group.
The bank loan represents the financial liability amount currently drawn down on the facility, measured at amortised cost using the effective interest rate method. The drawn down amount and any future borrowings bear interest at a rate of SONIA plus a margin which ranges between 2.1% and 2.75%. The rate of SONIA which is applied to the company's borrowings is capped at 2.0% to 14 June 2025, and 2.5% thereafter.
The provision at 31 December 2024 consists of the group's share of accumulated losses of a joint venture. The accumulated losses of the joint venture exceeded the carrying amount of the investment.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The company participates in a defined benefit pension scheme known as the CP Holdings Limited (1986) Retirement Benefit Scheme. The scheme provides retirement benefits on the basis of members’ final salary. The scheme is a group scheme that shares risks between entities under the common control of CP Holdings Limited. There is no contractual agreement or stated policy for charging the net defined benefit cost of the plan as a whole to individual group entities that participate in the plan. Therefore, as required by FRS 102 Section 28 “Employee Benefits”, the company accounts for this scheme as if it was a defined contribution scheme. The amount charged to the consolidated profit and loss account represents contributions payable to the scheme in respect of the accounting period.
The company agreed a funding plan with the trustee, whereby ordinary contributions were made into the scheme based on a percentage of active employees’ salary. Additional contributions are agreed with the trustee to reduce the funding deficit where necessary.
The surplus for CP Holdings Limited (1986) Retirement Benefit Scheme as at 31 December 2024 was £3,327,000 (2023: £3,586,000). This valuation is based upon the most recent actuarial valuation of the scheme as at 5 April 2022, which has been adjusted to 31 December 2024 by a qualified independent actuary.
The contribution rate is generally reviewed every three years following each full actuarial valuation of the scheme. Following the full actuarial valuation of the scheme as at 5 April 2022, the schemes trustees and participating employers agreed that no further employer contributions were required with effect from 1 October 2022.
There were no contributions made by the company during the year (2023: £nil).
The fair value of the major class of scheme assets as at the reporting date was as follows:
Annuities | £10,467,000 |
Gilts | £6,174,000 |
Cash | £461,000 |
Liquidity Fund | £1,103,000 |
Corporate bonds | £1,465,000 |
The group also operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £130,477 (2023: £112,974).
There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
Company
The company has guaranteed bank borrowings of other group companies. At 31 December 2024 the amount outstanding was £4,000,000 (2023: £4,000,000).
Group and company
The company has provided guarantees for rental payments due under the terms of operating leases held by joint ventures with an annual commitment of £537,000 (2023: £716,000).
The profit and loss account represents accumulated comprehensive income for the year and prior periods.
At 31 December 2024 the group and the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
Amounts owed to related parties are unsecured, interest free and repayable on demand.
The aggregate remuneration of key management personnel for the year ended 31 December 2024 was £322,826 (2023: £199,088).
On 16 May 2025 Applepeach Limited sold Delta House for gross proceeds of £2,850,000. At 31 December 2024 the property was held at its net book value of £1,463,428 within Freehold property.
The group owns 50.0% of the ordinary share capital of Applepeach Limited.
On 16 April 2025 Lenta Management Limited agreed a management contract to operate flexible workspace on behalf of a third-party landlord.
The agreement requires Lenta Management Limited to loan the client funds for the upfront fit-out costs of a new business centre, which will be repaid with interest over an initial term of five years. Lenta Management Limited will then manage this business centre in order to generate returns for the client, earning a base fee for its services, with a profit share arrangement also agreed.
The group owns 62.5% of the ordinary share capital of Lenta Management Limited.
Cash and cash equivalents at the end of the year comprise cash at bank and in hand.