The directors present the strategic report for the year ended 31 December 2024.
The group operates in the field of property acquisition, development and investment both Commercial and Residential within London and the Southeast of England. This is the seventh Annual Review for the company - Lodgecrest Holdings PLC. The Lodgecrest Group of companies include Lodgecrest Developments Ltd, Lodgecrest Investments Ltd, and Pure Resi Ltd.
Results and performance
The results of the group for the year, as set out on page 11, these show a profit on ordinary activities before taxation of £1.64m (2023 - £2.74m). The shareholders' funds of the group now stand at £53.55m (2023 - £54.21m) at the year-end. The group's continued good performance produced positive results considering the operational period covered. Lodgecrest Holdings PLC's profitability held and with its investment property increasing by £3.51m to £99.84m.
Business environment
Despite affordability challenges, the UK housing market demonstrated resilience throughout 2024, bouncing back from a sluggish 2023. average house prices grew by 3.6% (Nationwide House Price Index) during the year.
This recovery was supported by several positive shifts:
Cost-of-living pressures eased as inflation moved closer to the Bank of England's target.
Interest rates began to decline, reducing mortgage costs and encouraging buyer activity.
Consumer sentiment gradually improved, adding confidence to the market
At the start of 2024, cost-of-living pressures began to ease as inflation moved closer to the Bank of England’s target. This shift has contributed to a gradual improvement in consumer sentiment. In light of these developments—and with interest rates beginning to fall—we anticipate a modest upturn in average house prices over the course of 2025.
The rental market in Southeast England experienced notable resilience also in 2024, despite broader affordability pressures across the UK. Demand remained strong, particularly in commuter towns and urban centres, driven by a combination of limited housing supply and sustained interest from professionals and relocating families.
In 2024, Southeast England’s rental market demonstrated solid resilience amid the broader economic landscape. Despite ongoing affordability challenges across the country, the region continued to attract strong tenant demand, particularly in well-connected commuter towns and thriving urban centres. This demand was sustained by professionals, relocating families, and an undersupplied market affected by ongoing landlord exits prompted by rising costs and regulatory shifts.
Over the 12 months to August 2024, average private rents in the Southeast rose by 6.1%(ONS), outpacing the national average of 5.5% (ONS). While this marked a slowdown from the double-digit increases seen in 2023, it reflects a market starting to recalibrate in the face of tighter household budgets and easing post-pandemic pressures.
Looking ahead, further moderation is anticipated in 2025. However, the enduring imbalance between supply and demand is expected to keep upward pressure on rental values.
Strategy
The group's success relies on the thoughtful selection, accurate pricing, and active management of its owned, sold, and developed sites, as well as the effective oversight of its property portfolio. In 2024 and 2025, the group intends to further expand its residential property holdings through strategic growth initiatives.
PURE RESi Limited, the group's Private Rented Sector (PRS) fund, maintained stable operations throughout 2024. The debtors' book remained steady, with no significant increase, while occupancy levels consistently reached exceptional highs. A remarkably low vacancy rate of just 0.05% highlights the strength and reliability of tenant demand during the period.
In 2024, the Bank of England maintained a cautious stance on monetary policy, holding interest rates at 5.25% for much of the year before gradually easing to 4.25% by June 2025. These elevated rates, a legacy of the inflation-fighting cycle that began in 2022, continued to exert upward pressure on borrowing costs. As a result, bank interest payments remained a significant component of our direct expenses.
Nevertheless, the group benefited from a continued rise in property rental income, which provided a buffer against these higher financing costs and supported overall financial stability.
The group also faced persistent financial risks throughout the year, including pricing uncertainty, volatility in material and labour costs, and fluctuations across both residential and commercial property markets. These challenges underscored the importance of maintaining a disciplined financial strategy and a flexible, risk-aware operational approach.
Key performance indicators
Throughout the year, the Group has achieved substantial advancements in key aspects of our strategy. The Board tracks the company's progress using the following Key Performance Indicators (KPIs):
Key performance indicators
Throughout the year, the Group has achieved substantial advancements in key aspects of our strategy. The Board tracks the company's progress using the following Key Performance Indicators (KPIs):
| 2024 | 2023 | 2022 | 2021 | 2020 |
Turnover | £5.8m | £4.9m | £4.0m | £6.7m | £3.8m |
Net Profit | £1.0m | £2.0m | £4.4m | £4.5m | £7.9m |
Net Asset Value | £53.6m | £54.2m | £53.0m | £49.5m | £48.9m |
Fixed Assets | £100.0m | £96.6m | £93.4m | £86.3m | £77.1m |
The Lodgecrest Group is actively advancing its Private Rented Sector (PRS) presence through the continued development of PURE RESi Ltd. Simultaneously, Lodgecrest Investments Ltd is focused on expanding its investment portfolio by acquiring long-term commercial assets. Backed by robust cash reserves and access to attractive financing options, the group is strategically placed to realise its growth ambitions throughout 2025 and 2026.
Greenhouse Gasses
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report in its emissions, energy consumption or energy efficiency activities.
The directors, in line with their duties under s172 of the Companies Act 2006, act individually and collectively in the way they consider, in good faith, would be most likely to promote success of the group and in doing so have regard, amongst other matters, to the:
Interests of the group's employees
The continued desirability of the group to maintain its reputation for high standards of business conduct
The consequences of any decision in the long term
A need to foster the group's business relationships with suppliers, customers, and others
Impact of the group's operations on the community and the environment
The directors regard the above as key to their decision-making process. The group's business strategy is focused on achieving success for the group in the mid to long-term however, the board promotes a culture of upholding the highest standards of business conduct and regulatory conduct. It also ensures these core values are communicated to the group's employees and embedded in the group's policies and procedures.
The directors recognise that building strong and lasting relationships with our stakeholders will help us to deliver our strategy in line with our long-term values and operate a sustainable business.
The directors are supported in the discharge of their duties by:
A director training programme to further their understanding of their duties and obligations under applicable law and regulation
Processes which ensure the provision of timely management information and escalation through reporting lines to the directors from the group's business areas, its risk and control functions, support teams and various committees
Agenda planning for director and committee meetings to provide sufficient time for the consideration and discussion of key matters.
The Group monitors the impact of its developments on the local community and environment. The Group recognises that it has a responsibility to the environment beyond legal and regulatory requirements. It is committed to reducing its environmental impact and continually improving its environmental performance. It expects its suppliers and other stakeholders to do the same.
Stakeholders
The directors understand the importance of engagement with all of its stakeholders and gives appropriate weighting to the outcome of its decisions for the relevant stakeholder in weighing up how best to promote the success of the group.
The directors regularty discuss issues concerning employees, clients, suppliers, community and environment, regulators, and its shareholder, which it takes into account in its discussions and in its decision-making process.
In addition to this, the directors seek to understand the interests and views of the group's stakeholders by engaging with them directly when required.
The below summarises the key stakeholders and how we engage with each:
Stakeholders | Engagement |
Employees | Whilst we operate with a relatively small workforce, our employees are key to the continued success of our business. In addition to aiming to be a responsible employer in our approach to balanced pay and benefits across both male and female staff.
We encourage an inclusive culture within the organisation and invite different perspectives from our employees and value any new ideas for growth. Our appraisal programme encourages employee feedback and facilities the opportunity for both employees and managers to set performance goals on an annual basis.
Our aim is to nurture a feeling of wellbeing and encourage our employees. We work hard to ensure our employees feel recognised for their hard work. The Group is committed to respecting human rights and complying with The Modem Slavery Act 2015. It has a zero tolerance to slavery and human trafficking and expect all of those in its supply chain to adhere to these values and surrounding this.
The Group has a zero-tolerance approach to bribery and corruption. It is committed to acting professionally, fairly and with integrity in all its business dealings and relationships. It implements and enforces effective systems to counter bribery and corruption and has internal policies in place to educate its employees to recognise and deal with bribery and corruption. |
Clients (Tenants & Purchasers) | Our tenants and purchasers are at the centre of our business.
Our tenant's services and purchaser's sale teams build lasting relationships with current and potential clients to understand their objectives and requirements. We are in regular contact with tenants and purchasers with updates and news of our current developments and the building operation within their blocks. Our service team meet any maintenance requirements raised by our tenants and purchasers.
We understand the importance of building long-term relationships and have shown that we have an excellent track record in this regard. |
Supplies | As a business we operate in the south of east of England, but we work with a wide range of suppliers both in the UK and Europe. We remain committed to being fair and transparent in our dealings with all of our suppliers however the Board encourages the engagement of small business within the local community and area of our developments.
The group has systems and processes in place to ensure all suppliers are paid in a timely manner. |
Community & Environment | The directors' approach to social responsibility, diversity & the community is of high importance. We strive to create sustainable housing that offers greater value but leave a smaller impact. We take a consultative approach focused on building longterm relationships and solving business problems. Diversity and inclusion is a key pillar for Lodgecrest Holdings PLC. A director is assigned responsibility for diversity & inclusion and aims to connect with affiliates and networks. The directors have ensured that there is no "pay gap" between its male and female employees.
The directors continue to commit and broaden the group's work and associations with local charitable organisations, in particular involving local schools by offering mentoring opportunities. |
Shareholders | The directors also seek to behave in a responsible manner towards our shareholders. The directors communicate all information relevant to its shareholders, such as its financial reporting. |
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 11.
Ordinary dividends were paid amounting to £1,665,351. 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 current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the group's contractual and legal obligations.
Trade creditors of the group at the year end were less than 30 days purchases (2023 - less than 30 days), based on the average daily amount invoiced by suppliers during the year.
The financial instruments used by the group arise wholly and directly from its activities and comprise of debtors, cash at bank and creditors. The group regularly reviews its performance by producing monthly management accounts and closely reviewing them. The group regularly monitors the level of its debtors and creditors.
The group has put in place the following measures in order to manage the risks arising from these financial instruments:
The group’s credit risk is primarily attributable to tenants. Credit risk is managed by running credit checks on new tenants and by monitoring payments against contractual agreements. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The group manages its cash position by regularly monitoring cash flow, using cash flow forecasting and variance analysis.
The financial risk arising from the possible non-advance of credit by the group’s trade creditors, either by exceeding agreed credit limits or by not paying with the specified terms, is managed by regularly monitoring the trade balance and credit limit terms from all suppliers.
The company’s arrangements with other companies within the group ensures that in the event it has liquidity requirements above the level of cash generated from its on-going operations, it can access additional funds through group funding. The group’s liquidity requirements and interest rate risks are managed at a group level.
We have audited the financial statements of Lodgecrest Holdings Plc (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 our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the investment and property development sector
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reviewing legal and professional expense incurred;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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 year was £139,786 (2023 - £13,489 profit).
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
Lodgecrest Holdings Plc (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Old Courthouse, 267-273 High Street, Dorking, Surrey, RH4 1RY.
The group consists of Lodgecrest Holdings Plc 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, modified to include the revaluation of investment properties. 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate those of Lodgecrest Holdings Plc and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 December 2024.
All intra-group transactions, balances and unrealised gain 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. Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.
The company has taken advantage of the exemption under the terms of Financial Reporting Standard 102 not to disclose related party transactions with wholly owned subsidiaries within the group.
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 comprises proceeds from property sales, rental income generated from properties held as investments and fees for development of properties held by non-group companies.
Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes and is recognised on the following basis;
Property sales are recognised upon legal completion or unconditional exchange of contracts.
Rental income is recognised on an accrual's basis. in the period to which it relates.
Development fees arising from contracts with non-group members are recognised in accordance with the construction contracts policy.
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 profit and loss account.
No depreciation is provided. Changes in fair value are recognised in the profit and loss account for the period. Deferred taxation is provided on these changes at the rate expected to apply when the property is sold.
The Companies Act 2006 requires all properties to be depreciated. However this requirement conflicts with the generally accepted accounting principle set out in FRS 102. The directors consider that, because investment properties are not held for consumption, but for their investment potential, to depreciate them would not give a true and fair view.
If this departure from the Companies Act 2006 had not been made to give a true and fair view, the profit for the year would have been reduced by depreciation. However the amounts of depreciation cannot reasonably be quantified, because depreciation is only one of many factors reflected in the annual valuation and the amount relating to depreciation of the property cannot be separately identified.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
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).
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 is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 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.
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.
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.
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.
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 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
At each year end, a full review of property valuations is carried out by M Bright, a director with the group responsibility for all land acquisitions and property sales. M Bright uses his extensive experience in the construction industry combined with current market data to make his assessment of property valuations. Valuations are carried out on the basis of comparable evidence of properties advertised for sale and Land Registry actual sales evidence.
The company incurs development costs in relation to site acquisition, design and early-stage planning. These costs are recognised as work in progress (WIP) within inventories when management judges the project to be commercially viable and the costs to be recoverable.
A key judgement is whether to capitalise such costs before planning permission is obtained. Management assesses whether it is probable that planning consent will be granted and the project will generate future economic benefits. Where there is sufficient expectation of success, costs are capitalised. Otherwise, they are expensed. WIP is reviewed at each reporting date, and costs are written off if planning approval becomes unlikely or the project is no longer viable.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The fair value of the investment property has been arrived at on the basis of a valuation carried out at 31 December 2024 by the directors. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
As of reporting date, an assessment of the subsidiary's assets and liabilities has been conducted. The assets are being realised, and liabilities are being settled in accordance with the applicable legal and regulatory requirements.
The long-term loans are secured by fixed and floating charges over the assets in the following companies:
- Lodgecrest Holdings Plc
- Lodgecrest Investments Limited
- Pure Resi Limited
The loan is interest only at a fixed rate over SONIA and is due for repayment in 2027.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is not expected to reverse within 12 months.
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.
The shares carry full voting, dividend and capital distribution (including on winding up) rights. They do not confer any rights of redemption.
The profit and loss reserve of the group includes an amount of £56,568,600 (2023: £54,164,378) in respect of the revaluation of the investment properties. This amount is not distributable.
The £99 other reserve (2023: £99) is in respect of a merger reserve that was created upon the group reorganisation in 2018.
On 24 September 2024 Lodgecrest Asset Management Ltd, which was controlled by Lodgecrest Holdings Plc, was dissolved. There is no profit or loss included in the year to 31 December 2024 or the year to 31 December 2023 relating to the disposal or the performance of Lodgecrest Asset Management Ltd.
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:
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
During the year the group entered into the following transactions with related parties:
At the year end the directors owed the group £Nil (2023: 777,662). The loan is repayable upon demand and interest of £Nil (2023: £17,592) has been charged by the group on the outstanding balance at a rate of 2.75% per annum.