Company registration number 07988275 (England and Wales)
GAINFORD HOTELS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
GAINFORD HOTELS LIMITED
COMPANY INFORMATION
Director
Mr I Khaliq
Secretary
Ms L Kell
Company number
07988275
Registered office
Gainford House
Picktree Lane
Chester le Street
Co Durham
DH3 3SR
Auditor
Robson Laidler Accountants Limited
Fernwood House
Fernwood Road
Jesmond
Newcastle upon Tyne
NE2 1TJ
GAINFORD HOTELS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 26
GAINFORD HOTELS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The director presents the strategic report for the year ended 31 December 2024.
Review of the business
The year 2024 marks 14 years of successful trading in the hospitality sector. Building on this strong foundation, the Group has expanded its strategic vision with the acquisition of Milburn House a landmark property in heart of Newcastle city center having covered area 147,000sqf. This move signifies the Group’s entry into commercial real estate management, reinforcing its commitment to diversification and long-term growth. Milburn House offers premium office spaces with a full office facilities and services, alongside flexible meeting areas designed to meet the evolving needs of modern businesses.
The business demonstrated a strong post-COVID-19 recovery in 2022, with revenue increasing from £12.4 million in 2021 to £22.02 million—representing a 78% uplift. However, revenue declined slightly to £21.9 million in 2023 and remained relatively stable in 2024 at £22.4 million. This plateau reflects ongoing challenges in the hospitality industry, including reduced event activity, lower tourism volumes, and more cautious consumer spending in the leisure and entertainment segments.
Despite the stagnation in top-line growth since 2022, the Company achieved an improved Net Profit Before Tax (NPBT) margin of 18.4% in 2024, up from 16.0% in 2023. This improved profitability is largely the result of diversified revenue strategies, rigorous cost management, and operational efficiencies. The management team has remained agile and focused, targeting short-term occupancy gains and deploying tactical initiatives to maintain competitiveness in a challenging market environment.
Principal risks and uncertainties
Economic downturn
The company operates in a service sector which is largely dependent upon individuals' surplus disposable income. The company manages this risk by entering into contracts which can guarantee occupancy at their hotels, by developing the wedding function/conference side of the business and by strong marketing to specific groups of individuals with greater disposable income.
Competitor pressure
The market and geographical locations within which the company operates are without doubt very competitive. The company faces pressure both from large leisure chains and also local boutique brands. The company manages this risk by continually seeking to enhance the service it offers, by providing quality product and services, by maintaining strong relationships with key customers and contacts and close monitoring over suppliers.
Reliance on key suppliers
The company's purchasing activities could expose it to over reliance on certain suppliers and inflationary pricing pressure. The company manages this risk ensuring there is enough depth in its supplier base and by seeking to find alternative suppliers where necessary.
Loss of key personnel
This would represent significant operational difficulties for the company. Management seeks to ensure that key personnel are remunerated to ensure good performance is recognised. The group has a strong financial and operational team in place.
Partial/total damage to property by fire
All businesses are highly insured, should an outlet be lost or damaged by a major fire. The company also insures against the loss of profits and payment of payroll to protect financially in the unlikely event an outlet should be totally lost to fire.
Key performance indicators
Management use a range of performance measures to monitor and manage the business - the key cnes being turnover and EBITDA. These measures are clearly distinguishable in the profit and loss account and are discussed earlier in this report.
GAINFORD HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Section 172(1) statement
The director of Gainford Hotels Limited considers that he has acted in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172 (1)(a-f) of the act) in the decisions taken during the year ended 31 December 2024.
Our growth strategy is designed to have a long term beneficial impact on all of our stakeholders: it is customer focused and also provides security and development opportunities for our employees, effective management of our supply chain and enables us to deliver shareholder value whilst contributing and supporting our North East industry and communities.
Mr I Khaliq
Director
30 June 2025
GAINFORD HOTELS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
The director presents his annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company continued to be that of operating hotels, bars and leisure facilities.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr I Khaliq
Financial instruments
The company finances its activities with a combination of bank loans, finance leases and hire purchase contracts, cash and short term deposits. Overdrafts are used to satisfy short term cash flow requirements. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the company's operating activities. The purpose is to manage the interest rate risks arising from the company's operations and its sources of finance.
Cash flow and liquidity risk
The company aims to mitigate risk by forecasting cash requirements and managing available cash on a day to day basis.
Interest rate risk
The company invests surplus cash in a floating rate interest yielding bank deposit account and has access to a floating rate interest bearing overdraft facility and an asset finance revolving credit line. The company interest income and expenses are therefore affected by movements in interest rates. The company does not undertake any hedging activity.
Credit risk
The company has external debtors and undertakes assessments of the credit worthiness of its customers in order to manage the risk of default.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the company. This is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.
GAINFORD HOTELS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
Future developments
A key component of the company's investment strategy is the £200 million mixed-use development at the historically acquired Newbridge Street site in Newcastle city centre. The project includes a 190-unit residential tower, a 200-bed hotel, commercial office space, and a public realm with restaurants, bars, and fitness facilities, aimed at contributing to the area’s regeneration.
Auditor
Robson Laidler Accountants Limited 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.
Energy and carbon report
We have considered the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD) when preparing this report. These recommendations encourage businesses to increase disclosure of climate-related information, with an emphasis on financial disclosure. Gainford Hotels Limited supports these recommendations and are committed to disclosing the relevant information which can be found below.
Emissions and energy consumption
The kWh energy usage has been converted to a tonnes of carbon dioxide equivalent (tCO2e) using the governments published conversion factors.
During the year ended 31 December 2024, Gainford Hotels Limited recorded greenhouse gas emissions from:
Gas of 938.17 tonnes of CO2e per year (2023: 906.63 tonnes)
Purchased electricity of 562.44 tonnes of CO2e per year (2023: 604.64 tonnes)
Fleet mileage of 39.46 tonnes of CO2e per year (2023: 42.21 tonnes)
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
GAINFORD HOTELS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 5 -
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.
On behalf of the board
Mr I Khaliq
Director
30 June 2025
GAINFORD HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GAINFORD HOTELS LIMITED
- 6 -
Opinion
We have audited the financial statements of Gainford Hotels Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the 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; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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 in this regard.
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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
GAINFORD HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GAINFORD HOTELS LIMITED (CONTINUED)
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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 auditor's 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:
Based on our understanding of the company, we identified that there were principal risks of non-compliance with laws and regulations central to the company's operation of its bars, restaurants and hotels. However, it does not have to report to a regulatory body and there is no supervisory body which monitors its operations. We also considered those laws and regulations that have a direct impact on the financial statements of the company such as the Companies Act 2006 and UK tax legislation.
GAINFORD HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GAINFORD HOTELS LIMITED (CONTINUED)
- 8 -
Audit procedures performed by the engagement team included:
Discussions with directors and key management including consideration of known or suspected instances
of non-compliance with laws and regulations and fraud;
Evaluation and testing of the operating effectiveness of management's controls designed to prevent and
detect irregularities;
Reviewing relevant meeting minutes;
Identifying and testing journal entries based on risk criteria;
Testing transactions entered into outside of the company's normal course of business.
There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 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.
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.
Peter Charles BSc FCA (Senior Statutory Auditor)
For and on behalf of Robson Laidler Accountants Limited, Statutory Auditor
Accountants
Fernwood House
Fernwood Road
Jesmond
Newcastle upon Tyne
NE2 1TJ
30 June 2025
GAINFORD HOTELS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
22,474,156
21,919,673
Cost of sales
(11,198,055)
(11,202,188)
Gross profit
11,276,101
10,717,485
Administrative expenses
(8,178,494)
(7,620,331)
Other operating income
1,032,470
446,087
Operating profit
4
4,130,077
3,543,241
Interest receivable and similar income
8
900
Interest payable and similar expenses
9
(27,897)
Profit before taxation
4,130,977
3,515,344
Tax on profit
10
(1,371,789)
(342,594)
Profit for the financial year
2,759,188
3,172,750
GAINFORD HOTELS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 10 -
2024
2023
£
£
Profit for the year
2,759,188
3,172,750
Other comprehensive income
Tax relating to other comprehensive income
935,941
Total comprehensive income for the year
3,695,129
3,172,750
GAINFORD HOTELS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
178,338
293,338
Tangible assets
12
61,321,425
61,045,371
Investment property
13
3,520,000
3,520,000
65,019,763
64,858,709
Current assets
Stocks
14
225,108
243,085
Debtors
15
11,247,310
6,990,777
Cash at bank and in hand
1,652,552
3,240,570
13,124,970
10,474,432
Creditors: amounts falling due within one year
16
(6,101,295)
(5,799,646)
Net current assets
7,023,675
4,674,786
Total assets less current liabilities
72,043,438
69,533,495
Provisions for liabilities
Deferred tax liability
17
6,864,674
8,049,860
(6,864,674)
(8,049,860)
Net assets
65,178,764
61,483,635
Capital and reserves
Called up share capital
19
100
100
Revaluation reserve
20
27,267,598
26,986,399
Other reserves
24,700,074
24,700,074
Profit and loss reserves
13,210,992
9,797,062
Total equity
65,178,764
61,483,635
The financial statements were approved and signed by the director and authorised for issue on 30 June 2025
Mr I Khaliq
Director
Company registration number 07988275 (England and Wales)
GAINFORD HOTELS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
Share capital
Revaluation reserve
Capital contribution reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2023
100
27,646,109
24,700,074
5,964,602
58,310,885
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
3,172,750
3,172,750
Transfers
-
(659,710)
-
659,710
-
Balance at 31 December 2023
100
26,986,399
24,700,074
9,797,062
61,483,635
Year ended 31 December 2024:
Profit
-
-
-
2,759,188
2,759,188
Other comprehensive income:
Tax relating to other comprehensive income
-
935,941
-
935,941
Total comprehensive income
-
935,941
-
2,759,188
3,695,129
Transfers
-
(654,742)
-
654,742
-
Balance at 31 December 2024
100
27,267,598
24,700,074
13,210,992
65,178,764
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
1
Accounting policies
Company information
Gainford Hotels Limited is a private company limited by shares incorporated in England and Wales. The registered office is Gainford House, Picktree Lane, Chester le Street, Co Durham, DH3 3SR.
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 UK sterling which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards, modified to include the revaluation of freehold properties and to include investment properties at fair value. 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 company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group who are wholly owned.
The financial statements of the company are consolidated in the financial statements of Gainford Care Homes Limited. These consolidated financial statements are available from its registered office, Gainford House, Picktree Lane, Chester Le Street, County Durham, DH3 3SR.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Bar and leisure outlet takings are recognised at point of sale excluding value added tax.
Hotel income is recognised at point of sale or booking and is exclusive of value added tax.
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.4
Intangible fixed assets - goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measure at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
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:
Land and buildings
2% straight line
Property improvements
10% straight line
Plant and machinery
10% straight line
Fixtures and fittings
10% straight line
Equipment
10% straight line
Motor vehicles
33% 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
Investment property
Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.
The methods and significant assumptions used to ascertain the fair value of £3,520,000 and fair value movement of £Nil included in the profit/loss for the year are as follows:
Investment property was valued on an open market basis on 31 December 2021 by Lambert Smith Hampton, a registered RICS valuer. In the opinion of the directors there has been no significant change in fair value since that date
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
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 profit or loss. Reversals of impairment losses are also recognised in profit or loss.
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
1.8
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.
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 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.
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.
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
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.
1.9
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.
1.10
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.
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
As lessee
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.
As lessor
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
2
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements. If, in the future, such estimates and assumptions, which are based on management's best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and judgements will be modified as appropriate in the year in which the circumstances change.
The key assumptions concerning the future and other key sources of of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:
The estimated useful lives of tangible fixed assets
The estimated fair value of the investment property
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Accomodation
14,444,251
12,518,026
Wet sales
4,600,356
5,424,154
Dry sales
2,731,636
3,165,489
Room hire
438,413
535,844
Other miscellaneous income
259,500
276,160
22,474,156
21,919,673
2024
2023
£
£
Other revenue
Interest income
900
-
Rents receivable
1,032,470
446,087
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
2,780,968
2,649,630
Profit on disposal of tangible fixed assets
-
(151,346)
Amortisation of intangible assets
115,000
113,250
Operating lease charges
11,126
11,510
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
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
18,000
22,000
For other services
Taxation compliance services
3,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Management
12
12
Hotel, bar and restaurant
467
499
Total
479
511
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
6,886,371
6,874,999
Social security costs
371,984
349,822
Pension costs
74,430
81,675
7,332,785
7,306,496
7
Director's remuneration
The director of the company receives remuneration from the ultimate parent undertaking, Gainford Care Homes Limited.
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
900
9
Interest payable and similar expenses
2024
2023
£
£
Other interest
27,897
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,621,034
1,213,438
Adjustments in respect of prior periods
(27,211)
Total current tax
1,621,034
1,186,227
Deferred tax
Origination and reversal of timing differences
(249,245)
(843,633)
Total tax charge
1,371,789
342,594
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
4,130,977
3,515,344
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
1,032,744
878,836
Tax effect of expenses that are not deductible in determining taxable profit
66,649
11,511
Adjustments in respect of prior years
(27,211)
Effect of change in corporation tax rate
(68,852)
Depreciation on assets not qualifying for tax allowances
492,891
363,631
Amortisation on assets not qualifying for tax allowances
28,750
28,312
Deferred tax
(249,245)
(843,633)
Taxation charge for the year
1,371,789
342,594
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2024
2023
£
£
Deferred tax arising on:
Revaluation of freehold property
(935,941)
-
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2024 and 31 December 2024
1,150,004
Amortisation and impairment
At 1 January 2024
856,666
Amortisation charged for the year
115,000
At 31 December 2024
971,666
Carrying amount
At 31 December 2024
178,338
At 31 December 2023
293,338
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
12
Tangible fixed assets
Land and buildings
Property improvements
Plant and machinery
Fixtures and fittings
Equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost or valuation
At 1 January 2024
56,173,973
10,471,515
4,019,179
3,013,261
341,083
439,278
74,458,289
Additions
2,598,026
61,098
141,112
83,507
172,075
107,446
3,163,264
Disposals
(106,242)
(106,242)
At 31 December 2024
58,771,999
10,532,613
4,160,291
3,096,768
513,158
440,482
77,515,311
Depreciation and impairment
At 1 January 2024
2,303,601
5,025,630
3,468,780
2,167,985
190,380
256,542
13,412,918
Depreciation charged in the year
1,231,383
1,052,094
154,710
226,997
38,843
76,941
2,780,968
At 31 December 2024
3,534,984
6,077,724
3,623,490
2,394,982
229,223
333,483
16,193,886
Carrying amount
At 31 December 2024
55,237,015
4,454,889
536,801
701,786
283,935
106,999
61,321,425
At 31 December 2023
53,870,372
5,445,885
550,399
845,276
150,703
182,736
61,045,371
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
The carrying value of land and buildings comprises:
2024
2023
£
£
Freehold
59,691,904
59,316,257
Land and buildings
The fair value of the company's land and buildings were revalued via a full valuation on 31 December 2021 by Lambert Smith Hampton, a RICS registered valuer. A desk top valuation was performed by Lambert Smith Hampton on 31 December 2023 which indicated that the value was not materially different to the carrying value.
The revaluation surplus is disclosed in note 20.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Land and buildings
2024
2023
£
£
Cost
24,940,601
24,940,601
Accumulated depreciation
(1,455,356)
(878,716)
Carrying value
23,485,245
24,061,885
13
Investment property
2024
£
Fair value
At 1 January 2024 and 31 December 2024
3,520,000
The historic cost of the investment property is £2,158,240 (2023 £2,158,240).
14
Stocks
2024
2023
£
£
Finished goods and goods for resale
225,108
243,085
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 24 -
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
288,317
229,273
Amounts owed by group undertakings
10,548,419
6,040,730
Other debtors
7,777
33,656
Prepayments and accrued income
402,797
687,118
11,247,310
6,990,777
16
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
1,299,748
1,025,538
Amounts owed to group undertakings
326,409
327,248
Corporation tax
1,584,394
1,010,066
Other taxation and social security
962,720
1,108,468
Other creditors
445,589
554,130
Accruals and deferred income
1,482,435
1,774,196
6,101,295
5,799,646
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
549,046
797,783
Revaluation of freehold property
6,004,495
6,940,436
Revaluation of investment property
312,063
312,063
Short term timing differences
(930)
(422)
6,864,674
8,049,860
2024
Movements in the year:
£
Liability at 1 January 2024
8,049,860
Credit to profit or loss
(249,245)
Credit to other comprehensive income
(935,941)
Liability at 31 December 2024
6,864,674
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 25 -
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
74,430
81,675
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.
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
20
Revaluation reserve
2024
2023
£
£
At the beginning of the year
26,986,399
27,646,109
Deferred tax on revaluation of tangible assets
935,941
-
Transfer to retained earnings
(654,742)
(659,710)
At the end of the year
27,267,598
26,986,399
21
Capital contribution reserve
2024
2023
£
£
At the beginning and end of the year
24,700,074
24,700,074
This reserve records the value of investments made by the parent company which have been capitalised.
22
Operating lease commitments
As lessor - operating leases
The investment properties are let under operating lease agreements.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
GAINFORD HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
22
Operating lease commitments
(Continued)
- 26 -
2024
2023
Future amounts receivable under operating leases:
£
£
Within 1 year
374,021
259,067
Years 2-5
1,189,800
754,501
After 5 years
506,017
554,427
2,069,838
1,567,995
23
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Key management personnel
312
-
Other information
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
24
Ultimate controlling party
Gainford Care Homes Limited is regarded by the directors as being the company's ultimate parent company. A copy of the consolidated financial statements can be obtained via the Companies House website.
The ultimate controlling party is The Trustees of the Khaliq Family Discretionary Trust.
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