The directors present the strategic report for The Stage Shoreditch Residential Limited (the "Company") for the year ended 31 December 2024.
The principal activity of the Company is to sell residential property on a site in Shoreditch, London.
The Company’s development site is located within a prime London metropolitan area and is well-placed to benefit from the positive long-term outlook for the city.
Turnover for the year has decreased year on year mainly due to lower sales completion during the year. Additionally, the Company received rental income derived from short-term lets of the some of the available residential units. Gross profit is £2,570,351 in the year (2023 profit: £9,531,123).
A part of the Company's strategy is to identify risks and uncertainties in the course of its day to day operations and assess those risks with a view to minimising or mitigating these where possible. The directors consider that the principal risks and uncertainties faced by the Company are in the following categories:
Market risk
The major market risk factor affecting the property investment activities are:
- Tenants defaulting in the payment of rent and charges;
- Increased interest rate on borrowings
The Company manages these risks through suitable policies and procedures. The Company is committed to improving performance through regular review and continuous learning.
Liquidity risk
The liquidity risk faced by the Company is the inability to meet its financial obligations as they fall due. The Company manages this liquidity risks by continually monitoring its cash flow commitments and cash reserves with a wider focus on any potential economic impact of being able to service its existing debt facility.
Credit risk
The Company's debtors are mostly comprised of tenants with short term lease of the residential units. The risk of the tenants defaulting on their rental payment is mitigated by appropriate credit checks performed on tenants to ensure they are able to meet their rental obligations.
Other information and explanations
The directors consider, both individually and together, that they have acted in the way they consider in good faith would be most likely to promote the success of the Company for the benefit of its stakeholders (having regard to matters set out in Section 172 (1) (a) to (f) of the Companies Act 2006) in the decisions taken during the year ended 31 December 2024. Such considerations are set out below, having regard for, amongst other matters, the following:
- the need for the Company to foster strong business relationships with all stakeholders;
- the likely long term consequences of any decision making during the financial year;
- the need to communicate strategic decisions to stakeholders and explain the thought process and impact;
- the desirability of the Company maintaining a reputation for high standards of business conduct;
- the impact of the Company's operations on the community and the environment;
- the health, safety and wellbeing of suppliers and those on-site; and
- the need to act fairly and with integrity.
Whilst the Company does not have any employees (refer to note 5), and does not envision any significant impact to the community or environment due to its operations, no disclosures in relation to the same have been made below. The directors understand the importance of maintaining positive relations with all stakeholders.
Suppliers
As part of ensuring that the Company’s and its stakeholders’ commercial dealings are aligned, regular meetings and other forms of engagement are undertaken. This allows the Company to build on the relationships, discuss the appropriate strategic decisions and ensure milestones are met. This is important to ensure that the principal activity of the Company meets the end customers'
requirements whilst suppliers are treated ethically and fairly.
Customers
The leaseholders of the residential property are the principal end customers of the Company. The Company continuously seeks to identify areas of the property which can be improved with the aim to provide an overall better area in which the leaseholders can operate. The Company through the operations of other intra-group entities also engage with leaseholders in order to identify areas which can be refined in order to provide a more engaging space to the local community which ultimately leads to increased performance.
Shareholders
The Company seeks to generate a long term and stable return for its shareholders. The completion of the development site with the sale of some of the residential properties demonstrates the Company's ultimate intention to serve its shareholders.
On behalf of the board
The directors present their report of The Stage Shoreditch Residential Limited (the "Company") for the year ended 31 December 2024.
The loss for the period, after taxation, amounted to £1,618,162 (2023: £28,511,172). The directors do not recommend payment of a dividend.
The directors who held office during the year and up to the date of approval of the financial statements were as follows:
The directors anticipate that the activity of the Company will continue up until all residential units are sold.
Going concern
The financial statements have been prepared on a going concern basis, which assumes the Company will be able to meet its liabilities as and when they fall due from the date of approval of the financial statements through to 30 September 2026 (the ‘going concern period’). At 31 December 2024, the Company has net current asset of £197,383,490 (2023 net current liabilities: £45,798,626) and net assets of £68,877,264 (2023 net liabilities: £45,798,626). The directors have assessed the going concern period under assessment to be the period from the date of approval of the financial statements through the going concern period.
The directors of the Company have prepared a robust forecast of the anticipated residential unit sales and operational outgoings of the Company over its going concern period which considers severe but plausible downside risks. In preparing the cash flow forecast for this Company as part of the group of companies (“Residential Group”) party to the Macquarie facility over the going concern period, the directors have considered all known operational expenses including the amortisation of the loan facility.
Having considered the downside risk, there is a possibility that the anticipated sales of the residential properties might not be achieved in line with management’s forecasted cash flows (either from a quantum or timing perspective), which could result in cash shortfall and could adversely affect the debt amortisation repayments due during the going concern period; in this case, the Company would be reliant on further discretionary funding from its investors which is not within management’s control. Therefore, there is a material uncertainty which casts significant doubt over the going concern of the Company namely, we note that there is a risk that the entity will be unable to make the scheduled loan repayments in line with the amortisation schedule and fund working capital requirements of the entity as well as the risk that investors will not advance additional funding to cover the shortfall should the Company fail to meet its sales targets.
However, the directors are confident that sales will improve during the going concern period and the amortisation targets will be achieved, with any shortfall funded by the investors of The Stage Shoreditch LLP group. The directors therefore consider it appropriate to prepare the Company’s accounts on a going concern basis for the going concern review period to 30 September 2026.
Ernst & Young 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.
Details of any subsequent event are set out in note 17.
This report has approved by the board on 3 July 2025 and has been prepared in accordance with Companies Act 2006.
We have audited the financial statements of The Stage Shoreditch Residential Limited (the ‘Company’) for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes 1 to 17 including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Material uncertainties relating to going concern
We draw attention to Note 1.2 in the financial statements, which indicates that the Company has material uncertainties regarding its ability to continue as a going concern. The material uncertainties relate to (i) Company’s ability to generate income to pay off the loan balance and fund the working capital requirements and (ii) whether the Company will be able to secure additional commitment from the its parent company to cover the identified cash shortfall within the going concern period.
As stated in Note 1.2, these events or conditions, along with the other matters as set forth in note 1.2, indicate that material uncertainties exist that may cast significant doubt on the Company’s ability to continue as a 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. Our opinion is not modified in respect of this matter.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company's ability to continue as a going concern.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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 directors’ report have been prepared in accordance with applicable legal requirements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Our approach was as follows:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are the Companies Act 2006, those relating to its reporting framework being United Kingdom Generally Accepted Accounting Practice.
We understood how the Company is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of minutes of board meetings of the Company as well as validating how policies and procedures in these areas are communicated and monitored. We also read any correspondence with relevant authorities.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by making enquiries of management and those charged with governance. Where this risk was considered to be higher, we performed audit procedures in response to the identified fraud risks. These procedures included testing of specific accounting journal entries and focused testing on the valuation of the inventories and income recognition. These procedures were designed to provide reasonable assurance that the financial statements were free from fraud and error. We also considered management’s incentives around improving the performance of the Company, the opportunities available to execute any such actions through management override as well as the controls that the Company has established to address any such risks identified, including to prevent, deter and detect fraud and the monitoring of such controls by management.
Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved supplementing our enquiries of management and those charged with governance as well as review of meeting minutes with journal entry testing procedures undertaken using defined risk criteria tailored to the fraud risk factors affecting the Company in line with its current operations.
A further description of our responsibilities for the audit of the financial statements is located 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.
The notes on pages 12 to 20 form part of these financial statements.
The Statement of Comprehensive Income has been prepared on the basis that all amounts relate to continuing operations.
The Stage Shoreditch Residential Limited is a private company limited by shares incorporated in England and Wales. The registered office was changed to 72 Welbeck Street, London, W1G 0AY on 23 April 2024 (previously 116 Upper Street London N1 1QP). The Company number is 09557982. The Company was incorporated on 23 April 2015.
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 £.
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 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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, 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 Company’s contractual obligations expire or are discharged or cancelled.
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.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognised as investment property at the lower of the asset's fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the Statement of Financial Position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. Each lease payment is allocated between repayment of the liability and a finance charge to achieve a constant rate of return on the outstanding liability. The investment properties held under finance leases are subsequently carried at their fair value as they are held for long term capital appreciation. At the reporting date, the cumulative interest of £nil (2023: £nil).
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following are the Company's key sources of estimation uncertainty and the areas requiring significant judgement:
The Company makes a judgement of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management consider factors including the ageing profile and historical experience. The debtor balance at the reporting date includes a provision for impairment, see note 10 for carrying amount of debtors.
Inventory is stated at the lower of cost or net realisable value (NRV). Where there are indicators of impairment of residential property inventory, which indicate that the carrying value may not be recoverable, the Company performs impairment tests based on the fair value by comparing the carrying value with its recoverable amount, being the higher of its fair value, less costs to sell and its value in use. At the reporting date, there has been no impairment (2023: £nil).
The Company establishes provisions based on reasonable estimates based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies.
The Company recognises estimates in relation to accrued expenses recorded at the year end based on past experience of similar outgoings incurred or their knowledge of the expected outgoings to be incurred depending on the nature of goods or services rendered that are yet to be billed.
No non-audit services were provided during the year (2023: £nil).
The number of persons employed by the Company during the year was nil (2023: nil).
All directors of the Company received no remuneration during the current year (2023: £nil) from the Company or any entities within the Group. The directors believe that their qualifying services provided to the Company are incidental to the qualifying services provided to the members of The Stage Shoreditch LLP.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
In the March 2021 budget, it was announced that legislation would be introduced in the Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective April 2023. This was substantively enacted in May 2021 therefore, any closing deferred tax balance is calculated at 25%. The forthcoming change in the corporation tax rate in future years is not expected to materially affect the future tax charge.
The Company has cumulative taxable losses arising in the UK of £3,350,127 (2023: £1,629,856) that are available indefinitely for offset against future taxable profits.
Prior to financial year 2024, the capitalisation rate for the borrowing cost was based on the interest on the bank loan being 3.25% margin plus LIBOR per annum. In 2023 financial year, the capitalisation rate was based on the interest rate 3.25%
margin plus SONIA RATE for that day.
Under FRS 102, the Company capitalises the development expenditure and can elect to capitalise borrowing costs that are directly attributable to the development of a qualifying asset. As a result, stock includes borrowing costs relating to the development which have been capitalised in the year of £nil (2023: £13,553,657). The total borrowing costs capitalised since the start of development is £64,263,564 (2023: £64,263,564).
These costs are recognised against the proceeds of the sales to determine the profit of the development.
The Company has pledged its residential trading inventory as security for a commercial loan.
Amounts owed by group undertakings are unsecured, interest free and payable on demand without restrictions. Amounts due from group undertakings are stated after provisions for impairment of £nil (2023: £21,729,893).
Amounts falling within one year based on the contractual term of payable on demand, however these amounts are not expected to be realised within one year but intended to be settled within the foreseeable period.
Amounts due to group undertakings are unsecured, interest free and payable on demand without restrictions.
Included in amounts due to group undertakings is an unsecured, interest free loan from The Stage Shoreditch LLP, the parent undertaking of the Group, of £nil (2023: £65,175,657) which is payable on demand without restrictions. Accordingly this has been classified as current.
On 5 January 2024 the outstanding loan balance of £201,823,626 due to Lloyds Bank Plc was repaid in relation to the
residential development and a new facility secured with Macquarie Principal Finance Pty Limited, see details on note 12.
The Company has pledged its residential trading inventory as security for a commercial loan.
On 5 January 2024, the outstanding loan balance of £201,823,626, see note 11 due to Lloyds Bank plc was repaid in relation to the residential development and a new facility secured with Macquarie Principal Finance Pty Limited, UK granting the new lender security over the residential tower. The commitment on the new facility was £188 million and expires on 5 January 2027. During the year, the Company partially repaid £31,892,575 of the commitment. At the reporting date, the outstanding loan being the aggregate of the bank loan balance shown in note 11 net of capitalised financing cost of £3,533,897 was £155,534,405.
On 8 January 2024, the share capital of £100 was transferred from The Stage Shoreditch (Master) Unit Trust to The Stage Shoreditch Residential Holdco Limited for a share premium of £116,294,052.
The Company has profit or loss reserves which comprises of the total comprehensive income or loss for the period.
On 5 January 2024, the Company entered into a new facility of Macquarie Principal Finance Pty Limited to partially repay the £390 million facility held with Lloyds Bank Plc. Thus provided a guarantee in respect of a commercial loan of £188 million via a fixed and floating charge on its assets and shares of the residential entity. The Company does not have any other financial commitments, guarantees and contingencies aside from the disclosed commitments.
Agent fees of £520,849 (2023: £162,936) were provided by Vanke Beijing Real Estate Agent Ltd., a member of China Vanke Co., Ltd. group, of which Abloom Homes Limited is a member, which is also a member of The Stage Shoreditch LLP. There is a balance of £nil due to Vanke Beijing Real Estate Agent Ltd. as at 31 December 2024 (2023: £57,848).
The Company has been charged agent fees of £137,788 (2023: £280,419) by Galliard Homes Limited, a subsidiary of Galliard Holdings Limited. There is outstanding balance due to Galliard Homes Limited £247,252 (2023: £nil).
All of the transactions are at market rates and considered to be arm's length.
At the reporting date, the amounts due from fellow members of the Group was £17,233,787 (2023: £53,905,888). At 31 December 2024, the amounts due to fellow members of the Group was £nil (2023: £91,749,110).
All amounts are from The Stage Shoreditch Residential Holdco Limited Holdco post capitalisation.
The Company has taken advantage of the exemption afforded by FRS 102.33.1A not to disclose transactions between wholly owned members of the Group.
The Company's immediate parent undertaking is The Stage Shoreditch Residential Holdco Limited, an entity incorporated in England. The smallest group in which the results of the Company are consolidated is that prepared by The Stage Shoreditch LLP. Copies of the consolidated financial statements of The Stage Shoreditch LLP are publicly available from 72 Welbeck Street, London, W1G 0AY.
The largest group in which the results of the Company are consolidated is that prepared by Eldridge Industries LLC, of 600 Steamboat Road, Greenwich, CT 06830. The financial statements of this entity are not publicly available.
There are no subsequent events to report.