Company registration number SC128215 (Scotland)
STRATHMORE HOTELS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
STRATHMORE HOTELS LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
STRATHMORE HOTELS LIMITED
COMPANY INFORMATION
- 1 -
Directors
L Hamill
B Rickard
C L Rickard
Company number
SC128215
Registered office
116 Strathmore House
East Kilbride
United Kingdom
G74 1LF
Auditor
Consilium Audit Limited
169 West George Street
Glasgow
Scotland
G2 2LB
STRATHMORE HOTELS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

2022 saw a continuation of increasing costs due to the War in Ukraine pushing energy costs upwards. Continued supply chain issues also saw significant inflationary pressures and by extension interest rate increases. However due to Strathmore Hotels historic strategy of only operating units within key tourist and conference locations the company was, and is, always placed well to recover swiftly from any forced restriction on trade. In turn, the company has always maintained prudence and risk aversion in terms of borrowing so low Loan to Value ("LTV") have always been maintained. This. coupled with shift away in 2014 in relying on fossil fuels as it's primary energy source, means that, although the company has experienced significant increases in costs - the company is as well placed as any other to cope, and absorb, such increasing cost pressures.

Principal risks and uncertainties

Operating Climate

The directors regard the company as having a strong and stable customer base. The majority of the customers are UK and European based. Guest demographic and strong location of the hotels maintains a demand that the directors believe assures the company's core business. The principal risk in the medium term is the continuing economic climate.

 

Interest Rate risk

The company finances it operations through a mixture of retained profits and bank borrowings. It is the company's policy to undertake borrowings on the basis of variable interest rate facilities. The performance of the company during the pandemic and its consequential lack of requirement of extra borrowing, government assistance (i.e CBILS loan etc), coupled with its long-term strategy of minimising (LTV), means the directors are confident that the overall resources of the company are sufficient to enable it to absorb any potential adverse change in interest rate.

 

Energy Costs

Oil and Gas prices continue to fluctuate in the year which has resulted in record high prices of fossil fuel. In 2014 the directors decided to convert the hotels primary energy source from Gas to sustainable Biomass. This conversion has been successful and operated effectively for several years. As a result, the directors are confident that the company is well placed to avoid extreme energy costs due to its lack of reliance on Gas. 2023 saw the completion of installation and certification of a new Biomass system at the Ben Wyvis Hotel in Strathpeffer, replacing the aging Oil Heating system that was in situ. This new system at Ben Wyvis, which was installed in 2024, has seen a significant decrease in energy costs at the site.

Key performance indicators

An analysis of the company's key performance indicators is as follows:

 

 

 

2023

2022

 

£m

£m

Turnover

19.2

17.6

Gross profit

8.2

7.1

Operating profit

1.2

1.2

Profit before tax

0.4

0.8

Interest cover

1.4

2.8

Net assets

19.9

19.8

Bed Occupancy

 

63%

62%

Future developments

The directors will continue with current management policies which have resulted in the group's growth in recent years.

STRATHMORE HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Section 172 statement

The likely consequences of any decision in the long term

The directors are fully committed to the long-term sustainability of the company. This is evidenced by recent hotel additions and the continuing refurbishment of the hotel portfolio. All strategic decisions are made with a long term focus in mind.

 

The interests of the company's employees

The directors recognise the role the employees play in delivering customer service to guests through not only customer-facing roles, but also in back-office administration and maintenance of the buildings and grounds.

 

We are active in training and motivating our workforce to retain our employees and provide the level of service that we pride ourselves in.

 

The impact of the company's operations on the community and the environment

We are committed to supporting the communities that we are based in and being environmentally responsible.

 

The importance of the company's business relationships with suppliers, customers and others

We aim to give a high level of service to our customers. Guest feedback is sought by way of satisfaction questionnaires and KPls.

 

There are a number of key suppliers that maintain engagement with the individual hotels. We work closely with our regular suppliers and maintain regular contact by phone and email.

 

The desirability of the company maintaining a reputation for high standards of business conduct

The directors are determined to ensure that the business operates to the highest standards possible. The directors review performance regularly to ensure that the business is able to meet these standards.

 

The need to act fairly between members of the company

The directors and members work closely together to ensure that all relevant parties are consulted when determining a course of action for the business.

On behalf of the board

C L Rickard
Director
24 July 2025
STRATHMORE HOTELS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of owning and operating hotels.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

L Hamill
B Rickard
C L Rickard
L Cormack
(Resigned 30 May 2024)
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's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Auditor

Consilium Audit Limited were appointed as auditor to the company and are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

The company has taken exemption from Energy and Carbon reporting due to the fact that this information is included in the accounts of the ultimate parent company, Strathmore Leisure Limited.

STRATHMORE HOTELS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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
C L Rickard
Director
24 July 2025
STRATHMORE HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STRATHMORE HOTELS LIMITED
- 6 -
Opinion

We have audited the financial statements of Strathmore Hotels Limited (the 'company') for the year ended 31 December 2023 which comprise 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:

Basis for opinion

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 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 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

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are 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:

STRATHMORE HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE HOTELS LIMITED
- 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 directors' 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are 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 directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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.

 

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:

 

 

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.

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.

STRATHMORE HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE HOTELS LIMITED
- 8 -

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.

David Holt
Senior Statutory Auditor
For and on behalf of Consilium Audit Limited
Statutory Auditor
169 West George Street
Glasgow
Scotland
G2 2LB
30 July 2025
STRATHMORE HOTELS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
19,188,027
17,613,576
Cost of sales
(10,975,806)
(10,471,883)
Gross profit
8,212,221
7,141,693
Administrative expenses
(6,982,300)
(5,974,327)
Operating profit
4
1,229,921
1,167,366
Interest payable and similar expenses
7
(861,545)
(416,234)
Profit before taxation
368,376
751,132
Tax on profit
8
(205,187)
18,979
Profit for the financial year
163,189
770,111

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 12 to 23 form part of these financial statements.

STRATHMORE HOTELS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
31,735,029
31,870,783
Current assets
Stocks
10
306,967
288,752
Debtors
11
7,192,366
6,470,902
Cash at bank and in hand
19,649
19,649
7,518,982
6,779,303
Creditors: amounts falling due within one year
12
(5,271,649)
(5,045,881)
Net current assets
2,247,333
1,733,422
Total assets less current liabilities
33,982,362
33,604,205
Creditors: amounts falling due after more than one year
13
(9,753,658)
(9,619,355)
Provisions for liabilities
Deferred tax liability
15
4,306,172
4,225,507
(4,306,172)
(4,225,507)
Net assets
19,922,532
19,759,343
Capital and reserves
Called up share capital
17
250,000
250,000
Revaluation reserve
5,942,967
5,942,967
Capital redemption reserve
1,300,000
1,300,000
Profit and loss reserves
12,429,565
12,266,376
Total equity
19,922,532
19,759,343

The notes on pages 12 to 23 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 24 July 2025 and are signed on its behalf by:
C L Rickard
Director
Company Registration No. SC128215
STRATHMORE HOTELS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2022
250,000
5,942,967
1,300,000
11,496,265
18,989,232
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
770,111
770,111
Balance at 31 December 2022
250,000
5,942,967
1,300,000
12,266,376
19,759,343
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
163,189
163,189
Balance at 31 December 2023
250,000
5,942,967
1,300,000
12,429,565
19,922,532

The notes on pages 12 to 23 form part of these financial statements.

STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Strathmore Hotels Limited is a private company limited by shares incorporated in Scotland. The registered office is 116 Strathmore House, East Kilbride, United Kingdom, G74 1LF. The company's registration number is SC128215.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Strathmore Leisure Limited. These consolidated financial statements are available from its registered office.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

1.3
Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Turnover is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

 

Room revenue is recognised at the point at which the rooms are occupied, whilst food and beverage sales are recognised at the point of sale.

1.4
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.

STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

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:

Freehold land and buildings
Over 50 years
Leasehold properties
Over 20 years
Fixtures and fittings
Over 5 - 30 years
Motor vehicles
Over 4 years

Freehold land is not depreciated.

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 the profit and loss account.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in the profit and loss account or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in the profit and loss account.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss account, 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.

STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
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.

Impairment of financial assets

Financial assets, other than those held at fair value through the profit and loss account are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the profit and loss account.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.

STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, 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.

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.

STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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

Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value, and are depreciated in accordance with the above depreciation policies.

 

Future instalments payable under such agreements, net of finance charges, are included within creditors. Rentals payable are apportioned between the capital element, which reduces the outstanding obligation included within creditors, and the finance element, which is charged to the profit and loss account on a straight line basis.

Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in the profit and loss account.

STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Property valuations (including associated fixtures and fittings)

Individual freehold and leasehold properties are carried at fair value at the balance sheet date. A full valuation is obtained on a regular basis, and in any year where it is likely that there has been a material change in value. In years where no valuation is performed an assessment of valuation is carried out by the directors in light of current market conditions.

 

The carrying value of tangible fixed assets carried at valuation is outlined at note 9.

Depreciation

The estimates and assumptions made to determine asset lives require judgements to be made as regards to useful lives and residual values. The useful lives and residual values of the company's fixed assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets. Historically, changes in useful lives have not resulted in material changes to the company's depreciation charge.

 

The depreciation charge in the year is outlined at note 9.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Owning and operating hotels
19,188,027
17,613,576
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,500
21,250
Depreciation of owned tangible fixed assets
1,111,648
1,118,377
Operating lease charges
135,430
133,683
STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Hotels
406
366
Administration
9
10
Total
415
376

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
6,866,758
6,562,340
Social security costs
526,514
451,911
Pension costs
137,196
129,689
7,530,468
7,143,940
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
147,500
228,333
Company pension contributions to defined contribution schemes
5,767
5,433
153,267
233,766
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
87,500
Company pension contributions to defined contribution schemes
n/a
1,321

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
861,545
416,234
STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
124,522
164,105
Adjustments in respect of prior periods
-
0
(19,229)
Total current tax
124,522
144,876
Deferred tax
Origination and reversal of timing differences
80,665
95,245
Adjustment in respect of prior periods
-
0
(259,100)
Total deferred tax
80,665
(163,855)
Total tax charge/(credit)
205,187
(18,979)

The actual charge/(credit) 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:

2023
2022
£
£
Profit before taxation
368,376
751,132
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
86,642
142,715
Tax effect of expenses that are not deductible in determining taxable profit
-
0
3,418
Adjustments in respect of prior years
-
0
(19,229)
Group relief
(23,815)
(9,191)
Deferred tax adjustments in respect of prior years
-
0
(259,100)
Fixed asset differences
137,585
99,549
Remeasurement of deferred tax for changes in tax rates
4,775
22,859
Taxation charge/(credit) for the year
205,187
(18,979)
STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
9
Tangible fixed assets
Freehold land and buildings
Leasehold properties
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2023
27,787,465
6,339,408
4,742,671
84,133
38,953,677
Additions
-
0
-
0
898,736
77,158
975,894
At 31 December 2023
27,787,465
6,339,408
5,641,407
161,291
39,929,571
Depreciation and impairment
At 1 January 2023
3,156,123
1,004,408
2,838,230
84,133
7,082,894
Depreciation charged in the year
668,052
165,914
270,850
6,832
1,111,648
At 31 December 2023
3,824,175
1,170,322
3,109,080
90,965
8,194,542
Carrying amount
At 31 December 2023
23,963,290
5,169,086
2,532,327
70,326
31,735,029
At 31 December 2022
24,631,342
5,335,000
1,904,441
-
0
31,870,783

Included in freehold property is freehold land at a a cost of £11,302,957 (2022 - £11,302,957).

 

As at 1 June 2021 the company's hotel properties and leasehold properties were valued by JLL, independent valuers and surveyors, on a fair value basis. The hotels were valued as fully equipped operational entities having regard to trading potential. Leasehold properties includes the Cairn Hotel valued on a leasehold interest basis. Valuations were undertaken in accordance with the RICS Appraisal and Valuation Manual. In assessing fair value of the company's hotels, multiples are applied to the maintainable operating profits for each hotel, with an adjustment made for capital expenditure. In making their fair value assessment at the reporting date, the directors have considered the June 2021 valuations and subsequent events and are satisfied that the carrying values stated above represent an appropriate fair value.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

2023
2022
£
£
Cost
28,052,342
28,052,342
Accumulated depreciation
(6,608,140)
(6,047,093)
Carrying value
21,444,202
22,005,249
10
Stocks
2023
2022
£
£
Finished goods and goods for resale
306,967
288,752
STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
453,471
330,681
Amounts owed by group undertakings
3,682,741
2,917,909
Other debtors
2,485,476
2,595,354
Prepayments and accrued income
570,678
626,958
7,192,366
6,470,902
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
2,819,583
1,656,582
Obligations under finance leases
16,999
-
0
Trade creditors
737,634
1,617,339
Corporation tax
204,287
402,187
Other taxation and social security
968,785
895,777
Other creditors
348,555
200,286
Accruals and deferred income
175,806
273,710
5,271,649
5,045,881

Details of security given for bank loans and overdrafts are included in note 14.

13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
9,753,658
9,619,355

Details of security given for bank loans and overdrafts are included in note 14.

14
Loans and overdrafts
2023
2022
£
£
Bank loans
10,581,858
10,397,558
Bank overdrafts
1,991,383
878,379
12,573,241
11,275,937
Payable within one year
2,819,583
1,656,582
Payable after one year
9,753,658
9,619,355
STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Loans and overdrafts
(Continued)
- 22 -

In September 2022, the company refinanced its bank borrowings to a new £10.6m, 3 year facility with interest payable at 2.7% above base rate. £2.3m of the loan is repayable in quarterly instalments, with the remaining £8.3m repayable at the maturity date.

Bank loans are secured by standard securities and debentures over the company's hotel properties, together with a bond and a floating charge over the assets of the company.

15
Deferred taxation

The following are the major deferred tax liabilities recognised by the company and movements thereon:

2023
2022
Balances:
£
£
Fixed asset timing differences
2,288,049
2,207,384
Capital gains
2,018,123
2,018,123
4,306,172
4,225,507
2023
Movements in the year:
£
Liability at 1 January 2023
4,225,507
Charge to profit or loss
80,665
Liability at 31 December 2023
4,306,172

 

16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
137,196
129,689

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

17
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
250,000 Ordinary shares of £1
250,000
250,000
STRATHMORE HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
18
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
115,000
115,000
Between two and five years
460,000
460,000
In over five years
8,395,000
8,510,000
8,970,000
9,085,000
19
Related party transactions

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.

 

Included within amounts owed by group undertakings within note 11 is £2,811,392 (2022 - £2.047,100) owed from group undertakings not part of the wholly owned group.

 

Included within other debtors is £nil (2022 - £393,062) owed by connected companies.

 

Included within other creditors is £140,358 (2022 - £47,582) owed to connected companies.

20
Ultimate controlling party

The ultimate parent company is Strathmore Leisure Limited, a company registered in Scotland. Their address is 116 Strathmore House, East Kilbride, G74 1LF.

 

The intermediate parent company is Strathmore Hotels (Scotland) Limited, a company registered in Scotland. Their address is 116 Strathmore House, East Kilbride, G74 1LF.

 

The ultimate controlling party is Chris Rickard by virtue of his majority shareholding in the ultimate parent company.

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