The directors present their strategic report for the year ended 31 March 2025.
The group results are included in these financial statements from the date of acquisition, 29th August 2024, and therefore do not represent a full year of trading performance.
The group's gross property rental and other income has delivered in line with the expectations of the directors. This division has seen tenant changes in the period but continues to show resilience both in terms of rental income and capital value.
The ferry operation again performed in line with expectation and despite costs incurred as part of its repair cycle, this being a year in which more minor repairs are performed without taking the vessel out of the water, the division was also profitable. Income generated was relatively consistent with its prior trading period.
Review Hotels Limited owns two hotels in Newmarket; The Bedford Lodge Hotel, being the main trading operation, and The Rutland Arms Hotel, being a site which is now held for sale in stock having not traded now for a number of years. The trading landscape for leisure and hospitality businesses has been challenging, especially over recent years. Against that backdrop The Bedford Lodge Hotel has performed positively and in the current trading period it has seen an increase in room occupancy and gross margins.
The key business risk affecting the group is considered to be the current economic outlook for businesses and the wider economy. This is in part driven by changes which lead to increased cost pressures, such as the National Minimum and Living Wage increases and the increase in the effective cost of Employer's NIC. The directors are mitigating the impact of this to the extent possible through careful management of business operations and ensuring that spending within the business is carefully managed.
The management of the business is subject to a number of other risks, these are reviewed by the board and appropriate processes put in place to monitor and mitigate them.
The directors consider that the position of the group at the year end is satisfactory given the challenging trading and wider economic environment.
The group has a number of divisions and as such, whilst not immune to the impact of the trading and economic landscape, has diversity that allows some spreading of risk.
The directors are proud of the position The Bedford Lodge Hotel holds in the local market and are confident that consumer demand remains for the offering the hotel provides. The objective for the year ahead will be to continue the positive trajectory of trading performance against the backdrop of employment cost increases.
The Ferry continues to meet the needs of the local community. Revenue is anticipated to remain positive during the coming year. The directors will continue to await the outcome of the application for a toll increase which was heard at a public inquiry earlier in 2025.
The group's property divisions are being closely monitored but are not expected to see a material change in rental income.
The board monitors progress on overall strategy by reference to a variety of key performance indicators due to the diverse nature of the group's operations.
For the ferry division it is turnover compared to previous years.
For investment properties it is gross rents and occupancy rates.
For the hotel it is room occupancy and gross margin.
The group as it is reported here is newly formed in the year through a business combination and therefore does not contain a full year of trade, nor comparatives. In respect of the above performance indicators the directors have seen turnover for the ferry division remain consistent, occupancy rates and gross margin at the hotel both improve marginally and gross rents and occupancy rates remain consistent.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2025.
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £35,700. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A directors' indemnity policy exists in the form of a combined insurance policy across the group.
The group operates a treasury function which is responsible for managing the liquidity, interest and credit risks associated with the group’s activities. The group's management of this function does not include the use of derivative financial instruments.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business. Funds are transferred between group companies to assist in managing this risk.
The group is exposed to cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The group does not use interest rate derivatives to manage this risk as the directors do not feel this is necessary in the context of the overall risk management of the business.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
We have audited the financial statements of Fairacres Group (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management and via inspection of the group’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the group.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the group is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution; relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly the group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; data protection legislation; health and safety legislation and other specific trade legislation.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, journal entries crediting cash or any revenue account and journal entries posted by senior management;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis;
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £12,045,659 (2024 - £0 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Fairacres Group (Holdings) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Fairacres, Stock Lane, Ingatestone, Essex, CM4 9QL.
The group consists of Fairacres Group (Holdings) Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Fairacres Group (Holdings) Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The directors are aware of material uncertainties in respect of going concern which are disclosed in the financial statements of Review Hotels Limited, a subsidiary within the group. The directors have considered the impact of this on the group position and are satisfied that there are no material uncertainties from a group perspective.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Credit is taken for rents on a daily basis. Any amounts of rent received in advance are carried forward.
Credit is taken for the toll income on a daily basis. Any amount received in advance is carried forward.
In respect of the hotel division income; revenue from the sale of goods is recognised at the point of delivery of those goods to the customer, and in respect of food and drink sales at the point of consumption. Room rental is recognised at the point of occupation.
Income from properties held for development is recognised at the date of legal completion.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Investment properties are included in the balance sheet at their fair value.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Subsidiaries are carried in the company's balance sheet at cost less provision for impairment.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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, 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
In accordance with FRS102 deferred tax is provided in respect of historically revalued assets as appropriate.
In the consolidated financial statements current tax on profits for the current period is shown prior to the application of group relief. Group relief is applied where available and each company pays or receives £1 for every £1 of tax saved. This is accounted for at the point of submission of the appropriate returns. Amounts payable or receivable are eliminated on consolidation.
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.
The Bournemouth-Swanage Motor Road and Ferry Co Inc and Review Hotels Limited operate defined contribution schemes for the benefit of their employees. Contributions payable are charged to the profit and loss account in the year they are payable.
Motor ferry replacement reserve
An amount is being set aside over the period to 31 March 2032 to renew the motor ferry by the transfer of an estimated amount to the Motor Ferry Replacement Reserve, when sufficient funds are available. To ensure the reserve is available for the replacement of the Ferry with sufficient time, the reserve is being built up to the required level 2 years before the anticipated replacement year of 2034. The directors have specifically ring fenced this reserve for the purpose of the ferry replacement.
This reserve is being accumulated on the balance sheet of that company. On consolidation that reserve forms part of the consolidation reserve and the profit and loss reserve and is not separately presented at group level. The closing balance of these reserves is disclosed in the notes to the financial statements.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The Motor Ferry is a critical asset of the business and its useful economic life is variable depending on its upkeep and potential advancements in technology that may allow it to operate for longer than originally designed or intended. During the year the directors have reviewed the useful life of the Motor Ferry based on their expectation of its remaining useful economic life following further maintenance works completed during the year.
The directors exercise judgement on the carrying value of investment properties based on their experience and understanding of market conditions. Such judgement is supported by periodic professional valuations which provide further relevant information which assists the directors in reaching their conclusions.
The directors exercise their judgement to assess the present value of future cash outflows in respect of deferred consideration. The discount rate applied by the directors is based on current and expected borrowing rates.
An analysis of the group's turnover is as follows:
All group turnover derives from activities in the UK.
One of the subsidiaries has incurred £249,215 of costs relating to a toll application, which has been submitted and is currently awaiting the outcome of Public Inquiry.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual (credit)/charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
The fair value of the investment property has been arrived at on the basis of the directors valuation, as well as an independent valuation for two of the properties as at 31 March 2025. The valuation was made on a fair value basis by reference to market evidence of transaction prices for similar properties, and was completed by an independent valuer. The carrying value of £11,199,999, is considered to represent the fair value of these properties.
Details of the company's subsidiaries at 31 March 2025 are as follows:
The bank overdraft is secured by a fixed and floating charge over the assets of the group.
The £8,000,000 bank loan is secured by first priority legal charge over specific freehold property together with an unlimited cross company guarantee across the group.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
During the year as part of the business combination set out in these financial statements, 1,784 ordinary £1 shares were issued in exchange for shares held in Fairacres Group Limited. The one £1 unpaid share previously in issue is treated as fully paid as part of that transaction.
Consolidation reserve
This arises on the business combination during the year and reflects the associated fair value of net assets acquired by the group as part of the share for share exchange that formed part of the overall transaction, whereby two of the shareholders of Fairacres Group Limited, received shares in Fairacres Group (Holdings) Limited.
Motor ferry replacement reserve
In March 2019, a subsidiary obtained a professional estimate of the cost of building a diesel electric powered motor ferry to replace the company's existing vessel. The approximate cost including fees was £11,418,000. Allowing for inflationary increases to these estimated costs and based on the date of renewal, if full provision was being made for renewal, less what the company are able to borrow for this purpose, the Motor Ferry Replacement Reserve at the balance sheet date would have totalled £8,852,012.
Transfers are made from the profit and loss account to the Motor Ferry Replacement Reserve, to the extent that reserves are available within the motor ferry subsidiary. At the balance sheet date the amounts included in the Motor Ferry Replacement Reserve totalled £4,895,955.
On 29 August 2024 the group acquired 100% of the issued capital of Fairacres Group Limited. That company in turn owned 100% of the issued share capital of four subsidiaries. The acquisition resulted in cash & deferred consideration payable to an exiting shareholder of Fairacres Group Limited. In addition, a share for share exchange took place whereby the remaining shareholders received shares in Fairacres Group (Holdings) Limited in exchange for their shares in Fairacres Group Limited.
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
The company has taken advantage of the exemption available in FRS102 whereby it has not disclosed transactions with any wholly owned subsidiary undertaking.
At the balance sheet date the group owed £750,000 to a director.