REGISTERED NUMBER: SC474803 (Scotland)

Group Strategic Report,

Report of the Directors and

Audited Consolidated Financial Statements

for the Year Ended 31 December 2024

for

Perle Hotels Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Independent Auditors' Report

4

Consolidated Statement of Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

16

DIRECTORS:

Mr F Rehman

Mrs B A Rehman

REGISTERED OFFICE:

9-11 Bosville Terrace

Portree

Isle of Skye

IV51 9DG

REGISTERED NUMBER:

SC474803 (Scotland)

INDEPENDENT AUDITORS:

Gillespie & Anderson

Statutory Auditors

Chartered Accountants

147 Bath Street

Glasgow

G2 4SN

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS AND KEY PERFORMANCE INDICATORS

The directors monitor performance against the following key performance indicators:

2024

2023

Turnover

£11.21m

£10.27m

Gross margin

49%

49%

EBITDA (excluding one-off gain)

£2.37m

£2.3m

Turnover increased by 9% as the addition of Bracken Hide in late 2023 more than offset the reduction in turnover from the sale of Lochardil House Hotel in January 2024. EBITDA, excluding one-off gain from sale of fixed assets, remained flat year on year. Net margin consequently declined. This was primarily due to cost inflation particularly in staff costs. Increased ADRs and menu prices as well as efficiency savings elsewhere were less than the rising wage bill. The F&B business units continued to operate below capacity further pressuring profitability due to shortage of skilled staff.

The business continued to invest heavily in the quality of its hotel portfolio spending £2.9m mostly across of a range of upgrades to the hotels. Bracken Hide in particular, saw significant investment some of which of is ongoing and straddles 2024 and 2025.

PRINCIPAL RISKS AND UNCERTAINTIES

Inflation

The hospitality sector is facing significant pressure from rising costs across a range of expense lines with staff, energy and food costs being the most impactful. The Group has only a limited ability to mitigate and manage these cost increases.

Staff Shortage

This issue has been highlighted in the past and it shows no signs of abating. We are experiencing a severe shortage of skilled staff in each of our locations. This is vital for us as the Group needs to deliver high levels of service. Whilst the Group continues to make considerable effort to address this issue; through ensuring that the hotels are an attractive prospect to those entering the employment market; the challenge is industry wide. Despite rising wage levels, the hospitality sector in the UK is struggling to fill vacancies.

Customer Demand

There are a number of factors affecting our customer demand. Any slowdown in the UK or Global economy would lead to a weakening in customer demand. As we have seen in recent years Sterling's valuation relative to other currencies particularly the Euro and US Dollar also impacts our customer demand.

Capital Expenditure

Due to the nature and quantum of these expenditures there remains a material risk of delay and cost escalation. The Group actively manages these issues but residual risk remains.

FUTURE DEVELOPMENTS

The Group has invested heavily in its future growth. The investment has been in tangible assets but equally in our people and technology. That is expected to generally remain the case in the coming years.

ON BEHALF OF THE BOARD:

Mr F Rehman - Director

20 May 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The Group owns and manages a portfolio of hotels in Scotland.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024.

DIRECTORS

Mr F Rehman has held office during the whole of the period from 1 January 2024 to the date of this report.

Other changes in directors holding office are as follows:

Mrs B A Rehman - appointed 14 November 2024

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Gillespie & Anderson, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr F Rehman - Director

20 May 2025

Opinion

We have audited the financial statements of Perle Hotels Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2024 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the 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

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Auditors' Report thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 Auditors' 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach and assessment were as follows:

The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.

Enquire of management and review supporting documentation concerning the company's policies and procedures relating to:

- identify, evaluate and comply with laws and regulations and their awareness of any instances of non-compliance;

- detect and respond to the risks of irregularities, fraud and their knowledge of any actual, suspected or alleged fraud;

- internal controls established to mitigate risks related to, unusual items, fraud or non-compliance with laws and regulations.

Obtain an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included the Companies Act 2006 and Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", together with health and safety regulations, money laundering regulations, employment legislation and data protection legislation.

Discuss among the engagement team how and where irregularities might occur in the financial statements and potential indicators of fraud. Identify potential audit risks in relation to income recognition, authorisation of expenses and possible management override of controls.

Communicate relevant identified laws and regulations and potential irregularity risks to all engagement team members and remain alert to any indications of unusual items, fraud or non-compliance with laws and regulations throughout the audit.

Review all Minutes of Meetings of those charged with governance, Reports and correspondence with HMRC and legal advisers.

Perform audit testing which covers the audit assumptions of: existence, completeness, rights and obligations, accuracy and valuation in respect of income recognition and expenditure incurred.

Evaluate the overall presentation, structure and content of the financial statements, including disclosures, by performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to an irregularity or fraud. Agree financial statement disclosures to underlying documents.

Assess whether the financial statements represent the underlying transactions and events in a manner that achieves compliance with relevant laws and regulations.

To address the risk of fraud through management override of controls and management bias, we: assess the rationale behind significant or unusual transactions identified through audit testing and assess where management judgement used in determining accounting estimates were indicative of potential bias.

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.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.

Alastair Stewart BA (Hons) CA (Senior Statutory Auditor)

for and on behalf of Gillespie & Anderson

Statutory Auditors

Chartered Accountants

147 Bath Street

Glasgow

G2 4SN

20 May 2025

TURNOVER

3

11,210,664

10,270,774

Cost of sales

5,714,241

5,232,066

GROSS PROFIT

5,496,423

5,038,708

Administrative expenses

3,750,608

3,839,813

1,745,815

1,198,895

Other operating income

157,669

267,363

OPERATING PROFIT

5

1,903,484

1,466,258

Interest receivable and similar income

-

78

1,903,484

1,466,336

Interest payable and similar expenses

6

1,362,986

1,019,113

PROFIT BEFORE TAXATION

540,498

447,223

Tax on profit

7

466,891

102,761

PROFIT FOR THE FINANCIAL YEAR

73,607

344,462

OTHER COMPREHENSIVE INCOME

Revaluation of freehold properties

18,123,195

1,210

Deferred tax on revalued assets

(4,439,808

)

-

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

13,683,387

1,210

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

13,756,994

345,672

Profit attributable to:

Owners of the parent

73,607

344,462

Total comprehensive income attributable to:

Owners of the parent

13,756,994

345,672

FIXED ASSETS

Intangible assets

9

(2,600,770

)

(2,461,833

)

Tangible assets

10

37,570,136

19,103,958

Investments

11

-

-

Investment property

12

1,600,000

1,600,000

36,569,366

18,242,125

CURRENT ASSETS

Stocks

13

118,591

122,629

Debtors

14

167,840

149,156

Cash at bank

444,247

388,632

730,678

660,417

CREDITORS

Amounts falling due within one year

15

4,865,558

3,115,946

NET CURRENT LIABILITIES

(4,134,880

)

(2,455,529

)

TOTAL ASSETS LESS CURRENT LIABILITIES

32,434,486

15,786,596

CREDITORS

Amounts falling due after more than one year

16

(10,215,128

)

(12,223,592

)

PROVISIONS FOR LIABILITIES

20

(5,255,055

)

(355,695

)

NET ASSETS

16,964,303

3,207,309

CAPITAL AND RESERVES

Called up share capital

21

2

2

Share premium

22

999,999

999,999

Non-distributable fair value

reserve

22

13,675,830

-

Capital redemption reserve

22

1,000,000

1,000,000

Retained earnings

22

1,288,472

1,207,308

SHAREHOLDERS' FUNDS

16,964,303

3,207,309

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 20 May 2025 and were signed on its behalf by:

Mr F Rehman - Director

FIXED ASSETS

Intangible assets

9

64,221

256,161

Tangible assets

10

14,534,062

10,335,191

Investments

11

3,273,895

3,273,895

Investment property

12

1,600,000

1,600,000

19,472,178

15,465,247

CURRENT ASSETS

Stocks

13

118,591

121,505

Debtors

14

2,984,647

3,388,685

Cash at bank

435,979

244,755

3,539,217

3,754,945

CREDITORS

Amounts falling due within one year

15

4,830,719

3,231,121

NET CURRENT (LIABILITIES)/ASSETS

(1,291,502

)

523,824

TOTAL ASSETS LESS CURRENT LIABILITIES

18,180,676

15,989,071

CREDITORS

Amounts falling due after more than one year

16

(10,215,128

)

(12,223,592

)

PROVISIONS FOR LIABILITIES

20

(1,604,605

)

(263,866

)

NET ASSETS

6,360,943

3,501,613

CAPITAL AND RESERVES

Called up share capital

21

2

2

Share premium

22

999,999

999,999

Non-distributable fair value

reserve

22

2,819,015

-

Capital redemption reserve

22

1,000,000

1,000,000

Retained earnings

22

1,541,927

1,501,612

SHAREHOLDERS' FUNDS

6,360,943

3,501,613

Company's profit/(loss) for the financial year

40,315

(6,938

)

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 20 May 2025 and were signed on its behalf by:

Mr F Rehman - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2023

1,000,002

1,861,636

999,999

Profit for the year

-

344,462

-

Other comprehensive income

-

(998,790

)

-

Total comprehensive income

-

(654,328

)

-

Issue of share capital

(1,000,000

)

-

-

Balance at 31 December 2023

2

1,207,308

999,999

Profit for the year

-

73,607

-

Other comprehensive income

-

7,557

-

Total comprehensive income

-

81,164

-

Balance at 31 December 2024

2

1,288,472

999,999

Non-distributable

fair

Capital

value

redemption

Total

reserve

reserve

equity

£

£

£

Balance at 1 January 2023

-

-

3,861,637

Profit for the year

-

-

344,462

Other comprehensive income

-

1,000,000

1,210

Total comprehensive income

-

1,000,000

345,672

Issue of share capital

-

-

(1,000,000

)

Balance at 31 December 2023

-

1,000,000

3,207,309

Profit for the year

-

-

73,607

Other comprehensive income

13,675,830

-

13,683,387

Total comprehensive income

13,675,830

-

13,756,994

Balance at 31 December 2024

13,675,830

1,000,000

16,964,303

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2023

1,000,002

2,508,550

999,999

Deficit for the year

-

(6,938

)

-

Other comprehensive income

-

(1,000,000

)

-

Total comprehensive income

-

(1,006,938

)

-

Issue of share capital

(1,000,000

)

-

-

Balance at 31 December 2023

2

1,501,612

999,999

Profit for the year

-

40,315

-

Other comprehensive income

-

-

-

Total comprehensive income

-

40,315

-

Balance at 31 December 2024

2

1,541,927

999,999

Non-distributable

fair

Capital

value

redemption

Total

reserve

reserve

equity

£

£

£

Balance at 1 January 2023

-

-

4,508,551

Deficit for the year

-

-

(6,938

)

Other comprehensive income

-

1,000,000

-

Total comprehensive income

-

1,000,000

(6,938

)

Issue of share capital

-

-

(1,000,000

)

Balance at 31 December 2023

-

1,000,000

3,501,613

Profit for the year

-

-

40,315

Other comprehensive income

2,819,015

-

2,819,015

Total comprehensive income

2,819,015

-

2,859,330

Balance at 31 December 2024

2,819,015

1,000,000

6,360,943

Cash flows from operating activities

Cash generated from operations

1

2,134,684

2,277,407

Interest paid

(158,784

)

(159,486

)

Tax paid

(7,139

)

(588,084

)

Net cash from operating activities

1,968,761

1,529,837

Cash flows from investing activities

Purchase of intangible fixed assets

-

(180

)

Purchase of tangible fixed assets

(2,881,620

)

(598,284

)

Sale of intangible fixed assets

1

-

Sale of tangible fixed assets

2,210,990

-

Purchase of subsidiary

-

(2,460,225

)

Cash acquired on acquisition

-

69,858

Interest received

-

78

Net cash from investing activities

(670,629

)

(2,988,753

)

Cash flows from financing activities

New loans in year

-

3,000,000

Loan repayments in year

(3,115,825

)

(1,956,895

)

Amount introduced by directors

1,479,935

1,000,000

Share issue

-

(1,000,000

)

Net cash from financing activities

(1,635,890

)

1,043,105

Decrease in cash and cash equivalents

(337,758

)

(415,811

)

Cash and cash equivalents at beginning of year

2

(300,889

)

114,922

Cash and cash equivalents at end of year

2

(638,647

)

(300,889

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

Profit before taxation

540,498

447,223

Depreciation charges

1,041,423

834,409

Profit on disposal of fixed assets

(574,839

)

-

Capital expenditure grants

(21,663

)

(123,331

)

Finance costs

1,362,986

1,019,113

Finance income

-

(78

)

2,348,405

2,177,336

Decrease in stocks

4,038

14,149

(Increase)/decrease in trade and other debtors

(20,291

)

62,645

(Decrease)/increase in trade and other creditors

(197,468

)

23,277

Cash generated from operations

2,134,684

2,277,407

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

444,247

388,632

Bank overdrafts

(1,082,894

)

(689,521

)

(638,647

)

(300,889

)

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

388,632

1,891,341

Bank overdrafts

(689,521

)

(1,776,419

)

(300,889

)

114,922