The directors present the strategic report for the year ended 31 December 2024.
The principle activities of the group are property investment, trading and development. The directors do not envisage a major change in the nature or level of the group's activity in the year ahead. The directors continue to monitor the state of the market with a view to safeguarding the interests of the shareholders and other stakeholders. The directors continue to explore future opportunities.
Turnover has remained consistent at £12.6m (2023: £12.6m), principally derived from rental income generated by the Civil Justice Centre in Spinningfields, Manchester,
There have not been any other significant changes in the group's principal activities in the year under review. The directors will continue to seek new opportunities.
Cork Street Properties Limited managed its operations on a project basis and for this reason the company's directors believe that further key performance indicators for the group and company are not necessary or appropriate for an understanding of the development, performance or position of the business.
The group, as with all businesses, is exposed to a number of risks and uncertainties that can affect its operational performance in both the short and long term. The key risks and uncertainties and how they are managed are outlined below.
Liquidity
Liquidity risk is monitored by cash flow projections, which are reviewed by the board on a monthly basis. All capital expenditure is approved by the board and monitored at monthly meetings.
Although the improved economic climate has reduced pressure on working cash flow, the lack of availability of sufficient external capital could limit the groups ability to both develop and build out schemes. The directors ensure that all the groups development schemes are fully funded before they start on site. The directors closely manage the day to day liquidity position through detailed daily and monthly cash flow forecasts which are reviewed regularly by the board.
Health and safety
The group has dedicated, well trained health and safety staff and extensively uses third parties to monitor compliance. Training and site procedures are reviewed regularly to ensure the highest standards are continually maintained. Health and safety is reported on in detail at all board meetings.
Rental demand
The group owns and manages the Civil Justice Centre in Spinningfields, Manchester. Rental cash flows or fees generated from the property represent the majority of total group revenue.
As the group owns and manages the Civil Justice Centre, with the UK Government as the sole tenant for a fixed lease term, the directors do not expect a major change in the nature or level of the company's activity and cashflows in the year ahead. The directors have assessed the likelihood of non-payment of rentals, however, due to rentals continuing to be received post year end, the risk of non-payment is considered to be low, Therefore, the board considers that the company will be able to continue to trade as a going concern and meet its liabilities as they fall due.
Matters included in the strategic report
In accordance with Section 414(C) (11) of the Companies Act 2006, included within the strategic report is information relating to future development of the business which would otherwise be required by schedule 7 of the 'Large and Medium sized groups (accounts and reports) Regulations 2008' to be contained in a directors report.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 8.
No ordinary dividends were paid. 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:
The auditor, Sumer Auditco Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Cork Street Properties Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 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.
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, are 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, and through discussions with the Directors (as required by auditing standards) and discussed with the Directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; laws related to Health and Safety, Employment, UK Companies Act, Pension Legislation and Tax Legislation.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
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 auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outline below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error; as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transaction reflected in the financial statements, the less likely we are to become aware of it.
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 £106,482 (2023 - £133,875 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Cork Street Properties Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is C/O Allied London, Suite 1, Bonded Warehouse, 18 Lower Byrom Street, Manchester, M3 4AP.
The group consists of Cork Street Properties 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 £1.
The financial statements have been prepared under the historical cost convention. 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 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Cork Street Properties 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 December 2024. 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 net liability of £26m at 31 December 2024 (2023: £26m) arises principally due to the consolidation within the group's accounts of a subsidiary holding a finance lease asset at a value of £166m funded by a loan of £193m. The lender does not have recourse against any other group assets, apart from the finance lease asset to which the loan relates.
The directors have prepared and considered detailed forecasts and budget for a period of 12 months from the signing date of the accounts. The directors have assessed the likelihood of non-payment of rentals as well as the Company's obligations to settle amounts due under its long-term funding facility. The group owns and manages the Civil Justice Centre, with the government as the sole tenant for a fixed lease term. Given the tenure of the term, this is accounted for as a finance lease asset. The directors do not expect a major change in the nature or level of the group's activity and cashflows in the year ahead and the rental income and payments under the lending facility are predetermined at the inception of the facility and lease. The directors consider that the risk of non-payment is low given that the UK government is the sole tenant. Furthermore, rentals continue to be received post year-end and have been received in full up to the date of signing the accounts. The net receivable under the rental agreement is greater than the expected cashflows under the bank loan and therefore the Company has maintained a positive cash balance over the course of the year.
On the basis of these projections and the maintaining of a positive cash balance, the board considers that the group will be able to continue to trade as a going concern and meet its liabilities as they fall due.
Turnover is recognised at the fair value of the consideration received or receivable for rental services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Rental income receivable under finance leases is apportioned between rental income and repayment of the investment finance lease. Over the entire period of the finance lease, the finance income is equal to the gross earnings from the lease i.e. the amount by which the total of the receipts expected by the lessor exceeds the cost of the leased asset. The receipts expected by the lessor consist of the total rentals payable by the lessee, together with any residual value of the asset which is receivable by the lessor, whether or not that residual value is guaranteed.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
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.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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).
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.
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 is estimated to be less than its carrying amount, the carrying amount of the asset 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.
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 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 in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, 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.
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.
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, 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.
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 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.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Finance costs
Finance costs are charged to the profit and loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.
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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Determine whether the lease agreements entered into by the group as a lessor are operating leases or fiannce leases. These decisions depend upon an assessment of whether the risk and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis. The directors determined that significant risks and rewards were transferred at the time the lease on the Civil Justice Centre was entered into and therefore continues to be accounted for as a finance lease.
The average monthly number of persons (including directors) employed by the group and company during the year was:
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
In 2020, Cork Street Properties Limited entered into an agreement for the sale of the shares in Gartside Holdings Limited. The sale is conditional to the consents noted in the agreement being obtained. At the signing date of the accounts, the shares in Gartside Holdings Limited continue to be held by Cork Street Properties Limited.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The group and company considers that the fair value of cash and cash equivalents, loans, trade and other receivables, trade and other payables are not materially different to their carrying value. There are no financial instruments held at fair value through profit and loss.
All debtors are due for repayment within one year. The amounts due from group undertakings are repayable on demand and not interest bearing.
Within the cash and bank balance, there is £3,405,758 (2023: £3,403,805) which is held on blocked deposit accounts for the benefit of the secured lender and can only be utilised for specific purposes.
Accruals and deferred income includes £2,704,736 (2023: £2,691,376) accrued bank loan interest.
The amounts due to group undertakings are repayable on demand and not interest bearing.
The loan is secured over the Company's property and bears interest at 6.0406%.
Called up share capital represents the nominal value of shares issued. All shares carry no fixed right to income and rank pari-passu in every respect.
The profit and loss account represents cumulative profits and losses, net of any dividends paid and other adjustments.
Other reserves
The other reserves represents the difference between the consideration and the nominal value of the shares issued during a transaction and the fair value of the assets transferred.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The directors have taken advantage of the exemption allowed by Financial Reporting Standard 102, Section 33.1A "Related Party Disclosures", not to disclose any transactions with fellow 100% owned subsidiaries.
During the preparation of the financial statements we identified that there was an understatement of accrued income from the year ended December 2022 which had not been accounted for. Therefore, the opening profit and loss reserves have increased by £16,696.
This has impacted the balance sheet for the year ended December 2023. Prepayments and accrued income have been restated and increased by £16,696. This has no impact on the statement of comprehensive income for the year ended 2023.