The directors present their strategic report for the year ended 30 June 2025.
Ark UP1 Limited owns the data centre campus known as Union Park Block 1, which had 24 MW (2024: 12 MW) of built capacity as of 30 June 2025.
Financial indicators
The Board of Directors are pleased to report the following financial results:
| 2025 (£) | 2024 (£) | Change (£) | % Change |
Property income | 24,322,195 | 16,759,637 | 7,562,558 | +45.12% |
Operating profit | 17,528,261 | 1,319,879 | 16,208,382 | +1,228.02% |
Interest payable | (28,862,203) | (28,514,061) | (348,142) | +1.22% |
(Loss)/Profit for year | (6,446,738) | 14,571,156 | (21,017,894) | -144.24% |
Investment property | 358,600,000 | 353,500,000 | 5,100,000 | +1.44% |
Total equity | (9,971,909) | (3,525,171) | (6,446,738) | -182.88% |
All 6 phases of the construction of the Company's data centre were completed at the end of August 2024. As the data centre has been fully let since 6 September 2024, this has resulted in an increase in both property income and operating profit as shown in the above table.
Non-financial indicators
Alongside the financial performance, the key performance indicators of the Company include;
MW capacity (built, contracted and available)
contract term
build costs
delivering in accordance with build programmes
maintaining operational excellence
stakeholder (customer and supplier) satisfaction scores
The business plan of Ark is built around a long-term strategy and significant progress has been made during the year to 30 June 2025. The Board of Directors believe that the Company’s position within the marketplace remains strong, and we look forward to further expansion in 2026.
Principal risks faced by the Company are identified and monitored through a regular process that is reviewed by Ark's Senior Leadership Team and presented to the Board of Directors. Principal risks include, but are not limited to;
Operational risks from a power or cooling outage or a security breach. The Company places a primary focus on preventative measures and controls to address these risks through its design and construction of the facilities and operation of robust accredited processes and regular maintenance programmes. Additionally, the Company undertakes regular exercises, involving our customers and supply chain, across multiple scenarios to test the application and robustness of its procedures.
Performance in an increasingly competitive marketplace is continually monitored. The Company engages proactively with its customers to understand their requirements and has continuously progressed innovation in data centre design and construction to meet those needs and drive efficiencies.
Uncertainty of current economic conditions may impact supply and/or development arrangements, although this is largely mitigated by entering into fixed priced contracts for the construction of the data centres and ensuring critical supplies are available when needed.
The Company manages these risks on an ongoing basis, and the Board of Directors believe that the Company’s offering within the marketplace remains strong, and that it is well positioned to continue its growth.
No events have occurred since the balance sheet date which significantly affect the Company.
On behalf of the board
The directors present their annual report and audited financial statements for the year ended 30 June 2025.
The results for the year are set out on page 11.
The results for the year and the financial position at the year end were considered satisfactory by the directors.
No ordinary dividends were paid. The directors do not recommend payment of a dividend for the year (2024: nil).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditors, PricewaterhouseCoopers CI LLP, have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the General Meeting.
Companies Act 2006 ("company law") requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", 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:
select suitable accounting policies and then apply them consistently;
state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;
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 company will continue in business.
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. The directors confirm that they have complied with these responsibilities.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
Independent auditors’ report to the members of Ark UP1 Limited
Report on the audit of the financial statements
Basis for opinion
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter | How our audit addressed the key audit matter |
Valuation of Investment Property as at 30 June 2025 |
|
Please refer to note 1.5 and 9 to the financial statements.
The company owns investment property which is carried at fair value. The valuation of investment property is material to the financial statements and inherently subjective due to, among other factors, the individual nature of each investment property, its location, stage of development and expected future rental income.
The valuation of the company’s investment property was carried out by an independent professional valuer ("management’s expert") who performed their work in accordance with the latest version of the RICS Valuation – Global Professional Standards (known as the “Red Book”).
In determining the valuation of the company’s tenanted investment property, management’s expert has considered specific current property information, including tenancy agreements and rental income generated by the investment property. Assumptions are then applied in relation to capitalisation rates, prevailing market rents, and growth prospects, based on market data and recent comparable transactions, are applied to establish a valuation range, from which a point estimate is determined.
The directors have scrutinised and then adopted management’s expert value for financial reporting purposes
| We obtained and read management’s expert report on the valuation of the company’s investment property as at the year-end;
We confirmed that management’s expert report was prepared in accordance with professional valuation standards and suitable for use in determining the fair value of investment properties as at 30 June 2025;
We assessed management’s expert qualifications and expertise and read their terms of engagement with the company to determine whether there were any matters that might have affected their objectivity or may have imposed scope limitations upon their work;
We engaged our auditors’ expert to support our critique and challenge of the work performed and assumptions used by management’s expert. In particular, the valuation assumptions used by management's expert were compared to recent comparable market activity and industry indices and significant movements in the valuation were challenged; and
We assessed the appropriateness of disclosures made within the company’s financial statements.
Based on the audit work detailed above we have nothing to report to those charged with governance. |
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined the principal risks were related to posting of inappropriate journal entries to increase revenue, and management bias in accounting estimates and judgemental areas of the financial statements such as valuation of investment property. We engaged our own internal auditor's expert to review the valuation of investment property as at 30 June 2025. Our findings are documented in the Key Audit Matter "Valuation of investment property".
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the company’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall company materiality | £3.75 million (2024: £3.62 million). |
How we determined it | 1% of Total Assets |
Rationale for benchmark applied | We believe total assets to be the appropriate basis for determining materiality since this is a key consideration for members of the company when assessing financial performance. It is also a generally accepted measure used for companies in this industry. |
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £2.8 million (2024: £2.7 million) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above £375k (2024: £362k) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included:
Discussing and critically examining management's assessment of the company's ability to continue as a going concern. This included evaluating the nature of the company’s operations, the assumptions made, and the time frame covered by the assessment;
Inquiring about any events or conditions beyond the assessment period that might significantly undermine the company’s ability to continue as a going concern;
Assessing the company’s ability to meet its commitments; and
Reviewing the cash flow forecasts prepared by the directors which include relevant downside sensitivities.
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.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
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.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to Companies Act 2006, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue and the potential for management bias in accounting estimates and key judgements impacting the financial statements such as valuation of investment property. Audit procedures performed by the engagement team included:
enquiring with the management of the company and the directors as to any actual or suspected instances of fraud or non-compliance with laws and regulations;
reviewing the minutes of meetings of the board of directors for matters relevant to the audit;
testing the disclosures made in the financial statements, as well as in the Directors' report, for compliance with the requirements of the Companies Act 2006;
procedures relating to the valuation of investment property described in the related Key Audit Matter;
performing audit procedures to incorporate unpredictability around the nature, timing and extent of our testing;
identifying and testing journal entries considered to be of higher fraud risk; and
evaluating the business rationale for any significant or unusual transactions identified as being outside the normal course of business.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report. In our engagement letter, we also agreed to describe our audit approach, including communicating key audit matters.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
certain disclosures of directors’ remuneration specified by law are not made; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
There were no other comprehensive income or losses during the year. All amounts are derived from continuing operations.
The notes on pages 14 to 23 form part of these financial statements.
The notes on pages 14 to 23 form part of these financial statements.
The notes on pages 14 to 23 form part of these financial statements.
Ark UP1 Limited is a private company limited by shares incorporated in England and Wales. The registered office is Spring Park, Westwells Road, Hawthorn, Corsham, Wiltshire, SN13 9GB.
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 £.
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:
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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Ark Estates 2 Limited. These consolidated financial statements are available from Companies House.
Basic financial assets, which include trade and other 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 as the impact of discounting or the application of the effective interest method is considered immaterial to the financial statements.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, listed loan notes 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Listed loan notes represent unsecured, unsubordinated fixed rate funding loan notes issued by the company to fund the principal activities. These are initially recognised at amounts drawn and subsequently measured at amounts drawn plus interest less payments made.
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.
Derivatives, including interest rate swaps, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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. Judgements, estimates and assumptions have been made in relation to the valuation of the company's investment property (see note 9) and the valuation of financial derivatives (see note 14) . 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.
There were no employees during the year (2024: none).
No directors' remuneration was paid in either the current year or prior year. The directors are remunerated by other group undertakings for which no allocations are made to the company.
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
Investment property represents the data centre campus known as Union Park Block 1. The investment property has been revalued as at 30 June 2025 at fair value by the directors with reference to market-based evidence and expected future cash flows derived from the assets. An independent professional valuation of Union Park was carried out by a RICS qualified valuer as at 30 June 2025 and this was taken into consideration in the directors' assessment of the fair value. The valuation methodology used to establish the value of the investment property includes a number of key assumptions. These include, but are not limited to; occupancy rates, contracted and uncontracted income forecasts, operational costs, capital replacement costs, discount rates and exit yields.
The assets detailed within note 9 have been pledged as security against the bank loan detailed within note 14.
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Bank loans
As at 30 June 2025 the company had drawn down £170m (2024: £162.92m) of its £170m bank loan facility. The bank loan is repayable in quarterly instalments starting 5 November 2024, with full repayment on 21 July 2028. Interest is payable on a quarterly basis at a rate of SONIA plus 2.75% until 29 August 2024 and at a rate of SONIA plus 2.25% thereafter. The assets of the Company are pledged as security against the loan.
The loan covenants associated with the bank loan facility are calculated based on the financial results of the company. Full compliance with all covenants was achieved both during the financial year ended 30 June 2025 as well as throughout the post balance sheet period to the date of approval and issuance of these financial statements. Financial forecasts indicate that all covenants will be complied with throughout the period to 21 July 2028, being the term and maturity date of the loan facility.
The company uses financial derivatives to manage interest rate risk associated with the bank loan. At 30 June 2025 fixed floating swaps were in place which effectively capped interest at 4.839% on £28,186,704, 5.038% on £28,186,704, 4.8264% on £56,373,408 and 5.02% on £56,373,408 of the balance.
Amounts owed to related undertakings
Amounts owed to related undertakings are owed to subsidiaries of Ark Capital Partners I LP Inc., the ultimate parent of Ark UP1 Limited. On 19 March 2024 the amount owed to related undertakings was converted into unsecured loan notes due 31 December 2038 listed on TISE. Interest is payable on the loan notes at a fixed rate of 11.4% per annum and is converted into unsecured loan notes on a quarterly basis. During the year £14,622,489 (2024: £3,774,778) of interest was capitalised.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Lessor
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
Amounts contracted for but not provided in the financial statements:
There have been no post balance sheet events requiring disclosure in the notes to the financial statements.
There are no related party transactions requiring disclosure other than those disclosed in notes 6, 12, 13 and 14 to the financial statements.