The directors present the strategic report for the year ended 31 December 2024.
Balfour Hospitality Ltd is the holding company for three divisions - Balfour Winery LLP , one of the UK’s leading wine producers ; 3 pubs - the Goudhurst Inn , the Tickled Trout and Balfour at Bow ; and Hush Heath Inns , a joint venture company in which we hold a 49% shareholding, operating 5 pubs in partnership with Stonegate , one of the UK’s largest pub companies .
2024 has been a challenging year with high levels of inflation, high interest rates, continuing war between Russia and Ukraine, along with a Labour Government that appears anti-business despite its statements to the opposite. Indeed, in November 2024 Rachel Reeves's first budget has seriously damaged the hospitality and retail sectors with substantial rises in minimum wages, employers national insurance and a large reduction in the discount on business rates offered to the hospitality sector. All these factors have combined to increase operating costs which are likely to continue for several years.
Despite these issues the overall business in all 3 areas have performed well and in line with our budget forecasting. The management team and indeed all employees across our businesses have a strong culture in providing first class hospitality for all our guests, and our winery team continue to produce award winning wines. This has been combined with continued investment into growing our team in order to grow the businesses over the medium term. Indeed, the benefits of this investment strategy will begin to show in our 2025 financial performance, and I have great confidence in the future strength of the company. We have rigorous financial controls in place and as a result debt remains low and I am confident that from 2025 onwards we will be both cash flow positive and profitable.
Let me comment on the state of the English wine industry. My views are widely known throughout the industry and our trade body, Wine GB. There is a significant imbalance between the production of English wines and their sale. In 2023 approximately 23m bottles of wine were produced and about 8.5 m were sold. Whilst the poor 2024 harvest will help reduce this problem there is still far too much wine being produced and vineyards planted. This inevitably leads to increased bank debt and negative cash flows, and we are beginning to see a number of established wineries fail or struggle under the burden of high debt levels and dealing with high interest rates. A consolidation of the industry is inevitable over the next few years. Whilst the industry is suffering from turbulent times over the short time, I have great confidence in the industry’s long-term future.
How are we bucking the trend? Firstly, managing our vineyard planting program in order to control our stock levels. Our past and future plan has been to hold no more than about 3 years stock of wine measured against our sales. Obviously, we need a sensible stock to allow wines to age, but also to mitigate against poor harvests in the future. Indeed, I reported in my 2023 Directors Report that lack of stock was hampering our growth. I would rather that approach than over-production creating a negative cash flow. Having stated that, the vineyards we planted over the past few years are now becoming productive and from 2025 onwards we expect to have sufficient stock available to satisfy the demand for our wines.
We have invested this year in growing our brand recognition. Our social media side has seen significant growth and traction with consumers. Our wines are winning international awards and regularly appear in the press and on television. We have built a team to grow both corporate sales and corporates visiting the winery for away days, and this investment will produce strong results in 2025 onwards.
We have become the leading English winery for wine tourism with visitor numbers coming to the winery up from 20,000 in 2023 to 45,000 this year. Indications are that nearly 70,000 visitors will come to the winery in 2025. Not only does wine tourism help create brand recognition but is also extremely beneficial in cash flow terms.
We now produce a wide selection of wines, both still and sparkling and, have built a multi-channel sales distribution function alongside this. We sell to small specialist retail units, supermarkets and national wine retailers as well as to high end hotels and restaurants. This approach is made possible through having this large selection of wines allowing planned market segmentation. A wine sold to a supermarket for example, is produced specifically for them and is sold nowhere else. Whereas Sketch in the West End of London, a three-star Michelin restaurant has a number of wines produced exclusively for them. We are able to work within all market sectors.
We are one of the UK’s leading producers of still wines. Indeed about 40-45% of our production is now for still wines. Whilst margins are lower, cash flow is significantly better, being able to sell wines about 6 months after their harvest, unlike sparkling wines which take from 9 months to 5 years to mature. Additionally, consumers are likely to drink about 5-6 bottles of still wine to every bottle of sparkling wine.
The company has invested this year in building an improved export platform. Whilst exports are relatively low for all the English wine sector, we believe this is an important channel for sales growth over the medium to long term. This year we supplied our first container of wines to Australia, along with sales to USA, Norway, Japan and a number of other regions. We expect to see significant growth from this investment from about 2026 onwards.
We continue to make improvements in both our financial and IT systems helping to control operating costs better and at the same time allowing improved management of our spend on the various investments mentioned above. These cost control measurements will be felt in 2025 onwards.
In 2024 on the audit and technical side of the Wineries operation we achieved a B on our first ever BRC audit, a solid result for a first attempt. In 2025 we improved on this to an A which is a tribute to our winery audit procedures and our first-class technical team. On the wine production side, we filled a record 770,000 bottles from the large 2023 harvest. Total fruit received from the 2024 harvest was 470 tonnes, lower than 2023 which produced circa 800 tonnes, due to the poor weather throughout the 2024 season, although quality was good in our core varieties.
In summary, 2024 is a pivotal year in which we have invested in our team and systems which will begin to show in our 2025 results. I am extremely confident in the future of the business despite the poor economic outlook.
I am delighted to announce the appointment of 3 new Directors to the Board of Balfour Hospitality Ltd. Fergus Elias as Director of Wine. Fergus joined us 11 years ago and a few years ago was appointed Head Winemaker, one of the youngest in the country. He is highly talented, and I am pleased to record that he continues working with his father Owen who is a consultant to Balfour and produced our first wine Balfour Brut Rose in 2004. This father and son team have improved our wines every year.
The second new appointment is Lee Hart as Group Operations Director. Previously Lee headed up the management of our pub group as well as managing the joint venture with Stonegate. His success in this role and his involvement this year in operationally managing the cellar door wine tourism business at Balfour Winery has led to his promotion to the Group Board.
Finally, Rose Jones who has worked her way up through the accounts department since joining us 4 years ago and has been instrumental in improving our financial controls, accounting systems and financial reporting has been appointed Group Finance Director.
I welcome them all to the Board and as a result of their appointment I have stepped up to become Chairman.
Turning now to the financials, I can report that group turnover for 2024 was £8,702,404 up from £7,253,292 in 2023, an increase of 20%. It should be noted these figures do not include revenue from our Stonegate joint venture as we hold a 49% shareholding and thus the financial performance is not consolidated into Group results.
Group gross profit increased in 2024 to £5,517,813 up from £5,059,166 in 2023 an increase of 9% which I regard as an achievement in the face of increased costs of production resulting from the factors mentioned earlier in my report. However, as a result of our increased planned spend on our team combined with a tripling of our energy costs, group net loss increased to £847,289 up from £516,104 in 2023. We expect this to be reversed in 2025 as the benefits of our investments begin to kick in.
Net asset value deceased to £12,865,608 from £13,712,897 reflecting the net loss recorded.
Group debt increased to £5,064,816 from £4,034,166 in 2023. The £1m increase was due to the £1m Coutts borrowing to purchase the freeholds of both the Goudhurst Inn and Tickled Trout pubs. The increase in net asset value as a result of these purchases was reflected in the 2023 balance sheet as the purchase took place at the end of 2023, however completion of the loan only took place at the beginning of 2024. We are confident that as a result of becoming cash flow positive next year our debt will begin to reduce in 2025.
As with last year we have similar risks and uncertainties. Poor harvests - as reported 2024 was poor in quantity terms although quality was fine. We mitigate some of this risk by planting vineyards in different parts of Southern England and on a variety of different soils.
One cannot underestimate the current government’s budgets and approach this has had on the hospitality sector and business in general. This will be keenly felt next year. Our approach to deal with the significant cost increases is to tighten our belt, controlling costs rigorously, whilst renegotiating contracts with all our suppliers.
Interest rates whilst coming down slightly are managed by maintaining low debt levels and managing our cash flow carefully.
Whilst international events cause concern, we continue to look to grow new export markets to help build a sustainable and profitable future.
Sales Turnover for Balfour Winery increased to £6,269,962 in 2024 up from £4,983,009 in 2023 an increase of 26% which is an excellent achievement considering Wine GB report total English and Welsh wine sales across the UK grew by only 3% in 2024. We anticipate further sales growth for Balfour in 2025.
One of the key elements for this growth is our wine tourism offer at the winery. As I reported earlier visitor numbers grew this year to 45,000 up from 20,000 in the previous year. Turnover for cellar door increased by £705,000 from 2023 and we achieved sales turnover of £1.7m in 2024. This success was due to enhanced marketing and targeted meta campaigns along with a change in our marketing approach across the business. This trend has continued in 2025 with further focus on corporate and direct to consumer growth.
We made strategic changes to the way in which cellar door and our a la carte restaurant Winemaker’s Kitchen were managed and operated. We installed a new operational management team which have made substantial positive changes to improve our guest experience. This has set the foundations for the hospitality side of the business moving forward.
As a result of our investment into our team, financial and IT systems, and increased operational costs the Winery made a net loss of £333,585 for 2024 as opposed to a profit of £31,473 in 2023. I anticipate Balfour Winery will return to profit in 2025.
Net assets for the Winery decreased to £13,409,369 in 2024 from £13,742,954 in 2023 in line with the net loss.
Our 3-pub division comprising the Goudhurst Inn, the Tickled Trout and Balfour at Bow increased turnover to £2,549,397 in 2024 up from £2,364,851 in 2023 an increase of 8%. Against a backdrop of the cost-of-living increase and general consumer confidence declining this is a good result.
The Goudhurst Inn made a net profit of £27,504 in 2024 reversing a loss of £189,835 in 2023. The Tickled Trout made a net profit of £5,097 against a net loss of £73,730 in 2023. Whilst Balfour at Bow made a net profit of £7,162 against a net loss of £18,296 in 2023. It is encouraging to see all returning to profit despite the economic outlook. All 3 pubs are cash flow positive and require minimal capital spend as they are all fully refurbished and in excellent order. However, a note of caution, the Chancellor’s budget in November this year will substantially increase costs in 2025.
The great benefits of operating these pubs are enhanced visibility for our wines, luxury boutique bedrooms for visitors to the winery at both the Goudhurst Inn and Tickled Trout, both local to the winery and Balfour at Bow in the heart of the City of London acting as a London tasting venue for our sales team.
Towards the end of 2025 we have put in place a new financing package replacing Coutts bank. This will provide the Group improved financial flexibility on excellent terms.
In 2025 we exercised our put option under our joint venture with Stonegate to sell our shareholding in Hush Heath Inns. Completion of the sale will take place in March 2026 realising both the return of our investment combined with a reasonable profit return on capital employed.
We look forward with confidence to 2025 and beyond.
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 10.
No dividends were paid or are to be paid.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Gerald Edelman LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company 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 group and parent company, 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;
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Having reviewed the company's financial forecasts and expected future cash flows, the directors are confident that the company has adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of signing these financial statements. Accordingly, the going concern basis has been adopted in preparing the financial statements for the year ended 31 December 2024.
This report has been prepared in accordance with the provisions applicable to groups and companies entitled to the exemptions of the small companies regime.
We have audited the financial statements of Balfour Hospitality Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, 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, the company 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, is detailed below.
We planned our audit so that we have a reasonable expectation of detecting material misstatements in the financial statements resulting from irregularities, fraud or non-compliance with law or regulations.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
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.
Enquiring of management of whether they are aware of any non-compliance with laws and regulations.
Enquiring of management whether they have knowledge of any actual, suspected or alleged fraud.
Enquiring of management their internal controls established to mitigate risk related to fraud or non-compliance with laws and regulations.
Discussions amongst the engagement team on how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas; posting of unusual journals.
Obtaining understanding of the legal and regulatory framework 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. The key laws and regulations we considered in this context included UK Companies Act, tax legislation,data protection, anti-bribery, employment and health and safety.
To address the risk of fraud through management bias and override of controls, we:
Performed analytical procedures to identify any unusual or unexpected relationships;
Audited the risk of management override of controls, including through testing journal entries for appropriateness;
Assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
Investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non compliance with laws and regulations, we designed procedures which included, but are not limited to:
Agreeing financial statements disclosures to underlying supporting documentation.
Enquiring of management as to actual and potential litigation claims.
Reviewing correspondence with HMRC.
The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK). Furthermore, the more removed that laws and regulations are from financial transactions, the less likely that we would become aware of non-compliance.
Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors.
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 parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £549,499 (2023 - £111,703 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Balfour Hospitality Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Balfour Winery, Five Oak Lane, Staplehurst, Kent, United Kingdom, TN12 0HT.
The group consists of Balfour Hospitality 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 the revaluation of the leasehold interest and improvements at fair value. The principal accounting policies adopted are set out below.
The consolidated financial statements incorporate those of Balfour Hospitality Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
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.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. In the group financial statements, joint ventures are accounted for using the equity method.
At the time of approving the financial statements, the directors have a reasonable expectation that the group and parent company have 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.
Turnover represents amounts receivable for goods and services net of VAT and discounts. Turnover is derived from: food and beverage sales; hotel accommodation; related services of restaurants/bars and running of the Hush Heath Wine Estate which includes sales of wine and tour services.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
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). 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.
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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in 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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
In preparing these financial statements, the members have made the following judgement:
- Determine whether there are indicators of impairment of the group's tangible assets. Factors taken into account in reaching such a decision include the economic viability and expected future financial performance of the asset.
Other key sources of estimation and uncertainty:
- Tangible fixed assets
The group recognises fixed assets where such expenditure enhances the winery assets, whereas any expenditure classed as maintenance is expensed in the period incurred. Determining enhancement from maintenance is a subjective area. The estimated useful economic lives of fixed assets are based on management judgement and experience.
- Debtor recoverability
An assessment of the debtor recoverability has been made by the members as at 31 December 2024. The recoverability of these debts was based on expected future trade.
- Stock provisions
An assessment is made for the potential impairment of stock existing as at 31 December 2024.
- Stock valuation
The stock valuation include calculations of unit cost in which estimates of annual production quantities, extraction rates, overhead recovery rates and raw material average cost across the main product categories.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
If revalued assets were stated on a historical cost basis rather than a fair value basis, the total amounts included would have been as follows.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Details of associates at 31 December 2024 are as follows:
Hush Heath Inns Limited is a joint venture arrangement owned 49% by Balfour Hospitality Limited and 51% by Ei Group Limited, a wholly owned subsidiary of Ei Group plc, a well renowned operator of public houses.
The other debtors due after more than one year relates to a rent deposit of £60,000.
The bank loan is secured with fixed charge over the properties and assets of the group.
There are no specific terms of interest or repayment attached to the amounts owed to group undertakings.
The bank loan is secured with fixed charge over the properties and assets of the group.
The group bank loan is secured with a fixed charge over the properties and assets of the group.
The final repayment date for the bank loan is 5 years after the first tranche of the loan amount was drawn. The interest on the loan is between 2.95% and 3.75% over the lender's base rate.
The other loans relate to unsecured loans from the shareholders of company. The interest charge on these loans is 5%. The loan is a 4 year loan.
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.
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:
During the year the group purchased grapes and apples amounting to £187,164 (2023: £492,429), under a grower agreement, from L Balfour-Lynn who is a majority shareholder of Balfour Hospitality Limited.
During the year, one of the subsidiaries reimbursed expenses of £550 (2023: £3,808) incurred by L Balfour-Lynn.
Management fees of £200,000 (2023: £200,000) was paid to Warwick Balfour Management Limited, a company controlled by L Balfour-Lynn.
At year end included in debtors is an amount of £204,494 (2023: £120,742 - creditor) due from L Balfour-Lynn.
During the year the Winery sales and recharges of £78,611 (2023: £169,950) to companies under common control.
During the year, Winery sales and recharges amounting to £158,792 (2023: £110,383) were invoiced to an associate.
At the year end an amount of £21,657 (2023: £1,816 - debtor) was owed to the associate.
In addition Balfour Hospitality Limited charged £216,066 (2023: £194,587) in management fees and recharged costs respectively to companies under common control and associates.
At year end an amount of £119,282 (2023: £132,607 - debtor) was owed to companies under common control.
The company and group has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transaction with wholly owned subsidiaries within the group.