The directors present the strategic report for VR Entertainment Ltd ("the company") and its subsidiaries ("the group") for the year ended 31 December 2024.
The group operates several commercial premises across the UK and Republic of Ireland for the purpose of providing high quality virtual reality entertainment experiences. In 2024, the group launched its third premise in Wandsworth, London. The group launched two new experiences in 2024 with Deadwood PHOBIA, the third instalment in our hugely popular Deadwood series, and Netflix’s Rebel Moon, our second collaboration with the streaming giant.
The year proved to be a very strong trading period for the group, particularly led by growing footfall by 50% from the prior year to 130,101 guests. Both flagships in London and Birmingham posted strong like-for-like sales and EBITDA growth for the period.
At the reporting date, the group held net current liabilities of £705,606 (2023: £878,780), which are primarily driven by continued investment into tangible assets at operational sites and corresponding debt finance carried primarily within current liabilities. The cash position of the group improved from £172,720 to £281,819.
The group continues to deliver growth and expansion via a combination of debt and equity finance, and raised a further £1.22m of equity based finance in the company as well as external investment of £1.25m in its Irish subsidiary VR Entertainment (Ireland) Limited. The share allotment raise in the Irish subsidiary resulted in a dilution of the Group's interest in that subsidiary from 100% to 51%, with the Group retaining control.
Capital raised continues to be carefully invested in developing and expanding the group's operations and driving continued growth in number of admissions and the quality of experience offered.
The principal risks and uncertainties which the group are exposed to due to the nature of its activities and the markets in which it operates include:
Health and safety of our guests and team members on site;
Market conditions and discretionary spend of UK consumer;
Guest experience and public perception;
Rising cost base, notably in labour costs;
High capital expenditure requirements for new sites; and
Dependence on franchisor for new experiences.
The group monitors certain key performance indicators to benchmark its operational effectiveness, which include guest numbers and average spend per guest, returning guest rates, guest experience ratings, gross profit margin and venue EBITDA margin.
In 2024, the group delivered strong operational performance, with significant improvements across several key performance indicators. Guest numbers increased by 50% to 130,101, while venue EBITDA margin expanded from 12% to 17%. Other key metrics were maintained at satisfactory levels, including guest experience ratings (as measured by Google reviews, averaging 4.8 out of 5.0), returning guest rates, gross profit margin, and average spend per guest.
The group and company are party to financial instruments as part of day-to-day operations and part of longer term financing strategies. Its principal instruments include trade creditors, finance lease obligations and loans. The purpose of such instruments vary by class but the group works closely with lenders and stakeholders to structure these instruments appropriately dependent on the purpose and to fit in with the group's working capital, capital expenditure and general liquidity management policies.
Liquidity Risk
The group manages its working capital requirements by closely monitoring and forecasting its cash position to allow for settlement of liabilities as they fall due, and sufficient cash to be available to deploy when capital expenditure requirements arise. The group works closely with its suppliers and creditors to negotiate appropriate payment terms on both short, medium and long term credit arrangements. Hire purchase and finance lease arrangements are taken out on capital expenditure items to match payment profiles with expected longevity of the underlying assets being financed. Borrowing instruments are reviewed to ensure competitive interest rates and repayment profiles are able to be accommodated based on forecast future cash flows, whilst maintaining the appropriate gearing ratios between debt and equity based finance.
Interest Rate Risk
Debt finance instruments held by the group carry interest rates of which the majority are at fixed interest rates, and therefore do not pose major interest rate risk as the debt servicing requirements at known and forecast at the outset. The group is party to a sole instrument which carries a degree of variable interest which tracks the Bank of England Base Rate, and as such poses a manageable amount of risk in that debt servicing can vary as the base rate changes.
Credit Risk
The group's primary activities typically see cash at point of sale or in advance of venue bookings, so the credit risk borne by the group is considered very low. The group's remaining financial assets are typically long term or non-trading related balances which are not factored into expected short term cash flows.
The group expects to continue its growth in 2025; notably launching in the Republic of Ireland with construction of the group's fourth premise underway. Furthermore, the group expects to launch additional experiences later in the year to add to its current catalogue.
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 9.
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:
After the reporting date of these financial statements, but prior to their signing, the following events occurred:
The company allotted a further 37.570 Ordinary shares of 0.0005p each, at a total premium of £260,736.
The group opened new venues in White City and Dublin.
The Directors have conducted a comprehensive assessment of the Group’s ability to continue as a going concern for the foreseeable future, defined as a period of at least 12 months from the date of approval of these financial statements.
In making this assessment, the Directors have considered two significant uncertainties.
The Group is in a net current liabilities position as at the balance sheet date of £705,606 and is in discussions with key short-term creditors to agree to extended payment terms, in the event this extension was not agreed the Group would require additional finance to be raised to maintain liquidity. Furthermore, the directors have applied a severe but plausible stress test to their forecast to 31 December 2026 which also indicates that the Group would require additional funding to maintain liquidity and discharge its liabilities. The Group has been successful post year in raising the additional finance needed to maintain liquidity and increase its investment in VR opportunities and the Directors believe they have the ability to raise additional finance as required.
The above two matters identify the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern. Whilst the Group has been successful in raising finance, there is a risk the Group is unable to secure the necessary refinancing or additional funding, potentially leading to an inability to realise its assets and discharge its liabilities in the normal course of business. Given these uncertainties, the Directors acknowledge a material uncertainty regarding the Group’s ability to continue as a going concern. However, after considering all available information about the future, the Directors have a reasonable expectation that the Group has adequate resources to continue its operations for the foreseeable future.
Therefore, the financial statements have been prepared on a going concern basis.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
Qualified opinion on financial statements
We have audited the financial statements of VR Entertainment Ltd (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 statement of financial position, the company statement of financial position, 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 qualified opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of going concern basis of accounting in the preparation of the financial statements is appropriate.
We draw attention to note 1.4 in the financial statements concerning the group and parent company's ability to continue as a going concern. This matter is explained in note 1.4 to the financial statements, which indicates an existence of a material uncertainty which may cast significant doubt about the group and parent company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
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
We were not appointed as auditor of the company until after 31 December 2024 and thus did not observe the counting of physical inventories at the end of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31 December 2024, which are included in the balance sheet at £275,590, by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the inventory balance to be required, the strategic report would also need to be amended.
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional
scepticism throughout the audit.
We have gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures at company levels to respond to the risk, recognising that 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. We focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, taxation legislation, financial authority regulation, data protection, anti-bribery and health and safety legislation.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of income and the override of controls by management. Our audit procedures to respond to these risks included inquiries of management their own identification and assessment of the risks of irregularities, risk-based sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing legal expense accounts for spend which may be indicative of breaches of law & regulations and reading minutes of meetings of those charged with governance. Our audit procedures to respond to revenue recognition risks included sample testing revenue across the period to supporting documentation and assessment of income on a proof in total basis.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). We are not responsible for preventing non-compliance and cannot be expected to detect noncompliance with all laws and regulations.
The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from fraud because fraud may involve sophisticated and carefully organised schemes designed to conceal it, including deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.
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 loss for the year was £1,013,100 (2023 - £1,162,894 loss as restated).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
VR Entertainment Ltd (“the company”) is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is Sandbox Vr, 101 Museum Street, London, England, WC1A 1PB.
The group consists of VR Entertainment Ltd and all of its subsidiaries ("the group").
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 group has a subsidiary incorporated in the Republic of Ireland, whose functional currency is Euros.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The parent company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company VR Entertainment Ltd 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.
Non-controlling interests are initially measured at the fair value of the consideration received in respect of the share capital taken up, or purchased, by the non-controlling interest, net of the costs of issuing share capital. Subsequently, non-controlling interests on the group statement of financial position are measured at the non-controlling interests' proportionate share of the net assets of the subsidiary in which the interest is held. Any excess or deficit arising between the consideration paid to acquire an interest is transferred to retained earnings attributable to the owners of the parent company through reserves.
The Directors have conducted a comprehensive assessment of the Group’s ability to continue as a going concern for the foreseeable future, defined as a period of at least 12 months from the date of approval of these financial statements.
In making this assessment, the Directors have considered two significant uncertainties.
The Group is in a net current liabilities position as at the balance sheet date of £705,606 and is in discussions with key short-term creditors to agree to extended payment terms, in the event this extension was not agreed the Group would require additional finance to be raised to maintain liquidity. Furthermore, the directors have applied a severe but plausible stress test to their forecast to 31 December 2026 which also indicates that the Group would require additional funding to maintain liquidity and discharge its liabilities. The Group has been successful post year in raising the additional finance needed to maintain liquidity and increase its investment in VR opportunities and the Directors believe they have the ability to raise additional finance as required.
The above two matters identify the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern. Whilst the Group has been successful in raising finance, there is a risk the Group is unable to secure the necessary refinancing or additional funding, potentially leading to an inability to realise its assets and discharge its liabilities in the normal course of business. Given these uncertainties, the Directors acknowledge a material uncertainty regarding the Group’s ability to continue as a going concern. However, after considering all available information about the future, the Directors have a reasonable expectation that the Group has adequate resources to continue its operations for the foreseeable future.
Therefore, the financial statements have been prepared on a going concern basis.
Turnover is recognised at the fair value of the consideration received or receivable for goods and 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.
Turnover consists of admission fees, food and drink income.
Revenue earned from sales of products is recognised at the point of delivery to the customer.
Revenue earned from admission fees is recognised at the point of delivering the service to the customer (usually on delivery of the booking to the customer). Where the payment from a customer does not match the transfer of good and services, the group will recognise deferred income.
Deferred income is recognised where payments are made upfront prior to the booking (when the service is provided to the customer) and exceeds the revenue recognised at the period end date.
Revenue from the admission of customers to the group's venues is recognised when the booking is fulfilled on the date of physical admission, when the group fulfils its obligations to the customer in respect of their booking and entry.
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 income statement.
In the parent company financial statements, investments in subsidiaries 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 statement of financial position 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 and loans, 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.
The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
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.
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in other creditors as a liability in the balance sheet. The assets of the plan are held separately from the Group in independently administered funds.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
Consolidated within the group financial statements are the results and financial position of a foreign subsidiary undertaking. Items included in the financial statements of each of the entities in the group are measured using the currency of the primary economic environment in which the group operates (the functional currency). The functional currency is British Pounds Sterling. The company financial statements are presented in sterling.
(i) Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end, foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.
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, judgements 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 group is party to terms within leases for occupied commercial premises which give rise to an obligation to restore the premises to its original condition as it was at the outset of the lease, upon vacation of the premises. A dilapidations provision is recognised as management's estimate of expected future costs to restore the premises at the end of the lease. The estimate is based on projected future costs and gives rise to additional costs recognised within tangible fixed assets and a corresponding provision. A degree of judgement and estimation exists as to the value of the projected future costs as well as the likelihood and timing of future economic outflows being required.
The turnover of the group all originated within the UK market.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
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:
The Group has tax adjusted losses carried forward of £3,517,139 (2024: £2,994,419*), temporary differences relating to accelerated capital allowances of £109,127 (2024: £47,795*) and accelerated capital allowances of £1,531,187 (2024: £1,761,754*) for which a deferred tax asset of £520,769 (2024: £320,115*) has not been recognised, as the timing of future taxable profits arising within the Company against which to utilise these losses, is uncertain. The value of unrecognised deferred tax assets is calculated as 25%, being the rate of tax at the reporting date.
The tax adjusted losses carried forward do not have an expiry date.
*as restated following finalisation of the prior year's tax computations subsequent to the signing of the prior year's financial statements.
Amounts disclosed in the company's tangible fixed assets table above at 1 January 2024 have been reclassified between class names to better reflect the true nature of capitalised costs between categories disclosed. There was no restatement to the overall net book value of tangible fixed assets as at 31 December 2023 as a result of the reclassification.
Included within plant and equipment, of both the group and company tables above, are assets held under hire purchase and finance lease contracts with collective net book value of £488,957 (2023: £571,977). The assets are held as security against the contracts to which they relate.
Details of the company's subsidiaries at 31 December 2024 are as follows:
VR Entertainment (London) Ltd has claimed exemption under section 479A of the Companies Act 2006 not to be audited individually for the period ended 31 December 2024.
VR Entertainment Ltd as parent of the subsidiary has given a statutory guarantee under section 479C of the Companies Act 2006, guaranteeing all of the outstanding liabilities to which the subsidiary is subject to at the period end.
During the year, the group's interest in VR Entertainment (Ireland) Limited was diluted from 100% to 51% as a result of share capital allotments taken up in that subsidiary by non-controlling interests.
Amounts owed by group undertakings to the company are unsecured, interest free and repayable on demand.
Loans from related parties represent unsecured borrowings from key management personnel that are interest free and are repayable upon approval by resolution by the board.
Other loans are comprised of the following:
A loan from a related party of key management personnel of £200,000 originating in 2022 which carries 6% interest per annum, is unsecured and is repayable three years after drawdown, being June 2025. The carrying value of the loan with interest is £230,608 (2023: £218,575).
A loan of £125,000 (2023: £250,000) originating in 2023 which carries interest at 7% above the Bank of England base rate per annum, is unsecured and repayable on demand. The carrying value of the loan with interest is £131,198 (2023: £250,000).
Finance lease payments represent rentals payable for certain items of plant and machinery. The average lease term is between 3 to 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Convertible loan notes are comprised of a single loan instrument issued in 2023 for £150,000, carrying an interest rate of 12% per annum. The loan note is unsecured, and was originally due to mature in January 2024, and is in the process of being renegotiated to extend its term.
The value of the equity component of the convertible element has been deemed to be trivial and therefore no equity component is separately accounted for.
The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Statement Of Financial Position represents the effective interest rate less interest accrued to that date.
The group and company are party to lease agreements for commercial premises which contain obligations to restore the premises to its original condition at the end of the lease. As leasehold improvements, fixtures, fittings and equipment are installed at each site, an estimate of the future cost to restore each site to its original condition is made and provided for.
A degree of judgement exists around the timing of future cash outflows due in respect of the provision, as options to vacate or extend the lease require management to make an assessment of the likely occupation period and discount the future cash outflows from those dates.
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 date, contributions of £11,041 (2023: £14,253) were payable to the fund and are included in other creditors.
The Ordinary shares do not carry any present or future preferential rights to dividends, the company's assets on a winding up, or with regards to being redeemed in preference to shares in any other class. They have full voting and dividend rights. They do not confer any rights of redemption. They have capital distribution rights in proportion to the total number of shares.
During the year 177,060 Ordinary shares of 0.0005p each were issued at a total premium of £1,228,991.
At the reporting end date the group and company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as per the table below.
The group and company's leasing activities relate to the rent of commercial premises in both the UK and Republic of Ireland.
After the reporting date of these financial statements, but prior to their signing, the following events occurred:
On 7 March 2025, VR Entertainment Ltd entered into a new finance lease agreement for the rental of assets for 48 months at fixed interest of 9.48% per annum.
On 17 June 2025, VR Entertainment Ltd entered into a new finance lease agreement for the rental of assets for 48 months at fixed interest of 9.79% per annum.
On 21 March 2025, VR Entertainment (Ireland) Limited opened a VR experience venue in Dublin.
Subsequent to the reporting date, VR Entertainment Ltd entered into a shareholder’s loan agreement amounting to £500,000. The loan is unsecured, interest bearing at a fixed amount at £196,950 and repayable on 17 April 2029.
VR Entertainment Limited further entered into a €477,000 intercompany loan with VR Entertainment (Ireland) Limited. The loan is unsecured, interest bearing at 9.59% per annum, repayable 48 months from commencement in March 2026.
On 1 July 2025, VR Entertainment Ltd opened a VR experience venue in London.
For periods between 15 April 2025 and 16 October 2025, VR Entertainment Ltd allotted a further 37,570 ordinary shares for nominal value 0.000005p each. This did not result in a change in control of the Company, and no adjustment has been made to the financial statements.
The directors are considered to be the only key management personnel of the group and their remuneration is disclosed in note 7 to the financial statements.
During the year the group entered into the following transactions with related parties:
Management fee income received by the company relates to management services provided to a non-wholly owned subsidiary.
Interest expense incurred by the group and company relates to interest accrued on a loan payable to other related parties which carries interest at 6%.
The following amounts were outstanding at the reporting end date:
Amounts owed by the group and company to related parties consist of the following:
Unsecured loans with key management personnel which are interest free and repayable on demand subject to board approval by way of resolution.
Unsecured loans payable to other related parties which bear interest at 6% and are repayable in June 2025.
The following amounts were outstanding at the reporting end date:
Amounts due from related parties to the company are comprised of trade receivables of £20,000 and unsecured interest free intercompany loans of £40,081 which are repayable on demand.
During the preparation of the financial statements, a prior period error was identified in the company's financials at 31 December 2023, whereby lease incentives offered by the landlord on an occupied commercial premises were not correctly calculated. A prior year adjustment has been booked to reflect an increase in operating lease charges recognised in respect of rent costs of £176,207 recognised in the company's result for the year, and an increase in long term accruals of the same value.
The impact of the prior period adjustment was as follows on the financial statements of the company:
An increase in the loss for the year of £176,207 from £1,311,396 to £1,487,603.
A decrease in net assets and total equity of £176,207 from £2,500,148 to £2,323,941.
During the preparation of the company financial statements, the following prior period errors were identified and adjustments made:
Accrual for operating lease incentives:
The company occupies a commercial rental premises, which is leased from a third party by its subsidiary undertaking. No formal sub-lease is in place between the subsidiary and the company. At 31 December 2023, the company had recognised an accrual for lease incentives of £135,665, but upon review is not contractually entitled to record this as the company itself is not party to the terms of the lease. A prior period restatement has been booked to remove the accrual from the company's statement of financial position, which resulted in a reduction to creditors due after one year and the loss for the year of £135,665.
Dilapidations provision and asset:
As with the error noted above, the company was not contractually party to the lease provisions requiring the restoration of the rental premises to its original state upon exit of the lease. At 31 December 2023, the company had recognised such a provision. A prior period restatement has been booked to remove the tangible fixed asset, provision for liabilities and associated income statement items from the company's financial statements.
The impact of the restatement in respect of the dilapidations provision was as follows:
As at 31 December 2022:
A reduction in tangible fixed assets of £58,734;
A reduction in provisions for liabilities of £60,412; and
An increase in total equity (retained earnings) of £1,678
As at and during the year ended 31 December 2023:
A reduction in tangible fixed assets of £54.707;
A reduction in provisions for liabilities of £69,222;
An increase in total equity (retained earnings) of £14,515; and
A reduction in the loss for the year of £12,838.