The directors present the strategic report for the year ended 31 December 2025.
The principal activity of Veladail Hotels Limited and its subsidiaries (the group) continues to be the provision and management of hotel accommodation, golf course and investment in residential properties. The group owns and operates hotels located in Mayfair, Central London and in Hatfield Heath; a golf course in Bushey, Watford; and an investment property in Central London.
During the year ended 31 December 2025, the group faced a number of operational and economic challenges, including increased operating costs, a tight labour market and continued instability in the property market. Despite these challenges, the group adapted effectively and successfully navigated the changing business environment. Through its resilience and operational flexibility, the group continued to adjust its operations to meet evolving market conditions and maintain business performance.
The Group is exposed to a number of principal risks and uncertainties that could affect its operations, financial performance and future prospects. As an investment holding company with interests in hotels, investment properties and other investments, the Group faces risks arising from economic conditions, property market movements, financing, regulatory changes and operational activities. The Board regularly reviews these risks and has established appropriate processes and controls to monitor and manage them. The principal risks and uncertainties are set out below.
Economic conditions and market risks: Fluctuations in the overall economic environment, such as recessions or downturns, can have a significant impact on the demand for hotel services. Reduced consumer spending, decreased business travel, and lower discretionary income can lead to decreased occupancy rates and revenue. Fluctuations in financial markets can affect the value of the holding company's investments, especially in publicly traded securities.
Competitive landscape: The hotel industry is highly competitive. Increased competition, emergence of alternative accommodation options, and changing customer preferences can pose risks to hotel profitability.
Market demand and seasonality: Demand for hotel accommodation can vary significantly based on factors such as travel trends, local events and seasonality.
Operational risks: The hotels can face operational risks such as maintenance issues, supply chain disruptions, technology failures, and regulatory compliance. These risks can result in reputational damage, guest dissatisfaction, increased costs, or even legal consequences.
Health and safety concerns: The hotel industry is particularly sensitive to health and safety concerns, including outbreaks of diseases, natural disasters, or other unforeseen events. Such incidents can lead to reduced travel, cancellations, or changes in travel patterns, negatively impacting hotel performance.
Environmental factors: The hotels must contend with environmental risks such as climate change, natural disasters, and sustainability expectations. These factors can affect infrastructure, property damage, insurance costs, and operational efficiencies.
Financial risks: The group faces financial risks and uncertainties related to the use of financial instruments. The directors' report aims to provide a comprehensive understanding of how the company utilise financial instruments to support its operations and manage financial risks effectively.
The directors monitor and manage these risks effectively through comprehensive risk assessment, contingency planning, strategic pricing, brand differentiation, investment in technology, and continuous adaptation to changing market dynamics. Throughout the year, the group remained committed to investing in its infrastructure to ensure ongoing sustainability. Significant investments were made in renovation projects aimed at enhancing the overall hospitality experience and ensuring that the hotels can meet the demands and expectations of its guests. These renovations have positively contributed to the hotels' ability to deliver exceptional service, improve guest satisfaction, and maintain a competitive edge in the market. By continually investing in the property, the group strives to provide a welcoming and comfortable environment that exceeds guest expectations and fosters long-term loyalty.
The board of directors actively oversees the group's operations, with a specific focus on optimising interest rates, complying with bank covenants, and maintaining liquidity across all subsidiaries within the group. Additionally, the board diligently selects appropriate accounting policies, which serves the dual purpose of mitigating the impact of price fluctuations during periods of economic instability.
The group made a loss after taxation of £3,443,302 for the year ended 31 December 2025 (2024: £3,199,425 as restated). This loss includes the recognition of deferred tax amounting to £172,192 (2024: £978,391 as restated). The Board of Directors has not revalued the Group's assets. The Group's principal operational hotel properties are stated in the financial statements at deemed cost in accordance with the applicable accounting standards. There are net current assets as at 31 December 2025 of £6,035,023 (2024: £2,675,979 as restated). The group's total net assets have decreased from £59,201,897 as restated as at 31 December 2024 to £55,758,595 as at 31 December 2025.
The directors consider the financial position and future prospects at 31 December 2025 to be in line with expectations. Overall, the balance sheet remains strong and well-positioned for future growth from both a liquidity and capital perspective.
The Board receives monthly updates from all divisions across the group to track and assess key performance indicators ("KPIs") against targets set each and every year. The group's performance is monitored in a number of ways including KPIs, some of which are disclosed below. The group's results are reviewed and compared against budgets and prior year numbers on a monthly basis.
The group's KPIs are gross profit, gross profit percentage, operating profit and operating profit percentage. For the year under review, the group's results were as follows:
- Gross profit - £10,884,564 (2024: £11,035,650)
- Gross profit percentage - 41.67% (2024: 43.62%)
- Operating profit - £2,955,760 (2024: £2,543,938 as restated)
- Operating profit percentage – 11.32% (2024: 10.05% as restated)
Going Concern and Future Prospects of the Group
The directors have assessed the Group's ability to continue as a going concern for a period of at least twelve months from the date of approval of these financial statements.
The Group continues to generate positive operating cash flows, which are in line with management's expectations, and maintains a strong financial position. The directors remain committed to investing in the Group's hotel portfolio and property assets to enhance guest experience, improve operational performance and support long-term sustainable growth.
The Group continues to maintain a close and constructive relationship with its bankers, ensuring that appropriate banking facilities remain available to support the Group's operations and future investment plans. The directors regularly monitor the Group's liquidity, cash flow forecasts and financing arrangements and are satisfied that sufficient financial resources are available to meet the Group's obligations as they fall due.
Based on the Group's positive cash flow forecasts, available banking facilities and continued investment strategy, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing these financial statements.
The directors of Veladail Hotels Limited are committed to promoting the long-term success of the Group for the benefit of its members as a whole. In carrying out their duties under Section 172 of the Companies Act 2006, the directors consider the likely long-term consequences of their decisions and the interests of the Group's key stakeholders, including employees, customers, suppliers, local communities and shareholders. The Board's decision-making process seeks to ensure that the Group remains financially resilient, delivers high-quality hospitality services, maintains its investment properties to a high standard and creates sustainable long-term value.
Long-term decision making
The directors consider the long-term implications of significant strategic and operational decisions, balancing short-term performance with the sustainable growth of the business. During the year, the Board continued to invest in maintaining and improving the Group's hotel portfolio and residential investment properties, recognising that well-maintained assets, operational efficiency and service excellence support long-term profitability. Decisions relating to capital expenditure, financing and operational improvements are assessed against their long-term impact on the Group's financial strength and competitive position.
The directors recognise that employees are key to the group’s success and invest in staff development and training with a view to maintaining employee satisfaction and fostering a spirit of commitment. Our aim is to be an employer of choice, to provide our employees with challenges and to support career progression, to reward and recognise their contribution, whilst ensuring diversity across the workforce.
We work in partnership with our suppliers with whom we seek to develop long term relationships.
Our commitment to delivering an outstanding service to our discerning clients has resulted in several long-standing client relationships and this has contributed to the group’s exceptional reputation for quality and service.
We understand the impact we have on the environment and take our responsibilities seriously. Accordingly, we seek to control our environmental footprint, investing in responsibly sourced materials and striving to recycle where possible. We are subject to various legislative constraints including data privacy, licencing laws, equal opportunities and the national minimum wage and take these obligations seriously.
The hotel industry continues to operate in a challenging economic environment, characterised by persistent inflationary pressures, rising operating costs, labour shortages and evolving consumer spending patterns. In addition, higher interest rates and broader economic uncertainty have influenced both business and leisure travel demand across certain markets. Despite these headwinds, the group has remained resilient by maintaining a disciplined approach to cost management, enhancing operational efficiency and adapting its commercial strategies to respond to changing market conditions. These measures have enabled the group to continue delivering high-quality guest experiences while positioning the business to capitalise on opportunities for sustainable long-term growth.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2025.
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the group’s activities. The group’s principal financial instruments can include derivative financial instruments, the purpose of which is to manage currency risks and interest rate risks arising from the group’s activities, and bank overdrafts, loans and corporate bonds, the main purpose of which is to raise finance for the group’s operations. In addition, the group has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
The group is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. No derivative instruments were used during the year.
Foreign currency risk is considered to be low as the principal currency is sterling. The group’s principal foreign currency exposures arise from trading with overseas investment trading. Group policy permits but does not demand that these exposures may be hedged. This hedging activity involves the use of foreign exchange forward contracts.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Having reviewed the group’s exposure to credit, liquidity, interest and foreign currency risks, the directors are of the view that these are manageable notwithstanding adverse market conditions.
The group continues to develop new processes and services to improve and enhance its customer service and customer experience.
The group's policy is to consult and discuss with employees, on matters likely to affect employees' interests.
Events occurring after the reporting date, which are disclosed in the notes to the financial statements, consist of positive developments that have a favourable impact on the group.
The auditor, Affinia Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The parent is not required to report on group's emissions, energy consumption or energy efficiency activities on the basis that all subsidiaries are exempt from reporting due to their size.
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.
We have audited the financial statements of Veladail Hotels Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company and its group through discussions with the directors and from our commercial knowledge and experience of the sector; we focused on those laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company and its group, including the Companies Act 2006, taxation legislation, data protection, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through enquiries of management;
we enquired of the company and group's solicitor as to whether there has been any litigation or claims;
identified laws and regulations were communicated within the audit team who remained alert to instances of non-compliance throughout the audit;
we assessed the susceptibility of the company and group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud; and
we considered the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
Based on our understanding of the company, its group and industry, and through discussion with the directors and other management, we identified that the principal risks were in relation to:
management bias in relation to the risk of management override of controls and the risk of accounting for the transactions;
management assumptions in the accounting estimates associated with the property impairment and property valuation;
management judgements applied to the recoverability of intercompany balances;
not complying with the bank covenants and the associated risk of going concern;
revenue and investment income recognition;
the impairment and classification of development costs;
the accuracy, classification and disclosure of loan balances;
compliance with applicable laws and regulations;
valuation, impairment and disclosure of investments; and
existence and accuracy of the fixed assets' classification, and depreciation charges thereon.
In response to the risk of irregularities, including fraud and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
performing analytical procedures to identify any unusual or unexpected relationships and transactions;
auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
assessing whether judgments and assumptions made in determining the accounting estimates were indicative of potential bias;
agreeing disclosures within the financial statements to underlying supporting documentation;
requesting the minutes of meetings of those charged with governance;
enquiring of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims;
for an appropriate sample of transactions, identifying the revenue recognition point for the provision of services, and testing for completeness by ensuring the transaction was properly recorded in the income nominal ledger account;
for an appropriate sample of investment transactions checking the occurrence, classification, completeness and accurate presentation in the financial statements;
identifying the terms and conditions of loans and assessing whether those covenants were met accordingly;
enquiring of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations;
reviewing correspondence with HM Revenue and Customs, bankers and the company’s relevant legal costs; and
discussing the existence of related parties with management and obtaining confirmation of inter-company balances.
In addition, the following procedures were conducted on the consolidated balances:
evaluating whether all component entities have been included within the group financial statements;
checking that figures taken into the consolidation have been accurately extracted from the financial statements of the components;
ensuring completeness and accuracy of consolidation journals;
reviewing the component auditor’s documentation of identified significant risks, and the conclusions reached on these risks;
discussing with the component auditor the susceptibility of the company’s financial statements to material error or deliberate misstatement;
reviewing of relevant parts of the component auditor’s audit working papers;
ensuring the completeness and accuracy of current and deferred tax on consolidation adjustments as required by the applicable financial reporting framework;
summarising the key accounting judgements and estimates which have significant effect on amounts
recognised in the financial statements and ensuring that sufficient appropriate audit evidence has been obtained; and
evaluating the effect of uncorrected misstatements on the group financial statements.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
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 £416,286 (2024 - £674,402 loss).
Veladail Hotels Limited (“the company”) is a limited company domiciled and incorporated in England and Wales. The registered office address is 7-12 Half Moon Street, Mayfair, London, W1J 7BH.
The group consists of Veladail Hotels 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 freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The accounts of Fleming Hotel Mayfair Limited, one of the subsidiaries in the group have been restated to incorporate the impact of an error in calculating the depreciation for the year ended 31 December 2024. The impact of the error on the financial statements is further presented in note 38.
The consolidated group financial statements consist of the financial statements of the parent company Veladail Hotels Limited together with all entities controlled by the parent company (its subsidiaries). The Group does not have any investments in associates or joint ventures.
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The balance sheet as at 31 December 2025 presents net current assets amounting to £6,035,023 (2024: £2,675,979 as restated), and total net assets amounting to £55,758,595 (2024: £59,201,897 as restated). As at 31 December 2025, the revaluation reserve amounted to £67,257,165 (2024: £67,259,325).
The board of directors manage the continued availability of all group borrowing facilities, and the terms associated with their renewal, in order to secure the group’s short and long term funding.
One of the group's subsidiaries operated as a golf course until October 2019, when activities were suspended to enable the progression of redevelopment plans. During the year ended 31 December 2025, the subsidiary continued with its plans to pursue redevelopment opportunities for the site, having previously, during 2024, entered into a promotional agreement with a developer.
Under this agreement, following the grant of planning permission, the subsidiary would retain pre-emption rights over the land, while the promoter would be granted the right to purchase the land under certain conditions should the company decide not to exercise its rights. Following the grant of planning permission in February 2026, the directors are actively considering the future of the site, including both development and disposal options.
In addition, on 19 September 2025, another group subsidiary disposed of its investment property, which represented its principal asset. The directors has indicated that a decision has not yet been made as to whether the subsidiary will be placed into liquidation or whether it will continue to trade and reinvest in the acquisition of a new investment property.
Each of the above subsidiary’s financial statements for the year ended 31 December 2025 have been prepared on the going concern basis.
The directors have carried out a detailed review of the group's financial position including a review of cash flows and forecasts and having regard to the circumstances noted above. At the time of approving the financial statements, the directors are of the opinion that the group will continue to be able to meet its financial obligations as they fall due and to continue in operational existence for at least the next twelve months from the date of approval of the accounts.
Therefore the directors consider it appropriate to prepare the financial statements on the 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.
Turnover represents amounts receivable from ordinary activities and is in respect of hotel accommodation, conference facilities, golf club membership, rental income, green fees and food and beverage sold during the year, excluding value added tax. Sales of rooms, conference and events facilities are recognised on the date of the stay or event. Deposits received in advance are not recognised as revenue until the day of the stay or event.
The group operates restaurants, bars and a spa. Sales of goods are recognised when the hotel restaurant, spa or bar sells a product to a customer.
Interest income is recognised when it is probable that the economic benefits will flow to the group and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
Rental income, included in turnover, represents amounts receivable in respect of rent from investment properties and it is recognised over the rental period.
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.
Freehold property includes developmental expenditure in respect of certain building projects. Such costs include planning fees, planning permission and structural works. Once the developmental stage is completed and construction begins, the assets will be transferred to fixed assets under construction. Management monitors the assets during the developmental phase and consider whether changes indicate that impairment is required.
Fixed assets under construction represent construction in progress after the developmental construction phase. Relevant fixed assets continue to be categorised as such until the assets are put in to service, at which time the aggregate costs of the assets are transferred into property and plant and equipment. Assets under construction are not depreciated until they are brought into use.
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 losses 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.
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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, 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. The group has not applied hedge accounting.
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 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 tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Assets are valued at the lower of cost and net realisable value. Calculation of net realisable value in use requires judgements to be made, which include estimated future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate the present value of future cash flows.
The carrying amount of tangible fixed assets at 31 December 2025 was £132,682,817 (2024: £132,512,542 as restated). The group uses a discounting factor of 7% (2024: 7%).
The deferred tax asset in respect of unrelieved tax losses is recognised only to the extent that it is probable that it will be recovered against the reversal of deferred tax liabilities or other future taxable profits in the company or the group. The group's ability to generate future taxable profits is dependent on many factors, amongst which is its ability to continue to build occupancy rates and to consolidate on each hotel's improvements and developments made to date. Another key function of the group's future profitability is the movement in interest rates charged on the group's borrowings. The recovery of the deferred tax asset may also be influenced by the tax policy decisions made by the group. By its very nature, the recognition and measurement of deferred tax requires assumptions to be made about the future. The group estimates that, as at 31 December 2025, the deferred tax asset in respect of unrelieved tax losses amounted to £1,872,522 (2024: £2,257,510). The directors, whilst confident as to the recoverability of the deferred tax asset, feel it inappropriate to provide an estimate of the time period over which this asset may be recovered.
The classification of assets requires the exercise of judgement by the group’s management. In particular, land represents the group’s primary tangible asset.
During the period of redevelopment planning, land shall be classified based on the directors' current intentions and assumptions regarding its future use. Until a final decision is made by management regarding the land’s future function, the classification reflects the land’s current status and the anticipated outcomes under the redevelopment proposals.
Management will reassess the classification of the land upon receipt of planning permission and will adjust the accounting treatment in accordance with the decided future use.
Management exercise significant judgement in determining the appropriate accounting treatment of development expenditure incurred on projects that had been granted planning permission, subsequently abandoned, or remained at the planning stage.
Under FRS 102, an asset is defined as a resource controlled by the entity as a result of past events, from which future economic benefits are expected to flow. Management assessed whether the development expenditure met this definition, taking into account both the degree of control over the resource and the probability that future economic benefits would arise.
Development costs incurred prior to the granting of planning permission, or in respect of projects that are subsequently abandoned, do not meet the definition of an asset and are therefore expensed as incurred or written off.
Development costs incurred after planning permission has been granted, and for which it is probable that future economic benefits will flow to the company, are considered for capitalisation in accordance with FRS 102. Such costs are included within tangible fixed assets, investment property, inventory, or prepayments, depending on the nature and intended use of the expenditure.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives. As at 31 December 2025, the residual value of the freehold property amounted to £112,496,789 (2024: £112,480,567).
An analysis of the group's turnover is as follows:
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:
The group's assets have been pledged as security for the group's borrowings
Freehold property includes developmental expenditure amounting to £873,050 (2024: £873,050) in respect of consultancy fees, planning permissions, designs and structural architect fees relating to proposed further development of the hotel.
The value of freehold property is split as follows: freehold land £57,970,606 (2024: £57,970,606); and freehold buildings £68,850,268 (2024: £67,674,781).
The Group
The investment property in Audley Mayfair Properties Limited has been stated at a directors' valuation of £5,000,000 (2024: £5,800,000) as at 31 December 2025. To arrive at this value, the directors considered numerous factors, such as location, condition, rental income, market trends, legal considerations and similar transactions on the active market at the year-end. Directors considered post-year-end events that could impact property valuation and provide new information or circumstances that affect the fair value of the property. On a historical cost basis the investment property would have been included at an original cost of £4,746,827 (2024: £4,746,827) and aggregate depreciation of £Nil (2024: £Nil).
The investment property in Clarges Mayfair Properties Limited was sold during the year for a total sale price of £9,500,000. The sale was completed on 19 September 2025.
A fixed charge exists over the properties as security for the group's borrowings.
Listed investments amounted to £5,730,368 (2024: £7,092,229) and historical cost of £5,204,547 (2024: £6,257,912) have been valued by the directors based on observable prices on trading markets.
Unlisted investments presented at fair value of £270,556 (2024: £258,271) and historical cost of £159,808 (2024: £156,666) have been valued by the directors based on the valuation provided by the fund's investment managers and the fund's audited accounts. While observable prices were not available for the investments, the investment managers used valuation techniques to derive their fair value.
Unlisted investments with a deemed cost of £55,850 (2024: £55,850) and a historical cost of £33,265 (2024: £33,265) have been presented using the price from the last funding round of the relevant entity, less impairment in order to state the carrying value at recoverable amount.
As at 31 December 2025, unlisted investments amounting £145,196 (2024: £195,087) have been measured at cost of £275,767 (2024: £267,357), less cumulative impairment of £130,571 (2024: £72,269), as fair value could not be determined reliably.
Details of the company's subsidiaries at 31 December 2025 are as follows:
Other debtors include costs of £1,009,295 (2024: £1,009,295) which represent Community Infrastructure Levy payments made in respect of development projects that had commenced following the granting of planning permission to Veladail Leisure Limited, one of the group's subsidiaries. The project was subsequently suspended while the company pursued alternative development plans. In accordance with the Community Infrastructure Levy Regulations 2010, these payments are expected to be either credited against future development schemes upon approval of the alternative project, or recovered through the disposal of the land, which already benefits from existing planning permission.
The bank overdraft and loans are secured on the freehold and long leasehold properties and by a debenture over the group's assets.
Interest is charged on bank loans and overdrafts, after taking in to account gains on hedging instruments in a fair value hedge, at an average commercial rate of interest of 6.76% (2024: 7.02%).
Included in borrowings payable within one year is a loan amounting to £7,002,762 (2024: £7,002,186), which relates to a listed investment amounting to £5,730,368 (2024: £7,092,229), cash balances amounting to £5,031,224 (2024: £3,869,299) and derivatives amounting to £8,554 (2024: £Nil)
Included in borrowings payable after one year are bank loans of the following two subsidiaries:
Down Hall Hotel Limited: The bank loan is due for repayment in June 2029. The average effective rate of interest on the facility during the year was 7.2%.
The subsidiary has entered in to an interest rate swap contract (the ‘contract’) in order to mitigate the interest rate risks attached to its bank loan. As at 31 December 2025, the contract amounted to £4,113,200 (2024: £4,113,200), carries a fixed interest rate of 4.036% per annum and has a termination date of 12 June 2029.
The contract is measured at fair value, and changes in the fair value are reflected through the profit and loss account. The contract’s fair value is determined using valuation techniques that apply observable inputs. The key input is the discount rate applied to calculate the present value of the future fixed and floating cashflows. The discount rate is calculated by taking account of expected future sterling interest rates, as determined by the lender.
As at 31 December 2025, the fair value of the contract was £69,814 (2024: £5,504) and is presented as part of creditors due within one year.
Flemings Hotel Mayfair Limited: The bank loan is due for repayment in February 2028. The average effective rate of interest on the facility during the year was 6.56%.
The subsidiary has entered in to an interest rate swap contract (the ‘contract’) in order to mitigate the interest rate risks attached to its bank loan. As at 31 December 2025, the contract amounted to £20,000,000 (2024: £20,000,000), carries a fixed interest rate of 3.815% per annum and has a termination date of 15 February 2028.
The contract is measured at fair value, and changes in the fair value are reflected through the profit and loss account. The contract’s fair value is determined using valuation techniques that apply observable inputs. The key input is the discount rate applied to calculate the present value of the future fixed and floating cashflows. The discount rate is calculated by taking account of expected future sterling interest rates, as determined by the lender.
As at 31 December 2025, the fair value of the contract was £152,248 (2024: £187,186 debtors) and is presented as part of creditors due within one year.
Also, included in borrowings are loans from a related party amounting to £4,000,000 (2024: £4,000,000), repayable in February 2028 and March 2028 and a further loan from the ultimate parent company of £1,624,003 (2024: £1,536,223), repayable in November 2028. These loans carry interest at rates between 2.25% and 6%.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
The deferred tax assets set out above are expected to reverse after 12 months and relate to the utilisation of tax losses against future expected profits.
The deferred tax provision is calculated using a corporation tax rate of 25% (2024: 25%). Future changes to corporate tax laws that affect the prevailing rate may in turn affect the deferred tax assets and liabilities. Any movements in the assets and liabilities resulting from such changes will be reflected as part of the tax charge included in the financial statements for future periods.
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.
Each A Ordinary Share has full rights in the company with respect to voting, dividends and distribution.
During the year ended 31 December 2025, one of subsidiaries entered into a promoter agreement in respect of land development. Under the terms of this agreement, the promoter may become entitled to a fee if specific conditions are satisfied, including the granting of planning permission, the market valuation of the land meeting a minimum value as defined in the agreement, and the company exercising its pre-emption rights in relation to the land.
As part of the same agreement, the company is also obligated to refund rechargeable costs amounting to £458,679 as at 31 December 2025 (2024: £362,792) if the pre-emption rights are exercised.
As at the reporting date, these conditions had not been fully satisfied and, accordingly, no present obligation exists. No provision has therefore been recognised in the financial statements. The potential obligation represents a contingent liability, which may arise in future periods should the relevant conditions be met, and the amount of any future payment cannot be reliably estimated at this stage.
Amounts contracted for but not provided in the financial statements:
One of subsidiaries obtained planning permission in February 2026 for the development of its land and property, which does not include the continued operation of the golf course. In connection with the financial arrangement referred to in note 29 above, the subsidiary entered in to a promotional agreement with a third party in 2024. In accordance with the terms of that agreement, the subsidiary retains pre-emption rights over the land, while the promoter has the right to purchase the land under certain conditions should the subsidiary decide not to exercise its rights. As at the signing date, neither the pre-emption rights had been exercised nor had the land been disposed of to the promoter.
The company
As at 31 December 2025, the company owed £4,000,000 (2024: £4,000,000) to a member of the directors’ family. Interest charged on the loan amounted to £220,000 (2024: £220,000). In addition, the company owed £1,624,003 (2024: £1,570,600) to the ultimate holding company. Interest charged and accrued on the loan amounted to £53,403 (2024: £34,377).
As at 31 December 2025, amounts due from the subsidiary totalled £72,721,603 (2024: £76,436,054). These balances are repayable on demand and are interest-free.
The company also included amounts due from a subsidiary of £300,000 (2024: £300,000) within trade debtors and amounts due to a subsidiary of £306,868 (2024: £338,484) within trade creditors.
The financial statements of Flemings Hotel Mayfair Limited, a subsidiary within the Group, have been restated to correct an error identified in the calculation of depreciation for the year ended 31 December 2024