The directors present the strategic report for the year ended 31 March 2026.
Lake Merritt Hospitality Holdings Limited is the UK holding company for its shareholders' strategic investment into the UK hotel market. In selecting the hotels, the Directors have used UK based agents and advisers and appointed Richard Ellison from 7 Hospitality Management (UK) Ltd, as the UK Director to the Boards of the company and its subsidiaries.
The strategy is to invest in individual hotels with sound fundamental, local trading history in areas in the UK that offer a strong basis for longer term trading. The funding of the acquisitions has been through loans from the overseas parent company. The strategy is to seek UK based borrowing facilities once the trading has been established.
The year saw the closure of their Eight Acres Hotel in July 2025 for refurbishing and rebranding as an IHG Garner. Revenues year on year are down on the prior year but are also distorted as 2025 Sales include Braid Hills Hotel which was sold in Oct 2024. Total Revenues excluding Braid Hills decreased by 5% with occupancy across the Group at 74% (2025 72%) with an Average Room Rate of £81 (2025: £85). The cost of living crisis, continues to have an impact on the business, this together with increases in payroll national insurance contributions, unstable utility prices and interest rates have all impacted on the overall profitability of the business.
Group cash flow has the continued financial support of the ultimate parent company, Lake Merritt UK Hospitality Fund.
The directors recognise that our employees are fundamental to the delivery of our plan. We aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and well-being of our team members is one of our primary considerations in the way we conduct our business. Engagement with suppliers and customers is also key to our success. We meet with our stakeholders regularly throughout the year and take the appropriate action, when necessary, to prevent involvement in modern slavery, corruption, bribery and breaches of competition law. Our plan considers the impact of the company's operations on the community and environment and our wider social responsibilities, and in particular how we comply with economic legislation and pursue waste-saving opportunities and react promptly to local concerns.
The Directors have identified the following principal risks and uncertainties affecting the Company and its subsidiaries:
Market risks:
The successful operation of hotels requires detailed management and maintaining the attractiveness of the facilities offered to guests. Competition in the hospitality sector is keen and margins tight with continued attention required to monitor and maintain the market position of the hotel in its local area. Ongoing Investment in the infrastructure where necessary coupled with strong management and systems are used to remain actively focused on the continued success of the individual hotels. The introduction of branded operations to strengthen the market presence of the operations is a future consideration.
Legislative and regulatory risks: Successful operation of hotels requires protection of the reputation and goodwill of its customers, and the management's continuous vigilance to maintain high standards, bolstered by legislative and regulatory licences.
Liquidity risks:
Giving the structure of the group, and getting fully established in the UK, liquidity is at risk. The sale of Braid Hills in October 2024, new Bank loans being successfully acquired in 2025 and the overall continued support from the investors has helped in alleviating liquidity risks.
The Company monitors its performance against standard industry KPI's and the Directors are satisfied with the level of KPI achieved compared to industry benchmarks. Normalised earnings before interest, tax, depreciation and amortisation ('EBITDA') are shown below:
| 2026 | 2025 |
|
| £ | £ |
|
Operating Profit | (3,021,582) | (3,165,479) |
|
Depreciation | 1,711,612 | 2,005,930 |
|
Interest | 1,782,979 | 2,043,863 |
|
Sale Of Subsidiary | - | (196,799) |
|
Normalised EBITDA | 473,009 | 687,515 |
|
|
|
|
|
|
|
|
|
| 2026 | 2025 |
|
| £ | £ |
|
Room Sales | 4,036,926 | 5,830,582 |
|
Food & Beverage Sales | 627,156 | 1,266,121 |
|
Other Sales | 232,490 | 181,549 |
|
Total Sales | 4,896,572 | 7,278,252 |
|
|
|
|
|
Occupancy | 74% | 72% |
|
Average Room rate | £81 | £85 |
|
Gross revenues have decreased by £2,381,680 (2024: Decrease by £1,477,131) on last year. This is a decrease of 33% on the previous year. The decrease is primarily the result of the disposal of LM Edinburgh 1 Limited and Lake Merritt Hospitality Operations One limited (together Braids Hill) in October 2024. As such, the 2025 figure is not entirely comparable as it includes sales of £2,130,202 for these two entities. Sales excluding these two entities decreased by £251,478 year on year, a decrease of 5%. The decrease was primarily due to the closure of the Eight Acres Hotel in July 2025 for refurbishment and re-branding.
The Directors will continue to invest in individual hotels should the investment opportunity arise. They also recognise that the need to acquire a strong brand to compliment and strengthen the market base for their existing hotel operations is important. They have therefore recently acquired a franchise partner and are rebranding one of their hotels as an IHG Garner and will look to rebrand there other operations. This will enhance the overall quality of their hotel offer by introducing brand standards but ultimately increase revenues through stronger occupancy and average room rate.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2026.
In accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report)
Regulations 2013, disclosures relating to future developments and financial risk management are presented in
the Strategic Report.
The results for the year are set out on pages 9 to 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to groups and companies entitled to the exemptions of the medium companies regime.
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 Lake Merritt Hospitality Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2026 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or parent company or to cease operations, or have no realistic alternative but to do so.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 notes on pages 17 to 36 form part of these financial statements.
The notes on pages 17 to 36 form part of these financial statements.
The notes on pages 17 to 36 form part of these financial statements.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £861,090 (2025 - £942,600 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The notes on pages 17 to 36 form part of these financial statements.
The notes on pages 17 to 36 form part of these financial statements.
The notes on pages 17 to 36 form part of these financial statements.
Lake Merritt Hospitality Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 10 Orange Street, Haymarket, London, WC2H 7DQ.
The group consists of Lake Merritt Hospitality Holdings 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. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Lake Merritt Hospitality Holdings Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 March 2026. 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.
In assessing the appropriateness of the going concern assumption, the Directors have considered the Group's and Company's financial position, cash flow forecasts, available funding arrangements and the principal risks and uncertainties facing the business for a period of at least twelve months from the date of approval of the financial statements.
The Group is financed through borrowings which are repayable in the long term and are secured over the assets of the business. The Directors have reviewed the terms of these facilities and are satisfied that no repayments are due within the assessment period that would adversely affect the Group's ability to continue trading.
For the year ended 31 March 2026, the Group generated EBITDA of £473,008, demonstrating its ability to generate operating cash flows, providing evidence of the Group’s capacity to generate earnings.
In making their assessment, the Directors have considered a number of operational challenges and uncertainties. The Group will cease to generate revenue from one trading entity following the sale of that entity. In addition, the operations of a second entity have been mothballed while the entity carries out a refurbishment and the future trading performance of a third entity remains uncertain whilst refurbishment works are being undertaken. These matters have been incorporated into the Directors' forecasts in relation to revenue generation and cash flows.
The Directors have also considered the financial support available to the Group. Investors in the Lake Merritt UK Hospitality Fund have provided written confirmation of their intention and ability to continue supporting the Group for a period of not less than twelve months from the date of signing the audit report. The Directors have taken this support into account when evaluating the Group's ability to meet its obligations as they fall due.
The forecasts prepared by management indicate that the Group will have sufficient financial resources to continue in operational existence and meet its liabilities as they fall due throughout the assessment period. Accordingly, the Directors believe it remains appropriate to prepare the financial statements on the going concern basis.
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
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 costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 balance sheet 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.
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets, less their estimated residual value, over their expected useful lives. The company estimates the useful lives based on their historical experience and expectations of how long the assets will be used within the business.
The recoverability of trade debtors and intercompany debtors is regularly reviewed in the light of available economic information specific to each receivable and provisions are recognised for balances considered to be irrecoverable.
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the prior year, the Group disposed of its shares in LM Edinburgh 1 Limited. Consequently, Lake Merritt Hospitality Operations One Limited was also disposed of as a 100% subsidiary of LM Edinburgh 1 Limited. The above balance represents the profit made on the disposal of the subsidiary. The headline purchase price was £7.5m with £3.0m received after various completion adjustments.
The prior year Consolidated Statement of Comprehensive Income includes the financial performance of these two entities up until their disposal in October 2024. Accordingly, the prior year financial performance of these two entities has been recorded as discontinued operations on the face of the Consolidated Statement of Comprehensive Income.
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:
Details of the company's subsidiaries at 31 March 2026 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Subsequent to the reporting date on 2 July 2026 the group disposed of the shareholding in LM York 1 Limited and it's related subsidiary undertaking Lake Merritt Hospitality Operations Two Limited for a total consideration of £1.7m.
Bank loans are secured against the property held by the group, as well as debentures, inter-company guarantees and postponement of shareholder loans.
Other loans are secured against the property held by the group as well as debentures.
Bank loans are secured against the property held by the group, as well as debentures, inter-company guarantees and postponement of shareholder loans.
Amounts owed to group undertakings attract interest at 6% per annum. The loan are repayable on the event of an exit deal and as such are treated as long term on the basis that they do not fall due within the next 12 months. Other loans are secured over property held by the group and by fixed and floating charges over the assets of the company. Interest was charged on the loan at 10% per annum during the period, reducing to 9% per annum post year end.
Included within bank loans are amounts repayable by monthly instalments over 15 years to January 2030. Interest is payable on the loan at 10.24% and is secured against the property, and by way of a debenture over the assets of the company, a guarantee issued by the subsidiary company and a postponement of shareholder loans provided by Lake Merritt Hospitality Holdings Limited.
Included within other loans is a loan of £6m (2025: £6m) due for repayment in full July 2028, with an option to extend by 12 months. The loan is secured by way of fixed and floating charge over the trade and assets of the company. Interest was charged on the loan at 10% per annum during the period, reducing to 9% per annum post year end.
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.
Group
Included within creditors due after more than one year is a loan totalling £6m (2025; £6m) repayable to an entity in which one of the Groups directors has a significant interest. The loan is secured against property, and by fixed and floating charges over assets of the group. Interest is charged on the loan at 10% per annum during the year, reducing to 9% per annum post year end.
Included within creditors due after more than one year are amounts due to the parent group of £19.3m (2025: £18.4m). Interest is charged on the loan at 6% per annum. The loan are repayable on the event of an exit deal and as such are treated as long term on the basis that they do not fall due within the next 12 months.
Company
In accordance with the exemption under Financial Reporting Standard No 102, the Company does not disclose transactions with other wholly owned companies within the Lake Merritt group. During the period key management personnel were not remunerated.
Management has assessed that £750,000 of the original acquisition cost of the company's property is attributable to land. Historically, depreciation was applied to the full acquisition cost of £3.16m over a 50-year period. This prior year adjustment reflects the correction of this error by eliminating depreciation previously recognised on the land component since acquisition.
Management has assessed that £2,500,000 of the original acquisition cost of the company's property is attributable to land. Historically, depreciation was applied to the full acquisition cost of £11.47m over a 50-year period. This prior year adjustment reflects the correction of this error by eliminating depreciation previously recognised on the land component since acquisition.
Management has assessed that £350,000 of the original acquisition cost of the company's property is attributable to land. Historically, depreciation was applied to the full acquisition cost of £1,835,373 over a 50-year period. This prior year adjustment reflects the correction of this error by eliminating depreciation previously recognised on the land component since acquisition.