LEISURE_PARKS_REAL_ESTATE - Accounts
LEISURE_PARKS_REAL_ESTATE - Accounts
The directors present the strategic report for the year ended 31 March 2020.
The directors anticipate a sustained period of organic growth. The directors are satisfied with the results for the year under review.
The management of the business and the execution of the group's strategies are subject to risk, the key risk being the competition in the market place.
The group's principal financial instruments comprise bank balances, bank loans, finance lease agreements and balances owed to and from associated companies. The main purpose of these instruments is to raise funds for the group's operations and to finance the group's trading activities.
The group's approach to managing risks applicable to the financial instruments concerned is shown below.
In respect of bank balances and loans, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts and bank loans.
In respect of leasing commitments, the directors are aware of the group's finance requirements and have determined that these will be repaid, as and when they are due.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
In respect of balances due to and from related parties, the directors are aware of the individual companies' finance requirements and had determined that these will only be received or repaid, in whole or in part, when sufficient funds are available.
The key financial highlights are as follows:
| 2020 |
| 2019 |
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|
|
|
|
|
|
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Turnover | £20,151,268 |
| £16,428,710 |
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|
|
|
Gross profit | £ 5,186,791 |
| £ 3,900,687 |
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|
GP Margin | 25.74% |
| 23.74% |
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|
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Earnings before interest, tax, depreciation, amortisation, and pension (EBITDAP) | £ 3,918,240 |
| £ 2,437,498 |
Gross profit and EBITDAP percentage of sales
Gross profit as a percentage of sales is viewed as a key performance indicator for the business and this is reviewed regularly. The EBITDAP is a more comparable measure of the performance of the business which shows that the EBITDAP percentage of sales is 19.44% (2019: 14.84%). The results have improved in the current year and it is the intention of the company to continue to strengthen its financial performance in the industry by concentrating on and improving our management processes and further expanding our market share, whilst at the same time closely monitoring both direct and indirect costs.
Position at the end of the year
The balance sheet on page 9 of the financial statements shows that the group’s financial position at the year end was strong.
Future developments
The company had a successful year and the directors remain confident that the strategy the business continues to deploy in the market place will ensure its future stability through continued growth.
The coronavirus pandemic and the subsequent lockdown in mid-March 2020 had a significant impact on most businesses but there has been no impact on the company's operations. The company has been able to maintain its revenue stream during the pandemic. The company implemented work from home policy to ensure that its staff can safely perform their duties without interruptions.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2020.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £7,975. The directors do not recommend payment of a further dividend.
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
We have audited the financial statements of Leisure Parks Real Estate (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2020 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, the company statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2020 and of the group's loss for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 the 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 the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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 profit for the year was £4,778 (2019 - £6,119,504 profit).
Leisure Parks Real Estate (Holdings) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 166 College Road, Harrow, Middlesex, HA1 1RA and the business address is Hayes Farm Leisure Park, Burnham Road, Battlesbridge, Wickford, Essex, SS11 7QT.
The group consists of Leisure Parks Real Estate (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 group. 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 consolidated financial statements incorporate those of Leisure Parks Real Estate (Holdings) Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 March 2020. 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.
Turnover represents amounts receivable from pitch fees, sales of mobile homes, houses, caravans, log cabins, shop sales, commissions and utilities recharged net of VAT. Sales of houses taken on part exchange are also recognised in turnover on completion.
No depreciation is provided in respect of freehold land.
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.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
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).
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 measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the recoverable amount. The impairment loss is recognised in profit or loss.
Basic financial liabilities, including creditors and bank loans, are 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.
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.
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. Such 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.
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.
The group provides pension benefits for senior employees. Under the terms of the pension contracts entered into with the senior employees, fixed sums are provided for now in order to provide pension benefits to the individuals upon their retirement. The pension contracts allow for an annual increase in respect of indexation over and above the initial contracted amount.
Although under section 28 of FRS 102 this pension arrangement is regarded as being a defined benefit scheme, the directors consider that it does not bear any of the hallmarks of a defined benefit scheme as the group's contributions are fixed until the point of retirement at which point any further contributions of annual increases cease. Further information can be found in note 25 to the financial statements.
The group also provides pension benefits (defined contribution) in respect of senior employees. Amounts payable are charged to the profit and loss account in the year the contracts are entered into between the group and the employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
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 the profit and loss account over the period of the leases.
Mobile homes obtained under hire purchase contracts and finance leases are treated as stock. Obligations under such agreements are included in creditors net of finance charges allocated to future periods. The finance element of the rental payment is charged to the profit and loss account over the period of the leases.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Preference Shares
The Redeemable Preference shares are classified as equity in accordance with Section 22 (liabilities and equity) as they are redeemable at the option of the issuer and do not carry a right to a return.
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.
Intangible fixed assets consist of goodwill. The annual amortisation charge depends on the estimated useful economic life of the asset. The directors regularly review the remaining useful life of the asset. Changes in asset useful economic life can have a significant impact on amortisation charge for the period. Detail of the useful economic life is included in accounting policies.
Tangible fixed assets consist primarily of freehold land and buildings, fixtures and fittings and motor vehicles. The annual depreciation charge depends on the estimated useful economic lives of each type of asset and estimated residual values. The directors regularly review these asset useful lives and change them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation charges for the period. Details of the useful economic lives is included in the accounting policies.
The group makes an estimate of the recoverable value of the trade and other debtors. The group uses estimates based on historical experience determining the level of debts which the group believes will not be collected. These estimates include such factors as the current credit rating of the debtor, the aging profile of the debtors and historical experience. Any significant reduction in the level of customers that default on payments or other significant improvements that resulted in a reduction in the level of bad debt provision would have a positive impact on the operating results. The level of provision required is reviewed on an on-going basis and is disclosed in note 19.
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:
During the year, the directors and key management personnel were the same.
Investment income includes the following:
The actual charge/(credit) 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:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
Some of the Freehold land and buildings in the group with a carrying amount of £13,250,000 were revalued at 29 May 2020 by Avison Young independent professional valuers. The valuation was made on open market value basis by reference to market evidence of transactions prices similar properties.
The carrying value of the remaining freehold land and buildings is not materially different to the open market value as at the balance sheet date.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
In the opinion of the directors, the market value of the property is not materially different to the carrying value in the accounts as at the balance sheet date.
Details of the company's subsidiaries at 31 March 2020 are as follows:
For the financial year ended 31 March 2020, all of the above subsidiaries, except Leisure Parks Luxury Living Limited and Grape House Limited, have claimed exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.
Grape House Limited has claimed exemption from audit under section 480 of the Companies Act 2006 relating to dormant companies.
The fair value of trade and other receivables approximate to their carrying amounts. Trade debtors are stated after provisions for impairments of £30,237 (2019: £Nil).
There is a fixed and floating charge against the company in respect of certain supplier balances and the company's banking facilities.
Obligations under finance leases are secured on the related assets.
Bank loans and other loans are secured by a fixed and floating charge on all the current and future assets of the company and its subsidiaries.
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. The above pension charge includes an amount of £1,247 (2019: £709) in respect of defined contribution scheme paid by the group to the funds.
The group also provided pension benefits in respect of senior employees. Amounts payable are charged to the profit and loss account in the year the contracts are entered into between the group and the employees. The number of directors to whom benefits are accruing under these pension agreements is 3 (2019: 3).
The contributions and potential liabilities of the group in respect of the pension agreements are fixed at least until the date of retirement of the employees which is over 10 years from the year end date.
Although under section 28 of FRS 102 this pension arrangement is regarded as being a defined benefit scheme, the directors are of the opinion that it does not bear any of the hallmarks of what is usually considered to be a defined benefit scheme and therefore no further disclosures are considered necessary in order to understand the nature and measurement of the liability.
The directors are of the opinion that the liability as disclosed in the financial statements represents the full and final amount which could be expected, at this stage, to be paid in the future to settle the pension agreement liabilities.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
During the year 12,056,918 (2019: £1,425,560) Redeemable Preference Shares of £1 each were redeemed at par value.
At the balance sheet date a net amount of £2,772,922 (2019: £2,929,928) was owed to companies connected to C & J Crickmore. No interest was paid on these loans.
At the balance sheet date a net amount of £7,298,986 (2019: £7,370,415) was owed to companies connected to M Sines. No interest was paid on these loans.
During the year the group made sales totalling £140,193 (2019: £89) to, and purchases totalling £Nil (2019: £13,500) from Crickmore Developments Limited, a company in which C Crickmore is a director.
During the year the group made sales totalling £5,605 (2019: £238,489) to and purchases totalling £619,546 from Sines Parks Luxury Living Limited, a company in which M Sines is a director.
At the balance sheet date a net amount of £92,003 (2019: £Nil) was owed to companies connected to C Crickmore. No interest was paid on these loans. During the year the group was charged agency fees commission of £98,660 (2019: £Nil) by companies connected to C Crickmore.
At the balance sheet date a net amount of £108,052 (2019: £Nil) was owed to companies connected J Crickmore. No interest was paid on these loans. During the year the group was charged agency fees commission of £152,094 (2019: £Nil) by companies connected to J Crickmore
Included in other debtors is a balance of £Nil (2019: £708,061) due from the directors. The maximum balance outstanding during the year was £1,428,839 and interest of £20,974 (2019: £37,294) has been charged on overdrawn balances.
Included in other creditors is a balance of £10,802,917 (2019: £285,928) due to the directors.
The directors have given personal guarantees to the group's bankers amounting to £1,000,000.
There is an unlimited cross guarantee between the group and Sines Parks Limited, a company in which M Sines is a director and a shareholder.
Company
During the year the company charged licence fees of £60,000 (2019: £120,000) to Leisure Parks Luxury Living Limited.
At the balance sheet date a net amount of £2,884,555 (2019: £2,884,555) was owed to companies connected to C & J Crickmore. No interest was paid on these loans.
At the balance sheet date a net amount of £1,973,565 (2019: £1,973,565) was owed to companies connected to M Sines. No interest was paid on these loans.
The directors have given personal guarantees to the company's bankers amounting to £1,000,000.
Included in other creditors is a balance of £7,975 (2019: £Nil) due to the directors.
The ultimate controlling parties are the directors, with no one party having an overall control.