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Registered number: 11307838
FLEXI OFFICES (HOLDCO) LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2021
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FLEXI OFFICES (HOLDCO) LIMITED
REGISTERED NUMBER: 11307838
BALANCE SHEET
AS AT 31 DECEMBER 2021
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 2 to 9 form part of these financial statements.
Page 1
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Flexi Offices (Holdco) Limited is a private company limited by shares and incorporated in England and Wales under the Companies Act 2006. The address of the registered office is 322 High Holborn, London, England, WC1V 7PB.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company's functional and presentational currency is GBP. The amounts included are rounded to the nearest pound.
The following principal accounting policies have been applied:
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Exemption from preparing consolidated financial statements
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The Company, and the Group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and Group are considered eligible for the exemption to prepare consolidated accounts.
The group’s business was heavily impacted by the COVID-19 pandemic, incurring significant losses in 2020, 2021 and the first half of 2022, and remains in a recovery period. At the time of writing, the group is now trading profitably and generating positive cash from operations, however following a sustained period of substantial losses, it has significant liabilities in excess of its liquid assets, including overdue taxes and loans from shareholders which are overdue their stated repayment terms.
The group has negotiated a time-to-pay agreement with HMRC and the intercreditor agreement for the CBIL loan has resulted in a deferral of repayments relating to the overdue loans. The group’s ability to continue to trade and meet its liabilities as they fall due are dependent upon continued improvement in trading performance, and the continued support of its creditors, both of which are inherently uncertain.
In making their assessment of whether the going concern basis remains appropriate, the directors have used profit projections and cash flow forecasts for the remainder of 2023 and 2024 which they consider to be reasonable and achievable. Under the forecast scenario the directors expect the group will be able to trade and meet day to day liabilities as they fall due, assuming the continued support of creditors as explained above, and accordingly they consider the use of the going concern basis to remain appropriate.
However, the directors recognise that if there was a significant deterioration in trading, or if the group was required to repay all liabilities in accordance with their stated terms, the group would not be able to meet its liabilities without significant additional funding, which may not be achievable. The directors therefore recognise that the factors outlined above represent a material uncertainty that casts significant doubt over the group’s ability to continue trading as a going concern.
Interest income is recognised in profit or loss using the effective interest method.
Page 2
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Investments in subsidiaries are measured at cost less accumulated impairment.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 3
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
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The Company has no employees other than the directors, who did not receive any remuneration (2020 - £NIL).
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Page 4
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Investments in subsidiary companies
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The following were subsidiary undertakings of the Company:
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Flexi Offices (Bidco) Limited
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322 High Holborn, London, England, WC1V 7PB
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322 High Holborn, London, England, WC1V 7PB
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Flexi Offices Asia Pac Pty Limited*
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11, 139 Macquarie Street, Sydney, New South Wales, 2000
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Page 5
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Due after more than one year
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Amounts owed by group undertakings
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Amounts owed by group undertakings
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Amounts owed by group undertakings represent £278,913 variable rate unsecured consideration loan notes, issued on 25 May 2018, interest accrues at the higher of 10% or LIBOR + 5% and is payable quarterly in arrears. Repayment of the principal amount of the loan notes is due in two installments of 50% each on the fourth and fifth anniversary of the instrument, 25 May 2022 and 25 May 2023. The repayment due on 25 May 2022 was not made.
Since 25 May 2018 the interest has rolled up and is held in amounts owed by group undertakings, due within one year.
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Page 6
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Creditors: Amounts falling due after more than one year
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Other loans represent £260,913 Variable Rate Secured Management Loan Notes, issued on 25 May 2018. Interest accrues at the higher of 10% or LIBOR + 5% and is payable quarterly in arrears. Repayment of the principal amount of the loan notes is due in two installments of 50% each on the fourth and fifth anniversary of the instrument, 25 May 2022 and 25 May 2023. The repayment due on 25 May 2022 was not made.
The loan notes are secured by a fixed and floating charge over the assets of the Flexi Office (Holdco) Limited and its subsidiaries.
Since 25 May 2018, the interest has rolled up and is held in other creditors.
Coronavirus Business Interruption Loan
Subsequent to the completion of the period a subsidiary, Flexi Offices Limited, secured a Coronavirus Business Interruption Loan. The loan required the above-mentioned loans to be subordinated. While the Coronavirus Business Interruption Loan remains outstanding no payments may be made in favour of any other loans or deferred consideration. The term of the Coronavirus Business Interruption Loan is six years from 16 June 2021.
The repayment of any other loans will resume as follows:
Repayment of interest and principal of the Variable Rate Secured Management Loan Notes 2022 once repayment of the Deferred Consideration, owed by Flexi Offices (Bidco) Limited, is no longer in arrears.
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Page 7
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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The company entered into a guarentee to secure the borrowings of subsidiary, Flexi Offices (Bidco) Limited, in favour of NVM Private Equity LLP, the 'Investor Loan Notes'. The security is in the form of a fixed and floating charge over the assets of the company. At 31 December 2021 the amount secured ws £8,125,000 (2020: £8,125,000).
Fixed and floating charges over the assets of the company also exist to secure the borrowings of Flexi Offces (Bidco) Limited due to the former shareholders of Flexi Offices Limited. At 31 December 2021 the amounts secured amounted to £2,700,000 (2020: £2,700,000).
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Allotted, called up and fully paid
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75,000 (2020 - 75,000) Ordinary A shares of £1.00 each
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2,409 (2020 - 2,409) Ordinary B shares of £1.00 each
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22,258 (2020 - 22,258) Ordinary C shares of £1.00 each
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1 (2020 - 1) Ordinary share of £1.00
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The immediate and ultimate parent company is NVM III GP LLP, incorporated in England and Wales, by virtue of its position as general partner of the NVM Private Equity Vintage III L.P. fund. The registered office of NVM III GP LLP is 32 Gallowgate, Newcastle Upon Tyne, Tyne and Wear, NE1 4SN.
Page 8
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FLEXI OFFICES (HOLDCO) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The auditors' report on the financial statements for the year ended 31 December 2021 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
We draw attention to note 2.3 in the financial statements, which indicates that the company is reliant on both the continuing recovery of the Flexi Offices (Holdco) Limited Group's (the 'Group') trading performance following the effects of the COVID-19 pandemic and the ability of the Group to continue to meet its existing liabilities, as well as settlement of legacy liabilities that are past due, some of which have no formal agreement in place and if recalled would require that the Group secure further funding. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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The audit report was signed on 6 May 2023 by Alan Poole BA (Hons) FCA (Senior Statutory Auditor) on behalf of James Cowper Kreston Audit.
Page 9
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