Brayford Hotels Holdings Ltd - Limited company accounts 23.2

REGISTERED NUMBER: 07216055 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 December 2022

for

Brayford Hotels Holdings Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

L M Hall

D A Wann

SECRETARY:

L M Hall

REGISTERED OFFICE:

Unit 1

The Circus

Belton Park Road

Skegness

Lincolnshire

PE25 1GU

REGISTERED NUMBER:

07216055 (England and Wales)

AUDITORS:

Wright Vigar Limited

Statutory Auditors

Chartered Accountants & Business Advisers

15 Newland

Lincoln

Lincolnshire

LN1 1XG

The directors present their strategic report of the company and the group for the year ended 31 December 2022.

REVIEW OF BUSINESS

The results for the year and financial position of the group are as shown in the financial statements.

31.12.22

31.12.21

31.12.20

31.12.19

31.12.18

£

£

£

£

£

Turnover

14,365,913

10,139,847

5,465,026

13,174,072

12,014,204

Cost of sales

5,608,996

4,063,091

2,915,665

5,030,642

5,024,534

Gross profit

8,756,917

6,076,756

2,549,361

8,143,430

6,989,670

Gross profit margin %

60.96

59.93

46.65

61.81

58.17

Profit/(Loss) on ordinary activities before taxation

2,143,343

1,616,253

(462,835

)

572,675

1,763,223

Profit % on ordinary activities before taxation

14.92

15.94

(8.47

)

4.35

15.01

With the curtailment of the Covid-19 pandemic, the pace of recovery was interrupted at the start of the financial year following the onset of Omicron which had a particular impact on the meetings and events sector. Due to the quick and decisive actions taken by the directors to protect the business during the pandemic, it was well positioned and able to react when restrictions were finally lifted, which were reflected in room occupancy numbers for the year at 76.98% (2021: 69.44%). The group continues to invest in its hotel facilities to ensure they are maintained to a high standard.

With the geopolitical events in Ukraine at the end of February 2022, new challenges emerged for all business as inflation rose sharply, reaching in excess of 10% by July 2022, which resulted in supply chain issues which needed to be closely managed to ensure there was no impact on the hotels operations.

One of the main influences on the inflationary rises was the unprecedented price increases in the energy markets. The hotels electricity contracts expired in September and were faced with 500% increases in the volatile market conditions. Measures were quickly put in place to mitigate these increases by entering into a flexible purchasing agreement which gave access to wholesale market prices. Increases in many other cost areas, particularly in food, have been managed to limit the impact on the financial results.

The directors continue to monitor financial performance of the group both against prior years and forecasts, as they remain mindful of the competitive environment in which the group operates and the need to maintain close control over the company's working capital and financial position.

The directors consider the financial reporting position remains strong at the year end with healthy net assets of £11,933,378 (2021: £10,711,064) and a stable cash position, which provide strong foundations for the group to continue to grow despite the challenging market conditions.

Borrowings and risk management

The group's principal financial instruments comprise bank balances, bank loans, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the group operations. The group's approach to managing other risks applicable to the financial instruments minimised the risk to a level that the Directors consider appropriate.

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.

PRINCIPAL RISKS AND UNCERTAINTIES

The group is affected by a number of factors, the principal ones of which are:

- The group is exposed to the risk of negative developments in financial markets and the sectors in which it operates, either directly or through the impact on the group's bankers, suppliers or customers. These developments can result in recession, inflation, deflation, restrictions in the availability of credit, impact on demand for customers, problems in the supplier base, increases in the financing costs or in the cost of utilities and finished products. Such developments might increase operating costs, reduce revenues, lower asset values or result in the business being unable to meet in full its strategic objectives.

- The group operates in a competitive market, and failure to compete effectively in terms of price and quality can have an adverse effect on demand and/or margins.

The group mitigates risk in several ways:

- The group has in place an organisational structure with clearly defined lines of responsibility and delegation or authority. There are established policies and procedures for the setting of corporate strategies; financial planning and budgeting; for information and reporting systems; for systems of operational and financial internal control; for assessment of risk; and for monitoring operations and performance.

- Management and staff at all levels work closely with customers and suppliers to operate as effectively and efficiently as possible, whilst maintaining long term working relationships, innovation and good lines of communication.

- The group operates a recruitment and selection process to ensure employees are experienced and competent in their work. The workforce is trained to be alert, responsive to customer needs, and to operate in line with the group's corporate objectives.

ON BEHALF OF THE BOARD:

L M Hall - Director

24 May 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022.

DIVIDENDS

An interim dividend of 217.77 per share was paid on 31 December 2022. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2022 will be £ 196,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

L M Hall

D A Wann

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the 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 company and the group 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;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Wright Vigar Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

L M Hall - Director

24 May 2023

Opinion

We have audited the financial statements of Brayford Hotels Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2022 and of the group's profit 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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

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 the 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

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. 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 the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Group Strategic Report or the Report of the Directors.

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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our work is performed to include an assessment of the susceptibility of the entity's financial statements to material misstatement, including the risk of fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).

In identifying and assessing risk of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

-

We plan our work to gain an understanding of the significant laws and regulations that are of significance to the entity and the sector in which they operate. We perform our work to ensure that the entity is complying with its legal and regulatory framework.

-

We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making inquiries to the management and people charged with governance.

We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

-

Substantive procedures performed in accordance with the ISAs (UK).

-

Challenging assumptions and judgments made by management in its significant accounting estimates.

-

Identifying and testing journal entries, in particular material journal entries and an assessment of year end journals.

-

Assessing the extent of compliance with the relevant laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Kevin Shaw BSc FCA (Senior Statutory Auditor)

for and on behalf of Wright Vigar Limited

Statutory Auditors

Chartered Accountants & Business Advisers

15 Newland

Lincoln

Lincolnshire

LN1 1XG

24 May 2023

TURNOVER

14,365,913

10,139,847

Cost of sales

5,608,996

4,063,091

GROSS PROFIT

8,756,917

6,076,756

Administrative expenses

5,500,005

4,077,754

3,256,912

1,999,002

Other operating income

-

296,850

Gain/loss on revaluation of assets

194,577

-

OPERATING PROFIT

4

3,451,489

2,295,852

Interest receivable and similar income

39,072

-

3,490,561

2,295,852

Interest payable and similar expenses

5

1,347,218

679,599

PROFIT BEFORE TAXATION

2,143,343

1,616,253

Tax on profit

6

810,462

309,282

PROFIT FOR THE FINANCIAL YEAR

1,332,881

1,306,971

Profit attributable to:

Owners of the parent

1,294,267

1,256,645

Non-controlling interests

38,614

50,326

1,332,881

1,306,971

PROFIT FOR THE YEAR

1,332,881

1,306,971

OTHER COMPREHENSIVE INCOME

Revaluation of freehold property

991,745

-

Deferred tax movement

(906,171

)

-

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

85,574

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,418,455

1,306,971

Total comprehensive income attributable to:

Owners of the parent

1,379,982

1,256,645

Non-controlling interests

38,473

50,326

1,418,455

1,306,971

FIXED ASSETS

Intangible assets

9

195,292

223,871

Tangible assets

10

42,265,852

40,433,940

Investments

11

-

-

42,461,144

40,657,811

CURRENT ASSETS

Stocks

12

122,002

110,774

Debtors

13

13,844,777

13,578,900

Cash at bank

1,949,521

2,131,552

15,916,300

15,821,226

CREDITORS

Amounts falling due within one year

14

28,085,397

17,099,302

NET CURRENT LIABILITIES

(12,169,097

)

(1,278,076

)

TOTAL ASSETS LESS CURRENT LIABILITIES

30,292,047

39,379,735

CREDITORS

Amounts falling due after more than one year

15

(14,203,935

)

(25,847,275

)

PROVISIONS FOR LIABILITIES

18

(4,154,734

)

(2,821,396

)

NET ASSETS

11,933,378

10,711,064

CAPITAL AND RESERVES

Called up share capital

19

900

900

Revaluation reserve

20

7,001,637

6,916,063

Capital redemption reserve

20

100

100

Retained earnings

20

5,152,566

4,054,299

SHAREHOLDERS' FUNDS

12,155,203

10,971,362

NON-CONTROLLING INTERESTS

(221,825

)

(260,298

)

TOTAL EQUITY

11,933,378

10,711,064

The financial statements were approved by the Board of Directors and authorised for issue on 24 May 2023 and were signed on its behalf by:

L M Hall - Director

D A Wann - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

500,960

500,960

500,960

500,960

CURRENT ASSETS

Debtors

13

15,545,869

16,634,083

Cash at bank

545,774

592,720

16,091,643

17,226,803

CREDITORS

Amounts falling due within one year

14

10,940,674

11,566,535

NET CURRENT ASSETS

5,150,969

5,660,268

TOTAL ASSETS LESS CURRENT LIABILITIES

5,651,929

6,161,228

CREDITORS

Amounts falling due after more than one year

15

2,814,798

3,114,601

NET ASSETS

2,837,131

3,046,627

CAPITAL AND RESERVES

Called up share capital

19

900

900

Capital redemption reserve

20

100

100

Retained earnings

20

2,836,131

3,045,627

SHAREHOLDERS' FUNDS

2,837,131

3,046,627

Company's loss for the financial year

(13,496

)

(132,072

)

The financial statements were approved by the Board of Directors and authorised for issue on 24 May 2023 and were signed on its behalf by:

L M Hall - Director

D A Wann - Director

Called up

share

Retained

Revaluation

capital

earnings

reserve

£

£

£

Balance at 1 January 2021

900

2,797,654

6,916,063

Changes in equity

Total comprehensive income

-

1,256,645

-

Balance at 31 December 2021

900

4,054,299

6,916,063

Changes in equity

Dividends

-

(196,000

)

-

Total comprehensive income

-

1,294,267

85,574

Balance at 31 December 2022

900

5,152,566

7,001,637

Capital

redemption

Non-controlling

Total

reserve

Total

interests

equity

£

£

£

£

Balance at 1 January 2021

100

9,714,717

(310,624

)

9,404,093

Changes in equity

Total comprehensive income

-

1,256,645

50,326

1,306,971

Balance at 31 December 2021

100

10,971,362

(260,298

)

10,711,064

Changes in equity

Dividends

-

(196,000

)

-

(196,000

)

Total comprehensive income

-

1,379,841

38,473

1,418,314

Balance at 31 December 2022

100

12,155,203

(221,825

)

11,933,378

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2021

900

3,177,699

100

3,178,699

Changes in equity

Total comprehensive income

-

(132,072

)

-

(132,072

)

Balance at 31 December 2021

900

3,045,627

100

3,046,627

Changes in equity

Dividends

-

(196,000

)

-

(196,000

)

Total comprehensive income

-

(13,496

)

-

(13,496

)

Balance at 31 December 2022

900

2,836,131

100

2,837,131

Cash flows from operating activities

Cash generated from operations

1

4,084,418

2,449,398

Interest paid

(1,347,218

)

(679,599

)

Tax paid

-

(74,699

)

Net cash from operating activities

2,737,200

1,695,100

Cash flows from investing activities

Purchase of tangible fixed assets

(936,999

)

(75,825

)

Interest received

39,072

-

Net cash from investing activities

(897,927

)

(75,825

)

Cash flows from financing activities

Loan repayments in year

(1,764,979

)

(1,223,483

)

Other loan repayments

(61,148

)

(39,216

)

Amount withdrawn by directors

823

(30,728

)

Equity dividends paid

(196,000

)

-

Net cash from financing activities

(2,021,304

)

(1,293,427

)

(Decrease)/increase in cash and cash equivalents

(182,031

)

325,848

Cash and cash equivalents at beginning of year

2

2,131,552

1,805,704

Cash and cash equivalents at end of year

2

1,949,521

2,131,552

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2022

2021

£

£

Profit before taxation

2,143,343

1,616,253

Depreciation charges

125,412

123,814

Gain on revaluation of fixed assets

(194,577

)

-

Finance costs

1,347,218

679,599

Finance income

(39,072

)

-

3,382,324

2,419,666

Increase in stocks

(11,228

)

(29,428

)

Increase in trade and other debtors

(266,019

)

(2,643,185

)

Increase in trade and other creditors

979,341

2,702,345

Cash generated from operations

4,084,418

2,449,398

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2022

31.12.22

1.1.22

£

£

Cash and cash equivalents

1,949,521

2,131,552

Year ended 31 December 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

2,131,552

1,805,704

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.22

Cash flow

At 31.12.22

£

£

£

Net cash

Cash at bank

2,131,552

(182,031

)

1,949,521

2,131,552

(182,031

)

1,949,521

Debt

Debts falling due within 1 year

(12,772,027

)

(9,818,932

)

(22,590,959

)

Debts falling due after 1 year

(12,391,809

)

11,645,059

(746,750

)

(25,163,836

)

1,826,127

(23,337,709

)

Total

(23,032,284

)

1,644,096

(21,388,188

)