Harrison Leisure UK Limited - Limited company accounts 23.2

REGISTERED NUMBER: 04198044 (England and Wales)

HARRISON LEISURE UK LIMITED

STRATEGIC REPORT, DIRECTORS' REPORT AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Independent Auditors' Report

5

Statement of Income and Retained Earnings

9

Balance Sheet

10

Notes to the Financial Statements

11

Directors:

Mr W Harrison

Mr G Harrison

Mrs E Harrison

Secretary:

Mr G Harrison

Registered office:

Riverside Leisure Centre

Southport New Road

Banks

SOUTHPORT

PR9 8DF

Business address:

Southport New Road

Banks

SOUTHPORT

PR9 8DF

Registered number:

04198044 (England and Wales)

Auditors:

Xeinadin Audit Limited

Accountants and Statutory Auditors

Dalton House

9 Dalton Square

LANCASTER

LA1 1WD

Introduction

The directors present their Strategic Report for Harrison Leisure UK Limited for the year ended 31 December 2022.

Business review

The directors present a balanced and comprehensive review of the development and performance of the company during the year and the company's position at the year end.

Our strategic plans implemented throughout the pandemic have strengthened our financial position. As we now find ourselves on the edge of potential recession, with government policies announced in September 2022 not seen since 1970's, 2022 will see significant increases in our cost base, particularly in respect of interest rate increases, energy prices and cost of supply from manufacturers. The directors continue to plan for the future stability of the company and all its stakeholders.

The review is consistent with the size and nature of the company and is written in the context of the risks and uncertainties faced.

Principal risks and uncertainties

Management continually monitor the key risks facing the company together with assessing the controls used for managing risks. The directors agree policies for managing the risks arising from the company's financial instruments. These are as follows:

Economic downturn

We operate in a sector which is affected by the economic climate, therefore we operate a variety of different income streams in order to minimise the risk of a downturn affecting the whole company. After the last recession we started operating a hire fleet which has helped to improve monthly cash flows to help offset the risk of caravan sales declining. We also continue to develop new bases at our parks in order to help increase site fee income to offset the risk of more owners leaving the sites than anticipated. We have documented the impact on going concern throughout these financial statements.

Loss of key personnel

As we are a family business; we have a small number of key staff. Following our recruitment drive in 2020 and 2021 we have implemented a centralised Head Office Team which continues to help improve our internal structures, efficiencies, parks and facilities, together with communications with all our stakeholders. We ensure that key personnel are rewarded appropriately to help improve financial performance of the company as well as keeping staff motivated to avoid staff leaving. We have incentive programmes in place for staff to receive financial reward for hitting financial targets and performance is reviewed weekly.

Financial Risks

The company's operations expose it to a variety of financial risks that include the effect of changes in credit, liquidity and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the group.

Credit Risk

The company has implemented policies that require appropriate credit checks on customers before sales are made.

Liquidity Risk

The directors believe that the company has sufficient funds available to support its activities in the future. Working capital facilities are provided through bank debt facilities and the Group continues to experience a good working relationship with its bankers. The Group generates significant money from operating activities and cash flows are monitored daily in order to ensure any potential difficulties can be managed. Cash flow forecasting is also produced to help with this process.

COVID-19

The directors are aware of the risks and uncertainties surrounding the global pandemic and appropriate measures continue to be in place to ensure the safety of all our teams, customers and suppliers. The directors are aware that any future plans may be subject to unforeseen circumstances outside of the directors' control.

Financial key performance indicators

Management use a range of performance measures to monitor and manage the company. The directors consider the key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, being turnover, EBITDA, profitability before taxation and net assets.

2022

2021

£m

£m

Turnover

27.3

21.1

EBITDA

7.4

6.4

Profit before tax

5.1

4.9

Net assets

15.2

11.7

Financial performance

The strategic planning and recruitment implemented by the directors throughout 2021 and 2022 has resulted in the significantly improved financial performance of the company. The directors have implemented a detailed review of the cost base across the Group.

Financial position

The directors are pleased with the financial performance of the company and outcome of their strategic planning. 2022 has enabled the company to acquire an additional park and to invest £6.4m in the infrastructure of our parks and facilities.

On behalf of the board:

Mr W Harrison - Director

29 September 2023

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

Dividends

During the year the company declared dividends of £631,000 (2021 - £384,000).

Directors

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

Mr W Harrison

Mr G Harrison

Mrs E Harrison

Statement of directors' responsibilities

The directors are responsible for preparing the Strategic Report, the Directors' Report 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 of the profit or loss of the company 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 transactions and disclose with reasonable accuracy at any time the financial position of the 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 company 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 company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors

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

On behalf of the board:

Mr W Harrison - Director

29 September 2023

Opinion

We have audited the financial statements of Harrison Leisure UK Limited (the 'company') for the year ended 31 December 2022 which comprise the Statement of Income and Retained Earnings, Balance Sheet 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 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 company's affairs as at 31 December 2022 and of its 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 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

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 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 Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' 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 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 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.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or 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, or returns adequate for our audit have not been received from branches not visited by us; or

-	the 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 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 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 an Auditors' 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.

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

- enquiries are made of management and those charged with governance as to whether there is any knowledge of actual, suspected, or alleged fraud, whether there is any known non-compliance with laws or regulations, and whether the company has been subject to any litigation or any legal claims.

- audit work over the risk of management override of controls is undertaken. This includes testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.

- analytical reviews are performed on the financial statements at all stages of the audit by comparison to prior years, budgets and expectations to ensure the reasonableness of the figures therein.

- detailed audit testing is undertaken in specific areas to ensure that income and expenditure is correctly recorded and is a genuine income or expense of the company.

- financial statement disclosures are reviewed and tested to supporting documentation to assess compliance with applicable laws and regulations.

Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities 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 Auditors' 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 Auditors' 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.

Tim Preece FCCA (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

Accountants and Statutory Auditors

Dalton House

9 Dalton Square

LANCASTER

LA1 1WD

29 September 2023

Turnover

27,106,920

21,072,894

Cost of sales

12,711,021

9,437,068

Gross profit

14,395,899

11,635,826

Administrative expenses

8,552,158

6,657,370

5,843,741

4,978,456

Other operating income

3

-

279,275

Operating profit

5

5,843,741

5,257,731

Interest receivable and similar income

6

8,797

204

5,852,538

5,257,935

Interest payable and similar expenses

7

799,898

329,820

Profit before taxation

5,052,640

4,928,115

Tax on profit

8

848,472

1,289,550

Profit for the financial year

4,204,168

3,638,565

Retained earnings at beginning of year

11,663,351

8,408,786

Dividends

9

(631,000

)

(384,000

)

Retained earnings at end of year

15,236,519

11,663,351

Fixed assets

Intangible assets

10

3,287,380

2,691,856

Tangible assets

11

43,595,012

29,204,373

Investments

12

283,200

283,200

47,165,592

32,179,429

Current assets

Stocks

13

8,521,365

4,346,384

Debtors

14

5,484,593

4,878,258

Cash at bank and in hand

15

3,099,998

2,925,356

17,105,956

12,149,998

Creditors

Amounts falling due within one year

16

23,214,693

17,697,913

Net current liabilities

(6,108,737

)

(5,547,915

)

Total assets less current liabilities

41,056,855

26,631,514

Creditors

Amounts falling due after more than one year

17

(25,123,696

)

(14,438,161

)

Provisions for liabilities

20

(696,638

)

(530,000

)

Net assets

15,236,521

11,663,353

Capital and reserves

Called up share capital

21

2

2

Retained earnings

22

15,236,519

11,663,351

Shareholders' funds

15,236,521

11,663,353

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:

Mr W Harrison - Director

1.	Statutory information

Harrison Leisure UK Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	Accounting policies

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business, is being amortised over its estimated useful life of 10 years on a straight line basis.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.	Other operating income

2022

2021

£

£

Government grants

-

279,275

4.	Employees and directors

2022

2021

£

£

Wages and salaries

3,544,701

2,293,629

Social security costs

351,342

220,848

Other pension costs

78,378

40,509

3,974,421

2,554,986

The average number of employees during the year was as follows:

2022

2021

Site

88

66

Office

61

49

149

115

2022

2021

£

£

Directors' remuneration

38,322

37,471

5.	Operating profit

The operating profit is stated after charging/(crediting):

2022

2021

£

£

Hire of plant and machinery

64,930

43,838

Depreciation - owned assets

1,014,666

667,753

(Profit)/loss on disposal of fixed assets

(392,609

)

704,621

Goodwill amortisation

504,476

440,310

6.

Interest receivable and similar income

2022

2021

£

£

Bank interest receivable

6,750

204

Other interest receivable

2,047

-

8,797

204

7.

Interest payable and similar expenses

2022

2021

£

£

Bank interest payable

16,448

33,408

Bank loan interest

765,548

294,866

Hire purchase

17,902

1,546

799,898

329,820

8.

Taxation

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2022

2021

£

£

Current tax:

UK corporation tax

681,834

1,020,550

Deferred tax

166,638

269,000

Tax on profit

848,472

1,289,550

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2022

2021

£

£

Profit before tax

5,052,640

4,928,115

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

960,002

936,342

Effects of:

Expenses not deductible for tax purposes

6,840

6,878

Depreciation in excess of capital allowances

63,304

92,843

Adjustments to tax charge in respect of previous periods

(194,785

)

(15,450

)

Effects of UK tax rate changes

82,609

-

Short-term timing difference leading to an increase (decrease) in taxation

-

268,937

Benefit of UK super deduction

(69,498

)

-

Total tax charge

848,472

1,289,550

9.

Dividends

2022

2021

£

£

Ordinary A shares of 20p each

Interim

631,000

384,000

10.	Intangible fixed assets

Goodwill

£

Cost

At 1 January 2022

5,903,093

Additions

1,100,000

At 31 December 2022

7,003,093

Amortisation

At 1 January 2022

3,211,237

Amortisation for year

504,476

At 31 December 2022

3,715,713

Net book value

At 31 December 2022

3,287,380

At 31 December 2021

2,691,856

11.	Tangible fixed assets

Electrical

Freehold

and

Plant and

property

drainage

machinery

£

£

£

Cost

At 1 January 2022

28,878,970

646,267

5,339,224

Additions

13,504,818

-

1,505,938

Disposals

-

-

(432,704

)

At 31 December 2022

42,383,788

646,267

6,412,458

Depreciation

At 1 January 2022

3,153,168

581,111

2,341,961

Charge for year

414,779

6,697

415,222

Eliminated on disposal

-

-

(72,671

)

At 31 December 2022

3,567,947

587,808

2,684,512

Net book value

At 31 December 2022

38,815,841

58,459

3,727,946

At 31 December 2021

25,725,802

65,156

2,997,263

Fixtures

and

Motor

fittings

vehicles

Totals

£

£

£

Cost

At 1 January 2022

223,743

586,816

35,675,020

Additions

193,900

1,748,928

16,953,584

Disposals

-

(1,325,473

)

(1,758,177

)

At 31 December 2022

417,643

1,010,271

50,870,427

Depreciation

At 1 January 2022

181,642

212,765

6,470,647

Charge for year

46,977

130,991

1,014,666

Eliminated on disposal

-

(137,227

)

(209,898

)

At 31 December 2022

228,619

206,529

7,275,415

Net book value

At 31 December 2022

189,024

803,742

43,595,012

At 31 December 2021

42,101

374,051

29,204,373

12.	Fixed asset investments

Shares in

group

undertaking

£

Cost

At 1 January 2022

and 31 December 2022

283,200

Net book value

At 31 December 2022

283,200

At 31 December 2021

283,200