ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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RED SEA HOLIDAYS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The directors present their strategic report for the year ended 30 September 2023.
The Company is required by the Companies Act 2006 to set out in this report, a fair review of the business of the Company during the financial year ended 30 September 2023, the position of the Company at the end of the period and a description of the principal risks and uncertainties facing the Company. This review is prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for those strategies to succeed, and the business review should not be relied upon by any other party or for any other purpose.
Red Sea Holidays achieved a turnover of £7,752,628 (2022: £5,875,205) with a reduced loss after tax of £245,143 (2022: £434,488). The general market continued to experience negative surround effects post covid, slowing overall recovery to 2019 levels. Interest rates increased significantly in the accounting period (from 2.25% to 5.25%) at the same time as a general cost of living increase, impacting household disposable income. The industry responded well, providing a greater range of value holiday options to meet the ever-changing customer need. Customers opted to trade down in terms of average holiday duration, with a significant shift to all-inclusive holidays where spend could be better managed. Egypt proved to be a popular choice given its reputation of providing great value all-inclusive package holidays where it leads the way.
Key performance indicators
Sales remain buoyant for the year with a great increase in UK flying to Egypt, particularly from regional airports, offering customers a greater degree of flexibility in terms of local departure point as well as increased flexibility in duration.
Consumer confidence has been affected by recent geopolitical events in the region and the perceived risk associated with any potential escalation. The Israel/Palestinian situation continues to cause great concern to holiday makers considering travelling to the region. Whilst this has in no way affected the tourist experience given the location of the Rafah crossing to the main resorts of Hurghada and Sharm el Sheikh, it does however cause concern for a large number of travellers. Similar concerns exist with events in the Red Sea relating to the Houthis. Whilst this is 2,000km away from Egypt’s main resorts, the geography/location of the area isn’t widely known to consumers.
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RED SEA HOLIDAYS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The following risk factors may affect the Company's operating results and its financial position. The risk factors described below are those which the directors believe are potentially significant but should not be regarded as a complete and comprehensive statement of all potential risk and uncertainties facing the Company.
- Regulatory risk: The Company is exposed to various regulators, including the Civil Aviation Authority ("CAA"), which issues an Air Travel Organisers Licence ("ATOL"), which is required in order for the Company to operate. This licence is renewed in March each year and is subject to assessments of fitness and financial criteria, the framework of which is available on the CAA website (www.caa.co.uk). - Geo-political events and natural disasters: The nature of the business operation exposes the Company to a wide range of Geo-political natural disasters. To counter this the Company operate a flexible business model with the ability to shift capacity amongst a variety of destinations where necessary. - Information technology: The Company is heavily reliant upon information technology. Investment is being made to ensure the Company has advanced and efficient systems in place, but there is a risk if there were a major failure - particularly if it were to affect selling systems. Procedures are in place to minimise the time a selling system is unavailable in the event of such failure. - Financial risk: The Company operates in a sector that is exposed to the financial risk caused by the volatility of foreign currency exchange rates. The Company is directly exposed to movements in exchange rates as a large proportion of the travel components it sells are denominated in foreign currency. This risk is managed through the use of hedging. - Economic conditions: The demand for holidays is affected by local economic conditions. The uncertainty created by firstly the COVID-19 pandemic and then the war in Ukraine, and the ensuing volatility in exchange rates and consumer confidence creates a fragile trading environment. Despite the negative impact upon the travel industry, the directors believe that the Company is able to quickly adapt to changes in the local market demand, however a further prolonged period of booking slowdown could adversely affect future financial results and liquidity.
This report was approved by the board on 26 March 2024 and signed on its behalf.
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RED SEA HOLIDAYS UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED
UNDER SECTION 449 OF THE COMPANIES ACT 2006
We have audited the financial statements of Red Sea Holidays UK Limited (the 'Company') for the year ended 30 September 2023, which comprise the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
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RED SEA HOLIDAYS UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)
UNDER SECTION 449 OF THE COMPANIES ACT 2006
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.
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.
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.
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RED SEA HOLIDAYS UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)
UNDER SECTION 449 OF THE COMPANIES ACT 2006
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RED SEA HOLIDAYS UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)
UNDER SECTION 449 OF THE COMPANIES ACT 2006
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- We exercise professional judgment and maintain professional skepticism throughout the audit; - We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the deliberate override of internal control; - We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control; - We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made; - We assess the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; - We review the scope of the Company's compliance with its regulators, the Civil Aviation Authority ("CAA") and the Association of British Travel Agents ("ABTA"), and sample test relevant documentation to access this and the effectiveness of its control environment. - We request and review the minutes of management meetings, and assess any matters identified not already provided for or disclosed that may materially impact the financial statements; - We conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern.
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.
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RED SEA HOLIDAYS UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)
UNDER SECTION 449 OF THE COMPANIES ACT 2006
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.
for and on behalf of
Chartered Accountants and Statutory Auditors
2nd Floor, Nucleus House
2 Lower Mortlake Road
TW9 2JA
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RED SEA HOLIDAYS UK LIMITED
REGISTERED NUMBER: 06418075
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
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RED SEA HOLIDAYS UK LIMITED
REGISTERED NUMBER: 06418075
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 SEPTEMBER 2023
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 on
The notes on pages 12 to 23 form part of these financial statements.
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RED SEA HOLIDAYS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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RED SEA HOLIDAYS UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Red Sea Holidays UK Limited (the 'company') is a private company limited by shares and is registered and incorporated in England and Wales. The registered office is 5 New Street Square, London, EC4A 3TW.
The company's principal activities are disclosed in the Directors Report.
2.Accounting policies
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 following principal accounting policies have been applied:
Following the impact of the Covid-19 pandemic and the increase in trading since the restrictions were lifted, the Company's directors and management have continued to meet regularly to review the Company's financial position, budgets and forecasts in order to manage and mitigate the potential financial impact of issues such as the cost of living crisis and the Israel/Palestine war amongst others.
As a result of these forecasts, and specifically given the continuing written support of the principal shareholder/director, the Company's directors and management have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being at least the following 12 months from the signing of these financial statements. This is also supported by the continuing strong sales performance seen so far in late 2023/early 2024, which the Company has remained well placed to meet and service. As a result, the directors believe that it is still appropriate to apply the going concern basis for the foreseeable future.
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Turnover represents customer bookings where the date of departure has taken place during the period or when all services have been satisfied in the period. The direct expenses relating to these bookings are recognised in line with the associated turnover on the same basis. Direct expenses include all accommodation and transport costs which are classified as “cost of sales” within the Statement of Comprehensive Income. Transactions relating to customer bookings are recognised in the financial statements at the point the payment is received and recorded in advanced deposits. This treatment reflects the fact that customers retain the right to change or cancel their booking up to the date of departure. Transactions relating to customers’ bookings are reflected in turnover on the date of departure of travel. Cancellation revenue is recognised at the point of cancellation.
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £15,290 (2022: £15,744). Contributions totalling £1,407 (2022: £Nil) were payable to the fund at the reporting date.
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RED SEA HOLIDAYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Mohamed Abd-Elfattah, a director of the company, controls the company as a result of directly controlling 75% of the issued share capital of the company.
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