Leehand Leisure Limited - Limited company accounts 17.3

REGISTERED NUMBER: 04507823 (England and Wales)

Leehand Leisure Limited

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 30 September 2017

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

7

Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

AS Glassbrook

FM Cochrane

SECRETARY:

FM Cochrane

REGISTERED OFFICE:

Stanley House

Off Preston New Road

Mellor

Lancashire

BB2 7NP

REGISTERED NUMBER:

04507823 (England and Wales)

AUDITORS:

McMillan & Co LLP

Chartered Accountants and

Statutory Auditor

28 Eaton Avenue

Matrix Office Park

Buckshaw Village

Chorley

Lancashire

PR7 7NA

The directors present their strategic report for the year ended 30 September 2017.

REVIEW OF BUSINESS

Sales for the year ended 30 September 2017 remained relatively stable at £3.5m, with a small decline year on

year of 4.4%. A good performance in accommodation and spa was offset by a reduction in catered events

and conferences.

Food and beverage revenues were generally consistent in the year.

The gross profit margin decreased to 32.2% from 36.0% and the company recorded an EBITDA loss in the

year of £104,405 (2016: profit £136,666).

The operating loss increased to £655,682 from £518,083 and the loss on ordinary activities before taxation

increased to £655,682 from £517,585.

KEY PERFORMANCE INDICATORS

Financial

Gross profit margin 32.2% (2016: 36.0%) calculated as Gross Profit/Turnover

EBITDA loss £104,405 (2016: profit £136,666) calculated as profit/loss before interest, tax, depreciation and

amortisation

Non-financial

Operational headcount 119 (2016: 123)

PRINCIPAL RISKS AND UNCERTAINTIES

In 2018, the challenge will lie in increasing revenues and margin, controlling payroll costs and buildings

overhead, while maintaining the high levels of service expected by our customers. Further, inflationary

pressures in the areas of food cost and utility will put increased pressure on achieving the operating result.

ON BEHALF OF THE BOARD:

FM Cochrane - Director

29 January 2018

The directors present their report with the financial statements of the company for the year ended 30 September 2017.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of operating a hotel, spa and

restaurant.

DIVIDENDS

No dividends will be distributed for the year ended 30 September 2017.

FUTURE DEVELOPMENTS

There are no future developments under review.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 October 2016 to the date of

this report.

AS Glassbrook

FM Cochrane

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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 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 ought to have taken as a director in order to make himself aware of any relevant audit information and

to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, McMillan & Co LLP, are deemed to be reappointed under section 487(2) of the Companies Act

2006.

ON BEHALF OF THE BOARD:

FM Cochrane - Director

29 January 2018

Opinion

We have audited the financial statements of Leehand Leisure Limited (the 'company') for the year ended

30 September 2017 on pages seven to fifteen. 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).

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.

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 September 2017 and of its loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to

report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the

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 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, 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.

Opinion 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the 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 company and its environment obtained in the course of

the audit, we have not identified material misstatements in the 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, 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 three, 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.

Our 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.

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.

Neil McMillan FCA (Senior Statutory Auditor)

for and on behalf of McMillan & Co LLP

Chartered Accountants and

Statutory Auditor

28 Eaton Avenue

Matrix Office Park

Buckshaw Village

29 January 2018

TURNOVER

3,512,382

3,674,819

Cost of sales

2,382,417

2,351,698

GROSS PROFIT

1,129,965

1,323,121

Administrative expenses

1,803,570

1,858,550

(673,605

)

(535,429

)

Other operating income

17,923

17,346

OPERATING LOSS

4

(655,682

)

(518,083

)

Interest receivable and similar income

-

498

LOSS BEFORE TAXATION

(655,682

)

(517,585

)

Tax on loss

5

-

-

LOSS FOR THE FINANCIAL YEAR

(655,682

)

(517,585

)

LOSS FOR THE YEAR

(655,682

)

(517,585

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(655,682

)

(517,585

)

FIXED ASSETS

Tangible assets

6

7,755,099

8,084,426

CURRENT ASSETS

Stocks

7

73,991

74,922

Debtors

8

159,216

173,682

Cash at bank and in hand

709,960

930,535

943,167

1,179,139

CREDITORS

Amounts falling due within one year

9

934,611

944,815

NET CURRENT ASSETS

8,556

234,324

TOTAL ASSETS LESS CURRENT LIABILITIES

7,763,655

8,318,750

CREDITORS

Amounts falling due after more than one year

10

13,256,644

13,156,057

NET LIABILITIES

(5,492,989

)

(4,837,307

)

CAPITAL AND RESERVES

Called up share capital

12

3,466,999

3,466,999

Retained earnings

(8,959,988

)

(8,304,306

)

SHAREHOLDERS' FUNDS

(5,492,989

)

(4,837,307

)

The financial statements were approved by the Board of Directors on 29 January 2018 and were signed on its behalf by:

FM Cochrane - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 October 2015

3,466,999

(7,786,721

)

(4,319,722

)

Changes in equity

Total comprehensive income

-

(517,585

)

(517,585

)

Balance at 30 September 2016

3,466,999

(8,304,306

)

(4,837,307

)

Changes in equity

Total comprehensive income

-

(655,682

)

(655,682

)

Balance at 30 September 2017

3,466,999

(8,959,988

)

(5,492,989

)

1.	STATUTORY INFORMATION

Leehand Leisure 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.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Accounting convention

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.

The Directors have considered the financial position of the company and prepared detailed business

plans. These plans indicate, that for the foreseeable future, it is appropriate to prepare the accounts

on a going concern basis.

As the company had net liabilities of £5.5m at 30 September 2017 (2016: £4.8m), the Directors of

Leehand Limited have agreed to support the company for at period of at least 12 months from the date

of signing these financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption 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.

Turnover

Turnover represents sales of goods and services, excluding value added tax.

Tangible fixed assets

No depreciation is provided on freehold buildings as it is the company's policy to maintain these

properties to a high standard to protect their trade and the costs of maintenance are charged to the

profit and loss account. Therefore their value to the business is not impaired by the passage of time

and as a consequence, in the opinion of the directors, any provision for depreciation would be

immaterial. The directors consider that the aggregate of their residual values is at least equal to the

aggregate of their book values. Depreciation of all other tangible assets is calculated to write down

the cost less estimated residual value by instalments over their expected useful lives. The rates and

periods generally applicable are:

Fixtures & fittings, furniture and equipment

between 10% and 33% on 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.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

1,839,510

1,786,783

Social security costs

125,448

116,895

Other pension costs

8,574

7,479

1,973,532

1,911,157

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

2017

2016

Management and administration

8

8

Sales and marketing

5

5

Operational

119

123

132

136

2017

2016

£

£

Directors' remuneration

-

-

4.	OPERATING LOSS

The operating loss is stated after charging:

2017

2016

£

£

Hire of plant and machinery

16,896

22,976

Depreciation - owned assets

551,277

654,749

Auditors' remuneration

3,280

3,200

5.

TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 30 September 2017 nor for the year ended

30 September 2016.

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The

difference is explained below:

2017

2016

£

£

Loss before tax

(655,682

)

(517,585

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2016 - 20%)

(124,580

)

(103,517

)

Effects of:

Capital allowances in excess of depreciation

-

(15,671

)

Depreciation in excess of capital allowances

66,743

-

Movement in losses carried forward

6,061

119,188

Group relief

51,776

-

Total tax charge

-

-

The company has an unrecognised deferred tax asset in respect of the following, calculated at 19%

(2016: 20%):

2017

2016

£

£

Unrelieved trading losses

470,100

488,024

Accelerated capital allowances

671,951

637,500

Unrecognised deferred tax asset

1,142,051

1,125,524

6.	TANGIBLE FIXED ASSETS

Fixtures

& fittings,

furniture

Freehold

and

property

equipment

Totals

£

£

£

COST

At 1 October 2016

9,100,355

5,647,658

14,748,013

Additions

9,000

212,950

221,950

At 30 September 2017

9,109,355

5,860,608

14,969,963

DEPRECIATION

At 1 October 2016

1,700,000

4,963,587

6,663,587

Charge for year

-

551,277

551,277

At 30 September 2017

1,700,000

5,514,864

7,214,864

NET BOOK VALUE

At 30 September 2017

7,409,355

345,744

7,755,099

At 30 September 2016

7,400,355

684,071

8,084,426

The directors reviewed the carrying amount of tangible fixed assets following the operating loss

recorded in the year. Following the impairment charge in 2009 of £1.7m against the freehold property

the directors are satisfied that the property is valued at the higher of net realisable value and value in

use.

7.

STOCKS

2017

2016

£

£

Stock

73,991

74,922

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2017

2016

£

£

Trade debtors

14,682

25,314

Prepayments and accrued income

144,534

148,368

159,216

173,682

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2017

2016

£

£

Trade creditors

328,482

389,833

Social security and other taxes

67,838

33,952

VAT

101,046

118,139

Deposits and other creditors

379,478

356,151

Accruals and deferred income

57,767

46,740

934,611

944,815

10.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2017

2016

£

£

Amounts owed to group undertakings

13,256,644

13,156,057

11.	SECURED DEBTS

The following secured debts are included within creditors:

2017

2016

£

£

Owing to group undertakings

13,256,644

13,156,057

The amounts owing to group undertakings are secured by a debenture over the assets of the

company.

12.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2017

2016

value:

£

£

3,466,999

Ordinary

£1

3,466,999

3,466,999

The shares have attached to them full voting, dividend and capital distribution rights.

13.	ULTIMATE PARENT COMPANY

The ultimate parent company is Leehand Limited, whose registered office in the United Kingdom.

Leehand Limited prepare consolidated accounts which include the results of this entity and its fellow

subsidiary Leehand Properties Limited. A copy of those consolidated accounts can be obtained from

Companies House, Crown Way, Cardiff, CF14 3UZ.

14.	RELATED PARTY DISCLOSURES

In the opinion of the directors the company is ultimately controlled by Mrs HE Walker.