The directors present the strategic report for the year ended 31 January 2020.
We aim to present a balanced and comprehensive review of the development and performance of the group during the year and its position at the year end. Our report is consistent with the size and nature of the group and is written in the context of the business environment in which we operate.
Our key performance indicators are those that communicate the financial performance and strength of the group as a whole; these being turnover and operating profit. Visitor numbers to our attractions is the key driver of income.
The Principle activity of the group continued to be the operation of successful cultural visitor attractions across the UK – owning and operating, operating for third parties, and working in partnership with third party IP holders.
At the heart of what we do is a great story, told in an engaging way and often set in a truly memorable location – in that we are unique.
The early part of the year suggested that interest from European countries was falling. Although visits from North Americans rose by around 10%, it was not enough to offset the 6 per cent fall from European residents. Visits from residents of countries outside Europe and North America fell by around 7 per cent. Britons were also seen to be cutting back on trips abroad compared to the previous year, with the uncertainty of BREXIT having an impact.
Against the above uncertain backdrop a set of clear objectives was developed for the year ended 31 January 2020, the second year of the group ’s three year strategy ;
Ensure the safety of both staff and guests above all else
Further embed the culture of the “upside down company structure” – Team First, Customer Second – into the business
Refresh and update our Attractions’ visitor experiences - to extend their economic life over the period of the strategy and beyond and place further emphasis on creating outstanding content, quality and variety of our guest experiences
Consider CSR and Environmental plans commercially appropriate to the business
Create equity value for the shareholder and pay an annual dividend
Deliver annual budgeted financial performance, creating working capital to reinvest
Maintain Continuum’s outstanding Brand position in the Business to Business and Business to Consumer marketplaces and utilise modern marketing methods to drive performance cost effectively
Identify management contracts in the UK and Northern Europe
Grow the portfolio by adding further more commercial attractions
Underpin a sustainable and modern operation by protecting and updating the core functionality of our Processes and Systems Infrastructure.
Over the final quarter of 2019 Continuum operated in a relatively upbeat tourism marketplace; despite BREXIT with inbound business up (especially from China) and the home market wanting to stay local. However in the last month of the year it became apparent the COVID-19 outbreak was just starting to have an impact on the market; uncertainty over global travel, global trade and the Chinese travel market. All BA flight to China had been suspended.
Against the above backdrop and in line with the strategic objectives Continuum’s executive team focussed their attention on seeking opportunities to further expand the portfolio alongside investing in the guest experience of the existing portfolio of attractions.
A substantial investment in Greenwood Forest Park introducing themed outdoor play equipment was undertaken, with a view to launching in 2020.
Towards the end of the year, commercial deals were struck to add 2 further attractions to the portfolio in 2020 and 2021. However the COVID-19 pandemic meant these deals were not able to be completed.
Early in 2020, the COVID-19 scenario forced a decision to close The Canterbury Tales (Heritage Projects (Canterbury) Limited) as it was no longer commercially viable. The company was placed in to liquidation in April 2020.
Turnover was £ 15,290,393 compared with a total turnover of £ 16,413,960 in the previous year.
Overall the group made an operating profit of £ 1,046,014 against a profit for the year ended 2019 of £ 1,028,010.
At 31 January 2020, the group ’s net assets were £ 5,031,700 compared with £ 4,440,228 at 31 January 2019.
Going Concern
In common with most businesses, the group has suffered from the effects of the coronavirus pandemic and consequently the group's trading has been affected from late March 2020. The group has taken advantage of the Government's financial support packages, including the Job Retention Scheme (Furlough Scheme).
The financial statements do not include, at 31 January 2020, any allowances or provisions relating to matters arising as a result of the COVID-19 virus crisis. The parent company has been granted (in December 2020) a business interruption loan facility totalling £1,500,000.
On behalf of the board
The directors present their annual report and group financial statements for the year ended 31 January 2020.
The directors who held office during the year and up to the date of signature of the group financial statements were as follows:
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £220,000. The directors do not recommend payment of a final dividend.
As a Group, employee ownership and empowerment are promoted. With various forum groups across the portfolio team members are encouraged to contribute to the strategy of the business and take ownership by sharing ideas. A specific scheme - Bright Ideas - is in place to share any ideas.
Having and promoting open communication channels which include weekly newsletters, information bulletins and team surveys allow the team to contribute to the business strategy as well as achieve a common awareness on the part of the employees of the financial and economic factors affecting the Group's performance.
The auditor, Ashworth Moulds, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the group financial statements of The Continuum Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2020 which comprise the group statement of income and retained earnings, the group balance sheet, the company balance sheet, the group statement of cash flows and notes to the group 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the group 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 group financial statements is not appropriate; or
the directors have not disclosed in the group financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent 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 group financial statements are authorised for issue .
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the group financial statements and our auditor’s report thereon. Our opinion on the group 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 group financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the group 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 there is a material misstatement in the group financial statements or a material misstatement of the other information. 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 our audit :
the information given in the strategic report and the directors' r eport for the financial year for which the group financial statements are prepared is consistent with the group 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 group and the parent company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report and the directors' r eport .
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.
As explained more fully in the directors' r esponsibilities s tatement, the directors are responsible for the preparation of the group financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of group financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group 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.
Our objectives are to obtain reasonable assurance about whether the group financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 group financial statements.
A further description of our responsibilities for the audit of the group financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s 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 auditor's 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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the
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ompany has not presented its own profit and loss account and related notes. The
company’s profit for the year was £
The Continuum Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is St. Edmunds House, Margaret Street, York, YO10 4UX.
The group consists of The Continuum Group Limited and all of its subsidiaries.
These group financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The group financial statements are prepared in sterling , which is the functional currency of the company. Monetary a mounts in these group financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the group financial statements:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash f low and related notes and disclosures;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The group financial statements incorporate those of The Continuum Group Limited and all of its subsidiaries (ie entities that the g roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 31 January 2020 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The company is itself a wholly owned subsidiary of Heritage Projects (Management) Limited, for which consolidated group financial statements are prepared.
In common with most businesses, the group has suffered from the effects of the coronavirus pandemic and consequently the group 's trading has been affected from late March 2020. The company has taken advantage of the Government's financial support packages, including the Job Retention Scheme (Furlough Scheme).
The directors have prepared forecasts for the period to 31 January 2022. If the anticipated revenue levels are achieved, these forecasts demonstrate that the company would be able to continue to operate within its existing facilities.
However, at present, there is uncertainty throughout the hospitality and leisure sector as a result of the imposition of national and local lockdown restrictions. It is unclear how long these will continue and whether more severe restrictions could be imposed in the future. As a result, revenue levels are inherently uncertain.
The financial statements do not include any adjustments that would result were the group unable to continue as a going concern.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from visitors to the attractions is recognised by reference to the date of admission.
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly labour rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
A financial instrument is a contract giving rise to a financial asset (such as trade and other debtors, cash and bank balances) or a financial liability (such as trade and other creditors, bank and other loans, hire purchase and lease creditors) or an equity instrument (such as ordinary or preference shares).
Financial instruments are recognised in the group's balance sheet when the company becomes a party to the contractual provisions of the instrument.
All the group's financial instruments are basic financial instruments and are recognised at amortised cost using the effective interest method.
Amortised cost : the original transaction value, less amounts settled, less any adjustment for impairment.
Effective interest method : where a financial instrument falls due more than 12 months after the balance sheet date and is subject to a rate of interest which is below a market rate, the original transaction value is discounted using a market rate of interest to give the net present value of future cash flows.
Financial assets cease to be recognised only when the contractual rights to the cash flows expire, or when substantially all the risks and rewards of ownership are transferred to another entity.
Financial liabilities cease to be recognised when and only when the group 's obligations are discharged, cancelled, or they expire.
The tax expense represents the sum of the tax currently payable and deferred tax.
Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to reserves, in which case the deferred tax is also dealt with in reserves.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred . Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The total turnover of the group for the year has been derived from its principal activity, wholly undertaken in the United Kingdom.
The insurance claim relates to business interruption.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2019 - 3).
Investment income includes the following:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Goodwill arose on the acquisition of the entire issued share capital of Greenwood Forest Park Ltd. in July 2017.
Freehold land and buildings includes the fair value of land and buildings arising on the acquisition of Greenwood Forest Park Ltd. in July 2017.
The impairment provision in the year relates to Heritage Projects (Canterbury) Limited. In April 2020 liquidators were appointed.
Details of the company's subsidiaries at 31 January 2020 are as follows:
The investments in subsidiaries are all stated at cost less impairment.
In the previous year, t he parent company ha d a debt due from a subsidiary undertaking, Continuum (Entertainment ) Limited, amounting to £ 935,981 . The debt related to funding for the operation of visitor attractions that commenced in 2016 . The group directors recognise d that there we re uncertainties surrounding the trading performance of new attraction s during the initial years of operation but remained optimistic that over a period of time as the attraction s became established and visitor numbers increase d , the operation s would become profitable. As such the group directors were of the opinion that the debt of £ 935,981 would be recoverable and no provision was considered necessary. The debt was repaid in full during the year.
The Royal Bank of Scotland holds a debenture provided by the company and subsidiary companies for securing the group borrowings.
The Royal Bank of Scotland holds a debenture provided by the company and subsidiary companies for securing the group borrowings.
The bank loans comprise one loan repayable in February 2020 at £5,208 per month with interest chargeable at 5.16% pa , a second loan repayable in March 2020 at £5,000 per month with interest chargeable at 3% over bank base rate , and a third loan repayable over 10 years at £56,875 per quarter inclusive of interest, with interest chargeable at 2.6% over bank base rate. That loan is repayable in June 2027.
The group and company bank loans are secured by a debenture provided by the company and its subsidiary companies, comprising fixed and floating charges. See note 26.
Other loans comprises £900 (201 9 : £ 900 ) owed to Heritage Projects (Guernsey) Limited, which is interest free with no fixed date for repayment , and a loan from the Welsh government which is interest free and repayable at £3,500 per month. The amount outstanding is £38,500 (2019: £80,500).
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
The deferred tax asset not provided relating to utilisation of tax losses against future expected profits and other timing differences amounts to £465,436 (2019: £478,567).
Government grants which relate to capital expenditure included in tangible fixed assets have been recognised as deferred income and released over the expected useful life of the assets.
The amount released during the year amounted to £12,500 (2019: £12,500).
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Group
The subsidiary companies have provided a guarantee against the group bank borrowings, supported by a debenture over the group assets comprising fixed and floating charges. The guarantee is limited to £2,061,250 (2019: £2,288,750).
Company
The company has provided a guarantee against the group bank borrowings, supported by a debenture over the company's assets comprising fixed and floating charges. The guarantee is limited to £2,061,250 (2019: £2,288,750).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Leases of land and buildings are typically subject to rent reviews at specified intervals and provide for the lessee to pay all insurance, maintenance and repair costs.
Heritage Projects (Portsmouth) Limited has a lease under which it pays a basic annual rent of £ 142,699 per annum (2019: £136,780) . Further rent is payable annually, calculated as a percentage of the operating profit of the company. In addition the company has outstanding commitments for a maintenance contract under the lease of £992,250 (2019: £257,250) .
Heritage Projects (Oxford Castle) Limited and The Real Mary Kings Close visitor attraction in Edinburgh each pay an annual rent , together with potential additional rent based on turnover adjusted for certain expenses.
Heritage Projects (York) Limited has a lease under which it pays a basic annual rent of £ 170,840 (2019: £135,840) .
Continuum (Entertainment) Limited has agreements for the Emmerdale Tour attraction whereby rent is payable based on a percentage of profit and an amount per visitor.
Company
Under the terms of the lease for The Real Mary Kings Close attraction in Edinburgh the company pays a basic annual rent, together with potential additional rent based on turnover adjusted for certain expenses.
Amounts contracted for but not provided in the financial statements:
In early 2020 the Coronavirus pandemic (Covid-19) spread to the UK and in March 2020 the UK Government announced measures to mitigate the spread in the UK, including social distancing and a "lockdown". As a consequence the group 's trading has been affected from late March 2020.
During 2020 the group took advantage of the Government's financial support packages, including the Job Retention Scheme (Furlough Scheme). Despite this financial support it is considered that there will be some adverse financial impact on the group in the financial years 2020 and 2021. The overall financial effect cannot be reliably estimated given the uncertainties, notably the extent of the "lockdown" together with any potential resurgence of the virus.
As a result of the Covid-19 pandemic ITV took a decision to close the Emmerdale Studio Experience and terminated the commercial agreement with Continuum (Entertainment) Limited to operate the attraction. The attraction closed in July 2020.
The parent company of the largest group in which the company is a member is Heritage Projects (Management) Limited, a company registered in England and Wales. These group financial statements form part of the group financial statements of Heritage Projects (Management) Limited, copies of which are available at Companies House.
Heritage Projects (Guernsey) Limited, a company registered in Guernsey, is the company's ultimate parent undertaking . The directors consider the controlling party to be the trustees of the Cosgrove Trust.