Company Registration No. 02965452 (England and Wales)
The Bath Priory Limited
Annual report and financial statements
for the period ended 29 December 2019
The Bath Priory Limited
Company information
Directors
Andrew Brownsword
Jeremy Hancock
Christina Brownsword
Stephanie Hocking
Peter Tyrrell
Alessandra Brownsword-Matthews
(Appointed 15 May 2019)
David Matthews
(Appointed 15 May 2019)
Secretary
Peter Tyrrell
Company number
02965452
Registered office
8 Gay Street
Bath
BA1 2PH
Independent auditor
Saffery Champness LLP
St Catherine's Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
The Bath Priory Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 28
The Bath Priory Limited
Strategic report
For the period ended 29 December 2019
Page 1
The directors present the strategic report for the period ended 29 December 2019.
Fair review of the business
2019 saw challenging trading conditions across all segments however like for like sales remained relatively flat year on year. The Cotswold properties performed well during the year despite these challenging markets. Furthermore, Minster Mill was closed for complete refurbishment and rebranding for the first part of the year with it re-opening for Easter 2019, this was immediately following by a soft refurbishment of the Old Swan. These two major projects had a large cost of closure and as such, impacted heavily on the trading results of the company.
Further factors impacting the year's results included the completion of fire improvement works that covered all hotels that had commenced in 2018, balcony investigations and repairs at The Imperial, Torquay, annual charge for depreciation increasing by 39% and various exceptional repair costs to ensure the property and fabric of the hotels were maintained at their very high standard.
The loss for the period ended 29 December 2019, after taxation, amounted to £338,038 (period ended 30 December 2018: profit of £1,813,714).
Net assets the period end were £58,211,795 (period ended 30 December 2018: £58,549,833).
No dividends were paid or proposed in the period.
The board is satisfied with the overall trading performance throughout a period of challenging market conditions.
Principal risks and uncertainties
The
company
manages competitive trading risk by providing high quality services and maintaining
consistent renewal of its properties and
strong relationships with its customers.
In line with the hotel and restaurant industry generally, the business is exposed to normal economic and market factors which ultimately reflect the strength of the economy and the strength of local conditions. This is affected by business usage and tourism as well as normal seasonal factors and weather conditions.
The continual increase of hotel bedroom supply in all areas gas a negative impact on the ability to maximise pricing.
It is the
company
's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the group and its suppliers, provided that all trading terms and conditions have been complied with.
The directors believe the
company
is well placed to compete in the market despite challenging market conditions.
The Bath Priory Limited
Strategic report (continued)
For the period ended 29 December 2019
Page 2
Development and performance
In March 2020, the Coronavirus worldwide pandemic resulted in the hotel closing from 23 March to 4 July 2020. This temporary closure resulted in no revenue, whilst at the same time the hotel continued to have certain fixed costs (insurance, utilities, IT contracts etc).
The company utilised the government's Coronavirus Job Retention Scheme to minimise the cost of payroll whilst it was closed. As this measure is due to cease in October 2020, the company has made the difficult decision to restructure in order to sustain its long term future.
Towards the end of 2019, the company submitted a formal planning application for consideration for the change of use at Kelston Park as an addition to the hotel group. Kelston Park is a Grade II listed building in parkland 3 miles from Bath City Centre.
Key performance indicators
To enable review of performance and benchmarking within the
company
, many KPI’s are regularly used
and
key
example
s
of these would be:
-
Average Room Rate
-
Oc
cupancy
-
Y
ield
-
F
ood and beverage
gross profit margin
-
C
ertain room costs
and
payroll
per occupied room
-
W
age cost
as a percentage of revenue
-
U
tility cost per occupied
room
-
EBITDA
as a percentage of revenue
Peter Tyrrell
Director
18 August 2020
The Bath Priory Limited
Directors' report
For the period ended 29 December 2019
Page 3
The directors present their annual report and financial statements for the period ended 29 December 2019.
Principal activities
The principal activity of the company continued to be that of the provision of accommodation and restaurant services.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Andrew Brownsword
Jeremy Hancock
Christina Brownsword
Stephanie Hocking
Peter Tyrrell
Alessandra Brownsword-Matthews
(Appointed 15 May 2019)
David Matthews
(Appointed 15 May 2019)
Results and dividends
The results for the period are set out on page 9.
The director's report does not include a fair review of the business, details of the risks and uncertainties and future developments, as this information is documented within the Strategic Report as required under s414C(11).
Financial instruments
Liquidity risk
The company has significant cash resources to meet its financial obligations and has the ongoing support of its sole shareholder.
Interest rate risk
The company has outstanding loan balances at the period end and so is exposed to interest rate risk on the variable element, being the Bank of England base rate. Subsequent to the period end, interest rates have reduced to all time lows and so this is not considered to be a significant risk. This is coupled with the fact that the loan is due from a related party, rather than an external lender.
Foreign currency risk
The company makes its sales and purchases in sterling and so is not exposed to foreign currency risk.
Credit risk
Credit risk is considered low for the company as credit terms are not provided to the majority of customers.
The Bath Priory Limited
Directors' report (continued)
For the period ended 29 December 2019
Page 4
Disabled persons
The Bath Priory Limited is an equal opportunities employer and gives disabled people full and fair consideration for vacancies for which they apply, having regard for their particular aptitudes and abilities. It is the company's policy to offer training and career developement to disabled employees that is, as far as possible, the same as that offered to other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Post reporting date events
Following the period end, the outbreak of coronavirus, which is a rapidly evolving situation, has adversely impacted global commercial activities. This led to the closure of the hotel within the company between 23 March and 4 July, after which the hotel successfully reopened following government advice. The company has utilised government measures to the best extent, which has eased immediate cash flow requirements. Due to the reduction in revenues during the lockdown period and the Coronavirus Job Retention Scheme due to end in October 2020, the company has made the difficult decision to restructure in order to sustain its long term future.
The directors do not believe that this leads to an uncertainty with regard to the going concern of the company due to the liquidity within the Andrew Brownsword Hotels Limited group and The Bath Priory Hotel Limited and also the ongoing support of the ultimate sole shareholder.
Auditor
Saffery Champness LLP
have expressed their willingness to continue in office.
The Bath Priory Limited
Directors' report (continued)
For the period ended 29 December 2019
Page 5
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Peter Tyrrell
Director
18 August 2020
The Bath Priory Limited
Independent auditor's report
To the members of The Bath Priory Limited
Page 6
Opinion
We have audited the financial statements of The Bath Priory Limited (the 'company') for the period ended 29 December 2019 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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 FRS 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 29 December 2019 and of its loss for the period 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.
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 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
.
The Bath Priory Limited
Independent auditor's report (continued)
To the members of The Bath Priory Limited
Page 7
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's 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 there is a material misstatement in the 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 period 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 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, 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 directors'
r
esponsibilities
s
tatement, 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 is 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.
The Bath Priory Limited
Independent auditor's report (continued)
To the members of The Bath Priory Limited
Page 8
Auditor's 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 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 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: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor's 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.
Michael Strong (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
24 August 2020
Chartered Accountants
Statutory Auditors
St Catherine's Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
The Bath Priory Limited
Statement of comprehensive income
For the period ended 29 December 2019
Page 9
Period
Period
ended
ended
29 December
30 December
2019
2018
Notes
£
£
Turnover
3
27,375,071
28,070,700
Cost of sales
(15,335,384)
(15,004,812)
Gross profit
12,039,687
13,065,888
Administrative expenses
(11,950,997)
(10,355,218)
Other operating income
20,619
21,183
Operating profit
4
109,309
2,731,853
Interest receivable and similar income
6
11,253
13,758
Interest payable and similar expenses
7
(516,082)
(482,527)
(Loss)/profit before taxation
(395,520)
2,263,084
Tax on (loss)/profit
8
57,482
(449,370)
(Loss)/profit for the financial period
(338,038)
1,813,714
The income statement has been prepared on the basis that all operations are continuing operations.
The Bath Priory Limited
Statement of financial position
As at 29 December 2019
Page 10
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
9
81,812,146
77,260,741
Current assets
Stocks
11
470,490
397,048
Debtors
12
1,501,180
2,045,982
Cash at bank and in hand
2,745,576
6,941,299
4,717,246
9,384,329
Creditors: amounts falling due within one year
13
(26,918,207)
(26,923,073)
Net current liabilities
(22,200,961)
(17,538,744)
Total assets less current liabilities
59,611,185
59,721,997
Provisions for liabilities
15
(1,399,390)
(1,172,164)
Net assets
58,211,795
58,549,833
Capital and reserves
Called up share capital
18
44,850,280
44,850,280
Profit and loss reserves
13,361,515
13,699,553
Total equity
58,211,795
58,549,833
The financial statements were approved by the board of directors and authorised for issue on 18 August 2020 and are signed on its behalf by:
Peter Tyrrell
Director
Company Registration No. 02965452
The Bath Priory Limited
Statement of changes in equity
For the period ended 29 December 2019
Page 11
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2018
44,850,280
11,885,839
56,736,119
Period ended 30 December 2018:
Profit and total comprehensive income for the period
-
1,813,714
1,813,714
Balance at 30 December 2018
44,850,280
13,699,553
58,549,833
Period ended 29 December 2019:
Loss and total comprehensive income for the period
-
(338,038)
(338,038)
Balance at 29 December 2019
44,850,280
13,361,515
58,211,795
The Bath Priory Limited
Statement of cash flows
For the period ended 29 December 2019
Page 12
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
2,877,236
2,283,224
Interest paid
(516,082)
(482,527)
Income taxes paid
(418,373)
(286,244)
Net cash inflow from operating activities
1,942,781
1,514,453
Investing activities
Purchase of tangible fixed assets
(6,150,810)
(624,971)
Proceeds on disposal of tangible fixed assets
1,053
-
Interest received
11,253
13,758
Net cash used in investing activities
(6,138,504)
(611,213)
Net (decrease)/increase in cash and cash equivalents
(4,195,723)
903,240
Cash and cash equivalents at beginning of period
6,941,299
6,038,059
Cash and cash equivalents at end of period
2,745,576
6,941,299
The Bath Priory Limited
Notes to the financial statements
For the period ended 29 December 2019
Page 13
1
Accounting policies
Company information
The Bath Priory Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
8 Gay Street, Bath, BA1 2PH.
1.1
Accounting convention
These 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 financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these 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 financial statements of the company are drawn up to either a 52 or 53 week period each year which is in accordance with the company management accounts. This is in line with the Companies Act 2006 as the period end is never more than seven days before or after the year end date of 31 December each year.
1.2
Going concern
The directors have prepared the financial statements on a going concern basis, as in their opinion the company is able to meet its obligations as they fall due. This opinion is based on detailed forecasting for the following 12 months based on current and expected market conditions together with current performance levels.
true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Accommodation is recognised when a room is occupied; food and beverage revenue is recognised when food and beverages are sold; spa and beauty revenue is recognised when treatments are provided or products sold; sundry and other revenues, consisting of items such as room hire and car parking, are recognised at the point of sale.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
1
Accounting policies (continued)
Page 14
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
Nil - 10% straight line
Plant & machinery
5 - 20% straight line
Fixtures & fittings
10 - 25% straight line
Computer equipment
25 - 33% straight line
Motor vehicles
25% straight line
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 credited or charged to profit or loss
.
It is the company's practice to maintain its property in a continual state of sound repair and to extend and make improvements thereto from time to time. Accordingly, the directors consider that the life of the asset and residual value, based on the price prevailing at the time of acquisition, is such that its depreciation would be insignificant. Although this accounting policy is a departure from the requirements of the Companies Act 2006 for all tangible assets to be depreciated, the directors are of the opinion that providing for depreciation on freehold properties would prevent the accounts from showing a true and fair view.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
1
Accounting policies (continued)
Page 15
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks comprise raw materials and finished goods which are food and beverages respectively. Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash at bank and in hand
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company 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.
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 debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
1
Accounting policies (continued)
Page 16
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as 'creditors: amounts falling due within one year' if payment is due within one year or less. If not, they are presented as 'creditors: amounts falling due after more than one year'. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities classified as payable within one year are not amortised.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
1
Accounting policies (continued)
Page 17
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
1
Accounting policies (continued)
Page 18
1.11
Employee benefits
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.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Contributions in respect of the company's defined contribution pension scheme are charged to the profit and loss account for the
period
in which they are payable to the scheme. Differences between contributions payable and contributions actually paid in the
period
are shown either as accruals or prepayments at the
period
end.
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover
Bedrooms
13,668,050
14,098,364
Food
8,367,964
8,364,492
Beverage
3,807,722
3,937,229
Spas and beauty
977,643
934,198
Sundry and other revenue
553,692
736,417
27,375,071
28,070,700
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 19
4
Operating profit
2019
2018
Operating profit for the period is stated after charging/(crediting):
£
£
Exchange gains
(53)
-
Fees payable to the company's auditor for the audit of the company's financial statements
21,737
31,000
Depreciation of owned tangible fixed assets
1,597,418
1,148,113
Loss on disposal of tangible fixed assets
934
139,964
Cost of stocks recognised as an expense
3,612,056
3,767,037
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2019
2018
Number
Number
Employees
590
529
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
10,233,163
9,861,394
Social security costs
757,437
726,958
Pension costs
149,665
95,873
11,140,265
10,684,225
6
Interest receivable and similar income
2019
2018
£
£
Interest income
Interest on bank deposits
11,253
13,758
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 20
7
Interest payable and similar expenses
2019
2018
£
£
Other finance costs:
Other interest
516,082
482,527
8
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
-
383,919
Adjustments in respect of prior periods
(284,708)
-
Total current tax
(284,708)
383,919
Deferred tax
Origination and reversal of timing differences
227,226
71,267
Changes in tax rates
-
(5,816)
Total deferred tax
227,226
65,451
Total tax (credit)/charge
(57,482)
449,370
The actual (credit)/charge for the period can be reconciled to the expected (credit)/charge for the period based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
(Loss)/profit before taxation
(395,520)
2,263,084
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
(75,149)
429,986
Tax effect of expenses that are not deductible in determining taxable profit
45,979
33,584
Adjustments in respect of prior years
(284,708)
(5,816)
Other temporary differences
(26,733)
(8,384)
Effects of other reliefs
283,129
-
Taxation for the period
(57,482)
449,370
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 21
9
Tangible fixed assets
Freehold property and property improvements
Plant & machinery
Computer equipment
Fixtures & fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 31 December 2018
73,364,474
5,062,806
806,575
5,576,686
17,953
84,828,494
Additions
4,861,094
574,682
106,728
608,306
-
6,150,810
Disposals
-
(885)
-
(5,677)
-
(6,562)
At 29 December 2019
78,225,568
5,636,603
913,303
6,179,315
17,953
90,972,742
Depreciation
At 31 December 2018
491,373
2,599,118
680,470
3,778,839
17,953
7,567,753
Charge for the period
534,943
497,478
130,356
434,641
-
1,597,418
Eliminated in respect of disposals
-
(885)
-
(3,690)
-
(4,575)
At 29 December 2019
1,026,316
3,095,711
810,826
4,209,790
17,953
9,160,596
Carrying amount
At 29 December 2019
77,199,252
2,540,892
102,477
1,969,525
-
81,812,146
At 30 December 2018
72,873,101
2,463,688
126,105
1,797,847
-
77,260,741
10
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
385,766
1,348,625
Carrying amount of financial liabilities
Measured at amortised cost
24,743,500
24,909,314
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 22
11
Stocks
2019
2018
£
£
Raw materials and consumables
95,288
59,258
Finished goods and goods for resale
375,202
337,790
470,490
397,048
12
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
184,169
85,553
Corporation tax recoverable
319,162
-
Other debtors
201,597
1,263,072
Prepayments and accrued income
796,252
697,357
1,501,180
2,045,982
13
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Other borrowings
14
23,000,000
23,000,000
Trade creditors
675,378
715,817
Corporation tax
-
383,919
Other taxation and social security
331,408
275,533
Other creditors
1,922,159
1,477,833
Accruals and deferred income
989,262
1,069,971
26,918,207
26,923,073
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 23
14
Loans and overdrafts
2019
2018
£
£
Other loans
23,000,000
23,000,000
Payable within one year
23,000,000
23,000,000
The balance due is to Alessandra Brownsword-Matthews, director of The Bath Priory Limited, and is repayable on demand. Interest will accrue on the Loan at the rate of 1.5% per annum above the base rate from time to time of National Westminster Bank PLC.
15
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
16
1,399,390
1,172,164
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 24
16
Deferred taxation
Deferred tax assets and liabilities are offset where the 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:
Liabilities
Liabilities
2019
2018
Balances:
£
£
Accelerated capital allowances
1,404,351
1,175,100
Other
(4,961)
(2,936)
1,399,390
1,172,164
2019
Movements in the period:
£
Liability at 31 December 2018
1,172,164
Charge to profit or loss
227,226
Liability at 29 December 2019
1,399,390
The deferred tax liability set out above is expected to reverse after 12 months and relates to accelerated capital allowances that are expected to mature after that time.
Legislation was introduced in Finance Bill 2016 to reduce the main rate of corporation tax to 17% for Financial Year 2020. As this is the substantively enacted rate as at the period end, this has been applied in calculating the deferred tax provision. Following the period end, the Budget in March 2020 announced that the corporation tax rate would remain at 19% which will be reflected in the financial statements for the period ended 27 December 2020.
17
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
149,665
95,873
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 25
18
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
44,850,280 Ordinary shares of £1 each
44,850,280
44,850,280
Shares rank equally for voting purposes. On a show of hands, each member shall have one vote and on a poll each member shall have one vote per share held.
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2019
2018
£
£
Acquisition of tangible fixed assets
121,861
4,050,336
20
Ultimate controlling party
The company is owned and controlled by Andrew Brownsword, by virtue of his 100% shareholding in the company.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 26
21
Related party transactions
No guarantees have been given or received.
The company is controlled by Andrew Brownsword, a director of the company. The company undertakes its transactions on an "arm's length basis" and the following transactions are disclosed in accordance with FRS 102 section 33 "Related Party Transactions".
Andrew Brownsword was invoiced £1,018 (period ended 30 December 2018: £3,430) by The Bath Priory Limited for sales in the period. A balance of £nil (period ended 30 December 2018: £549) was outstanding at period end.
During the period, a total amount of £10,961 (period ended 30 December 2018: £6,110) was payable to Andrew Brownsword for the provision of administrative services. £2,972 (period ended 30 December 2018: £nil) was outstanding at period end.
A loan to the company of £23,000,000 (period ended 30 December 2018: £23,000,000) from Alessandra Brownsword-Matthews was outstanding at the period end. Interest on this loan accrued at a rate of 1.5% above the base rate of the company's bankers, Natwest Bank. During the period, interest of £516,082 (period ended 30 December 2018: £482,527) accrued on the loan of which £nil (period ended 31 December 2017: £nil) was outstanding at the period end. The loan is repayable on demand.
Paxton & Whitfield Limited is owned and controlled by Andrew Brownsword. During the period, The Bath Priory Limited made purchases from Paxton & Whitfield Limited totalling £35,408 (period ended 30 December 2018: £27,060). A balance of £3,924 (period 30 December 2018: £481) was outstanding at the period end.
Andrew Brownsword Hotels Limited is owned and controlled by Andrew Brownsword. During the period, a total amount of £1,471,296 (period ended 30 December 2018: £1,723,030) was payable to Andrew Brownsword Hotels Limited for the provision of management and other services. A creditor of £10,969 (period ended 30 December 2018: £253,606) was outstanding at the period end. Sales of £23,802 (period ended 30 December 2018: £33,300) were also made to Andrew Brownsword Hotels Limited during the period. A debtor of £nil (period ended 30 December 2018: £2,922) was outstanding at the period end.
Walton Street LLP is owned and controlled by Andrew Brownsword. During the period, The Bath Priory Limited made sales to Walton Street of £nil (period ended 30 December 2018: £900). £nil was outstanding at the period end (period ended 30 December 2018: £nil).
David Matthews is a director of PinPoint Projects Limited. During the period, Pinpoint Projects Limited made sales to The Bath Priory Limited totalling £26,829. A balance of £nil was outstanding at the period end.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
21
Related party transactions (continued)
Page 27
The Royal Clarence Hotel Limited is a 100% subsidiary of Andrew Brownsword Hotels Limited, owned and controlled by Andrew Brownsword. Sales of £nil (period ended 30 December 2018: £947) were made during the period to The Royal Clarence Hotel Limited. £nil (period ended 30 December 2018: £nil) was outstanding at the period end.
The Manchester Abode Limited is a 100% subsidiary of Andrew Brownsword Hotels Limited, owned and controlled by Andrew Brownsword. During the period, The Bath Priory Limited made purchases of £7,074 (period ended 30 December 2018: £1,673) from The Manchester Abode Limited. A balance of £nil (period ended 30 December 2018: £nil) was outstanding at the period end. Sales of £6,234 (period ended 30 December 2018: £6,059) were made during the period to The Manchester Abode Limited. A balance of £634 (period ended 30 December 2018: £880) was outstanding at the period end.
The Chester Abode Limited is a 100% subsidiary of Andrew Brownsword Hotels Limited, owned and controlled by Andrew Brownsword. During the period, The Bath Priory Limited made purchases of £1,914 (period ended 30 December 2018: £3,128). A balance of £nil (period ended 30 December 2018: £nil) was outstanding at the period end. Sales of £8,198 (period ended 30 December 2018: £7,070) were made during the period to The Chester Abode Limited. A balance of £967 (period ended 30 December 2018: £998) was outstanding at the period end.
The County Hotel Canterbury Limited is a 100% subsidiary of Andrew Brownsword Hotels Limited, owned and controlled by Andrew Brownsword. During the period, The Bath Priory Limited made purchases of £228 (period ended 30 December 2018: £280) from The County Hotel Canterbury Limited. A balance of £33 (period ended 30 December 2018: £nil) was outstanding at the period end. Sales of £5,367 (period ended 30 December 2018: £9,361) were made during the period to The County Hotel Canterbury Limited. A balance of £839 (period ended 30 December 2018: £918) was outstanding at the period end.
The Arthouse Glasgow Limited is a 100% subsidiary of Andrew Brownsword Hotels Limited, owned and controlled by Andrew Brownsword. During the period, The Bath Priory Limited made purchases of £2,635 (period ended 30 December 2018: £12,700) from The Arthouse Glasgow Limited. A balance of £743 (period ended 30 December 2018: £600) was outstanding at the period end. Sales of £4,245 (period ended 30 December 2018: £10,867) were made during the period to The Arthouse Glasgow Limited. A balance of £547 (period ended 30 December 2018: £1,039) was outstanding at the period end.
22
Contingent assets
As at the date of signing the financial statements, the company is undergoing a claim against various financial institutions in relation to finance charges. Although settlement is considered probable, the expected settlement cannot be reliably estimated at this stage.
The Bath Priory Limited
Notes to the financial statements (continued)
For the period ended 29 December 2019
Page 28
23
Post balance sheet event disclosure
Following the period end, the outbreak of coronavirus, which is a rapidly evolving situation, has adversely impacted global commercial activities. This led to the closure of the hotel within the company between 23 March and 4 July, after which the hotel successfully reopened following government advice. The company has utilised government measures to the best extent, which has eased immediate cash flow requirements. Due to the reduction in revenues during the lockdown period and the Coronavirus Job Retention Scheme due to end in October 2020, the company has made the difficult decision to restructure in order to sustain its long term future.
The directors do not believe that this leads to an uncertainty with regard to the going concern of the company due to the liquidity within the Andrew Brownsword Hotels Limited group and The Bath Priory Hotel Limited (see note 21) and also the ongoing support of the ultimate sole shareholder.
24
Cash generated from operations
2019
2018
£
£
(Loss)/profit for the period after tax
(338,038)
1,813,714
Adjustments for:
Taxation (credited)/charged
(57,482)
449,370
Finance costs
516,082
482,527
Investment income
(11,253)
(13,758)
Loss on disposal of tangible fixed assets
934
139,964
Depreciation and impairment of tangible fixed assets
1,597,418
1,148,113
Movements in working capital:
(Increase)/decrease in stocks
(73,442)
151,108
Decrease/(increase) in debtors
863,964
(1,081,153)
Increase/(decrease) in creditors
379,053
(806,661)
Cash generated from operations
2,877,236
2,283,224
2019-12-29
2018-12-31
false
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Jeremy Hancock
Christina Brownsword
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Peter Tyrrell
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