REG-Zentra Group plc Zentra Group plc: Full year results for the year ending 30 June 2024
30/10/2024 07:15
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Zentra Group plc (ZNT)
Zentra Group plc: Full year results for the year ending 30 June 2024
30-Oct-2024 / 07:00 GMT/BST
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30 October 2024
ZENTRA GROUP PLC
(the “Company”) or (the “Group”)
Full year results for the year ending 30 June 2024
Zentra Group PLC (LSE: ZNT), the UK-based residential developer, development manager and
property manager focused on the North of England, is pleased to announce its audited results
for the year ended 30 June 2024 (FY 2024).
Financial highlights
• Reduction in revenue of £0.94m, 6% on the prior year, from £15.59m to £14.65m, driven by
a reduction in sales completions from 71 to 52 during the period.
• Impairment £0.82m compared with £1.09m in the prior year, a reduction of £0.27m. The
impairment loss is included in cost of sales.
◦ Previously reported factors have continued to impact developments, including
increases in costs due to rising material prices, sub-contractor prices, delays
experienced and the cost of debt, as remaining self delivery projects completed by
year-end. The remaining project of Victoria Road Eccleshill, procured on a fixed
price contract, is within budget.
• Gross profit of £0.18m, down by £0.41m or 69% on prior year mainly due to the reduction
in sales completions (FY 2023: gross profit of £0.59m).
• Loss before tax of £3.56m (FY 2023: loss of £2.14m).
• Basic loss per share of 8.7 pence (FY 2023: loss of 6.2 pence).
• Net debt of £16.89m (FY2023: £16.94m). Repayment in the period of £1.0m of the £1.5m
Corporate Bond which matured in March 2024, with the reminder £0.5m rolled into a new
loan note facility on the same terms for a further 12 months to March 2025.
• A decrease in the One Heritage Property Development shareholder loan facility of £0.4m
to £10.98m (FY 2023: £11.38m). During the year renegotiation took place of the facility
termination date, which was extended to December 2025, with the ability to extend for a
further 3 years
Operating highlights
• Practical completion of St Petersgate Stockport and North Church House Sheffield (as
development manager), bringing to an end the policy of self-delivery development.
• A decision to move away from co-living activity due to uncertainties on returns.
• Advancement of construction on Victoria Road, Eccleshill within budget by utilising a
fixed price contract procurement strategy, with practical completion occurring in
October 2024.
• Completed a Company strategic review, resulting in a number of financial and operational
changes after the financial year, including the alignment of overheads to current
business position.
• Scott Nicol appointed as Group Head of Investment, adding substantial knowledge and
experience and Ben Scandrett also came on board as Group Head of Development, overseeing
all development activities, from pipeline management to project delivery.
Post Period Events
• Rebranding of One Heritage Group PLC to Zentra Group PLC reflecting a broader strategic
realignment.
• Unconditional exchange of contracts for the sale of our inventory valued at £7.0m.
• The acquisition of a 30% stake in the One Victoria project in Manchester, where we also
serve as Development Manager.
• Agreement of refinancing initiatives, including securing a new Related party £7.0m
facility at a more favourable 6% interest rate (down from 7%) and a £2.0m debt write-off
of existing Group facilities reducing our interest burden and increased financial
flexibility.
• Completion of the sale of the building Seaton House, Stockport for £0.6m together with
exchange of conditional contracts for the sale of the land to the rear for £0.4m.
• Practical completion in October 2024 of 24 houses at Victoria Road, Eccleshill.
Outlook
• The movement away from in-house delivery and Co-living are pivotal to allow the business
to focus on the securing of new business opportunities linked with the promotion of our
two main brands of Zentra Living for Apartments and Zentra Homes for single dwelling
houses.
• The robust review of financial and operational structures and steps put in place give
the Company greater operational and financial flexibility with the benefit of adding
value for our shareholders.
Jason Upton, Chief Executive Officer, commented:
“Over the past year, the Company has faced economic and trading challenges, affecting both
consumer confidence and our cost base. It has also been a time of reflection and transition,
with key decisions made to move away from self-delivery, reduce our exposure to Co-living,
and realign our cost base and staffing structure. These actions are vital for restoring
profitability and increasing shareholder returns.
The recent financial restructuring and inventory disposal have laid a strong foundation as
we enter a new era with a fresh identity and revised strategy under the Zentra brand. I look
forward to leading the team through this exciting chapter in the months ahead.”
Contacts
Zentra Group PLC
Jason Upton
Chief Executive Officer
Email: jason.upton@zentragroup.co.uk
Robert Holbrook
Head of Finance
Email: robert.holbrook@zentragroup.co.uk
Hybridan LLP (Financial Adviser and Broker)
Claire Louise Noyce
Email : claire.noyce@hybridan.com
Tel: +44 (0)203 764 2341
About Zentra Group PLC
Zentra Group PLC (previously One Heritage Group PLC) is a property development and
management Company. It focuses on the residential sector primarily in the North of England,
seeking out value and maximising opportunities for investors.
The Company is listed on the Standard List of the Main Market of the London Stock Exchange,
trading under the ticker ZNT.
For further information, please visit the Company’s website at 1 www.zentragroup.co.uk The
previous website 2 www.oneheritageplc.com will automatically redirect to the new website.
References to page numbers throughout this announcement relates to the page numbers within
the Annual Report of the Company for the year ended 30 June 2024.
Chairman’s statement
It is my pleasure to present this year’s annual report, which covers a period of significant
transformation for the Group. The period under review has continued to be extremely
challenging, with economic uncertainty and rising construction costs and reduced investor
appetite combining to adversely affect our business. However, ‘out of adversity comes
opportunity’ as the saying goes, and I am very pleased with the way that the executive team,
post-period, has executed opportunities to recapitalise the business and acquire a
significant stake in a prime Manchester high-rise apartment development.
During the year, we also made some difficult yet necessary decisions, including the
reduction of our core cost base, and the streamlining of operations to ensure a leaner and
more focused Group. Importantly, our strategic shift away from Co-Living and in-house
construction has allowed us to concentrate on our core strength—residential
development—enabling us to respond more effectively to market opportunities and deliver
predictable outcomes.
Looking ahead, I am optimistic about the prospects for the Group. The adjustments we have
made to our structure and the sharpening of our focus will better enable us to seize
emerging opportunities in the residential development market. Our continued emphasis on
urban residential projects and new-build housing in high-demand areas, particularly in the
North West of England, aligns with our commitment to meeting the evolving needs of our
customers while generating strong returns for our shareholders.
I would like to take this opportunity to express my gratitude to our shareholders,
employees, and other stakeholders for their unwavering support throughout this period of
transformation. As we embark on the next phase of our journey, we do so with confidence,
knowing that we have the right strategy, the right team, and the right foundations to
deliver long-term success for the Group.
David Izett
Chairman
29 October 2024
Chief Executive’s statement
As I reflect on the past few years, it is clear that our journey has been shaped by a
rapidly evolving environment that has presented both opportunities and challenges. Since
listing on the London Stock Exchange in December 2020, we have navigated significant changes
in the property development landscape, from rising construction costs and fluctuating
investor demand to broader macroeconomic uncertainties. These factors have affected the rate
of sales and our operational costs, forcing us to rethink our strategy and reposition
ourselves for the future.
The external environment has undoubtedly been challenging, with construction costs
escalating and the financial climate becoming increasingly complex. Investor sentiment has
also been tempered by economic volatility, further impacting the speed at which we have been
able to secure sales. Despite these headwinds, we have remained steadfast in our commitment
to delivering high-quality residential developments and managing our portfolio with
discipline and foresight.
Recognising the need for decisive action, we initiated a strategic review earlier this year,
which led to a restructuring of the Group. During this review, an opportunity presented
itself to complete several significant transactions. Although the restructuring process
presented challenges, it was crucial for securing the long-term success of the business. The
process began with the strategic review and culminated after the year-end with the
announcement of the exchange of contracts for the sale of our inventory valued at £7 million
and our rebranding to Zentra Group PLC, marking a key milestone in our evolution.
The proposed restructuring will strengthen our financial position and better align our
operations with current market opportunities. It also enabled us to refocus on our core
strength - residential development - while stepping away from higher-risk areas like
in-house construction and Co-Living services. By adopting a leaner, more efficient business
model, centred on cost certainty through fixed-price contracts with third-party contractors,
we have reduced financial exposure and mitigated the risks of rising construction costs, all
while continuing to deliver the high-quality developments that define our company.
Our decision to rebrand as Zentra Group is more than just a change in name; it reflects a
broader strategic realignment. Zentra embodies the values of balance, harmony, and
focus-principles that resonate with our renewed commitment to providing high-quality
residential developments. This new identity allows us to distance ourselves from potential
reputational risks with the One Heritage brand which is synonymous with financial services
in Asia, allowing us to have our own identity and forge a fresh path forward, particularly
in the UK market where our presence and reputation continue to grow.
The restructuring also includes the acquisition of a 30% stake in the One Victoria project
in Manchester, where we also serve as Development Manager. Scheduled for completion in H2 FY
2025, One Victoria will offer 129 apartments and 2 commercial units, further reinforcing our
commitment to high-quality urban developments. This acquisition, along with our refinancing
initiatives, including securing a new £7 million facility at a more favourable 6% interest
rate (down from 7%) and a £2 million debt write-off, are major achievements that bring
significant value to our shareholders. This refinancing arrangement is a significant
milestone, allowing us to reduce our interest burden and increase financial flexibility. The
new terms place the Group in a stronger position to navigate future market conditions while
providing us with the resources to focus on key development projects.
Executing such a comprehensive restructuring within the necessary timeframes was a
challenging task, especially considering the complexities of aligning it with our financial
results and market conditions. There were moments of uncertainty and in particular with
respect to the timing of transactions, but we remained focused on creating long-term value
for our shareholders. I firmly believe that the steps we have taken lay the groundwork for a
stronger, more resilient company going forward.
During the period under review, I am pleased we achieved several key milestones which
included the construction on the One Victoria project in Manchester mentioned above.
Additionally, we also commenced construction on our first new build housing project,
consisting of 24 houses at Victoria Road in Eccleshill, West Yorkshire which reached
practical completion post period in October. We also achieved practical completion of other
significant projects, namely St. Petersgate Stockport and North Church House Queen Street
Sheffield. Furthermore, we successfully repaid a £1.5 million corporate bond and secured a
£0.5 million unsecured loan with an interest rate of 8%, maturing on March 15, 2025. These
accomplishments reflect our ongoing commitment to delivering value and advancing our
strategic objectives, positioning us for future growth.
KEY PROJET ACHIEVEMENTS
In detail:
1. St Petersgate, Stockport:
In January, we achieved practical completion of this significant conversion project, which
involved transforming a former office building into 18 high-quality residential apartments
and a commercial unit. During the construction phase, the project encountered unexpected
challenges, notably around the rooftop extension. Despite these hurdles, we successfully
navigated the complexities to deliver the project on time. The residential units were all
sold, showing strong demand for well-located housing in Stockport. Additionally, the
commercial unit was fully let, contributing to a balanced mixed-use development that
integrates residential and commercial space effectively, creating value for both residents
and businesses.
2. Victoria Road, Eccleshill:
In October 2024, we completed our first new-build housing development at Victoria Road. The
development comprises 24 houses, marking a significant milestone in our story as we expand
into the new-build sector. Sales efforts are currently underway, with a dual approach
targeting both individual homebuyers and bulk sales to registered housing providers.
3. North Church House, Sheffield:
In March, construction completed on the 58-unit development North Church House. As the
development manager, we encountered several challenges in converting this former office
building, particularly in installing a rooftop extension, which required careful planning
and execution. Despite these obstacles, the project was executed successfully, resulting in
a well-finished development that adds residential capacity in a prime urban location. This
conversion showcases our expertise in adaptive re-use of commercial properties, contributing
to sustainable urban regeneration.
4. One Victoria, Manchester:
As well as exchanging contracts to acquire a 30% shareholding in the SPV that owns One
Victoria with completion of this contract expected in October, the Group has retained its
role as Development Manager for the project. This ongoing development consists of 129
high-quality residential apartments and two commercial units, strategically located in
Manchester city centre.
The project is progressing well, with construction expected to be completed in the second
half of FY 2025. To ensure smooth financial progress, construction finance is being drawn
down in stages to cover the ongoing construction costs. Torsion Construction Limited, a
well-established contractor, is leading the construction efforts, leveraging their expertise
to maintain progress on schedule.
This development is an important part of the Group’s broader growth strategy, further
strengthening its presence in the Manchester property market. One Victoria is poised to
provide valuable housing stock while also creating commercial opportunities that align with
the city’s economic growth. The project demonstrates the Group’s capability in managing
large-scale, mixed-use developments and its commitment to delivering projects that balance
residential and commercial needs effectively.
STRATEGIC OBJECTIVES FOR 2025
As we look to the future, we remain focused on our core strategic objectives, which will
drive our continued growth and success:
1. Successfully Delivering Existing Development Projects
Our development pipeline has been strengthened by the expected acquisition of a 30% equity
stake in One Victoria, with our contract due to complete in October . This investment
represents a significant addition to our portfolio. As Development Manager for One Victoria,
we are committed to overseeing its successful completion, ensuring the delivery of 129
high-quality residential units and 2 commercial spaces. Completion of the development is on
course for H2 FY 2025.
2. Securing Sales for our properties
Direct Residential Commercial Gross Exchanged Completed Expected
Development Units Units Development Reservations* * Sales * Completion
Projects Value (£m)
Lincoln
House, 88 0 £10.1m 0 0 88 Completed
Bolton
Bank Street, 23 0 £3.9m 0 0 23 Completed
Sheffield
Oscar House, 27 0 £6.8m 0 0 27 Completed
Manchester
St
Petersgate, 18 1 £2.9m 0 0 18 Completed
Stockport
Victoria
Road, 24 0 £6.5m 2 0 0 Completed
Eccleshill
One
Victoria, 129 2 £39.5m 8 38 0 H2 FY 2025
Manchester**
*As at 03 October 2024
** Exchanged unconditional contracts for 30% of the share capital of the company that owns
the project.
We are pleased to announce post year end that in October, the completion of a £7 million
bulk sale of our inventory took place, marking a significant achievement. This sale allows
us to focus on new opportunities and further strengthens our financial position to execute
our strategic objectives.
Sales at Victoria Road Eccleshill are now a priority following the project's practical
completion. We have launched a targeted marketing campaign, partnering with local agents to
promote the 24 units. In addition to individual buyer sales, we are in active negotiations
with several registered housing providers and institutions for a bulk sale, offering another
avenue to maximise value.
Our investment in One Victoria is also a key focus. So far, we have exchanged contracts on
38 units, and the newly completed showroom is expected to attract significant interest.
3. Expanding the Pipeline of New Development Opportunities
We are actively exploring new development opportunities, both as a direct developer and
through partnerships with local authorities and housing providers. Expanding our pipeline is
crucial to maintaining our growth momentum, and we are currently evaluating a number of
promising projects. The restructuring of our team earlier this year has positioned us to be
more agile and responsive in pursuing these opportunities. We anticipate providing further
updates as these opportunities progress into contracted positions, aligning with our
long-term strategic goals.
Our proactive approach to seeking new development sites will allow us to continue delivering
projects that meet market demand and generate value for our shareholders, while also
addressing the broader housing needs of the communities in which we operate.
OUR PEOPLE
Our people remain central to everything we do, and this year has brought several key changes
to our senior leadership team. Earlier in the year, we welcomed Robert Holbrook as Interim
Head of Finance, who brings extensive financial expertise and deep experience in the
property sector. Scott Nicol joined us as Group Head of Investment, adding substantial
knowledge and experience that has already enhanced our commercial performance. His strategic
insights have further strengthened our leadership team. Ben Scandrett also came on board as
Group Head of Development, overseeing all development activities, from pipeline management
to project delivery.
We remain dedicated to investing in our people and promoting a culture of inclusivity,
innovation, and professional growth. As we continue to expand, our team will play a crucial
role in driving our strategic objectives forward.
INDUSTRY OVERVIEW
Between June 2023 and June 2024, the UK economy expanded at a much faster rate than
initially estimated. Revised figures show GDP growth of 0.3% during this period, tripling
the earlier reported figure of 0.1%. This represents the strongest economic growth since the
post-pandemic recovery in 2021 and early 2022, following two consecutive quarters of falling
GDP in Q3 and Q4 of 2023, often termed a ‘technical recession.’ The Bank of England’s
reduction of its base rate from 5.25% to 5.00%, along with a decrease in inflation, offers
positive signs for the housing market, though consumer caution remains. The policies of the
new Labour government will be instrumental in restoring confidence.
Government intervention in both the housing market and the stagnating planning system will
be critical to achieving the target of building 1.5 million homes over the next five years.
A February 2024 report from the Competition and Markets Authority highlighted the planning
system's inadequacy and the constraints it places on land supply needed to meet housing
goals. While there have been reforms, including revisions to the National Planning Policy
Framework (NPPF) and the reinstatement of local housing targets, it is hoped that new
policies will address the systemic issues that have plagued the sector. Despite these
challenges, the ambitious housing targets create significant opportunities for the Group to
collaborate with local authorities, government bodies and NGOs, fostering an environment for
growth.
In line with these reforms, biodiversity net gain legislation came into force in February
2024, and the Future Homes and Building Standards legislation is expected to be passed
shortly. This will require new homes to reduce emissions by 75% to 80% compared to previous
standards. While these regulations present challenges, they also establish a level playing
field, allowing the Group to deliver high-quality developments in a competitive market.
Affordability remains a major concern, particularly for first-time buyers, as the cost of
purchasing a home now accounts for over 40% of take-home pay. While recent reductions in the
Bank of England’s base rate have allowed lenders to lower the average mortgage rate (75%
LTV) to 3.86%, nearly 1.00% lower than 12 months ago, the threat of further mortgage
increases looms large for many homeowners whose fixed-rate deals are yet to expire.
The constrained supply of new homes for sale, along with structural shifts in consumer
behaviour, has exacerbated the supply-demand imbalance in the rental market, supporting
continued rental growth. In the 12 months to June 2024, average UK residential rents
increased by 8.7%, only a slight decrease from the 8.9% rise in the previous year. This
supply-demand imbalance is expected to persist, keeping rental values strong as potential
homebuyers remain hesitant or unable to purchase homes.
The outlook for affordable housing is uncertain. The next Affordable Homes Program (AHP) in
England has been delayed until spring 2025 due to ongoing economic challenges, financial
uncertainties, and the need for critical repairs to existing stock, including cladding and
damp issues. These factors have reduced housing associations' capacity to invest in new
developments. The interim affordable housing grant introduced in October 2024 has offered
temporary relief, enabling registered providers to continue work on some schemes. The Group
is already engaged in discussions with several local authorities and housing associations to
explore potential partnerships to support their development needs.
After several years of volatile inflation, with the peak during the Covid-19 pandemic, the
past 12 months have seen a levelling off of construction cost inflation. Prices for 'all
work' have entered a period of deflation, though this is likely a temporary correction
following sustained price increases. While falling material costs offer some relief, the
industry's capacity and workforce shortages remain key constraints. Attracting and retaining
talent will be essential to managing future upward cost pressures and meeting government
targets.
Against this backdrop, the latest BCIS residential forecast predicts that build costs will
rise by 15% over the next five years, driven by pressures on materials and labour costs, the
latter expected to increase by 16%. Additionally, BCIS forecasts a 24% growth in new work
output over the same period, as pent-up demand fuels house price growth.
ESG (ENVIRONMENTAL, SOCIAL AND GOVERNANCE)
We remain dedicated to embedding ESG principles throughout our operations. Our ESG strategy
focuses on ethical business practices, sustainable development, and strong community
engagement. This year, we have furthered our commitment in the following ways:
1. Supporting Local Communities and Charitable Organisations
Supporting local communities remains central to our values, and this year we have continued
to engage with and contributed to the communities in which we operate. Our strategy is under
review and over the forthcoming financial year we will continue to support a range of local
initiatives and charitable organisations that focus on social welfare, education, and
housing. Our contributions will be not just financial; our team will actively participate in
volunteer programmes which we support by offering our people up to 2 volunteer days paid per
year. We are proud to work on established long-term partnerships with community
organisations, which enable us to make a lasting positive impact on the areas surrounding
our developments. Through these initiatives, we aim to foster stronger, more resilient
communities, demonstrating our commitment to social responsibility beyond the confines of
property development.
2. Employee Training and Development
We are committed to the professional growth and development of our employees, recognising
that a highly skilled workforce is essential to our success. This year, we launched a new
training system that facilitates regular e-learning across various disciplines, ensuring our
team stays updated with best practices and compliance requirements. Additionally, we
continue to support employees pursuing professional qualifications such as AAT and ACCA,
offering both financial assistance and study leave to help them achieve their career goals.
By investing in continuous learning and development, we ensure our team remains adaptable,
capable, and ready to meet the challenges of a fast-evolving industry.
3. Equality, Diversity, and Inclusion
We remain fully committed to fostering a diverse and inclusive workplace where all employees
feel valued and respected. Our ongoing efforts to promote equality across all levels of the
business include fair recruitment practices, employee development opportunities, and
fostering a culture that celebrates diversity in its many forms. Our recent application to
become a full member of the Greater Manchester Good Employment Charter reflects this
commitment to high standards in fair employment practices. Through this membership, we aim
to reinforce our dedication to improving working conditions, promoting diversity, and
ensuring an inclusive environment for all.
4. Environmental Impact
We are making progress in improving the environmental performance of our developments. Our
approach includes working closely with contractors to monitor and manage waste, aiming to
reduce landfill contributions and increase recycling rates. Additionally, we have been
proactive in incorporating energy-efficient design features where practical, such as
advanced insulation, energy-saving lighting, and sustainable materials, into our projects.
These measures not only help us minimise our carbon footprint but also deliver
cost-effective solutions that benefit both residents and investors. By prioritising
sustainability, we align our business practices with broader environmental goals,
contributing to a greener future while enhancing the long-term value of our developments.
TASK FORCE ON CLIMATE-RELATED DISCLOSURES (TCFD)
In response to growing global concerns over climate change, the Company is committed to
implementing the Task Force on Climate-related Financial Disclosures (TCFD) framework. This
initiative is central to our climate strategy and reflects our dedication to transparency in
climate-related financial risks and opportunities.
Our TCFD implementation plan includes:
• Governance: Establishing a dedicated committee to oversee climate-related risk
management.
• Risk Management: Conducting comprehensive climate risk assessments and integrating
climate risks into our broader risk management framework.
• Scenario Analysis: Developing models to assess the financial implications of different
climate scenarios on our business.
• Data Collection and Disclosure: Enhancing data collection systems to support accurate
TCFD reporting.
By adopting the TCFD framework, we are taking proactive steps to ensure our business remains
resilient in the face of climate challenges while aligning with best practices in corporate
governance.
OUTLOOK FOR 2025
The restructuring we recently announced has laid the foundation for a pathway to grow
shareholder value. Through this transformation, we have made bold decisions to streamline
our operations, reducing our overheads and core cost base by adjusting our headcount,
renegotiating our core finance facility, and reducing our debt to a more manageable level.
These decisive actions have resulted in a sharper, more focused approach to residential
development—our primary strength and the area where we see the greatest opportunity for
growth.
Our strategic decision to move away from Co-Living and in-house construction were critical
steps, enabling us to fully concentrate on delivering high-quality residential projects,
allowing for greater efficiency and more predictable outcomes. This targeted focus aligns
with the evolving needs of the market and reinforces our commitment to generating long-term
value for our shareholders.
After a turbulent few years marked by rising costs and uncertainty, we are beginning to see
the tide turn. With the pressures of escalating costs easing and our business now operating
under a leaner, more efficient structure, we are optimistic about the future. The fresh, new
look of Zentra Group PLC, coupled with our refined structure, gives us the best opportunity
to execute our strategy successfully. We believe that these changes will allow us to seize
emerging opportunities and achieve sustained success, as we move forward with renewed energy
and confidence.
Jason Upton
Chief Executive
29 October 2024
Group’s Financial Review
Trading
For the twelve months ended 30 June 2024, revenue decreased by £0.94m (6%) to £14.65m (FY
2023: £15.59m). This primarily reflects a reduction in development sales and a reduction in
the provision of management services.
FY 2024 FY 2023 Change Change
Revenue
£m £m £m %
Development sales 8.97 9.99 (1.02) (10)%
Co-Living project management fee 0.87 1.28 (0.41) (32)%
Construction 4.02 3.17 0.85 27%
Development management fee 0.36 0.70 (0.34) (48)%
Property services 0.32 0.33 (0.01) (3)%
Corporate 0.11 0.12 (0.01) (8)%
TOTAL 14.65 15.59 (0.94) (6)%
Development sales revenue from legal completions remained the largest contributor to Group
revenue, accounting for 61% (FY 2023: 64%) of total revenue. Overall, there is a reduction
in legal completions from 71 in FY 2023 to 52 in FY 2024 with St Petersgate Stockport and
Oscar House Manchester both achieving practical completion in the year, and the remainder of
revenue coming from completed developments. Lincoln House Bolton delivered £3.06m from 23
legal completions, St Petersgate Stockport legally completed 17 sales for £2.87m, 10 sales
legally completed at Oscar House Manchester for £2.42m, with Bank Street Sheffield legally
completing 2 sales equating to £0.35m.
Co-Living project management relates to the construction works undertaken on Co-Living
properties where the Group receives a 5.0% cost plus margin on all works undertaken and
generated revenue of £0.87m (FY 2023: £1.28m). In addition, construction services generated
revenue of £4.02m in the period (FY 2023: £3.17m) from the management of construction
activity at North Church House Sheffield on behalf of a related party.
There was a decrease in development management fee income to £0.36m (FY 2023: £0.70m) and
this relates to management services provided on One Victoria, Manchester and the One
Heritage Tower, Salford.
Property services delivered revenue of £0.32m (FY 2023: £0.33m). This was driven by
management fees and transaction fees.
FY24 FY23 Change Change
Statement of Comprehensive Income
£m £m £m %
Revenue 14.65 15.59 (0.94) (6)%
Cost of sales (13.65) (13.91) 0.26
Cost of sales - Impairment (0.82) (1.09) 0.27
Gross Profit 0.18 0.59 (0.41) (69)%
Gross margin 1.20% 3.78%
Administration costs (2.62) (2.21) (0.41)
Operating Loss (2.44) (1.62) (0.82) (51)%
Finance expense (1.12) (0.52) (0.60)
(Loss) before taxation (3.56) (2.14) (1.42) (66)%
(Loss) per share (pence) (8.7) (6.2) (2.5) (40)%
The gross profit declined by £0.41m to £0.18m (FY 2023: profit £0.59m) due mainly to an
overall reduction in legal completions and in particular those at Lincoln House, Bolton.
The impairment charge in the period was £0.82m (FY 2023: £1.09m) with the majority of the
charge arising from the completion of works at St Petersgate, the final project to be
completed using in-house construction services. The benefits of the decision to cease this
activity has been shown at Victoria Road, Eccleshill where the site will complete within
cost budget following the appointment of a principal contractor on a fixed price basis.
The gross margin was 1.20% (FY 2023: 3.78%), this reduction being predominantly due to the
reduced legal completions on Lincoln House offset by a reduced impairment charge in the
year.
Administrative expenses were £2.62m in the period (FY 2023: £2.21m). This represents an
overall £0.41m increase in overheads arising from a number of factors: a higher salary cost
of £0.11m driven by an increase in average headcount to 30 employees (FY 2023: 28) and an
increase in professional and consultancy costs. Post year-end, a review of overheads was
undertaken and a cost cutting exercise has been implemented including a series of
redundancies with headcount realigned to the current position in terms of development
streams.
The operating loss increased by £0.82m to a loss of £2.44m (FY 2023: loss of £1.62m).
Finance costs were £1.12m (FY 2023: £0.52m). The increase in finance cost is attributable to
the holding costs associated with unsold units on completed sites. Where practical, these
units have been rented to generate a revenue stream to offset the holding costs. The pre
taxation loss amounts to £3.56m (FY 2023: £2.14m). The basic loss per share was 8.7 pence
(FY 2023: loss 6.2 pence).
Balance Sheet
Development Inventory has decreased by £3.30m from £16.57m to £13.27m. The key balances are
at St Petersgate £0.3m (FY 2023: £2.7m), Oscar House £4.49m (FY 2023: £6.42m) and Lincoln
House £1.10m (FY 2023: £3.6m), where the projects are completed and sales have taken place.
The inventory balance at Victoria Road, Eccleshill is £5.23m (FY 2023: £1.80m), with
practical completion being achieved post year end in October 2024.
The negative equity position has increased by £3.38m from £0.57m to negative equity of
£3.95m due to the impaired inventory position generating insufficient profit to cover the
operational and financing costs of the business. The monetisation of impaired assets and the
recycling of the funds generated into new developments will improve this position over time,
and in this regard the regearing of borrowings together with the sale of stock properties to
a related party at market value post year end (as outlined in the post balance sheet events
note contained within the financial statements) is a great step towards rebuilding the
balance sheet. No dividends have been declared in this year due to continuing loss-making
position.
Reported Net Assets per share decreased by 8.7p in the period to negative 10.2p (FY 2023:
negative 1.5p).
Liquidity
There was no raising of Capital in the year through the issue of shares and the focus has
been on paying down development related borrowings and where appropriate putting new lines
of funding in place that give improved terms.
Net Debt has decreased marginally from £16.94m to £16.89m. This movement includes:
• Interest payment of £1.48m;
• A refinance of Oscar House, Manchester in line with the revised sales and letting
strategy on improved terms to the previous loan of £2.4m;
• Investment in Victoria Road Eccleshill from equity but also a £3.85m debt facility with
Hampshire Trust Bank of which £2.82m was drawn down at 30th June 2024.
• The repayment of £1.0m of the £1.5m Corporate Bond which matured in March 2024, with the
remaining £0.5m rolled into a new loan note facility on the same terms for a further 12
months to March 2025.
• A decrease in the One Heritage Property Development shareholder loan facility of £0.4m
to £10.98m (FY 2023: £11.38). During the year renegotiation took place of the facility
termination date which was extended to December 2025, with the ability to extend for a
further 3 years. As detailed in the post balance sheet events note, post year-end, the
sale of completed stock and a regear of the Group’s funding position has seen this
liability reduce to £7m with an improved debt servicing cost of 6%.
Net Cash inflow used in operating activities was £1.61m, primarily due to the cashing in of
stock inventory, albeit at nominal profit.
In summary, the Company’s operational and financial performance will improve as it divests
itself of the legacy sites and recycles cash into new developments which will be carefully
sourced and managed to improve operational efficiency. The operational and financial
restructures which have taken place post year end, will accelerate this strategy and put the
Group on a stronger financial footing.
Risk Management and Principal Risks
The ability of the Group to operate effectively and achieve its strategic objectives is
subject to a range of potential risks and uncertainties. The Board and the broader
management team take a pro-active approach to identifying and assessing internal and
external risks. The potential likelihood and impact of each risk is assessed and mitigation
policies are set against them that are judged to be appropriate to the risk level.
Management constantly updates plans and these are monitored by the Audit and Risk Committee
and reported to the Board.
The principal risks that the Board sees as impacting the Group in the coming period are
divided into six categories, and these are set out below together with how the Company
mitigates such risks.
1. Strategy: Government regulation, planning policy and land availability.
2. Delivery: Inadequate controls or failures in compliance will impact the Group’s
operational and financial performance.
3. Operations: Availability and cost of raw materials, sub-contractors, and suppliers.
4. People and culture: Attracting and retaining high-calibre employees.
5. Finance & Liquidity: Availability of finance and working capital.
6. External Factors: Economic environment, including housing demand and mortgage
availability.
1. Strategy: Government regulation, planning policy and land availability
A risk exists that changes in the regulatory environment may affect the conditions and time
taken to obtain planning approval and technical requirements including changes to Building
Regulations or Environmental Regulations, increasing the challenge of providing quality
homes where they are most needed. Such changes may also impact our ability to meet our
margin or site return on capital employed (ROCE) hurdle rates (this ratio can help to
understand how well a company is generating profits from its capital as it is put to use).
An inability to secure sufficient consented land and strategic land options at appropriate
cost and quality in the right locations to enhance communities, could affect our ability to
grow sales volumes and/or meet our margin and site ROCE hurdle rates. The Group mitigates
against these risks by liaising regularly with experts and officials to understand where and
when changes may occur. In addition, the Group monitors proposals by Government to ensure
the achievement of implementable planning consents that meet local requirements and that
exceed current and expected statutory requirements. The Group regularly reviews land
currently owned, committed and pipeline prospects, underpinned with robust key business
control where all land acquisitions are subject to formal appraisal and approved by the
senior executive team.
2. Delivery: Inadequate controls or failures in compliance will impact the Group’s
operational and financial performance
A risk exists of failure to achieve excellence in construction, such as design and
construction defects, deviation from environmental standards, or through an inability to
develop and implement new and innovative construction methods. This could increase costs,
expose the Group to future remediation liabilities, and result in poor product quality,
reduced selling prices and sales volumes.
To mitigate this, the Group liaises with technical experts to ensure compliance with all
regulations around design and materials, along with external engineers through approved
panels. It also has detailed build programmes supported by a robust quality assurance.
3. Operations: Availability and cost of raw materials, sub-contractors, and suppliers
A risk exists that not adequately responding to shortages or increased costs of materials
and skilled labour or the failure of a key supplier, may lead to increased costs and delays
in construction. It may also impact our ability to achieve disciplined growth in the
provision of high-quality homes.
The Group no-longer participates in in-house construction of residential development
projects. It is reducing its exposure to providing services for the development of
Co-Living projects for related parties and has also chosen an approach to the delivery of
our development projects by appointing a principal contractor after a period of due
diligence, which we believe will deliver the best shareholder value through cost certainty.
4. People and culture: Attracting and retaining high-calibre employees
A risk exists that increasing competition for skills may mean we are unable to recruit
and/or retain the best people. Having sufficient skilled employees is critical to delivery
of the Company’s strategy, whilst maintaining excellence in all of our other strategic
priorities.
To mitigate this the Company has a number of People Strategy programmes which include
development, training and succession planning, remuneration benchmarking against
competitors, and monitoring of employee turnover, absence statistics and feedback from exit
interviews.
5. Finance & Liquidity: Availability of finance and working capital
A risk exists that lack of sufficient borrowing and surety facilities to settle liabilities
and/or an ability to manage working capital, may mean that we are unable to respond to
changes in the economic environment, and take advantage of appropriate land buying and
operational opportunities to deliver strategic priorities.
To minimise this risk, the Group has a disciplined operating framework with an appropriate
capital structure together with forecasting of working capital and external funding
requirements. Management have stress tested the Group’s resilience to ensure the funding
available is sufficient. This process has regular management and Board attention to review
the most appropriate funding strategy to drive the Company’s growth ambitions. We have
regular Treasury updates, and we gain market intelligence and availability of finance from
in-house and experienced sector Treasury advisers.
6. External Factors: Economic environment, including housing demand and mortgage
availability
A risk exists that changes in the world and UK macroeconomic environment may lead to falling
demand or tightened mortgage availability, upon which most of our customers are reliant,
thus potentially reducing the affordability of our homes. This could result in reduced sales
volumes and affect our ability to deliver targeted returns.
To mitigate this risk, the Group partners with a network of overseas agents, tapping into
overseas investor and private individual demand and in particular in Hong Kong, China and
Singapore with the majority of overseas purchasers being cash buyers. The Group continually
monitors the market at Board, Executive Committee, and team levels, leading to amendments in
the Group’s forecasts and planning, as necessary. In addition, there are comprehensive sales
policies, regular reviews of pricing in local markets and development of good relationships
with mortgage lenders. This is underpinned by a disciplined operating framework with an
appropriate capital structure.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the Group and parent
Company financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements
for each financial year. Under that law they are required to prepare the Company financial
statements in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and applicable law and have elected to prepare the
parent Company financial statements in accordance with UK accounting standards and
applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced
Disclosure Framework.
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 Group and
parent Company and of the Group’s profit or loss for that period. In preparing each of the
Group and parent Company financial statements, the Directors are required to:
▪ select suitable accounting policies and then apply them consistently;
▪ make judgements and estimates that are reasonable, relevant, and reliable;
▪ for the Group financial statements, state whether they have been prepared in accordance
with international accounting standards in conformity with the requirements of the
Companies Act 2006 and, as regards the Group financial statements, International
Financial Reporting Standards;
▪ for the parent Company financial statements, state whether applicable UK accounting
standards have been followed, subject to any material departures disclosed and explained
in the financial statements;
▪ assess the Group and parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
▪ use the going concern basis of accounting unless they either intend to liquidate the
Group or the parent Company or to cease operations or have no realistic alternative but
to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the parent Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the parent Company and enable them to ensure that its
financial statements comply with the Companies Act 2006. They are responsible for such
internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a
Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and
financial information included on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
WEBSITE PUBLICATION
The Directors are responsible for the maintenance and integrity of the corporate and
financial information included on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
DIRECTORS’ RESPONSIBILITIES PURSUANT TO DTR4
The Directors confirm to the best of their knowledge:
▪ The financial statements have been prepared in accordance with the applicable set of
accounting standards and Article 4 of the IAS Regulation and give a true and fair view
of the assets, liabilities, financial position, and loss of the Company.
▪ The Annual Report includes a fair review of the development and performance of the
business and the financial position of the Company, together with a description of the
principle risks and uncertainties that it faces.
By order of the Board
Jason Upton
Chief Executive Officer
29 October 2024
Independent Auditor’s Report to the Members of Zentra Group PLC (previously One Heritage
Group PLC)
Our opinion
We have audited the consolidated financial statements and Company financial statements of
Zentra Group PLC (previously One Heritage Group PLC) (the “Company”) and its subsidiaries
(together, the "Group"), which comprise the consolidated statement of financial position and
Company’s balance sheet as at 30 June 2024, the consolidated statement of comprehensive
income, the consolidated and Company’s statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes, comprising material accounting
policies and other explanatory information.
In our opinion:
• the financial statements give a true and fair view of the state of the Group's and of
the Company's affairs as at 30 June 2024 and of the Group's loss for the year then
ended;
• the Group financial statements are properly prepared in accordance with UK-adopted
international accounting standards;
• the parent Company financial statements have been properly prepared in accordance with
UK accounting standards, including FRS 101 Reduced Disclosure Framework; 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 are described below. We have fulfilled our
ethical responsibilities under, and are independent of the Company and Group in accordance
with, UK ethical requirements including the FRC Ethical Standard as applied to public
interest entities. We believe that the audit evidence we have obtained is a sufficient and
appropriate basis for our opinion.
Key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most
significance in the audit of the consolidated financial statements and company financial
statements and include the most significant assessed risks of material misstatement (whether
or not due to fraud) identified by us, including those which had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of
the consolidated financial statements and company financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. In
arriving at our audit opinion above, the key audit matters were as follows (unchanged from
2023):
The risk Our response
Our audit procedures included:
Internal Controls:
Documenting and assessing the design
and implementation of the processes
and controls regarding impairment of
inventory;
Challenging management’s assumptions
Estimation uncertainty: and inputs:
The carrying value of inventory is We critically assessed the
determined by reference to a number appropriateness of key assumptions
of assumptions such as sales and the commercial viability of sites
values, costs to complete that are as determined by management through
inherent in site forecasts and the comparison against historic data and
level of provisioning, if any, consideration of current market
required for impairment. These conditions;
assumptions are inherently
subjective and therefore may be Assessing impairment model:
open to management bias.
For incomplete development sites we
The effect of these matters is compared the actual costs incurred to
Impairment of that, as part of our risk date to the budgeted costs to
inventory - assessment, we determined that the complete where relevant and agreed
developments assumptions used in the impairment the budgeted costs to construction
assessment have a high degree of contracts where they had been signed
2024: £13,273,743 estimation uncertainty, with a or completion of works statements
(2023 £16,566,922) potential range of reasonable from contractors;
outcomes greater than our
Refer to the Audit materiality for the financial Forecast sales for each development
and Risk Committee statements as a whole, and possibly site were vouched to pre-sales and
Report on page 28, many times that amount. bookings where available and, where
note 5 accounting not available, to budgeted sales
policy and note 13 Risk: listings (and assessed for
disclosures. reasonableness based on market prices
There is a risk that the carrying for similar developments);
value of inventory is overstated.
The carrying value of inventory is For each incomplete development we
assessed by management for recalculated the impairment charge by
impairment by reference to current deducting the estimated costs to
market information and assumptions. complete from the estimated selling
In performing the assessment, price, and where complete, we
management undertake quarterly compared actual costs incurred to
valuations to determine the estimated selling prices;
expected outcome of each
development and hence identify if Assessing disclosures:
any impairment is required.
We considered the adequacy of the
group’s disclosures about the
economic and operational
circumstances impacting the carrying
value of inventory property.
Our results:
We found the results of our testing
and related disclosures in respect of
the impairment to be satisfactory and
the carrying value of inventory
recognised to be acceptable.
The risk Our response
Our audit procedures included:
Consideration of whether these
risks could plausibly affect the
liquidity of the Group and Company
in the going concern period by
assessing the Directors’
sensitivities over the level of
available financial resources
indicated by the Group’s and
Company’s financial forecasts
taking account of severe, but
plausible, adverse effects that
Disclosure quality: could arise from these risks
individually and collectively.
Our procedures also included:
The financial statements
explain how the Board has Funding assessment:
formed a judgement that it is
appropriate to adopt the going • Understanding the impact of the
concern basis of preparation proposed restructure to be
for the Group and parent implemented post year end on the
Company. financial position and forecasts of
the Group, and obtaining the signed
That judgement is based on an agreements implementing those
evaluation of the inherent arrangements;
risks to the Group’s and
Company’s business model and • Agreeing the committed level of
how those risks might affect funding from current lenders in
the Group’s and Company’s note 17 and new funding secured in
financial resources or ability note 23 to the facility agreements
to continue operations over a and confirmed the balance drawn and
period of at least a year from undrawn as at the year end;
the date of approval of the
financial statements. • Agreeing post year-end receipts
from sale of units in completed
developments to bank statements,
repayment of the related
Risk: construction finance loans or
restructure agreements (as
The risks most likely to described in note 23);
adversely affect the Group’s
and Company’s available • Assessing whether the forecast
financial resources over this proceeds from the sale of
period were: developments projected to complete
in the forecast period to 31
• The implementation of the December 2025 (net of repayment of
Going concern post year end restructure of related construction finance
the group’s inventory and debt loans), supplemented by continued
financing (as described in financial support from the
note 23); Company’s parent company and
Refer to the Audit and related company are sufficient to
Risk Committee Report on • Continued support from a provide the Group and Company with
page 28 and notes 3 and 1 related company (in the nature sufficient liquidity to meet
disclosures in the Group of a confirmation from a committed expenditure in the
and Company financial related company that their forecast period up to 31 December
statements respectively. loan, due to mature in 2025;
December 2025, will not be
demanded for repayment until Sensitivity analysis:
such a time that the Group can
afford to repay them without • Considering sensitivities over
impacting on its going the level of available financial
concern); resources indicated by the Group’s
and Company’s financial forecasts
• The refinancing of a taking account of plausible (but
previous construction loan on not unrealistic) adverse effects
improved terms to match that could arise from these risks
forecast completion dates of individually and collectively. We
the related developments; and did this by stress testing the
identified critical factors, namely
• The timely completion and delaying the timing of the planned
sale of property developments. sales of developments by 3 months;
There are also less Evaluating Directors’ intent:
predictable but realistic
second order impacts, such as • Evaluating the achievability of
the erosion of customer or the actions the Directors consider
supplier confidence, which they would take to improve the
could result in a rapid position should the risks
reduction of available materialise, which included
financial resources. realising property sales via
auction and availing the group of
The risk for our audit was the financial support commitment
whether or not those risks from a related entity, taking into
were such that they amounted account the extent to which the
to a material uncertainty that Directors can control the timing
may have cast significant and outcome of these;
doubt about the ability of the
Group and the Company to Assessing transparency:
continue as a going concern.
Had they been such, then that • Considering whether the going
fact would have been required concern disclosure in notes 3 and 1
to have been disclosed. to the group and company financial
statements respectively give a full
and accurate description of the
Directors’ assessment of going
concern, including the identified
risks and dependencies.
Our results:
We found the going concern basis of
preparation without any material
uncertainty to be appropriate and
the related disclosure in notes 3
and 1 of the Group and Company
financial statements respectively
adequately describe the judgements,
assumptions and dependencies.
The risk Our response
Our audit procedures included:
Test of details:
Comparing the carrying amount
of 100% of the parent Company’s
loans to and investments in
subsidiaries with the relevant
subsidiaries’ balance sheet and
Low risk, high value: budgets for the underlying
development properties to
The carrying value of the parent identify whether their
Recoverability of parent Company’s loans to and investment financial position supported
Company’s loans to and in subsidiaries represents 99% of the carrying amount of the
investment in the parent Company’s total assets. parent Company’s loans to and
subsidiaries The assessment of carrying value investments in those
is not at a high risk of subsidiaries and evaluating
Loans to subsidiaries significant misstatement or budgeted forecasts in line with
£1,604,331 (2023 subject to significant judgement our knowledge of the entity.
£3,033,711) and as the carrying value is supported This procedure was also
investment in by the net asset value of the relevant for our assessment of
subsidiaries £nil (2023 subsidiaries and the profits going concern.
£1,007,732) forecast to be made on sale of the
development properties owned by Assessing disclosures:
Refer to the Audit and the subsidiaries (which are stated
Risk Committee Report on at cost in the financial We have also considered the
page 28, note 1 statements). However, due to its adequacy of the Company’s
accounting policy and materiality in the context of the disclosure of the circumstances
notes 3 and 4 disclosures parent Company financial identified by management in
in the Company financial statements, this is considered to respect of the carrying value
statements. be the area that had the greatest of the investments and
effect on our overall parent intercompany loan receivable
Company audit. from the subsidiary.
Our results:
The results of our testing were
satisfactory and we found the
carrying value and associated
disclosure of the investment in
subsidiary, following the
provision recognised by
management, and recoverability
of parent Company’s loans to be
acceptable.
Our application of materiality and an overview of the scope of our audit
Materiality for the consolidated financial statements as a whole was set at £120,000 (2023:
£147,000), determined with reference to a benchmark of group total assets of £14,853,264
(2023: £19,251,448), of which it represents approximately 0.81% (2023: 0.76%).
Materiality for the Company financial statements was set at £20,000 (2023: £40,000),
determined with reference to a benchmark of Company total assets of £2,093,631 (2023:
£4,354,322), of which it represents approximately 0.92% (2023: 0.83%).
In line with our audit methodology, our procedures on individual account balances and
disclosures were performed to a lower threshold, performance materiality, so as to reduce to
an acceptable level the risk that individually immaterial misstatements in individual
account balances add up to a material amount across the consolidated financial statements as
a whole. Performance materiality for Group was set at 65% (2023: 65%) of materiality for the
consolidated financial statements as a whole, which equates to £78,000 (2023: £95,500),
which is lower than the maximum of 75% per our methodology. This was to take into account
the Group nature of the audit and resulting increased level of aggregation risk from
consolidation of the subsidiaries. For the Company, performance materiality was set at 75%
(2023: 75%), which equates to £15,000 (2023: £30,000). We applied this percentage in our
determination of performance materiality because we did not identify any factors indicating
an elevated level of risk.
We reported to the Audit and Risk Committee any corrected or uncorrected identified
misstatements exceeding £6,000 (2023: £7,350), for the consolidated financial statements and
£1,000 (2023: £2,000) for the Company financial statements, in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Our audit of the Group was undertaken to the materiality level specified above, which has
informed our identification of significant risks of material misstatement and the associated
audit procedures performed in those areas as detailed above.
The group team performed the audit of the Group as if it was a single aggregated set of
financial information. The audit was performed using the materiality level set out above and
covered 100% of total group revenue, total group profit before tax, and total group assets
and liabilities.
Going concern
The Directors have prepared the consolidated financial statements and Company financial
statements on the going concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations, and as they have concluded that the Group and the
Company's financial position means that this is realistic. They have also concluded that
there are no material uncertainties that could have cast significant doubt over their
ability to continue as a going concern for at least a year from the date of approval of the
consolidated financial statements and the Company financial statements (the “going concern
period").
An explanation of how we evaluated the Directors’ assessment of going concern is set out in
the related key audit matter in the key audit matters section of this report.
Our conclusions based on this work:
• we consider that the Directors' use of the going concern basis of accounting in the
preparation of the consolidated financial statements and Company financial statements is
appropriate;
• we have not identified, and concur with the Directors' assessment that there is not, a
material uncertainty related to events or conditions that, individually or collectively,
may cast significant doubt on the Group and the Company's ability to continue as a going
concern for the going concern period; and
• we have nothing material to add or draw attention to in relation to the Directors'
statement in the notes to the consolidated financial statements and Company financial
statements on the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and the Company's use of
that basis for the going concern period, and that statement is materially consistent
with the consolidated financial statements and Company financial statements and our
audit knowledge. See the Key Audit Matter with respect to going concern for additional
detail.
However, as we cannot predict all future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgements that were reasonable at the time
they were made, the above conclusions are not a guarantee that the Group and the Company
will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events
or conditions that could indicate an incentive or pressure to commit fraud or provide an
opportunity to commit fraud. Our risk assessment procedures included:
• enquiring of management as to the Group’s policies and procedures to prevent and detect
fraud as well as enquiring whether management have knowledge of any actual, suspected or
alleged fraud;
• reading minutes of meetings of those charged with governance; and
• using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, we perform procedures to address the risk of management
override of controls, in particular the risk that management may be in a position to make
inappropriate accounting entries. On this audit we do not believe there is a fraud risk
related to revenue recognition because the Group’s revenue streams are simple in nature with
respect to accounting policy choice, and are easily verifiable to external data sources or
agreements with little or no requirement for estimation from management. We did not identify
any additional fraud risks.
We performed procedures including:
• Identifying journal entries and other adjustments to test based on risk criteria and
comparing any identified entries to supporting documentation; and
• incorporating an element of unpredictability in our audit procedures.
Identifying and responding to risks of material misstatement due to non-compliance with laws
and regulations
We identified areas of laws and regulations that could reasonably be expected to have a
material effect on the consolidated financial statements and Company financial statements
from our sector experience and through discussion with management (as required by auditing
standards), and from inspection of the Group’s regulatory and legal correspondence, if any,
and discussed with management the policies and procedures regarding compliance with laws and
regulations. As the Group is regulated, our assessment of risks involved gaining an
understanding of the control environment including the entity’s procedures for complying
with regulatory requirements.
The Group is subject to laws and regulations that directly affect the consolidated financial
statements and Company financial statements including financial reporting legislation and
taxation legislation and we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items.
The Group is subject to other laws and regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in the consolidated financial
statements and Company financial statements, for instance through the imposition of fines or
litigation or impacts on the Group and the Company’s ability to operate. We identified
financial services regulation as being the area most likely to have such an effect,
recognising the regulated nature of the Group’s activities and its legal form. Auditing
standards limit the required audit procedures to identify non-compliance with these laws and
regulations to enquiry of management and inspection of regulatory and legal correspondence,
if any. Therefore if a breach of operational regulations is not disclosed to us or evident
from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not
have detected some material misstatements in the consolidated financial statements and
Company financial statements, even though we have properly planned and performed our audit
in accordance with auditing standards. For example, the further removed non-compliance with
laws and regulations is from the events and transactions reflected in the consolidated
financial statements and Company financial statements, the less likely the inherently
limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection of fraud, as
this may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance or fraud and cannot be
expected to detect non-compliance with all laws and regulations.
The Directors' Report and Strategic Report
The Directors are responsible for the Strategic Report and the Directors' Report. Our
opinion on the consolidated financial statements and Company financial statements do not
cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the Strategic Report and the Directors' Report and, in doing
so, consider whether, based on our consolidated financial statements and Company financial
statements audit work, the information therein is materially misstated or inconsistent with
the consolidated financial statements and Company financial statements or our audit
knowledge. Based solely on that work:
• we have not identified material misstatements in the Strategic Report and the Directors'
Report;
• in our opinion the information given in those reports for the financial year is
consistent with the consolidated financial statements and Company financial statements;
and
• in our opinion those reports have been prepared in accordance with the Companies Act
2006.
Matters on which we are required to report by exception
Under the Companies Act 2006, we are required 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 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.
We have nothing to report in these respects.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 36, the Directors are responsible
for: the preparation of the consolidated financial statements and Company financial
statements including being satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the preparation of consolidated financial
statements and Company financial statements that are free from material misstatement,
whether due to fraud or error; assessing the Group and 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 they either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements and Company financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of the consolidated financial statements and Company financial
statements.
A fuller description of our responsibilities is provided on the FRC’s website at
3 www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
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 its members, as a body,
for our audit work, for this report, or for the opinions we have formed.
Edward Houghton (Senior Statutory Auditor)
For and on behalf of KPMG Audit LLC (Statutory Auditor)
Chartered Accountants
Isle of Man
29 October 2024
Consolidated statement of comprehensive income
For the year ended 30 June 2024
Year to Year to
£ unless stated Notes
30 June 2024 30 June 2023
Revenue 6,7 14,650,154 15,591,928
Revenue – developments 14,650,154 15,591,928
Cost of sales (14,473,775) (15,000,835)
Cost of sales - developments (13,657,663) (13,906,259)
Cost of sales – write down of inventory 13 (816,112) (1,094,576)
Gross profit 176,379 591,093
Administration expenses 8 (2,622,935) (2,210,021)
Operating (loss) for the year (2,446,556) (1,618,928)
Finance expense 10 (1,117,234) (520,851)
(Loss) before taxation for the year (3,563,790) (2,139,779)
Taxation 11 184,012 (250,473)
(Loss) after tax and comprehensive income for the year (3,379,778) (2,390,252)
Weighted average shares in issue over the period 38,678,333 38,657,785
(Loss) per share (GBpence) (8.7) (6.2)
Diluted (loss) per share (GBpence) (8.7) (6.2)
The accompanying notes on pages 51 to 78 form an integral part of the financial statements.
Consolidated statement of financial position
As at 30 June 2024
30 June 2024
£ unless stated Notes 30 June 2023
ASSETS
Non-current assets
Property, plant and equipment 12 177,204 278,628
Intangible assets 1,680 1,913
178,884 280,541
Current assets
Cash and cash equivalents 88,161 303,816
Inventory – developments 13 13,273,743 16,566,922
Trade and other receivables 15 1,312,476 2,100,169
14,674,380 18,970,907
TOTAL ASSETS 14,853,264 19,251,448
LIABILITIES
Non-current liabilities
Borrowings 17 11,097,615 11,572,047
11,097,615 11,572,047
Current liabilities
Trade and other payables 18 1,826,470 2,579,643
Borrowings 17 5,877,673 5,668,474
7,704,143 8,248,117
TOTAL LIABILITIES 18,801,758 19,820,164
EQUITY
Share capital 21 386,783 386,783
Share premium 21 4,753,325 4,753,325
Retained earnings (9,088,602) (5,708,824)
TOTAL EQUITY (3,948,494) (568,716)
TOTAL LIABILITIES AND EQUITY 14,853,264 19,251,448
Shares in issue 38,678,333 38,678,333
Net asset value per share (GBpence) (10.2) (1.5)
These financial statements were approved by the board of directors on 29 October 2024 and
were signed on its behalf by:
Jason David Upton
Company registration number: 12757649
The accompanying notes on pages 51 to 78 form an integral part of the financial statements.
Consolidated statement of cash flows
For the year ended 30 June 2024
Year to
Restated Year to
£ unless stated Notes 30 June 2024
30 June 2023
Cash flows from operating activities
Loss for the year before tax (3,563,790) (2,139,779)
Adjustments for:
Finance expense 10 1,117,234 520,851
Profit on disposal of associate 14 - 50,000
Loss on disposal of fixed assets 1,002 -
Depreciation of property, plant and equipment 8, 12 104,750 103,984
Amortisation of intangible asset 8 411 411
Movement in working capital:
Decrease/(increase) in trade and other receivables 787,693 (188,818)
Decrease/(increase) in inventories^ 3,667,813 117,179
(Decrease)/Increase in trade and other payables (502,261) 384,538
Cash inflow/ (outflow) from operations 1,612,852 (1,151,634)
Taxation paid (66,934) -
Net cash generated from/(used in operating) activities 1,545,918 (1,151,634)
Cash flows from investing activities
Purchases of property, plant and equipment 12 (4,284) (8,137)
Net cash used in investing activities (4,284) (8,137)
Cash flows from financing activities
Issue of share capital 21 - 1,247,100
Interest paid^ 10,17 (1,482,411) (2,064,587)
Proceeds from borrowings* 17 5,572,200 8,725,789
Borrowings repaid* 17 (4,559,386) (9,535,263)
Proceeds of related party borrowing* 17 10,149,165 12,177,035
Related party borrowings repaid* 17 (11,350,234) (9,974,065)
Payments made in relation to lease liabilities 12 (86,623) (86,623)
Net cash (used in)/generated from financing activities (1,757,289) 489,386
Net change in cash and cash equivalents (215,655) (670,385)
Opening cash and cash equivalents 303,816 974,201
Closing cash and cash equivalents 88,161 303,816
^ Restated. Refer note 10.
* Restated. Refer note 17.
The accompanying notes on pages 51 to 78 form an integral part of the financial statements.
Consolidated statement of changes in equity
For the year ended 30 June 2024
Share Share Retained Total
£ unless stated
capital premium earnings Equity
Balance at 01 July 2023 386,783 4,753,325 (5,708,824) (568,716)
Loss for the period - - (3,379,778) (3,379,778)
Total comprehensive income for the year - - (3,379,778) (3,379,778)
Balance at 30 June 2024 386,783 4,753,325 (9,088,602) (3,948,494)
For the year ended 30 June 2023
Share Share Retained Total
£ unless stated
capital premium earnings Equity
Balance at 01 July 2022 324,283 3,568,725 (3,318,572) 574,436
Loss for the period - - (2,390,252) (2,390,252)
Total comprehensive income for the year 324,283 3,568,725 (5,708,824) (1,815,816)
Issue of share capital 62,500 1,187,500 - 1,250,000
Cost of share issue - (2,900) - (2,900)
Balance at 30 June 2023 386,783 4,753,325 (5,708,824) (568,716)
The accompanying notes on pages 51 to 78 form an integral part of the financial statements.
Notes to the consolidated financial statements
For the year ended 30 June 2024
1. Reporting entity
Zentra Group PLC (the “Company”)(Company number: 12757649) is a public limited company,
limited by shares, incorporated in England and Wales under the Companies Act 2006. The
address of its registered office and its principal place of trading is 80 Mosley Street,
Manchester, M2 3FX. The principal activity of the company and subsidiaries is that of
property development.
These consolidated financial statements (“Financial Statements”) as at the end of the
financial year to 30 June 2024 comprise of the Company and its subsidiaries. A full list of
companies consolidated in these Financial Statements can be found in Note 25.
2. Measuring convention
The financial statements are prepared on the historical cost basis except for financial
assets at fair value through profit or loss.
3. Basis of preparation
The Group’s financial statements have been prepared and approved by the Directors in
accordance with international accounting standards in accordance with UK-adopted
international accounting standards (“UK-adopted IFRS”). The Company has elected to prepare
its parent company financial statements in accordance with FRS 101. These are presented on
pages79 to 87. The significant accounting policies are set out in note 5. The accounting
policies have been applied consistently to all periods presented in these group Financial
Statements.
They were authorised for issue by the Company’s Board of Director on 29 October 2024.
Segment reporting
The Group operates in three operating segments, each managed by a senior manager who sits on
the Group’s management team. In addition to these, there is a corporate segment which covers
central operations. The following is a summary of the operations for each reportable
segment.
Reportable segments Operations
Developments Internally managed development activities including the sales of
completed developments and Co-Living property management fee
Construction Construction services provided to an internally owned and managed
development
Property Services Property letting and management services
Corporate Head office, fees to related parties and other costs
Management has determined the Group’s operating segments based on the information reviewed
by Senior Management to make strategic decisions. The chief operating decision maker is the
Senior Management Team, comprising the Executive Director and the Department Directors. The
information presented to Senior Management Team includes reports from all functions of the
business as well as strategy, financial planning, succession planning, organisational
development and Company wide policies.
There are various levels of integration between Development and Construction. This
integration involves the services that Construction undertakes on the developments on behalf
of the Development segment.
The Group’s primary measure of financial performance for segments is the operating profit or
loss in the period.
Going concern
Notwithstanding net current liabilities of £6.3m (excluding inventory balances totalling
£13.3m) as at 30 June 2024 (2023: £5.8m (excluding inventory balances totalling £16.6m), a
loss for the year then ended of £3.4m (2023: £2.4m) and operating cash inflow for the year
of £1.5m (2023: outflow £1.2m), the financial statements have been prepared on a going
concern basis which the directors consider to be appropriate for the following reasons.
The Directors have prepared a cash flow forecast on a consolidated basis for the period to
31 December 2025 which indicates that, taking account of reasonably possible downsides, the
Group will have sufficient funds to meet its liabilities including loans and loan note, as
they fall due for that period using the proceeds from:
• existing resources held by the Group (including funds drawn down on external loan
facilities and the loan facility to be provided by OH UK Holdings Limited(“OHUK”) as
detailed in notes 19 and 23);
• the implementation of the proposed restructure of the Group outlined in note 23, which
includes the refinancing of Group shareholder loan with a related party, the disposal of
completed inventory, the acquisition of an equity stake in the One Victoria, Manchester
property development project, the waiver of a portion of the existing shareholder loan
and the provision of continuing shareholder financial support via related party;
• the forecast continued sale of development property inventory (net of repayment of
related construction finance loans (note 19)); being the Seaton House Stockport,
Churchgate Leicester and Victoria Road, Eccleshill and sales of units in the One
Victoria development property on completion in line with management estimates for timing
and quantum;
• in the event of need the Directors consider that mitigating actions are required,
actions available to the Group would include realising development property inventory
via auction and/or refinancing of the post restructure of the remaining 3rd party loan
due to expire in March 2025 and also the Loan Note due to expire in March 2025;
• in the event of need, continued financial support from both also its parent company, One
Heritage Property Development Limited (“OHPD”), and OHUK to meet its liabilities as they
fall due for that period. OHUK have confirmed that their loans due to mature in December
2025 will not be demanded for repayment until such a time that the Group can afford to
repay them without impacting on its going concern. OHUK have also confirmed the
potential to draw down on additional flexible funding support of up to £1.0m.
As with any company placing reliance on other group/related entities for financial support,
the Directors acknowledge that there can be no certainty that this support will continue
although, at the date of approval of these financial statements, they have no reason to
believe that it will not do so.
Consequently, and based upon events after the reporting date referenced in Note 23, the
Directors are confident that the Company and its subsidiaries will have sufficient funds to
continue to meet their liabilities as they fall due for at least 12 months from the date of
approval of the financial statements and therefore have prepared the financial statements on
a going concern basis.
4. Use of judgements and estimation uncertainty
The Board has made judgements, estimates and assumptions that affect the application of the
Group’s accounting policies and the reported amounts in the financial statements. The
directors continually evaluate these judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses based upon historical experience
and on other factors that they believe to be reasonable under the circumstances. Actual
results may differ from the judgements, estimates and assumptions.
The key areas of judgement and estimation are:
◦ The carrying value of inventory: Under IAS 2: Inventories the Group must hold
developments at the lower of cost and net realisable value. The Group applies judgement
to determine the net realisable value of developments at a point in time that the
property is partly developed and compares that to the carrying value. The Group has
undertaken an impairment review of all of the Inventory and determined that an
impairment is appropriate on four of the developments.
◦ Going concern: The directors have concluded that it is appropriate to prepare the
financial statements on a going concern basis and have disclosed the key assumptions on
which they have done so, being the continued availability of third party and related
party funding facilities and management of the Company and its subsidiaries are not
aware of any material uncertainties that may cast significant doubt on the Company and
its subsidiaries ability to continue as going concerns. Therefore, the Group financial
statements continue to be prepared on the going concern basis. For detail refer note 3
going concern.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair
values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair
values. The board has overall responsibilities for overseeing all significant fair value
measurements.
The board in conjunction with departmental directors regularly reviews significant
unobservable inputs and valuation adjustments. If third party information, such as broker
prices or pricing services, is used to measure fair values, then the board assesses the
evidence obtained from the third parties to support the conclusion that these valuations
meet the requirements of the Standards, including the level in the fair value hierarchy in
which the valuations should be classified.
Significant valuation issues are reported to the Group’s audit committee.
When measuring the fair value of an asset or a liability, the Group uses observable market
data as far as possible. Fair values are categorised into different levels in fair value
hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quotes prices (unadjusted) in active markets for identical assets and
liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs)
If the inputs used to measure the fair value of an asset or liability fall into different
levels of the fair value hierarchy, then the fair value measurement is categorised in its
entirely in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement.
The Group recognises transfer between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
5. Material accounting policies
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group ‘controls’ any entity when it
is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial statements from the
date on which control commences until the date on which control ceases.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses (except for
foreign currency transaction gains or losses) arising from intra-group transactions, are
eliminated. Unrealised gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest in the investee.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent
that there is no evidence of impairment.
Interests in equity-accounts investees
The Group’s interests in equity-accounted investees comprise interests in associates.
Associates are those entities in which the Group has significant influence, but not control
or joint control, over the financial and operating policies.
Interests in associates are accounted for using the equity method. They are initially
recognised at cost, which includes transaction costs. Subsequent to initial recognition, the
consolidated financial statements include the Group’s share of the profit or loss and OCI of
equity-accounted investees, until the date on which significant influence or joint control
ceases.
Earnings per share and net asset value per share
Basic earnings per share amounts are calculated by dividing net profit or loss for the year
attributable to the owners of the Company by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit or loss
attributable to the owners of the Company (after adjusting for interest on the convertible
notes) by the weighted average number of ordinary shares outstanding during the year plus
the weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
Net asset value per share amounts is calculated by dividing net assets of the Company at the
reporting date by the weighted average number of ordinary shares outstanding during the
year.
Revenue
Revenue is recognised when the performance obligation associated with the sale is completed
or as the performance obligation is completed over time where appropriate. The transaction
price comprises the fair value of the consideration received or receivable, net of value
added tax, rebates and discounts and after eliminating sales within the Group. Revenue and
gross profit are recognised as follows (note 7):
a. Developments
Revenue from housing sales is recognised in profit or loss when control is transferred to
the customer. This is deemed to be when title of the property passes to the customer on
legal completion and the performance obligation associated with the sale is completed.
b. Property services and developments
Management fees are recognised as revenue in the period to which they relate when
performance obligations are fulfilled based on agreed transaction prices. Variable
performance fees are estimated based on the expected value and are only recognised over time
as performance obligations are fulfilled when progress can be measured reliably and to the
extent that a significant reversal of revenue in a subsequent period is unlikely.
c. Construction services
The Group primarily operates under cost plus margin agreements and therefore revenue is
recognised when the relevant cost has been incurred.
d. Corporate income
The Group generates a monthly Co-Living management fee for services provided relating to
day-to-day administration and office space. These fees are recognised as revenue in the
period to which they relate when performance obligations are fulfilled based on agreed
transaction prices.
Cost of sales
The Group determines the value of inventory charged to cost of sales based on the total
budgeted cost of developing a site. Once the total expected costs of development are
established, they are allocated to individual plots to achieve a standard build cost per
plot. Cost of sales represent cost for purchase of land, construction costs, consultant
costs, utilities cost and other related direct costs.
To the extent that additional costs or savings are identified as the site progresses, these
are recognised over the remaining plots unless they are specific to a particular plot, in
which case they are recognised in profit or loss at the point of sale.
Operating profit/(loss)
Operating profit/(loss) is the Group’s total earnings from its core business functions for a
given period, excluding the deduction of interest and taxes, the gain/(loss) on sale of
subsidiaries and gain/(loss) on sale of fixed assets.
Financial guarantees
A financial guarantee contract is initially recognised at fair value. At the end of each
subsequent reporting period, financial guarantees are measured at the higher of:
▪ The amount of the loss allowance, and
▪ The amount initially recognised less cumulative amortisation, where appropriate.
The amount of the loss allowance at each subsequent reporting period equals the 12-month
expected credit losses. However, where there has been a significant increase in the risk
that the specified debtor will default on the contract, the calculation is for lifetime
expected credit losses.
Finance income
Interest income on bank deposits is recognised on an accruals basis. Also included in
interest receivable are interest and interest-related payments the Group receives on other
receivables and external loans.
Finance costs
Borrowing costs are recognised on an accruals basis and are payable on the Group’s
borrowings and lease liabilities. Also included are the amortisation of fees associated with
the arrangement of the financing.
Specific or general borrowing costs are capitalised if they are directly attributable to the
acquisition, construction or production of qualifying assets which are assets that
necessarily take a substantial period to get ready for sale. The Group considers that its
inventories are qualifying assets.
Foreign currencies
These consolidated financial statements are presented in Pound Sterling, which is the
Group’s functional currency.
The individual financial statements of each Group company are presented in Pound Sterling,
the currency of the primary economic environment in which it operates (its functional
currency). Transactions in currencies other than the functional currency are recorded at the
rates of exchange prevailing on the dates of the transactions. At each reporting date,
monetary assets and liabilities that are denominated in foreign currencies other than the
functional currency are retranslated at the rates prevailing at the reporting date.
Leases
The Group as a lessee
The Group assesses at inception whether a contract is, or contains, a lease. A lease exists
if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
The Group assessment includes whether:
▪ the contract involves the use of an identified asset;
▪ the Group has the right to obtain substantially all of the economic benefits from the
use of the asset throughout the contract period; and
▪ the Group has the right to direct the use of the asset.
At the commencement of a lease, the Group recognises a right-of-use asset along with a
corresponding lease liability.
The lease liability is initially measured at the present value of the remaining lease
payments, discounted using the Group’s incremental borrowing rate. The lease term comprises
the non-cancellable period of the contract, together with periods covered by an option to
extend the lease where the Group is reasonably certain to exercise that option based on
operational needs and contractual terms. Subsequently, the lease liability is measured at
amortised cost by increasing the carrying amount to reflect interest on the lease liability
and reducing it by the lease payments made. The lease liability is remeasured when the Group
changes its assessment of whether it will exercise an extension or termination option.
Right-of-use assets are initially measured at cost, comprising the initial measurement of
the lease liability adjusted for any lease payments made at or before the commencement date,
estimated asset retirement obligations, lease incentives received and initial direct costs.
Subsequently, right-of-use assets are measured at cost, less any accumulated depreciation
and any accumulated impairment losses, and are adjusted for certain remeasurements of the
lease liability. Depreciation is calculated on a straight-line basis over the length of the
lease.
Right-of-use assets are presented within non-current assets in property, plant and
equipment, and lease liabilities are included in current liabilities (borrowings) and
non-current liabilities (borrowings) depending on the length of the lease term.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation, and
accumulated impairment losses.
Depreciation is recognised to write off the cost or valuation of assets less their residual
values over their useful lives, using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at each year end, with the effect of
any changes in estimate accounted for on a prospective basis.
The gain or loss on the disposal or retirement of an item of property, plant and equipment
is determined as the difference between the sales proceeds and the carrying amount of the
asset as is recognised in the profit or loss.
Depreciation is provided at the following annual rates to write off each asset over its
estimated useful life:
Fixtures and fittings 15% on cost
Office equipment 15% on cost
Motor vehicles 25% on cost
Impairment of tangible and intangible assets
At each reporting 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 to determine the extent of the impairment loss (if any). Where the asset
does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
The 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 and the risks
specific to the asset.
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 as an expense immediately in the
profit or loss.
Where an impairment loss subsequently reverses, due to a change in circumstances or in the
estimates used to determine the asset’s recoverable amount, the carrying amount of the asset
or cash-generating unit is increased to the revised estimate of its recoverable amount, so
long as it does not exceed the original carrying value prior to the impairment being
recognised. A reversal of an impairment loss is recognised as income immediately in the
statement of comprehensive income.
Financial instruments
Financial assets
Financial assets are initially recognised at fair value and subsequently classified into one
of the following measurement categories:
• Measured at amortised cost
• Measured subsequently at fair value through profit or loss (“FVTPL”)
The classification of financial assets depends on the Group’s business model for managing
the asset and the contractual terms of the cash flows. Assets that are held for the
collection of contractual cash flows that represent solely payments of principal and
interest are measured at amortised cost, with any interest income recognised in profit or
loss using the effective interest method.
Financial assets that do not meet the criteria to be measured at amortised cost are
classified by the Group as measured at FVTPL. Fair value gains and losses on financial
assets measured at FVTPL are recognised in profit or loss and presented within net operating
expenses.
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit loss associated with its
financial assets carried at amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. For trade receivables, the
Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
Trade and other receivables
Trade and other receivables are measured at amortised cost, less any loss allowance.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with
an original maturity of three months or less from inception and are subject to insignificant
risk of changes in value.
Financial liabilities
Financial liabilities are initially recognised at fair value and measured at amortised cost.
Derecognition
Financial assets
The Group derecognises a financial asset when:
▪ the contractual rights to the cash flows from the financial asset expire; or
▪ it transfers the rights to receive the contractual cash flows in a transaction in which
either:
▪ substantially all of the risks and rewards of ownership of the financial asset are
transferred; or
▪ the Group neither transfers nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged
or cancelled, or expire. The Group also derecognises a financial liability when its terms
are modified and the cash flows of the modified liability are substantially different, in
which case a new financial liability based on the modified terms is recognised at fair
value.
On derecognition of a financial liability, the difference between the carrying amount
extinguished and the consideration paid (including any non-cash assets transferred or
liabilities assumed) is recognised in profit or loss.
Borrowings
Borrowings are allocated to either specific or general borrowings and initially recognised
at fair value, net of transaction costs incurred and subsequently measured at amortised
cost. Specific or general borrowing costs are capitalised if they are directly attributable
to the acquisition, construction or production of qualifying assets which are assets that
necessarily take a substantial period of time to get ready for sale. These are added to the
cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are
incurred.
Trade and other payables
Trade and other payables are measured at amortised cost. When the acquisition of land has
deferred payment terms a land creditor is recognised. Payables are discounted to present
value when repayment is due more than one year after initial recognition or the impact is
material.
Customer deposits
Customer deposits are recorded as deferred income on receipt and released to profit or loss
when the related revenue is recognised.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities. Equity instruments issued by the Group are
recorded as the proceeds are received, net of direct issue costs.
Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated
useful lives of intangible assets unless such lives are indefinite. Intangible assets with
an indefinite useful life and goodwill are systematically tested for impairment at each
balance sheet date.
Inventory - developments
Inventories are initially stated at cost and held at the lower of this initial amount and
net realisable value. Costs comprise direct materials and, where applicable, direct labour
and those overheads that have been incurred in bringing the inventories to their present
location and condition.
Net realisable value represents the estimated selling price based on intended use less all
estimated costs of completion and costs to be incurred in marketing, selling and
distribution. Land is recognised in inventory when the significant risks and rewards of
ownership have been transferred to the Group.
Non-refundable land option payments are initially recognised in inventory. They are reviewed
regularly and written off to profit or loss when it is probable that the option will not be
exercised.
Taxation
The tax charge represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs
from profit before tax as reported in the profit or loss 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 at the reporting date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the
carrying amounts of assets and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from
goodwill or from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are also recognised for taxable temporary differences arising on
investments in subsidiaries and interests in joint ventures, except where the Group is able
to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax is measured on a non-discounted basis using the tax rates and laws that have
been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets is reviewed at each reporting 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 charged or credited to
the profit or loss, except when it relates to items charged or credited directly to other
comprehensive income or equity, in which case the deferred tax is also dealt with in other
comprehensive income or equity.
Share capital
Ordinary shares are classified as equity. Any incremental costs directly attributable to
the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
6. Operating segments
The Group operates four segments: Developments, Construction, Property Services and
Corporate.
The accounting policies of the reportable segments are the same as the Group’s accounting
policies described in note 5.
All the revenues generated by the Group were generated within the United Kingdom and further
detail is contained within note 7.
Segment information for these businesses is presented below. Segment operating profit or
loss is used as a measure of performance as management believe this is the most relevant
information when evaluating the performance of a segment.
For the financial year to 30 June 2024
£ unless stated Developments Construction Property services Corporate Total
and Lettings
Revenue – developments 9,335,251 4,889,675 313,228 112,000 14,650,154
Cost of sales - (8,839,354) (4,656,096) (162,213) - (13,657,663)
developments
Impairment of inventory (816,112) - - - (816,112)
Gross (loss)/profit (320,215) 233,579 151,015 112,000 176,379
Depreciation - - - (104,750) (104,750)
Administration expenses (770,240) - (126,112) (1,621,833) (2,518,185)
Operating (loss)/profit (1,090,455) 233,579 24,903 (1,614,583) (2,446,556)
Finance expense (369,943) - - (747,291) (1,117,234)
Taxation - - - 184,012 184,012
(Loss)/Profit for the (1,460,398) 233,579 24,903 (2,177,862) (3,379,778)
year
For the financial year to 30 June 2023
£ unless stated Developments Construction Property services Corporate Total
and Lettings
Revenue – 10,689,920 4,448,376 333,299 120,333 15,591,928
developments
Cost of sales - (9,580,942) (4,235,478) (89,839) - (13,906,259)
developments
Impairment of (1,094,576) - - - (1,094,576)
inventory
Gross profit/(loss) 14,402 212,898 243,460 120,333 591,093
Depreciation - - - (103,984) (103,984)
Administration (532,900) - (411,682) (1,161,455) (2,106,037)
expenses
Operating (518,498) 212,898 (168,222) (1,145,106) (1,618,928)
(loss)/profit
Finance expense (455,331) - - (65,520) (520,851)
Taxation - - - (250,473) (250,473)
(Loss)/Profit for the (973,829) 212,898 (168,222) (1,461,099) (2,390,252)
year
7. Revenue
£ unless stated 30 June 2024 30 June 2023
Revenue
9,335,251 10,689,920
Developments
Development sales 8,970,896 9,991,574
Development management 364,355 698,346
Construction 4,889,675 4,448,376
Property Services and Lettings 313,228 333,299
Transaction services 9,728 81,500
Lettings services 303,500 251,799
Corporate 112,000 120,333
14,650,154 15,591,928
Cost of sales
(9,655,466) (10,675,518)
Developments
Development sales (8,839,354) (9,580,942)
Impairment (note 13) (816,112) (1,094,576)
Construction (4,656,096) (4,235,478)
Lettings services (162,213) (89,839)
(14,473,775) (15,000,835)
Gross profit 176,379 591,093
Developments
In the developments segment, £8,705,526 revenue was generated from external parties through
the sale of 52 units in completed developments (2023: £9,766,522). The Lincoln House
development sold 23 units (2023: 52 units) during the year generating revenue of
£3,061,461(2023: £6,496,522). The Oscar House development sold 10 units (2023: nil)
generating £2,421,480 in revenue (2023: £nil). The St Petersgate development sold 17 units
(2023: nil) generating £2,872,200 (2023: £nil) in revenue. The Bank Street development sold
2 units (2023: 19 units) generating £350,385 (2023: £3,270,000) in revenue. The remainder of
the revenue was earned from unrelated parties in the form of rental income and related
parties in the form of development management fees.
Development management income arises from four development management agreements with
related companies; One Heritage Tower Limited, ACT Property Holding Limited, One Heritage
Great Ducie Street Limited and One Heritage North Church Limited:
• One Heritage Tower Limited: The Group earned a management fee of 0.75% of costs
incurred to date per month and a 10% share of net profit generated by the development
through the agreement with One Heritage Tower Limited. The Group is also entitled to 1%
of any external debt or equity funding raised on behalf of the development. In total
£148,518 (30 June 2023: £134,599) of revenue was generated in the year.
• One Heritage Great Ducie Street Limited: The Group earned a management fee of £206,160
(30 June 2023: £206,160) through the agreement with One Heritage Great Ducie Street and
£nil (30 June 2023: £225,500) for external debt raised.
• One Heritage North Church Limited: The development agreement splits the fees into three
elements; 2% of total development cost (£9,677, 30 June 2023: £41,654), paid monthly
over the period of the development, 15% of net profit, paid on completion and 1% on any
debt finance raised (£nil, 30 June 2023: £31,650).
• ACT Property Holding Limited: The agreement has a 20% profit share of the net profit
generated by the development. The development generated £Nil (30 June 2023: £58,783) of
profit share for the Group.
With the exception of One Heritage North Church Limited which completed in the year to 30
June 2024 and ACT Property Holding Limited which completed in the year to 30 June 2023, the
Group has not recognised any further revenue linked to the profit share element of these
agreement as the transaction price is variable and the amount cannot be reliably determined
at this time. This is because the developments are in the early stages of construction and
there is too much uncertainty to reliably estimate expected revenue.
Construction
Construction generates revenue from two entities: Robin Hood Property Development Limited
and One Heritage North Church Limited. During the 2022 financial year, it signed an
agreement with Robin Hood Property Development Limited to undertake works on Co-Living
properties. The Group receives a cost plus 5.0% margin on all works undertaken, recognising
£863,681 (30 June 2023: £1,280,006) of revenue in the year. The Group has undertaken work
for One Heritage North Church Limited on a cost plus 5.0% margin basis, this generated
revenue of £4,021,266 (30 June 2023: £3,168,370) in the year.
The development and construction revenues have been generated through related parties.
Property Services and Lettings
Property Services generated revenue from management fees that are based on a percentage of
gross rental collected for clients and through transaction fees for each Co-Living property
bought and sold for Robin Hood Property Development Limited, a related party, generating
£nil revenue in the financial year (30 June 2023: £115,818).
It also includes any rental income collected for properties owned by the Group.
Corporate
The Corporate revenue is from contracts signed with Robin Hood Property Development Limited,
generating revenue of £100,000 (30 June 2023: £108,333) and One Heritage Portfolio Rental
Limited, recognising revenue of £12,000 (30 June 2023: £12,000) and is in consideration for
a range of administration services and use of the Company’s office.
Total revenue generated from Robin Hood Property Development Limited, a related party,
amounted to £963,681 (30 June 2023: £1,280,006) for the year. This amounted to 7% (30 June
2023: 8%) of the total revenue of the Group. This was derived from three segments of the
Group, being construction, property services and corporate (refer to note 7).
Revenue is measured based on the consideration specified in a contract with a customer. The
Group recognises revenue when it transfers control over a good or service to a customer.
The following table provides information about the nature and timing of the satisfaction of
performance obligations in contracts with customers, including significant payment terms,
and related revenue recognition policies.
Nature and timing of satisfaction
Type of product/service of performance obligations, Revenue recognition policies
including significant payment
terms
Housing sales
Revenue from housing sales is
recognised in profit or loss when
control is transferred to the
customer.
Development management recognition
is split into three elements:
management fee, arrangement fees
and a profit share on a final
transaction.
Management fee
Revenue from housing sales is
The performance obligation is that recognised when title of the
the Group remains the development property passes to the customer
manager on the site and undertakes on legal completion and the
the scope of works in the performance obligation associated
agreement. Payment is due on a with the sale is completed.
monthly basis after the service
has been undertaken.
Revenue for the management fee is
recognised monthly as long as the
Development management Group continues to be the
development manager during the
relevant calculation period.
Arrangement fee Assuming that the Group continues
to be the development manager the
The performance obligation is at Group will look to recognise
the point that the service is income from a profit share once
completed. Payment is due after the costs and proceeds of a
completion. particular site can be reliably
estimated and unlikely to be
reversed.
Profit share
Assuming that the Group has
performed the scope of works
effectively (its performance
obligation), it is entitled to a
share of the profits at the end of
the project. The payment for this
is made at the end of the project.
No warranties are provided.
The Group operates contracts where
it charges based on a cost
incurred plus margin basis.
Revenue is recognised at the point
that the cost is incurred. Revenue is recognised when the
Construction revenue associated cost is incurred.
Payment is generally made within
30 days of the invoice being
raised.
The Group offers property
management services to external
landlords. These services are
linked to a percentage of the
gross rental collected and any
additional services undertaken.
Management fee income is
recognised at the point that the
service is provided. Revenue is recognised when
Property Services – service is provided for
management fees and at the point
Management fees and the service is completed for
other services Other income is recognised at the other services.
point that the service is
completed.
Payments for these services are
made within 90 days of the service
being undertaken.
The Group provides services, which
include administration, reporting, Revenue is recognised monthly as
risk management, shared office long as the Group continues to
Corporate revenue space and other services, to provide the service during the
related parties. Revenue is relevant calculation period.
recognised for the period in which
the service is undertaken.
8. Administration expenses
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Staff costs 1,467,656 1,306,577
Depreciation and amortisation 105,025 104,217
Auditors’ remuneration 126,592 103,431
Other administration expenses 923,662 695,796
2,622,935 2,210,021
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Services provided by the auditor
- Interim audit of parent company and consolidated financial
33,637 29,011
statements
- Audit of parent company and consolidated financial statements 92,955 74,420
126,592 103,431
9. Staff costs and employees
Year to Year to
£ unless stated
30 June 2024 30 June 2024
The aggregate remuneration comprised:
- Wages and salaries 1,304,792 1,159,762
- National insurance 143,113 129,537
- Pension costs 19,751 17,278
1,467,656 1,306,577
Average number of employees 30 28
10. Finance costs
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Interest charged on lease liabilities 9,645 12,607
Interest paid on borrowings 1,482,411 2,064,587
Amount capitalised* (374,822) ^(1,556,343)
1,117,234 520,851
* The rate of interest used to capitalise the general borrowings is 7%.
^ The prior year presentation on interest capitalised to inventory in financial year has
been restated from £2,139,232 to £1,556,343 to correct a misstatement of the amount shown as
capitalised in the year in the table to note 10; this has a consequential impact on the
interest paid on borrowings.
In the Statement of Cash Flows, financing activities (interest paid) and operating
activities (movement in inventory) have been restated by £582,889 to reflect the
capitalisation of interest to inventory. As a result, the movement in inventory has changed
to £117,179 (previously £700,068) and interest paid in financing activities has changed from
£2,647,476 to £2,064,587. Consequently, cash outflow from operations has changed to
£1,151,634 (previously £568,744) and cash from financing activities has changed to £489,386
generated (previously £93,504 used).
There is no impact on profit or loss, nor the carrying value of inventory.
11. Taxation
The Group has generated a loss in the year and the prior year.
Tax losses carried forward
Tax losses for which no deferred tax asset was recognised expire as follows:
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Tax (losses) (3,563,790) (2,390,252)
Accumulated carried forward losses 8,975,800 5,412,010
The carried forward losses do not expire as they relate to trading activity that is expected
to continue.
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Income tax expense recognised in the period (184,012) (250,473)
Reconciliation of effective tax rate
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Loss for the year (3,563,790) (2,139,779)
Tax using the UK corporate tax rate of 25% (2023: (891,742) (438,655)
20.5%(blended rate))
Gross non-deductible expenses 52,707 555,748
Current year losses for which no deferred tax asset was 717,931 133,380
recognised
Adjustments to tax charge in respect of previous periods (183,596) -
Adjustments to tax charge in respect of previous periods’ 120,688 -
deferred tax
Total taxation (credit) /charge (184,012) 250,473
12. Property, plant and equipment
As at 30 June 2024
Right Office
£ unless stated Fixtures and fittings Plant and equipment Total
of use Equipment
Cost
At 30 June 2023 442,612 29,462 73,594 2,076 547,744
Additions - 4,164 120 - 4,284
Disposals - - - (1,586) (1,586)
At 30 June 2024 442,612 33,626 73,714 490 550,442
Accumulated depreciation
At 30 June 2023 236,134 9,400 23,138 444 269,116
Charge for the period 88,522 4,117 11,591 520 104,750
Disposals - - - (628) (628)
At 30 June 2024 324,656 13,517 34,729 336 373,238
Carrying amount
At 30 June 2023 206,478 20,062 50,456 1,632 278,628
At 30 June 2024 117,956 20,109 38,985 154 177,204
As at 30 June 2023
Right Office Fixtures and
£ unless stated fittings Plant and equipment Total
of use Equipment
Cost
At 30 June 2022 442,612 23,182 72,664 1,149 539,607
Additions - 6,280 930 927 8,137
At 30 June 2023 442,612 29,462 73,594 2,076 547,744
Accumulated depreciation
At 30 June 2022 147,612 5,019 12,472 29 165,132
Charge for the period 88,522 4,381 10,666 415 103,984
At 30 June 2023 236,134 9,400 23,138 444 269,116
Carrying amount
At 30 June 2022 295,000 18,163 60,192 1,120 374,475
At 30 June 2023 206,478 20,062 50,456 1,632 278,628
Right of use asset
£ unless stated 30 June 2024 30 June 2023
Amount recognised in the statement of financial position:
Right of use
Buildings 202,754 206,478
202,754 206,478
Lease liability
Non-current 116,131 193,109
Current 86,623 86,623
202,754 279,732
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Amount recognised in the statement of comprehensive income:
Depreciation on right of use building 88,522 88,522
Interest expense 9,645 12,607
Amount recognised in the statement of cash flow:
Lease payments made 86,623 86,623
Break options
The lease for the office has an option to break the lease after 5 years. The right-of-use
asset has been calculated on the assumption that the break clause is taken up.
13. Inventory - developments
£ unless stated 30 June 2024 30 June 2023
Residential developments
- Land 3,427,634 4,895,358
- Construction and development costs 8,406,730 9,547,628
- Capitalised interest 1,439,379 2,123,936
13,273,743 16,566,922
The key estimates related to carrying value of inventory in relation to all development
projects are estimated selling prices of inventory based on recent transactions and market
information, and construction costs to complete based on current arrangements with
contractors including contingencies.
Further to the impairment review which took place in previous financial years, due to
expenditure exceeding estimates, the Group has further impaired the value of its Bank
Street, Oscar House and St Petersgate developments. The impairment totalled £1,443,989 at 30
June 2024 (£2,392,136 at 30 June 2023) and the charge for the year was £620,874 (30 June
2023: £1,094,576).
As a result of the decision to dispose of the Group’s interests in Churchgate and Seaton
House, both of these developments were written down to their estimated net realisable value
resulting in an impairment charge of £152,941 (30 June 2023: £nil). The estimated net
realisable value of Seaton House is based on an unconditional contract of sale (less
estimated costs of sale). The estimated net realisable value of Churchgate is based upon
the value previously achieved in the market (less estimated costs of disposal).
14. Investment in associate
Reconciliation of investment in associate
£ unless stated 30 June 2024 30 June 2023
Opening - 50,000
Reversal of write down of investment in associate - -
Sale of investment in associate - (50,000)
Closing - -
Following the insolvency of two subsidiaries of the associate, One Heritage Complete
Limited, the Group made the decision to write down the full value of its investment in
associate in the 30 June 2022 annual financial statements. On 6 July 2022, the Group agreed
to sell its 47.0% stake in One Heritage Complete Limited for £50,000.
15. Trade and other receivables
£ unless stated 30 June 2024 30 June 2023
Trade receivables^ 25,407 52,676
Other debtors 392,827 1,132,525
Prepaid sales fees and commissions* 55,200 474,289
Other prepayments and accrued income* 385,219 94,399
VAT receivable 35,206 51,636
Related party receivables^ 418,617 294,644
1,312,476 2,100,169
^Related party receivables of £186,441 which were included within trade receivables have
been reclassified for ease of comparison.
*Prepayments of £94,399 which were included within prepaid sales fees and commissions have
been reclassified for ease of comparison.
At 30 June 2024 the Group was due £418,677 (30 June 2023: £294,644) from related parties,
including £248,564 (30 June 2023: £30,161) from Robin Hood Developments Limited, £48,163
(30 June 2023: £14,192) from One Heritage Tower Limited, £40,173 (30 June 2023: £nil) from
One Heritage Property Services Limited, £28,990 (30 June 2023: £209,168) from One Heritage
North Church Limited and £21,985 (30 June 2023: £216) from One Heritage Great Ducie Street
Limited and other related parties £30,802 (30 June 2023: £40,907). All related party
balances have been reviewed and considered recoverable. Further details of related parties
can be found in note 22.
Other debtors include £252,980 (30 June 2023: £413,304) which relates to taxation due under
the Construction Industry Scheme and £64,950 (30 June 2023: £630,980) of customer deposits
held by third party solicitors for the benefit of the Group.
The prepaid sales fees and commissions relate to the sales agent’s fees and commissions paid
on units from developments that have been exchanged but not yet completed.
Management consider that the credit quality of the various receivables is good in respect of
the amounts outstanding, there have been no increases in credit risk and therefore credit
risk is considered to be low. Therefore, no expected credit loss provision has been
recognised.
16. Capital management
The Group defines capital as the Group’s shareholder equity and borrowings. The Group’s
policy is to maintain a strong capital base so as to maintain, investor, creditor and market
confidence and to sustain future development of the business. Management monitors the return
on capital, as well as the level of external debt in the business.
The Group monitors capital using a ratio of ‘net debt’ to shareholder equity. Net debt is
calculated as total liabilities (as shown in the statement of financial position) less cash
and cash equivalents. The Group’s policy is to keep the ratio below 3.0. In the current and
prior year the ratio is significantly higher than the policy due to the negative equity and
the impairment of developments.
£ unless stated 30 June 2024 30 June 2023
Total borrowings 16,975,288
17,240,521
Less: cash and cash equivalents (88,161) (303,816)
Net debt 16,887,127 16,936,705
Total equity (3,948,494) (568,716)
Net debt to equity ratio N/A N/A
17. Loans and borrowings
£ unless stated 30 June 2024 30 June 2023
Non-current
Lease liability (note 12) 116,131 193,109
Related party borrowings 10,981,484 11,378,938
11,097,615 11,572,047
Current
Lease liability (note 12) 86,623 86,623
Loan 5,791,050 5,581,851
5,877,673 5,668,474
Total borrowings 16,975,288 17,240,521
As sales on the One Heritage Oscar House Limited development incurred delays, the company
refinanced the project settling the previous debt of £4.1m with Hampshire Trust Bank
Limited, which in turn was repaid on 22 December 2023, through an agreement being entered
into with a new lender, 365 Funding Limited, on improved terms for £3.25m, for a period of
18 months to provide appropriate funding until all the remaining units are legally completed
and handed over to customers; £2,579,084 was drawn down at 30 June 2024 (30 June 2023:
£nil).
On 9 November 2023, One Heritage Victoria Road Limited, entered into a loan agreement with
Hampshire Trust Bank Limited. This was for a gross amount of construction finance totalling
£3,846,700 of which £2,819,956 has been drawn down at 30 June 2024 (30 June 2023: £nil). The
loan has a term of 16 months and is to be drawn down on a monthly basis to fund construction
costs. It has a covenant that is linked to the underlying development, to not exceed a loan
to Gross Development Value of 61% which has been complied with during the reporting period.
On 18 March 2022 the Company had a £1.5 million corporate bond admitted to the Standard List
of the London Stock Exchange. This had a 2-year term and an 8.0% coupon which is paid on 30
June and 31 December each year. The Company incurred listing costs of £102,040 which were
capitalised and released over the term of the Bond. On maturity, £1.0m of the Bond was
repaid with the remaining £0.5m being converted to a Loan Note with a term of 12 months and
8% interest maturing 15 March 2025.
Related party borrowings
On 31 July 2023 the shareholder loan facility was increased by £1.7m, to £14.0m. This
facility can be drawn down as required, has an interest rate of 7.0% and was repayable on 31
December 2024. In January 2024, the Company’s current shareholder agreement, initially
executed on 21 September 2020, underwent an amendment. The principal modification confirms
the full balance of any drawdown is due on 31 December 2028. The balance on this loan at 30
June 2024 was £10,981,484 (30 June 2023: £11,378,938). As outlined in note 23, subsequent to
the balance sheet date, the shareholder loan facility was subject to refinancing with a
related party.
Terms and repayment schedule
The terms and conditions of outstanding loans are as follows:
30 June 2024 30 June 2023
Nominal Maturity Fair Carrying Fair Carrying
£ unless stated Currency interest amount
rate Date value value Amount
Hampshire Trust Bank GBP 10.8% Mar 25 2,819,956 2,819,956 - -
Limited
Funding 365 GBP 9.6% Jun 25 2,471,094 2,471,094 - -
Hampshire Trust Bank GBP 9.3% Apr 24 - - 4,118,054 4,118,054
Limited
One Heritage Property GBP 7.0% Dec 25 10,981,484 10,981,484 11,378,938 11,378,938
Development
Loan Note GBP 8.0% Mar 25 500,000 500,000 - -
Corporate bond GBP 8.0% Mar 24 - - 1,463,797 1,463,797
16,772,534 16,772,534 16,960,789 16,960,789
Reconciliation of movements of liabilities to cash flows from financing activities
Liabilities
Other loans and Lease Share capital/
£ unless stated borrowings Total
liabilities Premium
Balance as at 01 July 2023 16,960,789 279,732 5,140,108 22,380,629
Changes from financing cash flows
Proceeds from loans and borrowings 5,572,200 - - 5,572,200
Repayment of loans and borrowings (4,559,386) - - (4,559,386)
Proceeds from related party 10,149,165 - - 10,149,165
borrowings
Repayment of related party (11,350,234) - - (11,350,234)
borrowings
Interest paid (1,482,411) - - (1,482,411)
Payment of lease liabilities - (86,623) - (86,623)
Total changes from financing cash (1,670,666) (86,623) - (1,757,289)
flows
Other changes
Liability related
Capitalised borrowing costs 374,822 - - 374,822
Interest expense 1,107,589 9,645 - 1,117,234
Total liability-related other 1,482,411 9,645 1,492,056
changes
Total equity-related other changes - - - -
Balance as at 30 June 2024 16,772,534 202,754 5,140,108 22,115,396
Liabilities
^Other loans and Lease Share capital/
£ unless stated borrowings Total
liabilities Premium
Balance as at 01 July 2022 15,567,293 353,748 3,893,008 19,814,049
Changes from financing cash
flows
Proceeds from issue of share - - 1,247,100 1,247,100
capital
Proceeds from loans and 8,725,789 - - 8,725,789
borrowings*
Repayment of loans and (9,535,263) - - (9,535,263)
borrowings*
Proceeds from related party 12,177,035 - - 12,177,035
borrowings*
Repayment of related party (9,974,065) - - (9,974,065)
borrowings*
Interest paid^ (2,064,587) - - (2,064,587)
Payment of lease liabilities - (86,623) - (86,623)
Total changes from financing (671,091) (86,623) 1,247,100 489,386
cash flows
Other changes - - - -
Liability related
Capitalised borrowing costs^ 1,556,343 - - 1,556,343
Interest expense 508,244 12,607 - 520,851
Total liability-related other 2,064,587 12,607 - 2,077,194
changes
Total equity-related other - - - -
changes
Balance as at 30 June 2023 16,960,789 279,732 5,140,108 22,380,629
^ Restated. Refer Note 10.
* Restated to correct misallocations between the respective items. There were no changes to
financing cash flows as a result.
18. Trade and other payables
£ unless stated 30 June 2024 30 June 2023
Trade payables 653,156 778,994
Accruals 918,264 192,439
Customer deposits 67,950 1,302,276
Related party payable 79,915 17,482
Other payable 19,891 -
Tax payable (440) 250,473
PAYE payable 87,734 37,979
1,826,470 2,579,643
Trade payables and accruals relate to amounts payable at the reporting date for services
received during the period.
The Group has received deposits and reservation fees in relation to its developments, these
totalled £67,950 (30 June 2023: £1,302,276). These relate to units that were exchanged on
and are repayable. The deposits will be repayable if significant property damage occurs, and
reinstatement is not possible.
At 30 June 2024 the Group owed £79,914 (30 June 2023: £17,481) to related parties. Further
details of related parties can be found in note 22 to the financial statements.
The Group has financial risk management policies in place to ensure that all payables are
paid within the credit timeframe.
19. Financial instruments - fair value and risk management
Fair values
For all financial assets and financial liabilities not measured at fair value, the carrying
amount is a reasonable approximation of fair value.
Financial risk management
The Group has exposure to the following risks arising from financial instruments:
• Credit risk
• Liquidity risk
• Market risk
Risk management framework
The Company’s Board of Directors has overall responsibility for the establishment and
oversight of the Company’s risk management framework. The Board of Directors has established
the risk management committee, which is responsible for developing and monitoring the
Company’s risk management policies. The committee reports regularly to the Board of
Directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced
by the Company, to set appropriate risk limits and controls to monitor risks. Risk
management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities. The Company, through its training and management
standards and procedures, aims to maintain a disciplined and constructive control
environment in which all employees understand their roles and obligations.
The Company’s audit committee oversees how management monitors compliance with the Company’s
risk management policies and procedures and reviews the adequacy of the risk management
framework in relation to the risks faced by the Company.
Credit risk
Credit risk is the risk of financial loss where counterparties are not able to meet their
obligations. Group policy is that surplus cash, when not used to repay borrowings, is placed
on deposit with the Group’s main relationship banks and with other banks or money market
funds based on a minimum credit rating and maximum exposure.
The significant concentrations of credit risk are to related parties (refer note 22).
Management consider that the credit quality of the various receivables is good in respect of
the amounts outstanding and therefore credit risk is considered to be low.
The carrying amount of financial assets represents the Group’s maximum exposure to credit
risk at the reporting date assuming that any security held has no value.
Cash and cash equivalents
The Group held cash and cash equivalents of £88,161 at 30 June 2024 (30 June 2023:
£303,816).
Bank Amount held Standard and Poor’s Moody’s Fitch
Barclays Bank UK Plc 86,428 A A1 A+
Revolut Bank 1,513 - - -
The Group also held petty cash of £220 as at 30 June 2024 (30 June 2023: £241).
Guarantees
The Company’s policy is to provide financial guarantees only for subsidiaries’ liabilities.
At 30 June 2024, the Company has issued a guarantee to certain banks in respect of credit
facilities granted to One Heritage Oscar House Limited for £2,471,094 (30 June 2023:
£4,118,054) and One Heritage Victoria Road Limited for £769,000 plus interest, fees and
expenses (30 June 2023: £nil). Refer to note 5 and 10 of the Group financial statements.
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources
available to meet its obligations as they fall due. The Group manages liquidity risk by
continuously monitoring forecast and actual cash flows, matching the expected cash flow
timings of financial assets and liabilities with the use of cash and cash equivalents,
borrowings, overdrafts and committed revolving credit facilities with a minimum of 12 months
to maturity.
Future borrowing requirements are forecast on a monthly basis and funding headroom is
maintained above forecast peak requirements to meet unforeseen events. At 30 June 2024, the
Group’s borrowings and facilities had a range of maturities with an average life of 11.5
months.
In addition to fixed term borrowings, the Group has access to a shareholder loan facility.
At the reporting date, the total unused committed amount available for general purposes was
£3.02million and cash and cash equivalents were £0.09m (refer to note 23 which outlines a
restructure of shareholder loan facilities which took place after the reporting date).
The maturity profile of the anticipated future cash flows including interest, using the
latest applicable relevant rate, based on the earliest date on which the Group can be
required to pay financial liabilities on an undiscounted basis, is as follows:
As at 30 June 2024
Carrying On 1-2 2-5 5+
£ unless stated amount Total Within 1 year
demand years years Years
Non-derivative financial
liabilities
Secured bank debt 2,819,956 3,164,281 - 3,164,281 - - -
Secured other debt 2,471,094 2,471,094 - 2,471,094 - - -
Unsecured loan note 500,000 530,000 - 530,000 - - -
Other borrowings 10,981,484 12,193,530 - - 12,193,530 - -
Lease payables 202,754 202,754 - 86,623 116,131 - -
Trade payables 1,826,470 1,826,470 - 1,826,470 - - -
18,801,758 20,388,129 - 8,078,468 12,309,661 - -
As at 30 June 2023^
Carrying On 1-2 2-5 5+
£ unless stated amount Total Within 1 year
demand years years Years
Non-derivative financial
liabilities
Secured bank debt 4,118,054 4,268,240 - 4,268,240 - - -
Unsecured corporate bond 1,463,797 1,543,797 - 1,543,797 - - -
Other borrowings 11,378,938 12,634,852 - - 12,634,852 - -
Lease payables 279,732 279,732 - 86,623 193,109 - -
Trade payables 2,579,644 2,579,644 - 2,579,644 - - -
19,820,165 21,306,265 - 8,478,304 12,827,961 - -
^Restated. The profile of financial liabilities as at 30 June 2023 have been restated to now
include principal and interest to be accrued and paid.
The secured bank debt contains loan covenants, disclosed in note 17. A future breach of
covenant may require the Group to repay the loan earlier than indicated in the above table.
Market risk
Market risk is the risk that changes in market prices will affect the Group’s income. The
objective of market risk management is to manage and control risk exposures within
acceptable exposures within acceptable parameters, while optimising the return. The Group
does not hold any equity positions and trade in foreign currencies. It therefore considers
the market risk to be low.
Interest rate risk management
The Group has a policy to have fixed interest rate borrowings where possible. Where this is
not possible, the Group will look to hedge interest variability if cost effective.
Interest rate sensitivity
The Group currently has one variable interest rate arrangement in respect of a loan from
Hampshire Trust Bank and therefore an element of future returns are sensitive to movements
in the interest rates in the next financial period on existing borrowing obligations.
If interest rates on the loans had been 1% per cent higher/lower and all other variables
were held constant, the interest charge incurred by the Group in the year ended 30 June 2024
would have (increased)/decreased by (£8,563)/£8,637.
20. Directors’ remuneration
Taxable Pension
£ unless Taxable Pension Total Total
stated Salary Salary benefits benefits benefits
benefits remuneration remuneration
Year ended 30 2024 2023 2024 2023 2023
June 2024 2024 2023 (r)
Jason Upton 116,667 95,833
385 208 1,321 1,321 118,373 97,862
Bonus - 500
Yiu Tak 12,500 15,000
Cheung* 416 - - - 12,916 15,500
- 500
Bonus
Anthony 82,051 115,794
Unsworth* 629 340 881 1,211 83,561 117,595
- 250
Bonus
Stuart 19,833 - 47 - - - 19,880 -
Ormisher^
David Izett 30,000 29,167 - - - - 30,000 29,167
Jeremy 25,000 25,000 - - - - 25,000 25,000
Earnshaw
286,051 282,044 1,477 548 2,202 2,532 289,730 285,124
*remuneration for period from 1st July 2023 to date of leaving
^ remuneration for period 8th February 2024 to 24 March 2024
(r) Restated. The total remuneration as at 30 June 2023 have been restated to include
taxable benefits and bonus.
Bonus payments
During the year Jason Upton received a bonus payment of £nil (FY 2023: £500), Yiu Tak Cheung
£nil (FY 2023: £500) and Anthony Unsworth £nil (FY 2023: £250). All bonus payments received
in FY23 were discretionary and in line with bonus payments made to all members of staff.
Pension benefits
Pension benefits comprise Employer contributions into the Group’s defined contribution
pension scheme.
21. Share capital
£ unless stated 30 June 2024 30 June 2023
Share capital (1p per share) 386,783 386,783
Share premium 4,753,325 4,753,325
5,140,108 5,140,108
All shares issued by the Company are ordinary shares and have equal voting and distribution
rights. The total shares in issue as at 30 June 2024 is 38,678,333 (30 June 2023:
38,678,333) and are fully paid up.
22. Related parties
Parent and ultimate controlling party
At the reporting date 65.15% of the shares are held by One Heritage Property Development
Limited, which is incorporated in Hong Kong. One Heritage Holding Group Limited,
incorporated in the British Virgin Island, is considered the ultimate controlling party
through its 100% ownership of One Heritage Property Development Limited.
Transactions with key management
Key management personnel compensation comprised the following:
Year to Year to
£ unless stated
30 June 2024 30 June 2023
Short term employee benefits 490,045 412,851
490,045 412,851
Compensation of the Group’s key management personnel is short term employee benefits.
Key management personnel transactions
The key management control 2.8% (30 June 2023: 2.8%) of the voting shares of the Company.
Other related party activity
Details of related party balances as at the Reporting Date are disclosed in notes 15 and 18;
details of revenue derived from related parties is disclosed in note 7. Below is a table
that sets out the entities that are related parties to the Group:
Company Notes Description
7, 15
7, 15
7, 15
Common directors, owned by the beneficial owners
of the Group
7, 15 Common directors, owned by the beneficial owners
ACT Property Developments Limited of the Group
Bee Kitchens Limited Common directors, owned by the beneficial owners
of the Group
7, 15 Common directors, owned by the beneficial owners
Black Square Property Solutions of the Group
Limited
Common directors, owned by the beneficial owners
Great Ducie Building Management 7, 15 of the Group
Limited
Common directors, owned by the beneficial owners
Harley Street Developments Limited of the Group
Mosley Property Limited
Common director, owned by the beneficial owners
7, 15 of the Group
Nicholas Street Developments Limited
Common director, owned by the beneficial owners
North Church Building Management of the Group
Limited 7, 15
Common director, owned by the beneficial owners
OH Lincoln House Property Limited of the Group
OH Oscar House Property Limited Common director, owned by the beneficial owners
of the Group
OH Portfolio Rental 1 Limited 7, 15
Common director, owned by the beneficial owners
of the Group
OH Property Development Hong Kong 7, 15 Common directors, owned by the beneficial owners
of the Group
One Heritage Alexander House Limited
Common directors, owned by the beneficial owners
One Heritage Blackley Mere Limited 7, 15 of the Group
One Heritage Great Ducie Street Common directors, owned by the beneficial owners
Limited of the Group
Common directors, owned by the beneficial owners
7, 15 of the Group
7, 15
7, 15
7, 15
One Heritage North Church Limited 7,15 Common directors, majority stake held by the
beneficial owners of the Group
7, 15
One Heritage Property Development Common director, owned by the beneficial owners
Limited of the Group
One Heritage Property Holding Limited Common director, owned by the beneficial owners
of the Group
7, 15
One Heritage Property Management 7,15 Common director, owned by the beneficial owners
Limited of the Group
One Heritage Property Rental Common director, owned by the beneficial owners
7, 15 of the Group
One Heritage Property Services
Limited 7,15 Common directors, part owned by the beneficial
owners of the Group
One Heritage Tower Limited
7,15
Robin Hood Property Development Common directors, owned by the beneficial owners
Limited of the Group
Sakura Liverpool Limited Common directors, owned by the beneficial owners
of the Group
7, 15
23. Events after the reporting date
On 4 July 2024 the One Heritage Seaton House Limited completed the sale of the building of
Seaton House, Stockport for £0.6m together and exchanged conditional contracts for the sale
of the land to the rear for £0.4m. The completion of the conditional sale is subject to the
buyer obtaining planning approval and overall total gross proceeds would therefore be £1.0m
on which the Group would recognise a loss after selling costs of £0.15m which has been
provided for as part of the impairment review undertaken at 30 June 2024 as outlined in note
13.
On 1 October 2024, the Group exchanged contracts unconditionally to acquire a 30% stake in
the company that owns the One Victoria project by purchasing shares to the value of £3.0m
from One Heritage Property Development Limited Hong Kong (“OHPD”). The acquisition will be
funded by drawing down £3.0m from the remaining shareholder loan facility (“Existing
Facility”). The completion date for the acquisition is 29 October 2024, which may be
extended or brought forward by agreement between the parties, with a long stop date of 8
November 2024.
Simultaneous to the investment in One Victoria, Manchester, the Group has also exchanged
contracts unconditionally on 1 October 2024 for the sale of a portfolio of completed
residential and commercial properties, valued at £7.0m, to OH UK Holdings Limited (“OHUK”),
a company connected with OHPD. This portfolio includes residential properties at Bank
Street, Sheffield, Lincoln House, Bolton and Oscar House, Manchester, as well as the
commercial unit at St Petersgate, Stockport. The completion date for the sale is 29 October
2024, which may be extended or brought forward by agreement between the parties, with a long
stop date of 8 November 2024. With £2.0m of debt linked to Oscar House as part of this
transaction, the net proceeds of the portfolio sale will reduce from £7.0m million to £5.0m
million and these proceeds will be utilised to reduce the Existing Facility from £14.0m
million to £9.0m.
As part of this restructuring, One Heritage Property Developments Limited (“OHPD(UK)”)
entered into a new £7.0m loan agreement with OHUK on 1 October 2024 at an interest rate of
6%, i.e., lower than the previous rate of 7%, such facility to become available from the
date of the completion of the property transactions outlined above. The loan has a repayment
date of 31 December 2025, with an option to extend for up to 36 months. OHUK is a related
party, sharing the same majority shareholders as the Company and OHPD. This new loan will be
drawn down in full on completion and used to partially repay the Existing Facility. The
balance of approximately £2.0m of the Existing Facility will then be written off by OHPD as
part of the restructuring, and the Existing Facility will therefore be settled in full at
completion and terminated.
On 28 October 2024 One Heritage Bank Street Limited and One Heritage Lincoln House Limited
and the related party OH UK Holdings 2 Limited entered into a 12-month loan facility
agreement with Hilco Real Estate Finance UK Ltd of £2.33m secured upon the completed
properties held by those companies, of which £1.6m is attributable to Bank Street Sheffield
and Lincoln House Bolton.
24. New Standards and amendments to Standards
There are no new or amended standards that are expected to have a significant impact on the
Group’s consolidated financial statements when adopted.
New standards and amendments issued but not effective for the current annual period
The following standards and interpretations had been issued but not yet mandatory for annual
reporting periods ending June 30, 2024.
Description
• Non-current liabilities with Covenants - Amendments to IAS 1 (effective for annual
periods beginning on or after 1 January 2024)
• Classification of Liabilities as Current or Noncurrent – Amendments to IAS 1 (effective
for annual periods beginning on or after 1 January 2024)
The Group anticipates that these new standards, interpretations, and amendments will be
adopted in the financial statements as and when they are applicable and adoption of these
new standards, interpretations and amendments, may have no material impact on the financial
statements in the period of initial application.
25. Disclosures relating to subsidiary undertakings
The Company’s subsidiaries and other related undertakings at 30 June 2024 are listed below.
All Group entities are included in the consolidated financial results. All companies listed
below undertake all of their activity in the United Kingdom.
The share capital of each of the companies, where applicable, comprises ordinary shares
unless otherwise stated.
Company name Business activity Company number Ownership
One Heritage Property Development (UK) Limited Property developer 11982934 100.0%
One Heritage Churchgate Limited Development company 12114319 100.0%
One Heritage Lincoln House Limited Development company 12434625 100.0%
One Heritage Bank Street Limited Development company 12763845 100.0%
One Heritage Oscar House Limited Development company 11331256 100.0%
One Heritage St Petersgate Limited Development company 13154858 100.0%
One Heritage Red Brick Limited Property services 13178461 100.0%
One Heritage Property Services Limited Property services 13426415 100.0%
One Heritage Seaton House Limited Development company 13520340 100.0%
One Heritage Construction Limited Construction company 13761479 100.0%
One Heritage Victoria Road Limited Development company 14172104 100.0%
St Petersgate Building Management Limited Dormant 13979905 100.0%
Oscar House Building Management Limited Dormant 13981057 100.0%
Liberty House Building Management Limited Dormant 13986387 100.0%
Lincoln House Building Management Limited Dormant 12710283 100.0%
There are loans between these entities, which are all interest free and repayable on demand.
26. Audit exemption taken for subsidiaries
The following subsidiaries are exempt from the requirements of the Companies Act 2006
relating to the audit of individual accounts by virtue of Section 479A of that Act.
Company name Company number
One Heritage Property Development (UK) Limited 11982934
One Heritage Churchgate Limited 12114319
One Heritage Lincoln House Limited 12434625
One Heritage Bank Street Limited 12763845
One Heritage Oscar House Limited 11331256
One Heritage St Petersgate Limited 13154858
One Heritage Red Brick Limited 13178461
One Heritage Property Services Limited 13426415
One Heritage Seaton House Limited 13520340
One Heritage Construction Limited 13761479
One Heritage Victoria Road Limited 14172104
St Petersgate Building Management Limited 13979905
Oscar House Building Management Limited 13981057
Liberty House Building Management Limited 13986387
Lincoln House Building Management Limited 12710283
Company balance sheet
As at 30 June 2024
As at 30 June As at 30 June
£ unless stated Notes
2024 2023
INTANGIBLE ASSETS
Intangible assets 1,680 1,913
1,680 1,913
TANGIBLE ASSETS
Investments 2 - 1,007,732
- 1,007,732
OTHER NON-CURRENT ASSETS
Debtors 3 1,604,331 3,033,711
1,604,331 3,033,711
CURRENT ASSETS
Debtors 4 487,620 302,351
Cash at bank - 8,615
487,620 310,966
Creditors: amounts falling within one year 5 (2,101,141) (5,191,231)
Net current (liabilities) (1,613,521) (4,880,265)
Total assets less current liabilities (7,510) (836,909)
Net liabilities (7,510) (836,909)
CAPITAL AND RESERVES
Called up share capital 6 386,783 386,783
Share premium account 4,753,325 4,753,325
Profit and loss account (5,147,618) (5,977,017)
Shareholders’ deficit (7,510) (836,909)
These financial statements were approved by the board of directors on 29 October 2024 and
were signed on its behalf by:
Jason David Upton
Company registration number: 12757649
The accompanying notes on pages 81 to 87 form an integral part of the financial statements
Company statement of changes in equity
For the year ended 30 June 2024
Called up Share Profit and loss Shareholders
£ unless stated account
share capital premium Funds
Balance at 1 July 2023 386,783 4,753,325 (5,977,017) (836,909)
Profit for the period - - 829,399 829,399
Total comprehensive income for the 386,783 4,753,325 (5,147,618) (7,510)
period
Balance at 30 June 2024 386,783 4,753,325 (5,147,618) (7,510)
For the year ended 30 June 2023
Called up Share Profit and loss Shareholders
£ unless stated account
share capital premium Funds
Balance at 1 July 2022 324,283 3,568,725 (294,081) 3,598,927
Loss for the period - - (5,682,936) (5,682,936)
Total comprehensive income for the 324,283 3,568,725 (5,977,017) (2,084,009)
period
Issue of share capital 62,500 1,187,500 - 1,250,000
Cost of share issuance - (2,900) - (2,900)
Balance at 30 June 2023 386,783 4,753,325 (5,977,017) (836,909)
The accompanying notes on pages 81 to 87 form an integral part of the financial statements.
Notes to the Company financial statements
For the year ended to 30 June 2024
1. Accounting policies
The following accounting policies have been applied consistently in dealing with items which
are considered material in relation to the financial statements, except as noted below.
General information
One Heritage Group plc is a public limited company, limited by shares, incorporated in
England and Wales under the Companies Act 2006 on 21 July 2020. The address of its
registered office and principal place of trading is 80 Mosley Street, Manchester, M2 3FX.
The principal activity of the Company is a property development holding company. The Company
does not have any employees and is funded through the issuance of share capital to
investors.
Basis of preparation
These financial statements were prepared in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework (“FRS 101”).
In preparing these financial statements, the Company applies the recognition, measurement
and disclosure requirements of international accounting standards in conformity with the
requirements of the Companies Act 2006 (“Adopted IFRSs”) but makes amendments where
necessary in order to comply with Companies Act 2006 and has set out below where advantage
of the FRS 101 disclosure exemptions has been taken.
Under Section s408 of the Companies Act 2006 the Company is exempt from the requirement to
present its own profit and loss account.
In these financial statements, the Company has applied the exemptions available under FRS
101 in respect of the following disclosures:
▪ Cash Flow Statement and related notes;
▪ Certain disclosures regarding revenue;
▪ Certain disclosures regarding leases;
▪ Disclosures in respect of transactions with wholly owned subsidiaries;
▪ Disclosures in respect of capital management;
▪ The effects of new but not yet effective IFRSs;
▪ Disclosures in respect of the compensation of Key Management Personnel; and
▪ Disclosures of transactions with a management entity that provides key management
personnel services to the Company.
As the consolidated financial statements include the equivalent disclosures, the Company has
also taken the exemptions under FRS 101 available in respect of the following disclosures:
▪ Certain disclosures required by IFRS 3 Business Combinations in respect of business
combinations undertaken by the Company in the current and prior periods;
▪ Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures
required by IFRS 7 Financial Instrument Disclosures; and
▪ Certain disclosures required by IAS 36 Impairment of Assets
Going concern
Notwithstanding net current liabilities of £6.3m (excluding inventory balances totalling
£13.3m) as at 30 June 2024 (2023: £5.8m (excluding inventory balances totalling £16.6m), a
loss for the year then ended of £3.4m (2023: £2.4m) and operating cash inflow for the year
of £1.5m (2023: outflow £1.2m), the financial statements have been prepared on a going
concern basis which the directors consider to be appropriate for the following reasons.
The Directors have prepared a cash flow forecast on a consolidated basis for the period to
31 December 2025 which indicates that, taking account of reasonably possible downsides, the
Group will have sufficient funds to meet its liabilities including loans and loan note, as
they fall due for that period using the proceeds from:
• existing resources held by the Group (including funds drawn down on external loan
facilities and the loan facility to be provided by OH UK Holdings Limited(“OHUK”) as
detailed in notes 19 and 23);
• the implementation of the proposed restructure of the Group outlined in note 23, which
includes the refinancing of Group shareholder loan with a related party, the disposal of
completed inventory, the acquisition of an equity stake in the One Victoria, Manchester
property development project, the waiver of a portion of the existing shareholder loan
and the provision of continuing shareholder financial support via related party;
• the forecast continued sale of development property inventory (net of repayment of
related construction finance loans (note 19)); being the Seaton House Stockport,
Churchgate Leicester and Victoria Road, Eccleshill and sales of units in the One
Victoria development property on completion in line with management estimates for timing
and quantum;
• in the event of need the Directors consider that mitigating actions are required,
actions available to the Group would include realising development property inventory
via auction and/or refinancing of the post restructure of the remaining 3rd party loan
due to expire in March 2025 and also the Loan Note due to expire in March 2025;
• in the event of need, continued financial support from both also its parent company, One
Heritage Property Development Limited (“OHPD”), and OHUK to meet its liabilities as they
fall due for that period. OHUK have confirmed that their loans due to mature in December
2025 will not be demanded for repayment until such a time that the Group can afford to
repay them without impacting on its going concern. OHUK have also confirmed the
potential to draw down on additional flexible funding support of up to £1.0m.
As with any company placing reliance on other group/related entities for financial support,
the Directors acknowledge that there can be no certainty that this support will continue
although, at the date of approval of these financial statements, they have no reason to
believe that it will not do so.
Consequently, and based upon events after the reporting date referenced in Note 23, the
Directors are confident that the Company and its subsidiaries will have sufficient funds to
continue to meet their liabilities as they fall due for at least 12 months from the date of
approval of the financial statements and therefore have prepared the financial statements on
a going concern basis.
The above should be read in conjunction with note 3 to the consolidated financial
statements.
The accounting policies set out below have, unless otherwise stated, been applied
consistently to all periods presented in these financial statements.
Measuring convention
The financial statements are prepared on the historical cost.
Significant judgements
The significant judgements with regard to going concern are the forecast timing of
development property inventory realisations by subsidiaries and continued provision of third
party loan facilities to subsidiaries and in the event it is needed the ability of the
Company to be able to drawdown on the facility provided its related party OH UK Holdings
Limited. Management of the Company is not aware of any material uncertainties that may cast
significant doubt on the Company’s ability to continue as a going concern. Therefore, the
parent company financial statements continue to be prepared on the going concern basis. For
detail refer note 1 going concern.
Financial guarantees
A financial guarantee contract is initially recognised at fair value. At the end of each
subsequent reporting period, financial guarantees are measured at the higher of:
▪ The amount of the loss allowance, and
▪ The amount initially recognised less cumulative amortisation, where appropriate.
The amount of the loss allowance at each subsequent reporting period equals the 12-month
expected credit losses. However, where there has been a significant increase in the risk
that the specified debtor will default on the contract, the calculation is for lifetime
expected credit losses.
Investment in subsidiary
Investment in subsidiaries are stated at cost less impairment and loans to subsidiaries are
stated at amortised cost less impairment.
Impairment
The carrying amounts of the Company’s non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in
use and its fair value less costs to sell. 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 the purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or groups of assets (the
Cash-Generating Unit “CGU”).
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its
estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment
losses recognised in respect of CGUs are allocated first to reduce the carrying amount of
any goodwill allocated to the units, and then to reduce the carrying amounts of the other
assets in the unit (group of units) on a pro rata basis.
In respect of other assets, impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
2. Investment in subsidiaries
£ unless stated 30 June 2024 30 June 2023
One Heritage Property Development (UK) Limited - 1,007,732
- 1,007,732
The Company assesses the subsidiaries for any indicators of impairment by looking at the
individual performance of the underlying entities, including their budgets, development
progress and forecast profitability.
Due to losses in the underlying subsidiaries, the investment in subsidiaries were impaired
in the prior year by £1,742,368 and in the current year by £2,750,100 in order to reflect
the estimated recoverable amount based on the net asset value of the subsidiary entity and
net realisable value of inventory. The impairment was recognised in the current year as a
consequence of the losses and impairment to inventory recognised by subsidiary entities. The
carrying amount is considered to reflect the fair value less costs of disposal and is
considered a level 3 asset in the fair value hierarchy.
The share capital of each of the companies, where applicable, comprises ordinary shares
unless otherwise stated.
Company name Jurisdiction Company number Ownership
One Heritage Property Development (UK) Limited England and Wales 11982934 100.0%
Below is a list of the key subsidiaries of One Heritage Property Development (UK) Limited.
Company name Jurisdiction Company number Ownership
One Heritage Churchgate Limited England and Wales 12114319 100.0%
One Heritage Lincoln House Limited England and Wales 12434625 100.0%
One Heritage Bank Street Limited England and Wales 12763845 100.0%
One Heritage Oscar House Limited England and Wales 11331256 100.0%
One Heritage St Petersgate Limited England and Wales 13154858 100.0%
One Heritage Red Brick Limited England and Wales 13178461 100.0%
One Heritage Property Services Limited England and Wales 13426415 100.0%
One Heritage Seaton House Limited England and Wales 13520340 100.0%
One Heritage Construction Limited England and Wales 13761479 100.0%
One Heritage Victoria Road Limited England and Wales 14172104 100.0%
St Petersgate Building Management Limited England and Wales 13979905 100.0%
Oscar House Building Management Limited England and Wales 13981057 100.0%
Liberty House Building Management Limited England and Wales 13986387 100.0%
Lincoln House Building Management Limited England and Wales 12710283 100.0%
3. Debtors: amounts receivable after one year
30 June 2024 30 June 2023
£ unless stated
Intercompany loan 1,604,331 3,033,711
1,604,331 3,033,711
The Intercompany loan payable by One Heritage Property Development (UK) Limited is interest
free and payable on demand.
The Company assesses the intercompany loans for any indicators of impairment by looking at
the individual performance of the underlying entities, including their budgets, development
progress and forecast profitability and provisions made accordingly where recoverability is
in doubt.
4. Debtors: amounts receivable within one year
30 June 2024 30 June 2023
£ unless stated
Intercompany loan 10,102 -
Trade and other receivables 450,000 270,000
Other debtors 3,258 -
Prepayments 24,260 32,351
487,620 302,351
5. Creditors: amounts falling within one year
£ unless stated 30 June 2024 30 June 2023
Trade and other payables 15,888 15,000
Accruals 123,616 76,780
Loan note 500,000 -
Corporate bond - 1,463,797
Parental guarantee and loan provision (refer to note 9) 1,440,485 3,635,109
Other creditors 19,891 -
Amounts owed to related parties 1,261 -
Tax payable - 545
2,101,141 5,191,231
On 18 March 2022 the Company had a £1.5 million corporate bond admitted to the Standard List
of the London Stock Exchange. This had a 2 year term and a 8.0% coupon which is paid on 30
June and 31 December each year. The Company incurred listing costs of £102,040 which were
capitalised and released over the term of the Bond. On maturity, £1.0m of the Bond was
repaid with the remaining £0.5m being converted to a Loan Note with a term of 12 months and
8% interest maturing 15 March 2025.
6. Called up share capital
Ordinary
£ unless stated
Shares
Issued share capital as at 30 June 2024 and 30 June 2023 38,678,333
The holders of ordinary shares are entitled to receive dividends as declared from time to
time and are entitled to one vote per share at meetings of the Company.
7. Audit exemption taken for subsidiaries
The following subsidiaries are exempt from the requirements of the Companies Act 2006
relating to the audit of individual accounts by virtue of Section 479A of that Act. Under
the Act the Company has undertaken guarantees for all outstanding liabilities to which the
subsidiary company is subject at the end of the financial year to which the guarantee
relates, until they are satisfied in full.
Company name Company number
One Heritage Property Development (UK) Limited 11982934
One Heritage Churchgate Limited 12114319
One Heritage Lincoln House Limited 12434625
One Heritage Bank Street Limited 12763845
One Heritage Oscar House Limited 11331256
One Heritage St Petersgate Limited 13154858
One Heritage Red Brick Limited 13178461
One Heritage Property Services Limited 13426415
One Heritage Seaton House Limited 13520340
One Heritage Construction Limited 13761479
One Heritage Victoria Road Limited 14172104
St Petersgate Building Management Limited 13979905
Oscar House Building Management Limited 13981057
Liberty House Building Management Limited 13986387
Lincoln House Building Management Limited 12710283
8. Events after the reporting date
On 4 July 2024 the One Heritage Seaton House Limited completed the sale of the building of
Seaton House, Stockport for £0.6m together and exchanged conditional contracts for the sale
of the land to the rear for £0.4m. The completion of the conditional sale is subject to the
buyer obtaining planning approval and overall total gross proceeds would therefore be £1.0m
on which the Company would recognise a loss after selling costs of £0.15m which has been
provided for as part of the impairment review undertaken at 30 June 2024 as outlined in note
13.
On 1 October 2024, the Company exchanged contracts unconditionally to acquire a 30% stake in
the company that owns the One Victoria project by purchasing shares to the value of £3.0m
from One Heritage Property Development Limited Hong Kong (“OHPD”). The acquisition will be
funded by drawing down £3.0m from the remaining shareholder loan facility (“Existing
Facility”). The completion date for the acquisition is 29 October 2024, which may be
extended or brought forward by agreement between the parties, with a long stop date of 8
November 2024.
Simultaneous to the investment in One Victoria, Manchester, the Company has also exchanged
contracts unconditionally on 1 October 2024 for the sale of a portfolio of completed
residential and commercial properties, valued at £7.0m, to OH UK Holdings Limited (“OHUK”),
a company connected with OHPD. This portfolio includes residential properties at Bank
Street, Sheffield, Lincoln House, Bolton and Oscar House, Manchester, as well as the
commercial unit at St Petersgate, Stockport. The completion date for the sale is 29 October
2024, which may be extended or brought forward by agreement between the parties, with a long
stop date of 8 November 2024. With £2.0m of debt linked to Oscar House as part of this
transaction, the net proceeds of the portfolio sale will reduce from £7.0m million to £5.0m
million and these proceeds will be utilised to reduce the Existing Facility from £14.0m
million to £9.0m.
As part of this restructuring, One Heritage Property Developments Limited (“OHPD(UK)”)
entered into a new £7.0m loan agreement with OHUK on 1 October 2024 at an interest rate of
6%, i.e., lower than the previous rate of 7%, such facility to become available from the
date of the completion of the property transactions outlined above. The loan has a repayment
date of 31 December 2025, with an option to extend for up to 36 months. OHUK is a related
party, sharing the same majority shareholders as the Company and OHPD. This new loan will be
drawn down in full on completion and used to partially repay the Existing Facility. The
balance of approximately £2.0m of the Existing Facility will then be written off by OHPD as
part of the restructuring, and the Existing Facility will therefore be settled in full at
completion and terminated.
On 28 October 2024 One Heritage Bank Street Limited and One Heritage Lincoln House Limited
and the related party OH UK Holdings 2 Limited entered into a 12 month loan facility
agreement with Hilco Real Estate Finance UK Ltd of £2.33m secured upon the completed
properties held by those companies, of which £1.6m is attributable to Bank Street Sheffield
and Lincoln House Bolton.
9. Related party disclosures
Directors’ remuneration
The Directors of the Company were paid through One Heritage Property Development (UK)
Limited, a subsidiary.
Taxable Pension
£ unless Taxable Pension Total Total
stated Salary Salary benefits benefits benefits
benefits remuneration remuneration
Year ended 30 2024 2023 2024 2023 2023
June 2024 2024 2023 (r)
Jason Upton 116,667 95,833
385 208 1,321 1,321 118,373 97,862
Bonus - 500
Yiu Tak 12,500 15,000
Cheung* 416 - - - 12,916 15,500
- 500
Bonus
Anthony 82,051 115,794
Unsworth* 629 340 881 1,211 83,561 117,595
- 250
Bonus
Stuart 19,833 - 47 - - - 19,880 -
Ormisher^
David Izett 30,000 29,167 - - - - 30,000 29,167
Jeremy 25,000 25,000 - - - - 25,000 25,000
Earnshaw
286,051 282,044 1,477 548 2,202 2,532 289,730 285,124
*remuneration for period from 1st July 2023 to date of leaving
^ remuneration for period 8th February 2024 to 24 March 2024
(r) Restated. The total remuneration as at 30 June 2023 have been restated to include
taxable benefits and bonus.
Bonus payments
During the year Jason Upton received a bonus payment of £nil (FY 2023: £500), Yiu Tak Cheung
£nil (FY 2023: £500) and Anthony Unsworth £nil (FY 2023: £250). All bonus payments received
in FY23 were discretionary and in line with bonus payments made to all members of staff.
Pension benefits
Pension benefits comprise Employer contributions into the Group’s defined contribution
pension scheme.
Guarantees
The Company’s policy is to provide financial guarantees only for subsidiaries’ liabilities.
At 30 June 2024, the Company has issued a guarantee to certain banks in respect of credit
facilities granted to One Heritage Oscar House Limited for £2,471,094 (30 June 2023:
£4,118,054) and One Heritage Victoria Road Limited for £679,000 plus interest, fees and
expenses (30 June 2023: £nil). Refer to note 5 and 10 of the Company financial statements.
Parent and ultimate controlling party
At the reporting date 65.15% of the shares are held by One Heritage Property Development
Limited, which is incorporated in Hong Kong. One other shareholder holds more than 5.0% of
the shares in the Company.
One Heritage Holding Group Limited, incorporated in the British Virgin Island, is considered
the ultimate controlling party through its 100% ownership of One Heritage Property
Development Limited.
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Dissemination of a Regulatory Announcement that contains inside information in accordance
with the Market Abuse Regulation (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
════════════════════════════════════════════════════════════════════════════════════════════
ISIN: GB00BLF79495
Category Code: ACS
TIDM: ZNT
LEI Code: 2138008ZZUCCE4UZHY23
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 355868
EQS News ID: 2018469
End of Announcement EQS News Service
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