2021
ANNUAL REPORT &
FINANCIAL STATEMENTS
C O N T E N T S
Strategic Report
2
3
4
6
7
Vision and Objectives
The Group at a Glance
The Executive Chairman’s Report
s172 Report - Promoting the success of the Group for the benefit of its shareholders
Financial Review
10
Principal Business Risks
Governance
11
12
14
17
18
21
22
Directors and Advisors
Directors’ Report
Statement of Compliance with QCA Corporate Governance Code
Corporate, Environmental and Social Responsibility Report
Report on Remuneration
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Group Financial Statements under IFRS
26
27
28
29
30
33
56
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
Historical Financial Information
Company Financial Statements under UK GAAP
57
58
59
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
STRATEGIC REPORT
V I S I O N A N D
O B J E C T I V E S
Sutton Harbour Group plc, listed on the Alternative
O U R O B J E C T I V E S
Investment Market (AIM) of the London Stock
Exchange since 1996, is the parent of a number of
wholly owned subsidiary companies which include:
• Sutton Harbour Company, the statutory harbour
authority company, which operates the Plymouth
fishmarket (known as Plymouth Fisheries), The
• To develop a mix of trading activities for medium
to long-term sustainable growth and to provide a
balanced risk profile.
• To provide a secure investment proposition in a
profitable Group which has a strong asset base.
Marina at Sutton Harbour, together with a number
• To build on the Group’s strength as a specialist in
of operations related properties;
waterfront destination and regeneration in the South
• A number of other ‘Sutton Harbour’ group
West region.
companies engaged in waterfront property
• To increase and improve the income earning asset
regeneration and investment including King Point
portfolio of the Group.
Marina and car park operating activities; and
• To provide asset based value growth to shareholders
• Plymouth City Airport Limited, the Company
in the medium term.
holding legal interests in the former airport site.
G R O U P V I S I O N
C U R R E N T B U S I N E S S P L A N S
• Retention of strategic assets and development of
The Group is the owner and custodian of a unique
new adjacent assets for investment and revenue
historic harbour asset adjacent to Plymouth city
generation until they reach their full potential.
centre to the north and Plymouth Sound to the south,
connecting the sea to the South West of England.
• Realisation of inventory assets through development
and sale of some assets which have attained their full
The Group owns property assets around the harbour
potential.
and supports the City’s objective to create the
first National Marine Park, and to assist it to fulfil
its ambitions as the Ocean City thereby creating a
• Investment in infrastructure to increase capacity,
improve service and enhance quality.
prime location for living, working, visiting and hosting
• Growth of earnings from core divisions, harbour,
waterside events.
marina, fisheries, leisure and retail and parking.
• Maintain strong reputation for quality
and customer service.
3 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
STRATEGIC REPORT
T H E G R O U P
AT A G L A N C E
M A R I N E
Sutton Harbour currently has capacity for
berthing 523 leisure and commercial vessels
(as of June 2021 was accommodating 478 vessels)
and achieves an increasing, core annual revenue
stream in the form of dues, fees and rents from
the established fisheries, marinas and property
operations.
Marinas
Sutton Harbour Marina for leisure berthing is
currently 98% occupied and is trading at capacity.
The opportunity to increase revenues will arise
as the economy begins to recover from the
effects of the Covid pandemic.
The King Point Marina, which opened in 2013,
has now transitioned into a mature business
with 96% occupancy. The facility has 119 leisure
berths with additional berthing taking
approximately a third of the total space
occupied by Princess Yachts.
Plymouth Fisheries, the trading name of the
fishmarket in Plymouth, is recognised as an
important fishing port in England.
The Group’s subsidiary, Sutton Harbour
Company has been trading since 1847 and
during this long period of operating the harbour
and associated assets have experienced
successive economic cycles. This long history
serves as a guide to continue to develop the
asset for further performance and value
growth in the future.
The location of Sutton Harbour, in central
Plymouth and adjoining the historic Barbican
quarter, has undergone two main phases of
regeneration over the past 3 decades. The first
phase to unlock the potential of the area was
realised when Sutton Lock was installed in 1992
creating a usable depth of water, followed by the
relocation of the fishmarket to the eastern side
in 1995. In the second phase the development of
high quality residential and commercial buildings
overlooking the harbour, and improvements to
berthing facilities, added to the attractiveness
of the area to create a sustainable location for
business, leisure and living. The Group is now
focused on bringing forward the third phase with
new planning applications in preparation which
will join the city centre to communities east of
the Harbour, a long held aspiration of the
City of Plymouth.
R E A L E S TAT E
This division comprises the rentals from
investment properties and is particularly focused
on growing its annual income through asset
enhancement, including office space, retail and
leisure facilities.
The Group has continued to invest in and drive
value from its investment portfolio, securing
lettings in vacant premises in the Sutton Harbour
estate.
The Group has a diverse mix of national and
regional businesses as tenants as well as various
independent operators. The National Marine
Aquarium, a major visitor attraction in the region,
is also a tenant. These facilities and operators
attract visitors and citizens of Plymouth,
strengthening the natural attractiveness, leisure
and social enjoyment of the Harbour.
The Group has been active in establishing a
business community around the northern side
of Sutton Harbour and has been successful in
attracting a number of chartered accountants’
practices, legal firms and other professional
services companies.
C A R P A R K I N G
The Group has two major car parks at Sutton
Harbour, a 340 space multi storey close to the
National Marine Aquarium and a 51 space surface
car park in the Barbican area. Additionally,
the Group controls parking on the fishmarket
complex, at the marina, around Sutton Harbour
and adjoining various tenanted properties.
R E G E N E R AT I O N
development schemes on Sutton Harbour. These
schemes include a 14 unit apartment building
(Harbour Arch Quay), the iconic Sugar Quay
tower, with 170 units, both with retail/office space
incorporated facing the harbour and the extension
to an existing multi storey car park owned by the
Group is also approved, to be implemented along
with Sugar Quay.
The Group has also been working with the
Local Planning Authority to build two significant
residential complexes on Sutton Road which
will facilitate improved east west linkage across
Sutton Harbour joining the city centre and existing
easterly residential areas.
The Harbour Arch Quay development twelve
month build programme is due to start in
summer 2021.
Former Airport Site
In 2000, the Group purchased Plymouth City
Airport Limited and a long lease of the regional
airport site from Plymouth City Council. The
Group also owns some freehold land on the 113
acre site. In 2003 the Group set up and operated
the regional airline, Air Southwest which was
subsequently sold in November 2010 to Eastern
Airways International Limited (Eastern Airways).
On 28 July 2011 Air Southwest (under the
ownership of Eastern Airways) ceased flights in
and out of Plymouth City Airport.
Plymouth City Council agreed to the closure of
the former airport as of 23 December 2011, due
to withdrawal of flight services and unsustainable
This division focuses on development for revenue
losses. In March 2019, Plymouth City Council
and capital growth and for value realisation
through specific land asset sale.
Sutton Harbour
The Group has established a track record for the
delivery of six major regeneration schemes around
Sutton Harbour and a further two schemes in
other locations elsewhere in the South West. A
key feature of all these schemes was working in
partnership with other public and private sector
bodies. Following the change of majority control
of the Group in January 2018, consent has been
achieved for three planning applications for
produced a new local plan which was scrutinised
at public hearings and by Government Planning
Inspectors. The plan was accepted together with
the Council’s proposal to safeguard the former
airport site for aviation operations limited to five
years. Accordingly the Group is working towards
options for the site and developing a masterplan.
This strategic asset will either be redeveloped for
a range of urban uses or re-opened as an airport,
but in either case the intrinsic value of the asset is
represented by its potential urban uses.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 4
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
STRATEGIC REPORT
E X E C U T I V E
C H A I R M A N ’ S R E P O R T
I N T R O D U C T I O N
I am pleased to report on the Group’s results for the year ended 31 March 2021. These results include the impact of the Covid pandemic and periodic UK Government
imposed restrictions during the reporting year.
The Group maintained its trading operations throughout the full year. The Covid crisis most acutely undermined the car parking revenues, an important cash generative
activity, and throughput was slowed at Plymouth Fisheries as the market for high quality fish reduced in the wake of closures of restaurants and hospitality businesses.
Collection of rentals has been steady throughout the year with some tenants arranging instalment payment plans. Overall 90% rentals falling due have been collected and
the Group has continued to achieve lettings of vacant space to new tenants with the occupancy rate at 97% by 31 March 2021. The marinas benefitted from the boom in
UK based leisure during Summer 2020, a trend that has continued into the Summer 2021 season giving rise to a marinas occupancy rate of 96% by June 2021.
Sutton Harbour is a destination offering outdoor marine, leisure and hospitality facilities. Visitor activity has now returned to the Harbour area with tenants and other
operators now attracting strong footfall. In Summer 2020 after the Lockdown restrictions were relaxed, car parking revenues quickly recovered as visitors returned.
Unfortunately this recovery was cut short as two further Lockdowns followed. To date, the recovery of Summer 2021 is proceeding strongly as parking incomes and
tenants’ businesses improve, allowing the Group to move on from the difficulties of the past 16 months. During the year the Company was exposed to the business failure
of Edinburgh Woollen Mill, which occupied a 7,500 sq ft unit.
The Group has made significant progress with its stated regeneration business plans. After further delays resulting from the Covid crisis disruption, construction of the
14 apartment building known as Harbour Arch Quay is due to start this summer. In December 2020, the Company completed the purchase of a site just east of the
Harbour on Sutton Road and immediately submitted an application for two residential-led developments on this site.
To provide additional headroom on bank facilities to assure the financial resilience of the Group through the post Lockdown recovery period, the increased facility of
£2m above the core facilities of £25m has been successfully extended with National Westminster Bank plc until May 2022.
R E S U LT S A N D F I N A N C I A L
P O S I T I O N
The adjusted loss before taxation for the year was
£0.162m (2020: £0.221m profit before taxation)
which excludes non-cash fair value adjustments.
In this financial year these adjustments relate to
property asset valuation, undertaken by external
valuers as at 31 March 2021. The loss before
taxation for the year under review as per the
Income Statement, inclusive of the aforementioned
adjustments, was £2.373m (2020: £0.756m
loss). The financial impact of the Covid-19 crisis
is evident in the Gross Profit which is down by
£0.567m to £1.762m in the year to 31 March 2021
(year to 31 March 2020: £2.329m), attributable
to a decline of £0.294m in car parking; £0.146m
in marine activities (fisheries and marinas) and
£0.117m in real estate/regeneration. The Group
companies were not eligible for any Covid-19
related Government grants and full functionality
of the harbour (fisheries operations, harbour
services and 24 hour lock operations) operated
continuously to support users due to its status
a statutory harbour authority and as part of
the food supply chain infrastructure.
Net debt (including lease liabilities) increased to
£26.874m as at 31 March 2021 from £23.549m at
31 March 2020, an increase of £3.325m of which
£2.275m is a loan taken out in December 2020
to finance the purchase of the site on Sutton
Road. The increase in development property
inventory of £4.282m was principally incurred in
the purchase of the aforementioned site and costs
to prepare the full planning application.
Gearing (Net debt: net assets) as at 31 March 2021
stood at 57.0% (2020: 51.1%). Finance costs of
£0.753m in the year (2020: £0.844m) reflect the
lower rates of interest.
surplus relates to the owner occupied properties.
The investment portfolio and car park valuation
movements reflect the market uncertainty caused
by the UK Government’s restrictions to manage
the Covid-crisis as at 31 March 2021, with the
marinas’ valuation surplus following strengthening
in trading performance. During the year the new
fuel servery at Plymouth Fisheries was completed
and accordingly the net cost of £0.475m was
transferred from ‘Assets under the Course of
Construction’ to the Fisheries asset. The current
weaker level of trading at Plymouth Fisheries has
informed the valuer’s lower overall Fisheries asset
value resulting in the effective write down of the
fuel servery.
As at 31 March 2021, net assets were £47.153m
(2020: £46.082m), a net asset value of 40.6p per
ordinary share (2020: 39.7p per ordinary share).
The movement includes the valuation of the
Group’s property assets which gave rise to an
overall valuation surplus of £1.035m, as reconciled
in the table below, of which £1.142m deficit relates
to the investment property portfolio and £2.176m
DIRECTORS AND STAFF
There have been no other Board changes during
the year. Headcount as at 31 March 2021 was 28
(31 March 2020: 30). During the year five staff
were furloughed for a very minimal period of
time and two redundancies were made. Harbour
operations personnel were designated as key
workers.
VALUATION SURPLUS/(DEFICIT)
ACCOUNTING*
Owner Occupied Portfolio
Fisheries
(£1.061m)
Marinas
Car Parks
£3.563m
(£0.317m)
Fair valuation adjustment recorded in the Income Statement as no revaluation reserve
available to absorb the deficit
Credited to the Revaluation Reserve in the Balance Sheet
Debited to the Revaluation Reserve in the Balance Sheet
Investment Property Portfolio
(£1.150m)
Fair valuation adjustment recorded in the Income Statement
TOTAL
£1.035m
*Accounting for the fair value movement between valuations at 31 January 2020 and 31 March 2021 has been accounted in the current year as the movement was
materially related to factors that occurred from 1 April 2020.
5 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
OPERATIONS REPORT
MARINE
Sutton Harbour Marina and King Point Marina both
enjoyed a record year of annual berth sales with
overall annual berth sales up by 5% and overall
occupancy up to 92% by 31 March 2021 (80% by
31 March 2020). Total marinas revenue for the year
ended 31 March 2021 was slightly up on the previous
year, although the overall result was offset by weaker
visitor bookings. The current year is set to be another
record year with occupancy currently at 96% setting
a strong platform for future revenue and valuation
growth. Prices have been held this year and will be
reviewed as the economy recovers. The marinas have
benefited from the renewed popularity of UK based
boating since the start of the Covid crisis and it is
pleasing to see many first-time boat owners taking up
the leisure activity. Demand for berths has justified
installation of the final pontoons at a cost of £60,000
REAL ESTATE AND CAR PARKING
Tenant occupancy by 31 March 2021 stood at 97% (31
March 2020: 95%). Following the period of administration
and end of their lease, Edinburgh Woollen Mill vacated
the 7,500 sq ft premises at the heart of the Barbican
at the end of May 2021. 2,500 sq ft is already reserved
for a new high quality tenant subject to lease, and the
remainder of the space is now being actively marketed.
Car parking revenues were down by half due to the
Lockdowns during the year. The multi-storey Harbour
Car Park was closed during Lockdown periods due to
lack of use and to save business rates. The Group has
also incurred security costs to prevent trespass of the car
park. Following each Lockdown, and as footfall returned,
car parking revenues recovered with the height of
Summer 2020 trading at a similar level to Summer 2019.
at King Point Marina making the facility, which opened
REGENERATION
in 2013, complete. At Sutton Harbour Marina,
provision for jet skis has been increased, which was
quickly sold out, and improvements to the business’
telephony and customer management software have
been undertaken.
Plymouth Fisheries trading slowed during the year
with both landings of fish and fuel sales impacted by a
combination of uncertainty arising from the Covid-19
crisis and Brexit transition, local competition from
other south-west ports and a declining local fleet
as fishing licences are concentrated to fewer, larger
vessels, some which are too large for Sutton Harbour
Sutton Harbour
The Group is working diligently with the Local Authority
on the finalisation of planning applications for the two
buildings on the Sutton Road site. The Group is hopeful
of a start on site with the first of the Sutton Road
developments in Summer 2022. The smaller Harbour
Arch Quay scheme is due to start construction this
summer and is due for completion in a year’s time.
Since the year end the Group has arranged separate
development financing, which is subject to completion,
to fund the Harbour Arch Quay scheme. Marketing of
the 14 high quality waterfront apartments will soon be
underway with good levels of informal interest already
to accommodate. Fishing remains an important
component of the Harbour’s vibrancy and supports
reported.
direct and indirect employment. The Group is
Former Airport Site
working closely with Plymouth City Council and other
As previously reported the site is safeguarded from
stakeholders on a plan to stimulate Fisheries-related
development until 2024. The Group has ready proposals
activity through the provision of new facilities which
for a deliverable alternative use of the 113 acre site which
will better meet future needs of the industry and
meet the social and economic needs of Plymouth.
provide public access to and enjoyment of Plymouth’s
fishing tradition.
S U M M A R Y A N D O U T L O O K
The disruption caused by three Lockdowns and restrictions imposed by the UK Government to contain the spread
of Covid-19 was more extensive than we foresaw last summer and there is the potential for further interruptions
to trading in the future. The Board is now more optimistic that with the vaccination programme well advanced and
with businesses finding ways to adapt to different levels of restriction, the Group is well placed to benefit from the
re-popularisation of UK based tourism and staycations. This has already been demonstrated by the growth in marina
occupancy, recent increase in new lettings and recovery in parking revenues in the post year end period.
The Group has used the last year to advance the development projects, invest in a new development site and develop
the marketing and operations efficiencies of the marinas business. The Group now wishes to continue its pace of
progress. To support the completion of the Harbour Arch Quay development, provide headroom to invest in other
strategic sites and support the costs of planning and professional fees the Group accordingly intends to make an open
offer for new equity capital to enable existing shareholders to participate in future growth of the Group in the
near future.
P H I L I P B E I N H A K E R
E X E C U T I V E C H A I R M A N
5 July 2021
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 6
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
STRATEGIC REPORT
s17 2 R E P O R T - P R O M OT I N G
T H E S U C C E S S O F T H E
G R O U P F O R T H E B E N E F I T
O F I T S S H A R E H O L D E R S
The s172 report explains how the Board has sought to promote the success of the Group for
the benefit of shareholders and highlights the key decisions taken by the Group in the past year.
DECISION MAKING
Typically major decision making concerns
financing/funding, strategic business direction, key
contracts and major business transactions, risk
management, human resources and pay matters,
Board appointments and regulatory reporting
matters. Implications of specific decisions are
researched to ensure communications to specific
stakeholder groups make clear the business
reasons, the benefits and the costs, as applicable.
ENGAGING WITH STAKEHOLDERS
The Group regards its key stakeholders as its
bankers, investors, the City Council, customers
and staff.
The Group’s approach is to collaborate with
partners to promote the success of the Group,
balanced proportionately with needs of
collaborators to meet their own criteria
for success.
The Group communicates with investors about
progress at regular reporting intervals and when
other reportable events occur.
The Group works closely with its key
stakeholders being bankers, major investors, City
Council, other governance and trade bodies and
consults with these parties where appropriate to
ensure the ongoing success of business activities.
The Group engages professional advisors to assist
with the formulation of strategies that are best
positioned for success and deliverability and for
advice on technical, legal or special matters.
The Group is available to talk directly to key
customers and tenants as matters arise. The
Covid-19 crisis has necessitated more frequent
contact with tenants and in some cases the
Group has agreed deferred payment plans to
assist where tenants’ cash flow was adversely
impacted.
Staff communications are managed informally and
through monthly one to one meetings given the
small number of employees (currently 28).
KEY DECISIONS TAKEN IN THE YEAR
Continuity of Operations
The Board was regularly updated on the impact
of the Covid-19 crisis and agreed on actions to
manage its effects:
• Daily management meetings to address all
matters requiring urgent attention and to focus
upon strategic actions
To allow progress with the stated regeneration
and development strategy the Company intends
to make an open offer to existing shareholders
for new equity capital in the near future to secure
£3.5m to part fund the Harbour Arch Quay
development, provide funding for other strategic
land purchase and pre-construction planning and
development fees.
• Regular communication with tenants having
difficulty meeting rent payments
• All efforts were made to lobby Government
for grant support, particularly to assist the
harbour and fisheries operations maintained
at full capacity to meet statutory harbour
obligations, although none was made available
• Continuation work to prepare new planning
permissions to provide a pipeline of projects
to deliver as restrictions are lifted and
conditions improve
• Except for very short Furlough periods for five
employees and the redundancy of two others,
all staff were paid in full although pay was
frozen for a year
• Improved telephony, marketing and software
solutions together with additional IT equipment
was invested into to improve efficiency and
to facilitate home-working for administrative
personnel
Financing
The Board entered into a new 4 year committed
bank facility with incumbent bankers in
December 2019 to ensure continuity of funding
through the next phase of the Group’s
strategic plan to develop new properties
in the Harbour area.
In March 2021, following discussions with bankers
the additional £2m Covid support facility was
extended for a further year until May 2022 to
provide buffer funding through the ongoing
Covid-19 recovery period.
Board Composition
No changes to the Board’s composition have
occurred in the last year. The Board has reviewed
its composition and is satisfied that taking into
account the size of the Group, its AIM listing and
its principal interests it has the right balance of
finance, property development and governance
expertise to manage its affairs efficiently and
effectively. The Board has reviewed its balance of
independent and non-independent directors and
is satisfied that a single Independent Director,
Graham Miller, is acceptable given his experience
on other boards. The Board also notes, that
whilst Sean Swales has served more than 9 years
on the Board, he has become more independent
as the corporate interests he represents have
reduced (now 5.71%, previously 28.79% until
January 2018) and his long term experience of
the Group, knowledge of property investment
and financial specialism are valuable contributions
to the governance of the Group.
Philip Beinhaker and Corey Beinhaker continue
to be the board appointees nominated by FB
Investors LLP, the majority shareholder in the
Company. It has been agreed by the board
that no decision or meeting would be quorate
unless at least one of the Non-Executive
Directors is present in addition to the FB
Investors’ appointees.
P H I L I P B E I N H A K E R
E X E C U T I V E C H A I R M A N
5 July 2021
7 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
STRATEGIC REPORT
F I N A N C I A L
R E V I E W
K E Y P E R F O R M A N C E I N D I C AT O R S
The key performance indicators used to measure performance of the Group are stated below and narrative to these is provided in the
Executive Chairman’s Report.
F I N A N C I A L H I G H L I G H T S
Net Assets
Net Asset value per share
(Loss)/profit before tax from continuing operations
Adjusted profit before tax excluding fair value
adjustments
(Loss)/profit after tax
Basic (Loss)/profit per share
Dividend per share
Total Comprehensive Income for the year attributable to shareholders
Total Comprehensive Income per share
Net Debt
Gearing (Net Debt/Net Assets)
2 0 2 1
£47.153m
40.6p
(£2.373m)
(£0.162m)
(£2.175m)
(1.88p)
0.0p
£1.070m
0.92p
£26.874m
57.0%
2 0 2 0
£46.082m
39.7p
(£0.756m)
£0.221m
(£0.988m)
(0.85p)
0.0p
£0.350m
0.30p
£23.549m
51.1%
BUSINESS SEGMENTS
The Group separates its activities into 3 trading
segments: Marine (comprising Fisheries, Harbour
and Marina operations), Real Estate being the
business of renting the portfolio of commercial
premises owned by the Group and Car Parking
which records results from the operation of
two public car parks and various other parking
areas. A fourth regeneration segment is activated
when active construction of new build assets is
underway. Plymouth Fisheries receives its income
from landings dues (a percentage of the value of
the fish determined at auction), the margin on
fuel sales, sales of ice and rental of commercial
space at the Fisheries complex. During the
past year the results of the segment have been
undermined by various factors including the loss
of demand from both the UK hospitality industry
and from European Markets mainly due to the
disruption caused by the Covid crisis and UK
Government imposed lockdowns. The Group
has improved its marina results through increases
in overall occupancy. Continued digital targeted
marketing and the renewed popularity of UK
based leisure boating have been key success
factors in stimulating growth. The car parking
results have suffered from the three periods
of lockdown imposed during the financial year,
although when lockdown restrictions were
reduced in Summer 2020 car parks activity
returned to near-normal seasonal levels.
Property Asset Performance Key Performance
Indicators, which are markers of the portfolio’s
success are reporting as follows:
P R O P E R T Y M E T R I C S
Total estate portfolio valuation
Owner occupied portfolio valuation
Investment portfolio valuation
Number of investment properties
Contracted rent (per annum)
Net initial yield
Reversionary yield
Occupancy rate
Estimated rental value (ERV) of vacant units
Average unexpired lease
Gross car parks revenue
Development Inventory
Sites around Sutton Harbour
Portland
Former airport site
Total
A S AT 3 1 M A R C H
2 0 2 1
A S AT 3 1 M A R C H
2 0 2 0
£47.320m
£29.475m
£17.845m
73
£1.620m
8.72%
9.61%
97%
£0.106m
8.1 years
£0.349m
£16.113m
£0.200m
£12.962m
£29.275m
£45.985m
£27.000m
£18.985m
71
£1.620m
7.58%
8.73%
95%
£0.136m
8.3 years
£0.655m
£11.983m
£0.200m
£12.810m
£24.993m
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 8
The Group assesses the performance of its
• As at 31 March 2013 the land and building
operator to bring forward a plan for a
property assets through annual independent
asset was transferred to development
licensed general aviation airport. The
valuation and monthly review of the property
inventory and combined with the pre-existing
Inspectors also advised that a longer
metrics as above. Success is measured in terms of
inventory total, which included the cost of
safeguarding period would not be appropriate
occupancy rate, the number of vacant properties
building the Link Road and planning intellectual
given the strategic value of this brown-field site
available and the rent that letting voids could
property costs.
yield. Car parking cash takings are monitored
weekly and are cross referenced to activity
levels in the harbour, measured by a number of
strategically placed footfall counters. The Group
is actively pursuing new planning consents, in
addition to the live consents already held, and
cost of the pre-construction work is capitalised
to the carrying value. The sites around Sutton
Harbour include the newly acquired site on
Sutton Road purchased for £2.280m.
R E G E N E R AT I O N P R O J E C T S
Costs incurred in pre-construction projects are
held as development stock and are expensed
against delivery of the project. In the year to 31
March 2021 no regeneration projects were under
construction.
A S S E T V A L U AT I O N
During the year, independent valuation of
the Group’s investment and owner-occupied
portfolio was undertaken as at 31 March 2021.
This valuation gave rise to a net surplus of
£1.035m, reconciled as £1.150m deficit on the
investment portfolio and £2.185m surplus on the
owner-occupied portfolio.
C A R R Y I N G V A L U E O F F O R M E R
A I R P O R T S I T E
• It was agreed at 31 March 2013 that the
transfer would be made at valuation, inclusive
of historic revaluations. As at 31 March 2013
and based on their determination that 5 years
should be more than enough time to realise
a viable business plan for aviation activity, if
such activity was viable.
the carrying value of the former airport asset
• The Company has continued to prepare
was £11.479m, inclusive of past
its masterplan for alternative use of the site
revaluations totalling £3.969m. The net
reflecting the guidance of the Government
increase in former airport asset valuation
Planning Inspectors that presided over the
from 31 March 2013 (£11.479m) to 31
2019 new Local Plan. The costs incurred have
March 2021 (£12.962m) of £1,483,000
been capitalised to the asset value.
represents the capitalised costs of developing
the planning intellectual property less the cost
attributed to sales of small plots.
The Company does not regard the carrying
value of the former airport site to be reflective
of its value for alternative use. The net cash
• Net Realisable Value is estimated with
expenditure on the airport asset, former aviation
reference to expected net proceeds for the
operations, costs incurred to inform sustainable
25% share of the leasehold interest. The
mechanism for sharing of net proceeds with
alternative use, ongoing site maintenance and
security, together with interest costs thereon is
the freeholder, Plymouth City Council, is set
more than double the carrying value, which is in
out in the lease.
• An Emphasis of Matter paragraph has been
included within the 2015, to 2019 Audit
Reports (previous auditor) due to uncertainty
about the impact on Net Realisable Value of
the planning process (Plymouth and South
West Devon Joint Local Plan 2017-2034) and
the outcome of a Government Report about
the future of Plymouth City Airport. The new
audit firm also reports the same ‘Emphasis of
Matter’ in the 2020 and 2021 Audit Reports.
• In December 2016 the Department for
Transport published the ‘Plymouth Airport
The former airport site, a 113 acre site in which
Study Report’, which concluded that a lack of
the Group holds an unexpired 136 year leasehold
demand and a short runway mean
interest, with a right to renew for a further 150
commercially viable passenger services could
years, is held as development inventory at a
not be run out of the former Plymouth Airport
carrying value of £12.962m. At each balance sheet
date, this carrying value is tested for impairment
with the board needing to satisfy itself that the
asset is included in inventory at the lower of cost
and net realisable value, with net realisable value
including developer’s return where applicable.
The carrying value of £12.962m is derived as
follows:
• The land and building asset was independently
valued twice yearly until 31 March 2013,
when the asset was transferred to
development inventory.
site as it would remain “financially vulnerable”
in a “high risk environment”.
• In April 2017, the Group submitted its
representations and detailed evidence base in
support of allocation of the former Airport
Site for alternative use in advance of the
Government Inspectors’ public hearing
of proposed new local planning framework.
• The public hearing took place in early 2018,
with the Government Inspectors’
report subsequently issued in March 2019.
The Government Inspectors supported a ‘
safeguard’ of the former airport site for five
years to allow time for a potential airport
9 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
turn significantly less than the value that can be
earnt from redevelopment of this strategic asset.
This enhanced value of the site is not reflected
in its carrying value as recorded in development
inventory.
C A S H F L O W A N D F I N A N C I N G
The Group’s main sources of cash inflow are
commercial property rentals, marina berthing
fees, car parking fees, fish landings dues and fuel
and ice sales income. These incomes cover the
overhead and debt servicing costs and routine
capital infrastructure replacements of the Group.
The bank facility and from time to time, new
equity capital, has been drawn upon to fund pre-
construction costs of new regeneration projects.
Separate development funding is sought for the
construction and project delivery costs.
The Group had total borrowing net of cash and
cash equivalents of £26.874m at 31 March 2021
(2020: £23.549m) with a gearing level of 57.0%
(2020: 51.1%). The Group has operated within
its authorised facilities. The bank facilities were
amended in December 2020 to permit the carve
out of the Sugar Quay site provided as security
to a different lender for the purchase of the
Sutton Road site. The facilities were amended
again in March 2021 to extend the additional
£2m RCF until May 2022 and to amend certain
covenants in line with Covid crisis impacted
trading expectations.
Debt servicing costs continue to be a major
• Regular discussions with key stakeholders,
expense to the Group and the board regularly
including the Local Authority, MPs, Trade and
considers the merits of entering into LIBOR
Industry bodies, and the Group’s bankers and
swap arrangements to fix interest on part of the
professional advisors
• Engagement with customers and tenants
• Working from home for some staff and where
possible for their own safety
• Maintaining harbour services for users as a
facility through which supply chains pass
• Minimal furlough of staff to maintain
continuity of operations and to minimise
delays with planned projects
• Pay reviews placed on hold for the year to
31 March 2021
N ATA S H A G A D S D O N
F I N A N C E D I R E C T O R
5 July 2021
total debt. There are currently no LIBOR swap
agreements in place.
TA X AT I O N
The standard rate of tax applicable to the Group
is 19% (2020: 19%). The overall tax credit for
the year is £0.198m (2020: charge of £0.232m).
No current tax is due on the year’s results
with the tax charge resulting from movements
in timing differences.
D I V I D E N D P O L I C Y
Taking into account the current level of bank
borrowing and consequent debt servicing costs
and the Group’s need for bank facility headroom
to maintain current operations and the planning
stages of future real estate development, the
Board does not recommend a dividend on the
year’s results. The Group regards itself as an
asset-based investment with its opportunities to
reduce bank debt and realise value vested in the
success of future development projects.
C O V I D - 1 9 M E A S U R E S
The board has taken a number of decisions and
measures to uphold its responsibilities to manage
the impact of the Government’s crisis control
measures upon its financial position, continuity
of operations, reputation and staff welfare:
• Daily management team briefings to agree
priority actions and to monitor performance
closely
• Ongoing discussions with bankers to secure
sufficient funding
• Precautionary measures taken to limit access
to marina facilities to protect customers, staff
and third party service providers
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 10
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
STRATEGIC REPORT
P R I N C I PA L
B U S I N E S S R I S K S
The Group maintains a register of risks which is updated as business risks change. The risk
register is reviewed regularly by the Board to ensure that appropriate processes are in place to
manage business risks. Certain business risks are general to all Group activities whereas others
are pertinent to particular business activities. Principal Risks and Uncertainties are as follows:
P R I N C I P A L
R I S K /
U N C E R TA I N T Y
Financing
R I S K I D E N T I F I E D
R E S P O N S E T O R I S K
The availability of adequate
borrowing and other
funding facilities.
The Group’s current banking facilities to a maximum of £25m expire in December 2023, with
an additional £2m facility extended until May 2022. Development will be funded through
specific loans and equity capital. The Group has raised £5.750m equity finance since January
2018 to fund project and capital maintenance expenditure and intends to raise further equity
capital in the near future.
Compliance with bank terms
and covenants.
The Group maintains a regular dialogue with bankers over progress of the Group and
operates to a business plan to remain within bank facility terms.
Interest rate rises.
The Group currently has total debt exceeding £27m and any material increase in interest
rates could have a significant impact on debt servicing costs. The Group regularly reviews
interest rates and its exposure. LIBOR swap agreements may be entered into to manage
interest risk exposure, as agreed by the board.
Reputation
The impact of negative
publicity about the Group,
its operations or stakeholders
The Group retains the advice of public relations specialists to advise on potentially
contentious matters. Key stakeholders are consulted with as appropriate to the
matter. Media publicity about the Group is actively followed and reported where
it is misleading or untrue.
Covid - 19 Pandemic
Loss of business because
operations are prevented,
interrupted or undermined
by Government restrictions
ordered as a result of
measures to control the
Covid -19 pandemic.
Follow all government advice.
Sourced additional finance to support continuity of operations.
Sourced equipment to allow offsite working wherever possible.
Maintained operations where required or possible with recommended safeguarding
precautions in place.
Maintained close contact with employees to discuss changes to working practices and
concerns as they arise.
Maintained contact with customers to manage expectations and concerns.
Planning to re-commence/adapt operations as restrictions are removed.
A P P R O V A L
The Strategic Report from pages 1 to 10 was approved by the Board of Directors on 5 July 2021 and signed on its behalf by
P H I L I P B E I N H A K E R
E X E C U T I V E C H A I R M A N
11 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
GOVERNANCE
D I R E C TO R S
A N D A D V I S O R S
Company Number
2425189
Directors
Philip H. Beinhaker (Executive Chairman)
Corey B. Beinhaker (Chief Operating Officer)
Natasha C. Gadsdon (Finance Director)
Graham S. Miller (Non-Executive Director)
Sean J. Swales (Non-Executive Director)
Secretary
Natasha C. Gadsdon
Registered Office
Independent Auditors
Nominated Broker and Nominated Adviser
Registrar
Bankers
Sutton Harbour Office
Guy’s Quay Office
Sutton Harbour
Plymouth
PL4 0ES
Tel: 01752 204186
www.suttonharbourgroup.co.uk
PKF Francis Clark
Centenary House
Peninsula Park
Rydon Lane
Exeter
EX2 7XE
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Computershare Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
National Westminster Bank plc
135 Bishopsgate
EC2M 3UR
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 12
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
GOVERNANCE
D I R E C TO R S ’
R E P O R T
The Directors present their Directors’ Report and audited
Consolidated Financial Statements for the year ended 31 March 2021.
The review of activities during the year and future developments is
contained in the Strategic Report.
M A J O R S H A R E H O L D I N G S
As at 5 July 2021 the Group’s register of shareholdings showed the
following interests in 3% or more of the Group’s share capital:
%
O R D I N A R Y S H A R E S
FB Investors LLP
Crystal Amber Fund Limited
The late Mr. D.McCauley/Rotolok (Holdings) Limited
72.65
10.76
5.71
84,231,428
12,472,605
6,615,690
The Directors are not aware of any other interest in its share capital in excess of 3%.
D I R E C T O R S ’ I N T E R E S T S
The interests of the Directors in the ordinary shares of the Group as at 31 March 2021 are set out below.
Philip H. Beinhaker
Corey B. Beinhaker
Graham S. Miller
Natasha C. Gadsdon
Sean J. Swales
2 0 2 1
-
-
450,700
24,839
3,199
2 0 2 0
-
-
394,930
24,839
3,199
13 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
D I R E C T O R S A N D T H E I R I N T E R E S T S
P H I L I P H . B E I N H A K E R
G R A H A M S . M I L L E R
Aged 80. Appointed Non-Executive Director and Chairman
on 22 January 2018 following the ‘Partial Offer and
Acceptance’ which precipitated a change in control of the
Group whereby FB Investors LLP acquired a controlling
interest in the Group’s shares and appointed Executive
Chairman in April 2018. Philip is a Director and the
Chairman of Beinhaker Design Services Limited, which is
a member of FB Investors LLP. He is also a member of the
Audit Committee. Philip served as co-founding partner and
Chief Executive Officer of IBI Group, a world-leading firm in
architecture, engineering and project management from its
formation in 1974 until 2013, continuing as a Senior Director
of the IBI Group Management Partnership.
C O R E Y B . B E I N H A K E R
Aged 51. Appointed Executive Director and Chief
Operating Officer on 23 October 2019. Prior to his
involvement with Sutton Harbour Group, Corey Beinhaker
worked for IBIB Group Consultants (Israel) Limited from
2010 to 2017 latterly as its Chief Executive Officer where
he, amongst other things, was contract manager for a
number of significant projects including the Tel Aviv Red
10 Line Underground Station design and the design and
technical specification for the traffic management for the
inter-urban network in Israel. Corey Beinhaker has been
working closely with the Group since January 2018 when
FB Investors LLP acquired a 72.65% holding in the Group’s
share capital, initially through Beinhaker Design Services
Limited (a Company of which he is a Director) and then as
an employee of Sutton Harbour Group from July 2019.
Aged 58. Appointed Non-Executive Director and Chairman
on 23 September 2013, stepping down from the Chairman role
on 22 January 2018. He was appointed Chairman of the Audit
Committee in November 2013 because the Board of Directors
considered him best placed to chair the Audit Committee. He
is also a member of the Remuneration Committee. He has a
strong background in private equity, having held senior and
director positions at Murray Johnstone Private Equity and 3i plc.
Graham currently holds a number of other directorships.
S E A N J . S W A L E S
Aged 53. Appointed Non-Executive Director in December
2009, he is a Chartered Accountant and Group Managing
Director of Rotolok (Holdings) Limited, the Group’s third
largest shareholder. He is also a member of the Audit and
Remuneration Committees.
N ATA S H A C . G A D S D O N
Aged 51. Appointed Executive Director in July 2004 and Finance
Director in October 2004. She is a Chartered Accountant and
has been with the Group since 1996. She has also been the
Group Secretary since 2001.
In accordance with the Group’s Articles of Association Natasha C. Gadsdon and Sean J. Swales retire by rotation at this year’s Annual General Meeting
and being eligible offer themselves for re-election.
D I R E C T O R S A N D O F F I C E R S I N S U R A N C E
The Group maintained a Directors’ and Officers’ liability insurance policy throughout the financial year.
F I N A N C I A L I N S T R U M E N T S
The Group’s financial risk management objectives and policies are given in note 3, with additional information provided in the financial review on page 8.
D I S C L O S U R E O F I N F O R M AT I O N T O A U D I T O R S
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there is no relevant audit
information of which the Group’s auditors are unaware, and each Director has taken all the steps that he/she ought to have taken as a Director to make
himself/herself aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.
On behalf of the Board
N ATA S H A G A D S D O N
F I N A N C E D I R E C T O R
5 July 2021
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 14
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
GOVERNANCE
STATEMENT OF COMPLIANCE
WITH QCA CORPOR ATE
GOVERNANCE CODE
S E N I O R I N D E P E N D E N T D I R E C T O R ’ S I N T R O D U C T I O N
The Group is the owner and operator of specialist marine assets (which include
two marinas and a commercial fishmarket), car parks, real estate investment
properties and is the holder of land assets identified for regeneration. The
Group’s assets and operations are all located in Plymouth, Devon, primarily at
Sutton Harbour.
Our vision is to conserve and improve the historic Sutton Harbour and its
immediate environs for harbour users, local residents, businesses, visitors to the
area and for the wider stakeholder community in the City of Plymouth. To achieve
this the Board is concerned with setting the strategy to facilitate maintenance
of existing land, property and specialised assets and also the regeneration of
underutilised assets to improve the attractiveness of the area and to ensure it
has a sustainable and vibrant future and to deliver shareholder value growth.
The Group’s corporate governance framework manages the decision-making
processes of the Board having regard to opportunities and risks of specific
strategies and the objective to deliver value growth to shareholders in the
medium-long term.
G R A H A M M I L L E R
S E N I O R I N D E P E N D E N T D I R E C TO R ( N O N - E X E C U T I V E )
The Board of Directors
OFFICE
APPOINTEE COMMIT TEE ROLES
AT TENDANCE OF BOARD/
COMMIT TEE MEETINGS
SHAREHOLDING AND
INDEPENDENCE
Executive
Chairman
Senior
Independent
Director
(Non-
Executive)
Philip Beinhaker
Audit Committee Member
Board Meeting – 9/9
Remuneration Committee Chair
Audit Committee – 2/2
Nomination Committee Chair
Remuneration Committee – 1/1
Nomination Committee - 0/0
Graham Miller
Audit Committee Chair
Board Meeting – 9/9
Remuneration Committee Member
Audit Committee – 2/2
Nomination Committee Member
Remuneration Committee – 1/1
Nomination Committee – 0/0
Non -
Sean Swales
Audit Committee Member
Board Meeting – 9/9
Executive
Director
Remuneration Committee Member
Audit Committee – 2/2
Nomination Committee Member
Remuneration Committee – 1/1
Nomination Committee – 0/0
Board Meeting – 9/9
Board Meeting – 9/9
Corey
Beinhaker
Natasha
Gadsdon
Chief
Operating
Officer
(Executive)
Finance
Director
(Executive)
and Group
Secretary
15 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Philip Beinhaker has no personal shareholding in the
Group. FB Investors LLP, which owns 72.65% of the
issued share capital, is jointly owned by Beinhaker
Design Services Limited and 1895 Management
Holdings UIC. Philip is a Director and Chairman of
Beinhaker Design Services Limited.
Graham Miller and his spouse together hold
450,700 shares in the Group and he is the Senior
Independent Director on the Board. Graham was
appointed a Director in 2013.
Sean Swales holds 3,199 shares in the Group. He
is also the corporate representative of Rotolok
(Holdings) Limited which has an interest in
6,028,760 (5.71%) of the Group’s shares. Sean was
appointed a Director in 2009. Until 10 January
2018, Rotolok (Holdings) Limited was interested
in 28.79% of the Group’s shares and was reported
as having significant influence. Sean Swales is now
regarded as an independent Director as Rotolok
(Holdings) Limited no longer has significant control
and the board composition has changed. Although
Sean has served eleven years on the board, the
continuity of his experience through the recent
majority shareholder change and board composition
transition is valued.
Corey Beinhaker holds no shares in the Group. FB
Investors LLP, which owns 72.65% of the issued
share capital, is jointly owned by Beinhaker Design
Services Limited and 1895 Management Holdings
UIC. Corey Beinhaker is a Director and 100%
shareholder of Beinhaker Design Services Limited.
Natasha Gadsdon holds 24,839 shares in the Group
and has been an Executive Director since 2004.
She also holds options over 131,340 ordinary shares
exercisable under provisions of the Group Share
Option Plan rules.
The Board composition has undergone a
transition, which started in January 2018 after a
change in majority ownership of the Group and is
B O A R D D E C I S I O N
M A K I N G , Q U O R U M A N D
I N T E R N A L C O N T R O L
now complete.
9 full Board meetings were held in the financial
Investment Appraisal:
Capital expenditure is regulated by authorisation
levels. For expenditure beyond specified levels,
detailed written proposals are submitted to
Philip Beinhaker is appointed Executive Chairman
year to 31 March 2021 (attendances are
the Board.
(since April 2018, previously Non-Executive
Chairman from January – April 2018) and
presides over the business of the Board as well
as directing and overseeing the operations of the
Group through the senior management team.
Corey Beinhaker was appointed Chief Operating
Officer in October 2019 with a wide-ranging role
focusing on Group operations and regeneration
projects.
Graham Miller, the previous independent and
Non-Executive Chairman, is now the Senior
Independent Non-Executive Director on the
summarised in the table above). Prior to each
meeting an agenda together with narrative
business reports and supporting appendices are
circulated to each Board member. Matters for
Board decision are highlighted in advance of the
meeting. The advice of non-board colleagues
and professional advisors is sought where
additional specialist information is required
to inform a decision. Following the change of
majority shareholder in early 2018 and Board
level changes, the Board has considered its
effectiveness and has concluded that its present
composition, taking into account the size of
Board. He is the main contact to handle matters
the Company, its AIM listing, the skills and
where other Directors have a conflict of interest.
experience it requires and current diversity of
Sean Swales, a Non-Executive Director since
December 2009. A Chartered Accountant, he
Board personnel, is appropriately balanced with
experienced appointees.
continues to contribute actively to the Board due
The Board is responsible for setting the strategy
to his financial specialism, property investment
and development expertise and regional
to deliver shareholder value growth over the
medium to long term. Decisions about financing,
knowledge.
Natasha Gadsdon, a Chartered Accountant, is
appointed Finance Director and Group Secretary.
She is responsible for financial reporting and
compliance and oversees risk management,
human resources, corporate responsibility. She
is responsible for preparing detailed monthly
reports to the Board.
S H A R E H O L D E R R E L AT I O N S H I P
A G R E E M E N T W I T H F B
I N V E S T O R S L L P
acquisitions and disposals, project and capital
expenditure, senior staffing, key third party
appointments, budget approval, approval of
annual and interim financial reports, dividend
policy, insurances and strategic direction of the
trading businesses are all matters reserved for
the Board’s decision. To ensure decisions are
made with independent input it has been agreed
that such decisions can only be taken where
either Graham Miller or Sean Swales are present
with Philip Beinhaker and Corey Beinhaker.
The key procedures which the Directors have
established with a view to providing effective
The Relationship Agreement dated 23
internal controls are as follows:
Corporate Accounting and Procedures:
There are defined authority limits and controls
over acquisitions and disposals. There are also
clear reporting lines within the business and
risk assessments are undertaken and regularly
reviewed in all divisions and at all levels within the
Group. Appropriate internal controls are set for
all divisions of the business.
Quality of Personnel:
The competence of personnel is ensured through
November 2017, addresses amongst other things,
the composition of the SHG Board providing FB
Investors with the ability to appoint up to two
Directors to the SHG Board (one of whom may
be the Chairman for so long as it holds, directly
or indirectly, 50 per cent or more of the issued
voting share capital of the Group). It contains
certain restrictions in relation to Directors
appointed by FB Investors voting at meetings of
the SHG Board on matters in which FB Investors
is interested. Under the Relationship Agreement,
FB Investors has agreed not to vote in relation
to any resolution put to SHG Shareholders to
cancel its admission to trading on AIM, pursuant
to Rule 41 of the AIM Rules, for a minimum
period of two years following the Partial Offer
unless such resolution is recommended by those
Board members of the Board not appointed by
FB Investors. FB Investors has nominated Philip
Beinhaker and Corey Beinhaker to serve as
Directors of Sutton Harbour Group plc.
G O V E R N A N C E C O M M I T T E E S
The roles of the Board’s governance committees
are set out below.
The Remuneration Committee within its terms
of reference determines and agrees with the
Board the employment terms and remuneration
packages of the Executive Directors and other
senior personnel. The Executive Directors
make recommendations to the Board on the
remuneration of Non-Executive Directors.
Independent advice on remuneration is taken
where considered appropriate.
The Audit Committee has written terms of
reference and provides a forum for reporting
by the Group’s auditors. The Committee may
request Executive personnel to attend all or
part of any meeting as the Committee considers
appropriate. The Audit Committee meets two
or three times a year to review the Interim and
Annual Reports and Accounts, agree the Audit
Plan, confirm the Auditor engagement, review
risk management and insurance provision, assess
the adequacy of the Group’s finance personnel
and any other matters pertaining to financial
management, the statutory audit and tax
compliance.
In accordance with FRC Ethical Standard
prohibiting auditors of AIM listed companies
from offering services to prepare computations
of taxation, the Audit Committee engaged a
different firm of accountants, from the auditors,
to undertake this work.
The Nomination Committee is responsible for
proposing candidates to the Board having regard
to its balance, expertise and structure.
R I S K M A N A G E M E N T
The Group maintains a register of risks, split
by category, and identifies potential impact and
likelihood, together with the response deployed
to manage/mitigate the risk. The risk register
is regularly updated with input from across the
Group and external advice is taken if required.
Included in the monthly reports to the Board,
high recruitment standards and subsequent
new risks are identified together with proposals
training courses. High quality personnel are seen
to manage/mitigate the risk. Group Bankers
as an essential part of the control environment.
and Insurers are kept appraised of business
Financial Reporting:
The Group has a comprehensive system for
reporting financial results to the Board and
monitoring of budgets.
risks and vulnerabilities on an ongoing basis.
Annual independent health and safety audits
are undertaken with the results reported to
the Board. Advice from the appointed external
Health and Safety Advisor is taken where
appropriate.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 16
S TA K E H O L D E R E N G A G E M E N T
A N D R E S P O N S I B I L I T I E S T
Investor Relations
The Group maintains an active dialogue with
major institutional investors and annually invites
shareholders to an open day which includes
a tour of the assets. The Board welcomes the
participation of shareholders at the Annual
General Meeting with the opportunity to
answers questions of any Board member
offered. The Annual Report and Accounts,
Interim Reports and other announcements
and presentations are the main formalised
communications to shareholders. The
Annual General Meeting and Open Day are
opportunities for two-way communication
C O R P O R AT E V A L U E S
Refer also to the Corporate, Social Responsibility
and Environment Report on page 19. Senior
Managers are regularly invited to present at
Board Meetings and to respond to questions
and this forum sets the cultural tone. At annual
appraisals performance of employees is reviewed
against specific targets and conduct in line with
the Group’s standards of conduct as set out in
the foreword of the Employee Handbook.
By Order of the Board
N ATA S H A G A D S D O N
C O M P A N Y S E C R E TA R Y
between the Board and shareholders. The Group
5 July 2021
Secretary is normally the first point of contact for
any general enquiries or arrangement regarding
shareholder meetings.
Email: n.gadsdon@sutton-harbour.co.uk
Public Bodies
The Group maintains an active relationship
with Plymouth City Council, the Local Planning
Authority, the Environment Agency and other
public agencies in connection with a wide range
of issues relating to the land and property assets
held by the Group. Open public consultation is
undertaken in relation to proposed applications
to the Local Planning authority.
Customers
The Group maintains a number of websites and
social media platforms, to communicate with
different customer groups in addition to direct
email and postal communications. Surveys of
marina customer satisfaction are undertaken
annually.
Employees
The Group is committed to paying, as a
minimum, the living wage as recommended by
the Living Wage Foundation, to its employees.
The Group undertakes appraisals for all
employees annually, arranges monthly contact
meetings for all employees with their line
manager, sponsors their essential qualifications
and continuing professional development (as
appropriate to role) and has a schedule of
monthly function meetings with a Director
present at each.
17 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
GOVERNANCE
C O R P O R AT E ,
E N V I R O N M E N TA L
A N D S O C I A L
R E S P O N S I B I L I T Y
R E P O R T
H E A LT H A N D S A F E T Y
E N V I R O N M E N TA L I S S U E S
The Board of Directors understands its
The Board has agreed the following
responsibility to the health and safety of
Environmental Statement:
employees, customers and others who are
directly or indirectly affected by the Group’s
operations.
The environment plays a key role in the
continuing success of the Sutton Harbour Group
and the Group recognises that it needs to set
The Group’s Health and Safety Committee
itself achievable environmental standards.
C O M M U N I T Y E N G A G E M E N T
A N D C H A R I TA B L E
I N V O LV E M E N T
The area of Sutton Harbour is located in the
heart of Plymouth. The Group supports various
community and tourist initiatives and in the
recent past has hosted a number of high profile
yachting events. The Group is a member of the
Safety Officer and an Independent Health
The Group is working to:
is chaired by Natasha Gadsdon and has
representation from all Group activities. The
Health and Safety Committee is an open forum
and minutes of the meetings are made available
to all staff upon request. Committee meetings
are also attended by the Group’s Health and
and Safety Consultant. The Committee has a
comprehensive agenda and is briefed on new
legislation or regulation by the Independent
Health and Safety Consultant.
The Group does not currently undertake direct
construction on site. An excellent Health and
The Group has looked at the areas of its business
Mayflower 400 Founders club which is working
which could have both positive and negative
together with Plymouth City Council and other
impacts on the environment and has identified
organisations to co-ordinate a re-scheduled
the following policy aims to enhance its overall
programme of events postponed from 2020 to
environmental performance.
• Reduce its Carbon Footprint by minimising
energy use and cutting out energy waste.
race which will take place in July 2021.The Group
• Minimise the amount of waste it creates
and ensures that it recycles as much of
the waste generated as is feasible.
commemorate the 400th Anniversary of the
departure of the Pilgrim Fathers to America.
The Group is assisting the City’s hosting of the
UK leg of the internationally acclaimed Sail GP
has a long-established commitment to the
community and its neighbourhood. Throughout
its regeneration work, the Group has undertaken
extensive public consultation which has led to
the reshaping and design of many successful
quality regeneration projects surrounding the
historic harbour. The Group sees itself as the
custodian of the harbour for future generations
and as such believes that working with the local
community is essential to achieve this aspiration.
The Group supports local charities and other
community initiatives.
Safety management record is a key criterion in
• Ensure that it meets and if plausible exceeds
the selection of contractors.
environmental legislative requirements.
The Group has a good health and safety
• Use and operate sound procedures to avert
record with no enforcement notices and no
water pollution in Sutton Harbour.
prosecutions for breaches of Health and Safety
legislation to report.
• Tackle the issues that arise from car travel
by introducing ways of reducing the impact
of travel to work and business mileage.
P O R T M A R I N E S A F E T Y C O D E
• Review its purchasing requirements and
practices also whenever possible to do so make
environmentally sound purchasing decisions
and increase local purchasing.
N ATA S H A G A D S D O N
F I N A N C E D I R E C T O R
5 July 2021
Sutton Harbour Group, a Statutory Harbour
Authority, and a wholly owned subsidiary of the
Group, is committed to undertaking statutory
duties in accordance with the standards defined
within the Port Marine Safety Code. To ensure
full compliance with the code an independent
audit of the Sutton Harbour Safety Management
System is carried out annually. The Maritime
and Coastguard Agency audit took place in
March 2015.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 18
F O R T H E Y E A R E N D E D 3 1 M A R C H 2 0 2 1
GOVERNANCE
R E P O R T O N
R E M U N E R AT I O N
R E M U N E R AT I O N C O M M I T T E E A N D R E M U N E R AT I O N P O L I C Y
The members of the Committee during the year were as follows:
Philip H. Beinhaker – Chairman
Graham S. Miller
Sean J. Swales
The Committee met several times during the year, within its terms of reference, to consider the remuneration
packages of the Executive Directors and to make recommendations to the Board. The overriding objective is to
ensure that salary, benefits and other remuneration is sufficient to attract, retain and motivate executives of high
quality, capable of achieving the Group’s objectives and creating value for our Shareholders. The Committee also
takes into account the scale and complexity of the Group’s operations and seeks independent advice, from specialist
advisers, where appropriate.
C O M P O S I T I O N O F R E M U N E R AT I O N
Executive Directors’ pay comprises basic salary reviewed annually, pension scheme contributions to the Group’s
defined contribution pension scheme, annual bonus based on audited results of the Group, and other benefits in
kind including provision of a car allowance and private medical healthcare. Salary is paid monthly and the annual
bonus is accrued in the financial year to which it relates. Non-Executive Directors receive fees; they do not have
service contracts, are not eligible to join the pension scheme and have no entitlement to annual bonuses. It is a
requirement that Directors purchase shares in the Group, although there is no specified minimum holding.
B O N U S P AY M E N T S T O E X E C U T I V E D I R E C T O R S
Profit share bonuses earned on the achievement of targets agreed by the Remuneration Committee for the year
ended 31 March 2021 were £1,900 in respect of Natasha C. Gadsdon (2020: £nil).
S H A R E O P T I O N S
An Inland Revenue approved Group Share Option Scheme was established in November 2019 for the Remuneration
Committee to make discretionary awards of share options to certain Executive Directors and other Group
personnel to reward performance. On 8 July 2020, Natasha Gadsdon was awarded 63,158 share options with an
exercise price of 19p per share. These options are not expected to vest before 8 July 2023, subject to the scheme
rules. The expense in connection with the unexercised share options is calculated using a Black Scholes model and
expensed annually until exercise or lapse of options.
N O N - E X E C U T I V E D I R E C T O R S F E E S
The fees for Non-Executive Directors are determined by the Board after taking independent advice.
TA B L E S O F D I R E C T O R S R E M U N E R AT I O N
The total remuneration of the Directors of the Group is as follows:
Fees
Other Emoluments
Pension Contributions
Expense of Unexercised Share Options
2 0 2 1
£ 0 0 0
144
273
32
2
451
2 0 2 0
£ 0 0 0
145
179
32
3
359
19 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
The remuneration, excluding pension contributions, of the individual Directors is as follows:
F O R T H E Y E A R
T O 3 1 M A R C H
2 0 2 1
Philip H. Beinhaker
Graham S. Miller
Corey B. Beinhaker
Natasha C. Gadsdon
Sean J. Swales
Directors’
salaries
£000
Taxable
benefits
£000
Bonus
Payments
£000
Share
Options
£000
Directors’
fees
£000
-
-
160
99
-
259
-
-
-
14
-
14
-
-
-
2
-
2
-
-
-
2
-
2
101
23
-
-
20
144
F O R T H E Y E A R
T O 3 1 M A R C H
2 0 2 0
Philip H. Beinhaker
Graham S. Miller
Corey B. Beinhaker (Appointed 23 October
2019)
Natasha C. Gadsdon
Sean J. Swales
Directors’
salaries
£000
Taxable
benefits
£000
Bonus
Payments
£000
Contractual
Payments
£000
Directors’
fees
£000
-
-
68
99
-
167
-
-
-
12
-
12
-
-
-
-
-
-
-
-
-
3
-
3
102
23
-
-
20
145
Total
£000
101
23
160
117
20
421
Total
£000
102
23
68
114
20
327
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 20
The pension contributions made in respect of the Executive Directors to the Group’s defined contribution
scheme were:
Corey B. Beinhaker
Natasha C. Gadsdon
C O N T R A C T S
2 0 2 1
£ 0 0 0
-
32
32
2 0 2 0
£ 0 0 0
-
32
32
On 27 June 2018, the Group entered into a revised service contract with Natasha C. Gadsdon. Under this
agreement she is employed as a full time Executive Director with a one year rolling contract. She was appointed
Finance Director in October 2004.
On 23 October 2019, the Group entered into a service contract with Corey B. Beinhaker. Under this agreement he
is employed as a full time Executive Director with a one year rolling contract. He was appointed Chief Operating
Officer in October 2019.
The Non-Executive Directors are appointed with three months’ notice and the Executive Chairman has a six month
notice period.
On Behalf of the Board
P H I L I P H B E I N H A K E R
E X E C U T I V E C H A I R M A N A N D C H A I R
O F T H E R E M U N E R AT I O N C O M M I T T E E
5 July 2021
21 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
GOVERNANCE
Statement of Directors’ Responsibilities
For the year ended 31 March 2021
Statement of Directors’ responsibilities in respect of the Annual Report and the financial statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group
financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the Parent Company financial
statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including
Financial Reporting Standard 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 the Parent Company and of the profit or loss of the Group for that period. The
Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the
Alternative Investment Market. In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs, as adopted by the European Union and applicable UK Accounting Standards, subject to any
material departures disclosed and explained in the Group and Parent Company financial statements respectively;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Parent Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on
the Group’s website, in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance and integrity of the Group’s website is the responsibility of the Directors. The Directors’ responsibility also
extends to the ongoing integrity of the financial statements contained therein.
By Order of the Board
N ATA S H A G A D S D O N
C O M P A N Y S E C R E TA R Y
5 July 2021
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 22
GOVERNANCE
Independent Auditor’s Report
For the year ended 31 March 2021
OPINION
We have audited the financial statements of Sutton Harbour Group plc (the
‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 March
2021 which comprise the Consolidated Income Statement, the Consolidated
Statement of Other Comprehensive Income, the Consolidated and Company
Balance Sheets, the Consolidated and Company Statement of Changes in
Equity, the Consolidated Cash Flow Statement, and the notes to the financial
statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in the preparation of the group
financial statements is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union. The financial reporting
framework that has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom Accounting Standards
including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally
Accepted Accounting Practice).
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 March 2021 and of the group’s loss for the year
then ended;
• The group financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union;
• The parent company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted Accounting
Practice; and
• The financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with those requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use
of the going concern basis of accounting in the preparation of the financial
statements is appropriate. Our evaluation of the directors’ assessment of the
group’s and parent company’s ability to continue to adopt the going concern
basis of accounting included:
• Understanding the impact of Covid-19 on the group.
• Reviewing and challenging management’s assessment of going concern
and key assumptions (including assessment at the planning stage of the audit
process). Our work included assessing the timing and amount of turnover
and related cashflows in the forecast models. We also tested the integrity and
mathematical accuracy of the models used.
• Reviewing and assessing the appropriateness of management’s sensitivity
analysis including changes in turnover and related cashflows.
• Reviewing the amended bank facility agreement dated 26 March 2021, which
confirms an additional £2m revolving credit facility in place until 22 May 2022.
• Assessing the amount of available and potential facilities and expected
headroom based on the forecast over the next 12 months and covenant
compliance.
• Evaluating the reliability of the forecast through discussion with management,
review of post year end trading and considering the historic reliability of
forecasts compared to actual results.
• Reviewing going concern related disclosures in the financial statements to
ensure they are appropriate
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the group’s and parent company’s ability to continue as
a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
EMPHASIS OF MATTER – VALUATION OF INVENTORY
We draw attention to the Strategic Report and note 4 of the consolidated
financial statements which describes the potential impact of government future
planning permission applications upon the valuation of the Plymouth airport
site, which is held as inventory on the Balance Sheet at £13.0m. The ultimate
outcome of these future applications cannot be presently determined, and the
financial statements do not reflect any impairment that may be required if the
result is unfavourable. Our opinion is not modified in respect of this matter.
KEY AUDIT MATTERS
We have determined the matters described below to be the key audit matters
to be communicated in our report. Key audit matters include the most
significant assessed risks of material misstatement, including those risks that had
the greatest effect on our overall audit strategy, the allocation of resources in
the audit and the direction of the efforts of the audit team. In addressing these
matters, we have performed the procedures below which were designed to
address the matters in the context of the financial statements as a whole and
in forming our opinion thereon. Consequently, we do not provide a separate
opinion on these individual matters.
23 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
K E Y A U D I T M AT T E R
R E S P O N S E A N D C O N C L U S I O N
Valuation of Investment Properties and
Owner Occupied Land and Buildings
The group adopts a policy of revaluation for its owner-occupied
land and buildings as well as its investment properties, with all
such properties stated at fair value. Under IFRS 13, fair value
measurement is required to be based on the ‘highest and best use’
and in most cases an entity’s current model is presumed to be its
highest and best use, although consideration needs to be made on
a property by property basis to ensure that market opportunities
and conditions do not suggest otherwise.
Investment properties are held at £17.8m and owner occupied
land and buildings are held at £27.0m. Due to the significance
of the valuation for the financial statements and their inherently
judgemental nature, we have considered this area as a key
audit focus.
In the prior year an external valuation was performed at 31 January
2020 and due to the Covid-19 pandemic the Board was unable
to obtain a reliable assessment of the impact on fair values as at
31 March 2020 due to the extraordinary circumstances at that
time. In the current year an external valuation as been performed
at 31 March 2021 and we have therefore assessed management’s
assessment of the timing of the movement in fair values over the
14-month period.
The main procedures performed on the valuation assessment and areas where
we challenged management were as follows:
• Agreeing the valuations recognised in the accounts to the reports prepared by
a professional third party.
• Assessing the professional valuation firm as independent and sufficiently
competent, with respect to qualifications, experience and reputation.
• Considering the appropriateness of the assumptions that had the most
material impact. Key variables in the valuations include Fair Maintainable
Operating Profit, yields and market rates.
• Reviewing and challenging managements split of the valuation movement over
the 14 month-period (i.e. between the January 2020 valuation and March 2021
valuation) between the current financial year and prior year.
• Considering the appropriateness of the disclosures made in the financial
statements, in particular as regards the judgements and estimates in
respect of the fair value movements through profit and loss and other
comprehensive income.
Conclusion
We have reviewed the external valuation performed at 31 March 2021, along with
other available information, in the Board’s determination of fair values at 31 March
2021 and are satisfied that the carrying values of investment properties and owner
occupied land and buildings are materially correct. We have also reviewed and
challenged managements analysis of the fair value movements since the last valuation
and are satisfied it materially relates to the year ended 31 March 2021.
Valuation of Former Plymouth City Airport Site
Within development inventory the group holds the former airport
site at a carrying value of £13.0m. IAS 2 requires inventory to be
held at the lower of cost and net realisable value. As detailed in the
Strategic Report and note 4, a Government Inspectors’ Report was
issued in March 2019 which supported a 5-year safeguard period
to allow time for a potential airport operator to bring forward a
plan for a licensed general aviation airport. This creates significant
uncertainty in the Group’s ability to realise value of this site.
Valuation Of Development Sites
The group has a number of development sites, in particular Sugar
Quay and Harbour Arch Quay, with substantial balances held in
WIP. The requirement is to carry these at the lower of cost and net
realisable value.
No developments have commenced as at 31 March 2021.
Our work included
• Reviewing management’s assessment of the carrying value of the site,
which includes the latest external opinion/appraisals and discussed these
with management to obtain an understanding of the current situation.
• Critically assessing and challenging the assumptions used in these reports.
• Reconfirming ownership of the site.
• Vouching a sample of current year expenditure to source documentation.
• Considering the adequacy of the related disclosures in the financial statements.
Conclusion
We are satisfied with the current treatment adopted by the directors’ based on
our work. However, the safeguarding period until 2024 impacts the value and
timing of any potential development of the site as detailed in the Strategic Report
and note 4. This is the reason for the Emphasis of Matter paragraph above.
Our work included
• Focussing on the material balances within Group inventory, being Sugar Quay
(£10.6m), incorporating Sutton Road acquisition (£2.7m) and Harbour Arch
Quay (£1.0m).
• Reviewing management’s assessment of the carrying values of the key sites,
which includes the planning permission obtained, site appraisals and overall
project profitability.
• Critically assessing and challenging the assumptions used in those site appraisals
in the light of available external market data and our experience of the
residential construction sector (appreciating the specialist nature of these
projects).
• Vouching a sample of expenditure to source documentation, including the
purchase of Sutton Road land.
• Reconfirming ownership of the sites.
Conclusion
As a result of the procedures performed, we are satisfied that development costs
are stated at the lower of cost and net realisable value.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 23
OUR APPLICATION OF MATERIALITY
Materiality for the group financial statements as a whole was set at £800,000.
We determined materially by reference to the group’s total assets. We
consider total assets to be an appropriate measure for a group of companies
with significant value in investments and development activities which are
fundamental to the current and future trading of the group. Materiality
represents 1% of group’s total assets as presented on the face of the
Consolidated Balance Sheet. We report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding £24,000, in addition to
other identified misstatements that warrant reporting on qualitative grounds.
Materiality for the parent company financial statements was set at £345,000.
This has been determined with reference to the total assets of the parent
company, which we consider to be one of the principal considerations for
members of the company in assessing the performance of the company.
Materiality represents 1% of the parent company’s total assets as presented
on the face of the Balance Sheet. We report to the Audit Committee any
corrected or uncorrected identified misstatements exceeding £10,350, in
addition to other identified misstatements that warrant reporting on
qualitative grounds
The range of materiality at the two components subject to full scope
audit is £130,000 - £343,000.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
We planned and performed our audit by obtaining an understanding of the
group and its environment, including the accounting processes and controls,
and the industry in which it operates. The group comprises 12 wholly owned
subsidiaries.
• We performed statutory audits on 3 entities (Sutton Harbour Group plc,
Sutton Harbour Company and Plymouth City Airport Limited).
• We performed audit procedures on risk significant balances and transactions
in Sutton Harbour Services Limited, Sutton Harbour Car Parks Limited,
Sutton Harbour Projects Limited and Sutton East Holdings Limited
• We performed analytical review procedures on Sutton Harbour Property
and Regeneration Limited.
• Remaining components are dormant.
The components within the scope of audit work covered 94% of group
revenue, 100% of group loss before tax and 97% of group net assets.
OTHER INFORMATION
The other information comprises the information included in the annual report
and financial statements, other than the group and parent company financial
statements and our auditor’s report thereon. The directors are responsible for
the other information. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED
BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
• The information given in the strategic report and the directors’ report for
the financial year for which the financial statements are prepared is consistent
with the financial statements; and
• The strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
24 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the group and parent
company and its environment obtained in the course of the audit, we have not
identified any material misstatements in the strategic report or the directors’
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for
our audit have not been received from branches not visited by us; or
• the 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
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out
on page 22, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing
the group’s and parent company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate
the group and parent company or to cease operations, or have no realistic
alternative but to do so.
AUDITORS RESONSIBILITIES FOR THE AUDIT OF THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
We obtained an understanding of the legal and regulatory framework
applicable to the parent company, the group and the industry in which it
operates. We identified the principal risks of non-compliance with laws and
regulations as relating to breaches around health and safety and specifically the
Port Marine Safety Code. We also considered those laws and regulations that
have a direct impact on the preparation of the financial statements such as
financial reporting legislation (including the Companies Act 2006) and relevant
taxation legislation. We considered the extent to which any non-compliance
with these laws and regulations may have a negative impact on the group’s
ability to continue trading and the risk of a material misstatement in the
financial statements.
We also evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements and determined that the principal
risks related to the misstatement of the result for the year and impairment
in relation to development WIP. We considered the adequacy of the design
and implementation of internal controls in relation to supplier payments
and cash collection.
Based on this understanding we designed our audit procedures to identify
irregularities. Our procedures involved the following:
• Valuation of development WIP was assessed as a Key Audit Matter and our
work in respect of that is detailed above.
• We made enquiries of senior management as to their knowledge of any
non-compliance or potential non-compliance with laws and regulations
that could affect the financial statements. As part of these enquiries we also
discussed with management whether there have been any known instances
of material fraud, of which there were none.
• We identified the individuals with responsibility for ensuring compliance with
laws and regulations and discussed with them the procedures and policies
in place.
• We obtained and reviewed the annual review of the Port Marine Safety
Code and general health and safety management of Sutton Harbour
performed by an external health and safety consultant.
• We reviewed minutes of meetings of senior management and those charged
with governance.
• We challenged the assumptions and judgements made by management in its
significant accounting estimates.
• We audited the risk of management override of controls, including
through substantively testing journal entries and other adjustments
for appropriateness, and evaluating the business rationale of significant
transactions outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not
detect all irregularities, including those leading to a material misstatement in the
financial statements. This risk increases the further removed non-compliance
with laws and regulations is from the events and transactions reflected in the
financial statements as we are less likely to become aware of instances of non-
compliance. The risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at: www.
frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
USE OF OUR REPORT
This report is made solely to the parent 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 parent 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 parent company and
the parent company’s members as a body, for our audit work, for this report, or
for the opinions we have formed.
G L E N N N I C O L
S E N I O R S TAT U T O R Y A U D I T O R
PKF Francis Clark
Statutory Auditor
Centenary House
Peninsula Park
Rydon Lane
Exeter
EX2 7XE
5 July 2021
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 25
Consolidated Income Statement
For the year ended 31 March 2021
Revenue
Cost of sales
Gross profit
Fair value adjustments on investment properties and fixed assets
Administrative expenses
Operating (loss)/profit
Finance income
Finance costs
Net finance costs
(Loss)/Profit before tax from continuing operations
Taxation (charge)/credit on (loss)/profit from continuing operations
(Loss)/profit for the year from continuing operations
(Loss)/profit for the year attributable to owners of the parent
Basic (loss)/earnings per share
from continuing operations
Diluted (loss)/earnings per share
from continuing operations
(Loss)/Profit for the year
Items that will not be reclassified subsequently to profit or loss:
Revaluation of property, plant and equipment
Items that may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to owners of the parent
The notes on pages 32 to 53 are an integral part of these consolidated financial statements.
26 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Note
5
13,14
5,6
9
9
10
2021
£000
5,400
(3,638)
1,762
(2,211)
(1,171)
(1,620)
-
(753)
(753)
(2,373)
198
(2,175)
(2,175)
2020
£000
6,558
(4,229)
2,329
(977)
(1,264)
88
-
(844)
(844)
(756)
(232)
(988)
(988)
12
(1.88p)
(0.85p)
(1.88p)
(0.85p)
Note
13
2021
£000
(2,175)
3,245
-
3,245
1,070
2020
£000
(988)
1,338
-
1,338
350
Consolidated Statement of Other Comprehensive Income
For the year ended 31 March 2021
(Loss)/Profit for the year
Items that will not be reclassified subsequently to profit or loss:
Revaluation of property, plant and equipment
Items that may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to owners of the parent
The notes on pages 31 to 55 are an integral part of these consolidated financial statements.
Note
13
2021
£000
(2,175)
3,245
-
3,245
1,070
2020
£000
(988)
1,338
-
1,338
350
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 27
Consolidated Balance Sheet
As at 31 March 2021
Non-current assets
Property, plant and equipment
Investment property
Inventories
Current assets
Inventories
Trade and other receivables
Tax recoverable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Deferred income
Provisions
Non-current liabilities
Bank loans
Lease liabilities
Deferred government grants
Deferred tax liabilities
Provisions
Total liabilities
Net assets
Issued capital and reserves attributable to owners of the parent
Share capital
Share premium
Other reserves
Retained earnings
Total equity
Note
13
14
17
17
18
19
22
23
21
25
20
23
21
16
25
26
2021
£000
29,766
17,845
12,962
60,573
16,359
2,396
6
928
19,689
80,262
1,730
141
1,819
56
3,746
27,475
186
646
1,056
-
2020
£000
27,958
18,985
12,810
59,753
12,217
2,595
5
792
15,609
75,362
1,396
63
1,544
70
3,073
24,250
28
646
1,254
29
29,363
26,207
33,109
29,280
47,153
46,082
16,266
10,695
16,280
3,912
47,153
16,266
10,695
13,034
6,087
46,082
The notes on pages 31 to 55 are an integral part of these consolidated financial statements.
The Financial Statements were approved and authorised by the Board of Directors on 5 July 2021 and were signed on its behalf by:
N ATA S H A G A D S D O N
F I N A N C E D I R E C T O R
28 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Consolidated Statement of Changes in Equity
For the year ended 31 March 2021
Notes
Share
capital
Share
premium
£000
£000
Revaluation
reserve
Hedging
reserve
-------------- --- Other reserves ------------------
£000
Merger
reserve
£000
£000
Balance at 1 April 2019
16,266
10,695
7,825
3,871
Comprehensive income
Loss for the year
Other comprehensive income
Revaluation of property, plant and equipment 13
Total comprehensive income
Balance at 31 March 2020
-
-
-
-
16,266
10,695
-
1,339
1,339
9,164
-
-
3,871
Balance at 1 April 2020
16,266
10,695
9,164
3,871
Comprehensive income
Loss for the year
Other comprehensive income
Revaluation of property, plant and equipment 13
Total comprehensive income
-
-
-
-
-
-
-
3,245
3,245
-
-
-
Balance at 31 March 2021
16,266
10,695
12,409
3,871
-
-
-
-
-
-
-
-
-
-
The notes on pages 31 to 55 are an integral part of these consolidated financial statements.
Further information in relation to the other reserves set out within the statement of changes in equity can be found in note 26.
Retained
earnings
Total
equity
£000
£000
7,075
45,732
(988)
(988)
-
1,339
(988)
350
6,087
46,083
6,087
46,083
(2,175)
(2,175)
-
3,245
(2,175)
1,070
3,912
47,153
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 29
Consolidated Cash Flow Statement
For the year ended 31 March 2021
Cash generated from total operating activities
Cash flows from investing activities
Net expenditure on investment property
Expenditure on property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Loan drawdown
Lease finance recieved
Cash payments of lease liabilities
Grants received
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Note
2021
£000
28
(2,536)
14
13
19
19
(10)
(161)
(171)
(754)
3,225
378
(142)
136
2,843
136
792
928
2020
£000
(455)
(52)
(823)
(875)
(844)
1,750
-
(78)
-
826
(504)
1,296
792
Reconciliation of financing activities for the year ended 31 March 2021
Bank loans
Other loans
Lease liabilities
Long term debt
2021
£000
25,200
2,275
327
27,802
Cash
flow
£000
950
2,275
236
3,461
2020
£000
Cash
flow
£000
2019
£000
24,250
1,750
22,500
-
91
24,341
-
(78)
1,672
-
169
22,669
The notes on pages 31 to 55 are an integral part of these consolidated financial statements.
30 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
1. General information
Sutton Harbour Group plc, (‘the Company’) and its subsidiaries are together referred to as ‘the Group’. The Group is headquartered at Sutton Harbour,
Plymouth and owns and operates the harbour and its ancillary facilities. The other principal activities of the Group are marine operations, waterfront real
estate regeneration, investment and development and also provision of public car parking.
The Company is a public limited company which is listed on the Alternative Investment Market of the London Stock Exchange, is incorporated and
domiciled in the UK and registered in England and Wales with number 02425189. The address of its registered office is Sutton Harbour Office, Guy’s Quay,
Plymouth, Devon, PL4 0ES.
2. Group accounting policies
Basis of preparation
The Group financial statements consolidate those of the Group and its subsidiaries.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and International Financial
Reporting Interpretation Committee (IFRIC) interpretations as adopted by the European Union, and the Companies Act 2006 applicable to companies
reporting under IFRS.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Group financial statements.
Judgements made by the Directors in the application of these accounting policies that have significant effect on the financial statements and estimates with a
significant risk of material adjustment in the next year are discussed in note 4 to these financial statements.
Changes in accounting policies and disclosures
There are no new or amended standards or interpretations that impact on the Group’s financial statements this year.
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been
published by the IASB but are not yet effective and have not been adopted early by the Group. Management anticipates that all the relevant standards,
amendments and interpretations will be adopted in the Group’s accounting policies for the first period beginning after their effective dates. No new
standards in issue but not yet effective are expected to have a material impact on the Group.
Going concern
The review of the Group’s business activities is set out in the combined Executive Chairman’s Report on pages 4 to 6. The financial position of the Group,
its cash flows and financing position are described in the Financial Review on page 9. In addition, note 3 to the financial statements gives details of the
Group’s financial risk management.
The Group’s forecasts and projections, taking account of reasonably foreseeable possible changes in trading performance, show that the Group should be
able to operate within the level of the facilities and covenants over a period of at least twelve months. The covenants measure interest cover, debt to fair
value and capital expenditure.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future. The Group, therefore, continues to adopt the going concern basis in preparing its financial statements.
Measurement convention
The financial statements are prepared on the historical cost basis as modified by the fair value of property.
The functional currency of the Group and its subsidiaries is pounds sterling and therefore balances are shown in the financial statements in thousands of
pounds sterling, unless otherwise stated.
Basis of consolidation
The consolidated financial statements include the financial statements of Sutton Harbour Group plc and its subsidiaries at each reporting date. Control
exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases.
Intra-Group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised profits and losses are also
eliminated.
Property, plant and equipment
Property, plant and equipment is divided into the following classes:
Land and buildings
Assets in the course of construction
Plant, machinery and equipment
Fixtures and fittings
Land and buildings
Land and buildings include:
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 31
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
- Freehold and leasehold land. Where a lease has an unexpired term of more than 50 years it is considered to share the same characteristics as freehold
land and is shown as such.
- Properties that are mainly owner-occupied, or that are an integral part of the Group’s trading operations (marina including the lock, quays, marina
buildings, the fishmarket building and car parks).
Owner occupied assets are initially recorded at cost and are subsequently revalued and stated at their fair values. Fair value is based on regular valuations
by an external independent valuer and is determined from market-based evidence by appraisal. Valuations are performed with sufficient regularity (at least
annually) to ensure that the fair value of a revalued asset does not differ materially from its carrying amount.
Where owner occupied assets (such as marinas, the fishmarket and car parks) comprise land, buildings, plant and machinery the valuation is of the asset as
a whole. Any valuation movement is allocated to land and buildings; plant and machinery continue to be carried at cost less accumulated depreciation
(see below).
Any revaluation surplus is credited to the revaluation reserve except to the extent that it reverses a decrease in the carrying value of the same asset previously
recognised in the income statement, in which case the increase is recognised in the income statement. Any revaluation deficits are recognised in the income
statement, except to the extent of any existing surplus in respect of that asset in the revaluation reserve.
Assets in the course of construction
Assets in the course of construction are held at cost. Depreciation commences when the asset is fully operational as intended.
Plant, machinery and equipment, fixtures and fittings
Plant, machinery and equipment includes items used in the operation of marina, fishmarket and car park trading operations (such as pontoons, piles, ice making
equipment and chillers, car parking meters). Fixtures and fittings includes building fit outs. Plant, machinery and equipment, fixtures and fittings are all stated
at cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Leased assets
Leased assets acquired are stated initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception
of the lease, less accumulated depreciation and impairment losses. Leased assets are depreciated over the shorter of the lease term and useful economic life.
Lease payments are apportioned between finance charges and the reduction of lease liabilities so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly to the income statement. Leased properties are subsequently revalued to their fair value.
Depreciation
Depreciation is charged to the income statement over the estimated useful lives of each part of an item of property, plant, machinery and equipment, fixtures
and fittings. Estimated useful lives and residual values are reassessed annually. Where parts of an item of property, plant, machinery and equipment, fixtures
and fittings have different useful lives, they are accounted for as separate items. Freehold land is not depreciated. The estimated useful lives and depreciation
basis of assets are as follows:
Freehold buildings
Leasehold buildings
Plant, machinery and equipment
Fixtures and fittings
(straight line)
(straight line)
(straight line)
(straight line)
10 to 50 years
50 years or remaining period of lease
4 to 30 years
4 to 10 years
Investment property
Investment properties are properties which are held to earn rental income and/or for capital appreciation. Investment properties are initially measured at cost
and subsequently revalued to fair value which reflects market conditions at the balance sheet date. Any gains or losses arising from changes in fair value are
recognised in the income statement in the period in which they arise. Fair value is the estimated amount for which a property could be exchanged, on the date
of valuation, between a willing buyer and a willing seller, in an arm’s length transaction, after proper marketing, in which both parties had acted knowledgeably,
prudently and without compulsion.
Some properties are held both to earn rental income and for the supply of goods and services and administration purposes. Where the different portions of
the property cannot be sold separately, the property is accounted for as an investment property only if an insignificant portion is held for the production and
supply of goods and services and administration purposes.
The portfolio is valued on an annual basis by an external independent valuer, who is RICS qualified. The valuer will also have recent experience in the location
and category of property being valued.
The valuations, which are supported by market evidence, are prepared by considering the aggregate of the net annual rents receivable from the properties and
where relevant, associated costs. A yield which reflects the specific risks inherent in the net cash flows is then applied to the net annual rentals to arrive at the
property valuation.
Rental income from investment property is accounted for as described in the revenue accounting policy.
Investment property that is redeveloped for continued future use as an investment property remains classified as an investment property while the
redevelopment is being carried out. While redevelopment is taking place, the property will continue to be valued on the same basis as an investment
property.
32 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
All tenant leases have been examined to determine if there has been any transfer of the risks and rewards of ownership from the Group to the tenant in
accordance with IFRS 16 ‘Leases’. All tenant leases were determined to be operating leases. Accordingly, all the Group’s leased properties are classified
as investment properties and included in the balance sheet at fair value.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle and includes expenditure incurred in
acquiring the inventories and bringing them to their existing location and condition. Where inventory has been transferred from fixed assets, deemed cost
includes revaluation. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
Inventories – development property
Land identified for development and sale, and properties under construction or development and held for resale, are included in non-current or current
assets, depending on the estimated time of ultimate realisation, at the lower of cost and net realisable value. Cost includes all expenditure related directly
to specific projects, including capitalised interest, and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on
normal operating capacity. Net realisable value is estimated selling value less estimated costs of completion and estimated costs necessary to make the
sale and includes developer’s return where applicable.
Cash and cash equivalents
Cash in the balance sheet comprises cash at bank and in hand. Bank overdrafts and similar borrowings that are repayable on demand and form an integral
part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Offset
arrangements across Group businesses are applied to arrive at the net cash figure.
Impairment
The carrying amounts of the Group’s assets other than investment property and inventories are considered at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. 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.
Where the carrying amount of an asset exceeds its recoverable amount it is impaired and is written down to its recoverable amount. Impairment losses
are recognised in the income statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period
of the borrowings on an effective interest basis.
Revenue
Revenue comprises the fair value of the consideration received or receivable, net of value-added-tax, rebates and discounts. Revenue is recognised in
accordance with the transfer of promised goods or services to customers (ie. when the customer gain control of ownership that has been transferred).
The following criteria must also be met before revenue is recognised:
Rent and marina and berthing fees
Rent from investment property and marina and berthing fees are typically invoiced in advance and are accounted for as deferred income and recorded to
revenue on a straight-line basis during the period to which the tenant had control of the service.
Lease incentives and costs associated with entering into tenant leases are amortised over the lease term. These are held in the balance sheet within
accrued income
Other marine related revenue
Fuel sales, landing dues and other ancillary incomes, are recorded to revenue on the transfer of goods to the customer.
Car park revenue
Car park revenue is recognised at the point that a car parking ticket is paid for, normally a maximum of one day’s parking. Where seasonal parking permits
are sold for longer periods the income is spread over the period the permit relates to.
Property sales
Revenue from property sales is recognised when effective control of the asset has passed to the buyer. This will be at the point of legal completion.
Interest Income
Interest income is recognised as it becomes receivable.
Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received and that the Group will comply with all conditions
associated with the grant. Government grants in respect of capital expenditure are credited to reduce the initial carrying value of the related asset. Grants
of a revenue nature are credited to a deferred income account and released to the income statement so as to match them with the expenditure to which
they relate.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 33
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
Lease payments
The Group has a small number of short term leases and leases of low value items and therefore continues to recognise payments made under these
agreements on a straight line basis over the term of the lease. The Group has one leasing arrangement in relation to a property, which is due to expire in
September 2021. The Directors have concluded that the expected right of use asset and corresponding lease liability would be immaterial to the Group’s
financial statements and have therefore not adopted the requirements of IFRS16 in relation to this arrangement. Details of the future payments under this
arrangement are disclosed in Note 27.
Net financing costs
Net financing costs comprise interest payable, commitment fees on unused portion of bank facilities, amortisation of prepaid bank facility arrangement fees,
unwinding of discount on provisions, finance charge component of minimum lease payments and interest receivable on funds invested. Interest payable and
interest receivable are recognised in profit or loss as they accrue, unless capitalised as described under “borrowing costs” below, using the effective interest
method. The fair value movement of derivative financial instruments and any ineffective portion of cash flow hedges are also included within net financing
costs.
Capitalisation of borrowing costs
Borrowing costs are capitalised on qualifying assets. A qualifying asset is one that takes more than twelve months to complete. The borrowing rate applied
is that specifically applied to fund the development. In the case of bank borrowings this is the weighted average cost of debt capital. Capitalisation ceases
when substantially all the activities that are necessary to get the property ready for use are complete and is paused when a project pauses.
Employee benefits: defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.
Employee benefits: share-based payment transactions
The share option programme allows Group employees to acquire shares; these awards are granted by the Company. The share-based payments are all
equity-settled and are measured at fair value. The fair value of options granted is recognised as an employee expense with a corresponding increase in
equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options.
The fair value of the options granted is measured using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is
due only to share prices not achieving the threshold for vesting.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable
that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the
liability.
Taxation
Tax on the profit for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable profit for the year, using tax rates enacted or substantively enacted at the balance sheet date.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of
assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
Deferred tax is recognised on all temporary differences except on the initial recognition of goodwill or on the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses and whose
results are regularly reviewed by the Board.
The following operating segments have been identified:
Marine
Real Estate
Car Parking
Regeneration
34 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
Revenue included within each segment is as follows:
Marine:
Marina and commercial berthing fees
Fishmarket landing dues
Other marine related revenue including fuel sales and other ancillary income
Car Parking:
Car park revenue
Real Estate:
Rent
Regeneration:
Property sales
Costs, assets and liabilities are allocated to each business segment based on the revenue that they are used to generate.
Trade Receivables
Trade receivables are initially measured at the transaction price less impairment. In measuring the impairment, the Group has applied the simplified
approach to expected credit losses as permitted by IFRS9. Expected credit losses are assessed by considering the Group’s historical credit loss experience,
factors specific for each receivable, the current economic climate and expected changes in forecasts of future events. Changes in expected credit losses are
recognised in the Group income statement.
Trade Payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are
classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented
as non-current liabilities. They are initially recognised at fair value and subsequently carried at amortised cost.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 35
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
3. Financial risk management
Fair values
IFRS 13 requires disclosure of fair value measurements for balance sheet financial instruments by level according to the following measurement hierarchy:
Level 1: Quoted prices unadjusted in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly as prices or indirectly
derived from prices; and
Level 3: Inputs for the asset or liability that are not based on observable market data.
The Group does not hold any Level 1 balance sheet financial instruments.
Capital risk management
The capital structure of the Group consists of net debt which includes the borrowings disclosed in notes 19 and 20 and shareholders’ equity comprising
issued share capital, reserves and retained earnings.
The capital structure of the Group is reviewed annually with reference to the costs applicable to each element of capital, future requirements of the Group,
flexibility of capital drawdown and availability of further capital should it be required.
The Group has a target gearing ratio of approximately 50% but gearing may exceed these levels where a project is in the final stages before start of
construction and development refinancing or ultimate disposal. The Group currently has three consented schemes with planning, with final stages of
preconstruction work underway. The Group structures borrowings into general facilities and secures specific financing for individual property projects as
deemed appropriate.
The gearing ratio at the year end was as follows:
Borrowings and loans
Other loans
Lease liabilities
Cash and cash equivalents
Net debt
Equity
Net debt to equity ratio
2021
£000
(25,200)
(2,275)
(327)
928
(26,874)
47,153
57.0%
2020
£000
(24,250)
-
(91)
792
(23,549)
46,082
51.1%
Bank borrowing facilities and financial covenants
The Group had total borrowing net of cash and cash equivalents of £26.874m at 31 March 2021 (2020: £23.549m) with a gearing level of 57.0% (2020:
51.1%). The Group has operated within its authorised facilities and has complied with the terms of the banking agreement. The bank facilities were renewed
in December 2019, when the Group entered into an agreement which provides a maximum £25.0m committed facility with a confirmed expiry date of
December 2023 with the possibility of a further 12 month extension. A £2m extension to the revolving credit facility was agreed in May 2020 to provide
additional funding to manage the Group through the Covid-19 Lockdown and recovery period. The extension expires in May 2022.
The banking facilities include financial covenants, including (i) a measure of EBITDA to interest covenant (ii) a debt to fair value of property valuation
covenant and (iii) a capital expenditure covenant. The Group’s forecasts and projections, taking account of reasonably possible changes in trading
performance, show that the Group will be able to operate within the level of the facilities and covenants as specified in the banking agreement over a period
of at least twelve months.
Liquidity risk
The Group uses financial instruments, comprising bank borrowing and various items including trade receivables and trade payables that arise directly from
its operations. The main purpose of these financial instruments is to raise finance for the Group’s operations. The main risk arising from the Group financial
instruments is liquidity risk. The Group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably. Short-term flexibility is achieved by overdraft facilities. The Group has the ability to manage its liquidity through the timing of
development projects and also the timing of the sale of assets.
36 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
Contractual maturity
The following tables analyse the Group’s financial liabilities and net settled derivative financial liabilities into relevant maturity groupings based on the
remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the tables are the contractual undiscounted cash flows
including principal.
As at 31 March 2021:
Bank loans*
Other loans*
Trade and other payables*
Lease liabilities*
Derivatives financial instruments**
As at 31 March 2020:
Bank loans*
Trade and other payables*
Lease liabilities*
Derivative financial instruments**
Total
£000
0 to <1 year
£000
1 to <2 years
£000
2 to <5 years
£000
(25,200)
(2,275)
(1,730)
(325)
-
(29,530)
-
-
(1,728)
(141)
-
(1,869)
(200)
(2,275)
-
(186)
-
(25,000)
-
-
-
-
(2,661)
(25,000)
Total
£000
0 to <1 years
£000
1 to < 2 years
£000
2 to <5 years
£000
(24,250)
(1,396)
(91)
-
(25,737)
-
(1,396)
(63)
-
(1,459)
-
-
(28)
-
(28)
(24,250)
-
-
-
(24,250)
* financial liabilities at amortised cost
** financial liabilities at fair value
Interest rate risk
There is currently no LIBOR swap in place to fix interest on any of the Group’s bank debt.
Credit risk
Many of the Group’s customers are required to pay for services in advance of supply which reduces the Group’s exposure to credit risk. Property rentals
and marina berthing are examples of this. The Group pursues debtors vigorously where credit terms have been exceeded. The credit quality of the
Group’s financial assets can be summarised as follows:
Trade receivables:
New customers (less than 12 months)
Existing customers (more than 12 months) with no defaults in the past
Existing customers (more than 12 months) with some defaults in the past
Total trade receivables net of provision for impairment
2021
£000
56
422
334
812
2020
£000
64
534
137
735
Commodity price risk
The Group experiences volatile fuel prices throughout the year. The Group only acts as a reseller of fuel at the fishmarket and marina. The sales prices are
derived from the price paid for fuel and therefore fuel price exposure is no longer considered a risk.
Sensitivity analysis
Interest rates
In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings. Over the longer-term, however,
permanent changes in interest rates would have an impact on consolidated earnings.
At 31 March 2021, it is estimated that a general increase of half a percentage point in interest rates (being the best estimate of future anticipated changes in
interest rates), would have decreased the Group’s profit before tax from continuing operations by approximately £130,000 (2020: £120,000). Net assets
would have decreased by the same amount.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 37
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
Valuation of investment property and property held for use in the business
Land & buildings valuations are complex, require a degree of judgement and are based on data some of which is publicly available and some that is not. We
have classified the valuations of our property portfolio as level 3 as defined by IFRS 13 Fair Value Measurement. Level 3 means that the valuation model
cannot rely on inputs that are directly available from an active market. All other factors remaining constant, an increase in trading income would increase
valuation, whilst an increase in equivalent nominal yield would result in a fall in value and vice versa.
In establishing fair value the most significant unobservable input is considered to be the appropriate yield to apply to the trading income. This is based on a
number of factors including the maturity of the business and trading and economic outlook.
Yields applied across the trading and investment assets are in the range of 4.35% – 11.54% with the average yield being 7.7%. Assuming all else stayed the
same; a decrease of 1.0% in the average yield would result in an increase in fair value of c.£5.4m. An increase of 1.0% in the average yield would result in a
corresponding decrease in fair value of c.£5.4m.
These assets were independently valued by Jones Lang LaSalle (“JLL”) at 31 March 2021. The valuation by JLL was in accordance with the Practice
Statements in the Valuations Standards (The Red Book) published by the Royal Institution of Chartered Surveyors, on a market-based evidence approach,
which is consistent with the required IFRS 13 methodology.
4. Accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Estimates
The following are the areas that require the use of estimates that may impact the Group’s balance sheet and income statement:
The valuation of investment property and property held for use in the business as at 31 March 2021 was £17,845,000 and £29,475,000 respectively; (As at 31 January
2020: £18,985,000 and £27,000,000 respectively). In determining the fair value of properties, the Board relies on external valuations carried out by professionally
qualified independent valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. The valuation of investment
properties uses estimated rental yields for each property based on market evidence at the date the valuation is carried out. Judgement is exercised in determining
future rental income or profitability of the relevant properties. Within the valuation of property held for use in the business, judgment is required to allocate the
valuation between land and buildings. The Group reviewed the movement between external valuations for each asset from 31 January 2020 and 31 March 2021 and
concluded that the factors affecting the movements materially related to the period from 1 April 2020. Accordingly the movements have been fully accounted to the
financial year to 31 March 2021.
Judgements
The following are the areas that require the use of judgements that may impact the Group’s balance sheet and income statement:
The Board exercises judgement in determining whether properties should be classified as investment property or development inventory and this is done by
reference to criteria including whether the property is being marketed for sale in the ordinary course of business and the nature of the development activity ongoing
(including planning applications and development of proposals for submission to the relevant authorities).
Determining the net realisable value of development property 2021: £29,275,000; (2020: £24,993,000)
• The Board has exercised judgement in determining the net realisable value of development property, taking into account expected costs to complete and future
sale proceeds, and hence whether any write-down of development property is required. Incorporated in the appraisal of net realisable value are judgements about:
disposal revenue and/or investment value at completion; project formulation (including mix of development uses and development density); full development
cost; amounts payable to third parties (for example, contributions to the local authority under section 106 agreements, sharing of proceeds with local authority
and repayment of grants in the case of development of the former airport site); financing costs; time value of money; and, allowance for contingency. Included in
development inventory is the Former Airport Site. The Inspectors also advised that a longer safeguarding period could risk the site being left vacant and unused and
that that would not be appropriate. The Government Inspectors view of the importance of the site for alternative use, in absence of an airport operation, affirms
the Group’s view of the value of the land.
Should the board change its strategy with a view to an alternative, this may have an effect on the carrying value of the asset. No write down has been included in the
current year.
The second largest development inventory item relates to the Sugar Quay (East Quay) site at Sutton Harbour. At the present time, a planning submission is underway
and it is expected that proceeds will exceed the carrying value of the inventory.
38 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
5. Segment results
Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.
Details of the types of revenue generated by each segment are given in note 2.
The Board of Directors assesses performance using segmental operating profit. The segment information provided to the Board of Directors for the
reportable segments for the year ended 31 March 2021 is as follows:
Year ended 31 March 2021
Revenue
Segmental Operating Profit before fair value
adjustment and unallocated expenses
Fair value adjustment on investment
properties and fixed assets
Marine
£000
3,509
770
(1,061)
Real Estate
£000
Car Parking
£000
Regeneration
£000
1,542
1,020
(1,150)
349
110
-
-
(138)
-
Unallocated:
Administrative expenses
Operating profit
Financial income
Financial expense
Loss before tax from continuing activities
Taxation
Loss for the year from continuing operations
Depreciation charge
Marine
Car Parking
Administration
Total
£000
5,400
1,762
(2,211)
(449)
(1,171)
(1.620)
-
(753)
(2,373)
(198)
(2,175)
336
31
32
399
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 39
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
Year ended 31 March 2020
Revenue
Gross profit prior to non-recurring items
Fair value adjustment on investment
properties and fixed assets
Marine
£000
4,323
916
(483)
Real Estate
£000
Car Parking
£000
Regeneration
£000
1,580
1,157
(494)
655
404
-
-
(148)
-
Unallocated:
Administrative expenses
Operating profit
Financial income
Financial expense
Loss before tax from continuing activities
Taxation
Profit for the year from continuing operations
Depreciation charge
Marine
Car Parking
Administration
Total
£000
6,558
2,329
(977)
1,352
(1,264)
88
-
(844)
(756)
(232)
(988)
313
26
1
340
40 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
Assets and liabilities
Segment assets:
Marine
Real Estate
Car Parking
Regeneration
Total segment assets
Unallocated assets:
Property, plant & equipment
Trade & other payables
Cash and cash equivalents
Total assets
Segment liabilities:
Marine
Real Estate
Car Parking
Regeneration
Total segment liabilities
Unallocated liabilities:
Bank overdraft & borrowings
Trade & other payables
Deferred tax liabilities
Tax payable
Total liabilities
Additions to property, plant and equipment
Marine
Car Parking
Unallocated
Total
2021
£000
25,846
18,715
4,861
29,343
78,765
70
499
928
80,262
2021
£000
2,062
689
19
1,142
3,912
27,802
373
1,056
-
33,107
161
-
-
161
2020
£000
23,858
19,640
5,267
25,115
73,880
79
611
792
75,362
2020
£000
1,960
550
108
903
3,521
24,341
163
1,254
-
29,279
796
26
1
823
Unallocated assets included in total assets and unallocated liabilities included in total liabilities are not split between segments as these items are centrally managed.
Unallocated expenses include central administrative costs that cannot be split between the various business segments because they are incurred in assisting the
Group generate revenues across all business segments.
Revenue can be divided into the following categories:
Sale of goods
Rental income and service recharges
Provision of services
No revenues from any one customer represented more than 10% of the Group’s revenue for the year.
2021
£000
1,441
1,542
2,417
5,400
2020
£000
1,980
1,580
2,998
6,558
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 41
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
6. Operating result
The following items are included within operating profit/(loss):
Staff costs
Increase/(decrease) in provisions
Rental income from investment property
(Profit)/loss on sale of property, plant and equipment
Direct operating expenses of investment properties (including repairs and maintenance)
(Gain)/loss on remeasurement of investment property to fair value
(Gain)/loss on re-measurement of fixed assets
Depreciation of property, plant and equipment
Operating lease payments
7. Services provided by the Group’s auditors
During the year the Group obtained the following services from the Group’s auditors:
Note
8
25
27
14
13
13
27
Fees payable to Group’s auditors for the audit of Parent Company and
consolidated financial statements
Fees payable to the Group’s auditors for other services:
The audit of Group’s subsidiaries pursuant to legislation
Tax compliance services
2021
£000
1,441
(43)
(1,542)
3
522
1,150
1,061
399
196
2021
£000
22
25
-
2020
£000
1,354
(135)
(1,580)
2
423
494
483
340
204
2020
£000
21
24
8
42 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
8. Staff numbers and costs and Directors’ remuneration
The average number of persons employed by the Group (including Executive Directors, excluding Non-Executive Directors) during the year, analysed by
category, was as follows:
Number of employees
2020
2021
Marine Activities
Property and Regeneration
Administration
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs (note 24)
The total remuneration of the Directors of the Group was as follows:
Fees
Other Emoluments
Pension Contributions
Expenses of Unexercised Share Options
20
1
7
28
2021
£000
1,098
110
175
1,383
2021
£000
144
275
32
2
453
20
1
9
30
2020
£000
1,093
111
150
1,354
2020
£000
145
179
32
3
359
Further details of Directors’ remuneration are given in the Remuneration Report on pages 18 to 20, which forms part of these financial statements.
9. Finance income and finance costs
Finance income
Interest payable on bank loans and overdrafts
Interest payable on finance leases
Finance costs
Finance costs are net of borrowing costs capitalised in the year. See note 17.
2021
£000
2020
£000
-
634
119
753
-
753
91
844
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 43
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
10. Taxation
Deferred tax
Adjustments in respect of previous years
Origination and reversal of temporary differences
Change in tax rate
Note
2021
£000
46
(244)
-
Total tax (credit)/charge in income statement
16
(198)
The tax assessed for the year uses the standard rate of corporation tax in the UK of 19% (2020: 19%).
Reconciliation of effective tax rate
Profit/(loss) before tax
Tax on profit at standard corporation tax rate of 19% (2020: 19%)
Expenses not deductible for tax purposes
Adjustments in respect of periods
Movement on potential chargeable gain on revaluation
Creation of tax losses
Total tax (credit)/charge on continuing operations
11. Share based payment
2021
£000
(2,373)
(451)
448
46
(217)
(24)
(198)
2020
£000
232
-
-
232
2020
£000
(756)
(144)
(335)
-
-
1,459
232
An Inland Revenue approved Group Share Option plan (CSOP) has been established by Sutton Harbour Group plc whereby the Group may at the
discretion of the Remuneration Committee grant options over ordinary shares in the Group to key management personnel. The options are issued for
nil consideration and are granted in accordance with the schemes rules at the absolute discretion of the Remuneration Committee. Option holders may
exercise options after a minimum 3 year and maximum 10 year holding period, subject to the provisions and exceptions of the scheme rules. There are no
other performance conditions governing the holder’s right to exercise the options after the minimum holding period. Share options may only be exercised
for shares. During the year 115,790 share options were granted with an exercise price of £0.19. The fair value of the options was calculated using the Black
Scholes model and the charge to the income statement for the year ended 31 March 2021 was £3,000 (2020: £5,000).
44 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
12. Earnings per share
Continuing operations:
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
2021
Pence
(1.88)
(1.88)
2020
Pence
(0.85)
(0.85)
Basic earnings per share
Basic earnings per share is calculated using the loss for the year of £2,175,000 (2020: loss of £988,000) for continuing operations and the weighted average
number of ordinary shares in issue of 115,944,071 (2020: 115,944,071.
Diluted earnings per share
Diluted earnings per share uses a weighted average number of 116,130,728 (2020: 115,979,280) ordinary shares after adjusting for the effects of share
options in issue of 186,657 (2020: 35,209).
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 45
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
13. Property, plant and equipment
Assets in the
course of
Construction
£000
Plant, machinery
and equipment,
fixtures and
fittings
£000
Land and
buildings
£000
Cost or valuation
Balance at 1 April 2019
Additions
Revaluations to income statement
Revaluations to revaluation reserve
Impairment
Transfers
Disposals
Balance at 31 March 2020
Balance at 1 April 2020
Additions
Revaluations to income statement
Revaluations to revaluation reserve
Grants recieved
Transfers
Disposals
Balance at 31 March 2021
Accumulated depreciation
Balance at 1 April 2019
Depreciation charge for the year
Transfers
Disposals
Balance at 31 March 2020
Balance at 1 April 2020
Depreciation charge for the year
Transfers
Disposals
Balance at 31 March 2021
Net book value
At 31 March 2020
At 31 March 2021
23,916
154
(483)
1,338
-
-
-
24,925
24,925
90
(1,061)
3,245
-
475
-
27,674
371
116
-
-
487
487
164
-
-
651
117
569
-
-
-
-
-
686
686
-
-
-
(136)
(475)
-
75
-
-
-
-
-
-
-
-
-
-
24,438
27,023
686
75
5,086
100
-
-
-
-
(153)
5,033
5,033
71
-
-
-
-
(157)
4,947
2,116
224
-
(141)
2,199
2,199
235
-
(155)
2,279
2,834
2,668
Total
£000
29,119
823
(483)
1,338
-
-
(153)
30,644
30,644
161
(1,061)
3,245
(136)
-
(157)
32,696
2,487
340
-
(141)
2,686
2,686
399
-
(155)
2,930
27,958
29,766
Included in Land and Buildings is long leasehold land at a value of £2,200,000 (2020: £2,200,000).
Revaluations
Land and buildings are measured using the revaluation model as set out in note 2. These assets were independently valued by Jones Lang LaSalle (“JLL”) at 31
March 2021 (see Strategic Report page 4). The valuation by JLL was in accordance with the Practice Statements in the Valuations Standards (The Red Book)
published by the Royal Institution of Chartered Surveyors, on a market-based evidence approach.
At 31 March 2021, had the freehold land and buildings been measured using the cost model (historical cost less accumulated depreciation and accumulated
impairment losses), their carrying value would be £18,898,000 (2020: £19,274,000).
46 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
At 31 March 2021, had the leasehold land and buildings been measured using the cost model (historical cost less accumulated depreciation and accumulated
impairment losses), their carrying value would be £1,110,000 (2020: £1,110,000).
Assets in the course of construction, plant, machinery and equipment and fixtures and fittings are all measured using the cost model, as set out in note 2.
The Group’s obligations under leases are secured by the lessor’s title to the fixed assets. The carrying value of plant, machinery and equipment which is subject
to leases is £473,000 (2020: £539,000).
14. Investment property
At fair value:
Balance at the beginning of the year
Additions during the year
Fair value adjustments
Balance at the end of the year
Notes
2021
£000
18,985
10
(1,150)
17,845
2020
£000
19,425
56
(496)
18,985
Investment property is measured using the fair value model as set out in note 2. The fair value of the Group’s investment property at 31 March 2021 has been
determined by a valuation carried out on that date by independent, external valuers (see Strategic Report page 4), JLL in accordance with the Practice Statements
in the Valuation Standards (The Red Book) published by the Royal Institution of Chartered Surveyors. JLL is a member of the Royal Institution of Chartered
Surveyors and have appropriate qualifications and recent experience in the valuation of properties in the relevant locations. The valuations, which are supported
by market evidence, are prepared by considering the aggregate of the net annual rents receivable from the properties and, where relevant, associated costs. A
yield which reflects the specific risks inherent in the net cash flows is then applied to the net annual rentals to arrive at the property valuation.
All of the Group’s investment property is held under freehold interests with the exception of four (2020: four) properties which are held under long leaseholds.
15. Investments
At 31 March 2021 the Group has the following subsidiaries:
Subsidiaries
Sutton Harbour Company
Sutton Harbour Services Limited
Plymouth City Airport Limited
Sutton Harbour Property and Regeneration Limited
Harbour Arch Quay Limited
Harbour Arch Quay Management Limited
Sutton Harbour Projects Limited
Sutton Harbour Car Parks Limited
Sugar Quay Holdings Limited
Sugar Quay Limited
Sutton East Holdings Limited
Sutton East Developco No1Limited
Class of Ownership
shares held
2021
2020
Nature of Business
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
Harbour Authority
Marine Leisure & Property
Property Developer
Property
Property
Property
Property
Car Park Operator
Investment Company
Property Developer
Property Developer
Property Developer
All of the above companies were incorporated in the United Kingdom and registered in England and Wales and for each the registered address is Sutton Harbour
Office, Guy’s Quay, Plymouth PL4 0ES.
All subsidiaries are included in the Group consolidated financial statements.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 47
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
16. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities Net
Property, plant and equipment
Investment property
Change in tax rate
Losses carried forward
Tax assets / (liabilities)
Movement in deferred tax during the year
Property, plant and equipment
Investment property
Losses carried forward
2021
£000
2020
£000
-
-
-
453
453
-
-
359
359
1 April
2020
£000
(998)
(615)
(359)
(1,254)
2021
£000
(1,090)
(419)
-
-
(1,509)
Change in
deferred
tax rate
£000
2020
£000
(998)
(615)
-
2021
£000
(1,090)
(419)
-
453
2020
£000
(998)
(615)
(359)
(1,388)
(1,056)
(1,254)
Recognised
in income
£000
Recognised
in equity
£000
31 March
2021
£000
-
-
-
-
(92)
196
94
198
-
-
-
-
(1,090)
(419)
453
(1,056)
The Directors believe the deferred tax asset relating to losses carried forward will be utilised by future taxable profits. The Government has announced an
increase to the main tax rate to 25% from 1 April 2023, however this had not been substantively enacted by the balance sheet date and accordingly has not
been recognised in these financial statements.
17. Inventories
Stores and materials
Goods for resale
Development property
2021
£000
8
38
29,275
2020
£000
8
26
24,993
29,321
25,027
Included within inventories is £29,275,000 (2020: £24,993,000) expected to be recovered in more than 12 months. £12,962,000 (2020: £12,810,000) of the
Development Property, being the carrying value of the former airport site, is classified in the Balance Sheet as a non-current asset as realisation of the asset
may be in more than five years’ time.
Inventories to the value of £1,003,000 were recognised as an expense in the year (2020: £1,784,000).
Interest capitalised during the year in relation to development property was £138,000 (2020: £111,000). The capitalisation rate used to determine the
amount of borrowing costs eligible for capitalisation was 3.2% (2020: 3.7%).
In the course of the year, £nil of development property inventory was written down (2020: £nil).
48 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
18. Trade and other receivables
Trade receivables
Provision for impairment of trade receivables
Expected loss rate of trade receivables
Other receivables
Prepayments and accrued income
2021
£000
885
(73)
812
8%
46
1,538
2,396
2020
£000
785
(50)
735
6%
68
1,792
2,595
Included within trade and other receivables is £794,000 (2020: £998,000) expected to be recovered in more than 12 months which relates to prepayments
and other accrued income.
The fair value of trade and other receivables classified as loans and receivables are not materially different to their carrying values.
The provision for impairment of trade receivables is arrived at by using the historic loss rate and adjusting for current expectations, customer base and
economic conditions. With historic and expected future losses being low, the Directors consider it appropriate to apply a single average rate for expected
credit losses to the overall population of trade receivables.
19. Cash and cash equivalents
Cash and cash equivalents per Consolidated Balance Sheet
Cash and cash equivalents per Cash Flow Statement
Security over the assets of the Group has been given in relation to the bank facilities.
Undrawn facilities:
Expiring within one year
Expiring within one to two years
Expiring between two and five years
2021
£000
928
928
2021
£000
-
1,800
-
1,800
2020
£000
792
792
2020
£000
-
-
750
750
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 49
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
20. Bank loans
This note provides information about the contractual terms of the Group’s interest-bearing loans. For more information about the Group’s exposure to
interest rate risk, see note 3.
Non-current liabilities
Secured bank loans
Other secured funding
2021
£000
25,200
2,275
27,475
2020
£000
24,250
-
24,250
Secured bank loans:
The current secured bank loans relate to a facility of £27.0m comprising two loans and a revolving credit facility, which incur interest at various rates
over LIBOR during the term of the facilities and fall due for renewal more than 12 months from the Balance Sheet date. Assets with a carrying amount of
£47.320m (2020: £49.90m) have been pledged to secure borrowings of the Group. Separate assets which have been valued at £5.820m are held as security
on the Other secured funding of £2.275m.
21. Deferred income and deferred government grants
Deferred income classified as current liabilities comprises advance rental income and advance marina fees.
Deferred government grants relate to grants received in relation to the Airport runway and lighting surrounding the runway. The grant liability relating to
the airport runway and lighting will not be released prior to any future sale of the site.
Deferred
Deferred income government grants
2020
£000
2020
£000
2021
£000
2021
£000
At the beginning of the year
Adjustment to opening balances
Released to the income statement
Income and grants received and deferred
At the end of the year
Current
Non-current
1,544
-
(1,405)
1,680
1,819
1,819
-
1,819
1,398
-
(1,583)
1,729
1,544
1,544
-
1,544
646
-
-
-
646
-
646
646
646
-
-
-
646
-
646
646
50 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
22. Trade and other payables
Trade payables
Other payables
Other taxation and social security costs
Accruals
The ageing of trade payables is as follows:
Not yet due:
0 – 29 days
Overdue:
30 – 59 days
60 – 89 days
90 – 119 days
120 + days
23. Finance lease liabilities
2021
£000
1,082
95
178
375
1,730
2021
£000
550
295
51
76
110
2020
£000
1,125
87
90
94
1,396
2020
£000
667
261
47
15
135
1,082
1,125
Capital element
Minimum lease payments of lease payments
2020
£000
2020
£000
2021
£000
2021
£000
Amounts payable under finance leases:
Within one year
In the second to fifth years inclusive
Less: future finance charges
Present value of lease obligations
Current
Non-current
141
207
348
(21)
327
63
35
98
(7)
91
141
186
327
n/a
327
141
186
327
63
28
91
n/a
91
63
28
91
It is the Group’s policy to lease certain of its property, plant and equipment under leases. The average lease term is 1.9 years (2020: 2.9 years). For the year
ended 31 March 2021, the average effective borrowing rate was 3.2% (2020: 3.7%). Interest rates are fixed at the contract date. All leases are on a fixed
repayment basis and no arrangements have been entered into for contingent rental payments. All lease obligations are denominated in sterling and the fair
value of the Group’s lease obligations approximates to their carrying amount.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 51
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
24. Employee benefits
Pension plans
Defined contribution plans
The Group operates a number of defined contribution pension plans.
The total expense relating to these plans in the current year was £175,000 (2020: £150,000). There were no amounts outstanding or prepaid at
the year end (2020: £nil).
25. Provisions for other liabilities and charges
Onerous
Balance at 1 April 2019
Provisions made during the year
Provision utilised during the year
Balance at 31 March 2020
Balance at 1 April 2020
Provisions made during the year
Provisions utilised during the year
Balance at 31 March 2021
Current
Non-current
leases
£000
234
-
(135)
99
99
-
(43)
56
56
-
56
Total
£000
234
-
(135)
99
99
-
(43)
56
56
-
56
Onerous leases are those where expected rents payable exceed rents receivable on sub-let office space in respect of two leases expiring in 2021.
52 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
26. Capital and reserves
Share capital
Ordinary shares Deferred shares Total shares
Thousands of shares
2021
2021
2021
2020
2020
2020
In issue at the beginning of
the financial year - fully paid
Issued for cash
In issue at the end of the
financial year – fully paid
115,944
-
115,944
-
62,944
-
62,944
-
178,888
-
178,888
-
115,944
115,944
62,944
62,944
178,888
178,888
Allotted, called up and fully paid
115,944,071 (2020: 115,944,071)
Ordinary shares of 1p each (2020: 1p each)
62,943,752 (2020: 62,943,752)
Deferred shares of 24p each (2020: 24p each)
2021
£000
1,160
-
1,160
2020
£000
1,160
-
1,160
2021
£000
-
15,106
15,106
2020
£000
-
15,106
15,106
2021
£000
2020
£000
1,160
15,106
16,266
1,160
15,106
16,266
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
Group. On a winding up each Ordinary share shall rank in priority to the Deferred shares.
The holders of Deferred shares are not entitled to receive dividends nor are they entitled to vote at meetings of the Group. On a winding up each Deferred
share shall only be entitled to the nominal capital paid up or credited as paid up after paying the nominal capital paid up or credited as paid up on the
Ordinary shares, the Deferred shares and/or any other shares in issue, together with the sum of £1,000,000 on each Ordinary share.
Other reserves
Share premium account
The share premium account represents premiums paid over the nominal value of share capital issued less transaction costs.
Revaluation reserve
The revaluation reserve relates to the revaluation of land and buildings included within property, plant and equipment.
Merger reserve
The merger reserve was created when Sutton Harbour Group was incorporated into the holding Group, Sutton Harbour Group plc. It was further
increased when a cash box placing of shares occurred on 4 September 2009, creating an additional £3.6m.
Retained earnings
Retained earnings represent retained earnings attributable to owners of the parent. Retained earnings include £3.374m (2020: £4.524m) in respect of
unrealised valuation surpluses on the Investment property assets.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 53
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
27. Leases
Leases
Non-cancellable lease rentals are payable as follows:
Less than one year
Between one and five years
Greater than five years
2021
£000
196
-
-
196
2020
£000
202
108
-
310
During the year £191,000 was recognised in respect of lease rentals in the income statement (2020: £204,000): £172,000 in cost of sales (2020: £196,000)
and £8,000 in administrative expenses (2020: £8,000).
Included within lease rentals is an amount of £191,000 (2020: £196,000) due in relation to the lease of part of a property which has been sublet. Income will
therefore be generated to offset some of these lease rental amounts.
Leases as lessor
The Group leases certain properties (see notes 13 and 14). The future minimum lease rentals receivable under non-cancellable leases are as follows:
Investment property:
Less than one year
Between one and five years
More than five years
Owner-occupied properties:
Less than one year
Between one and five years
More than five years
2021
£000
1,298
3,486
23,975
28,759
35
139
113
287
2020
£000
1,363
3,604
23,901
28,868
35
139
113
287
Total contingent rents recognised in the income statement in the year were £89,000 (2020: £89,000). Contingent rents are determined by reference to
specific clauses within the leases.
During the year ended 31 March 2021 £1,542,000 (2020: £1,580,000) was recognised as rental income in the income statement. Repair and maintenance
expense recognised in cost of sales for the year to 31 March 2021 was £30,000 (2020: £34,000).
Leases on the properties have terms between 5 years and 125 years in length and cannot be cancelled before the end of the lease, unless there is a break
clause. Rent reviews usually occur at five year intervals.
54 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Consolidated Financial Statements
For the year ended 31 March 2021
28. Cash flow statements
Cash flows from operating activities
Loss for the year from continuing operations
Adjustments for:
Taxation on loss from continuing activities
Financial expense
Fair value adjustments on investment property
Revaluation of property, plant and equipment
Depreciation
Loss on sale of property, plant and equipment
Cash generated from continuing operations before changes in working capital and provisions
(Increase) in inventories
(Increase) in trade and other receivables
(Decrease) in trade and other payables
Increase/(decrease) in deferred income
(Decrease) in provisions
Cash generated from continuing operations
29. Related parties
2021
£000
(2,373)
-
753
1,150
1,061
399
3
933
(4,294)
199
334
275
(43)
(2,536)
2020
£000
(756)
-
844
494
483
340
2
1,407
(1,460)
(312)
(100)
145
(135)
(455)
The parent of the Group is Sutton Harbour Group plc. The ultimate controlling party is FB Investors LLP, which is owned jointly by Beinhaker Design Services
Limited and 1895 Management Group ULC. In the course of the year, Beinhaker Design Services Limited provided services to the value of £175,000 (2020:
£174,000).
Transactions between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on consolidation and are not disclosed
in this note.
Transactions with key management personnel:
Executive Directors of the Group and their immediate relatives control 73.0% (2020 73.00%) of the voting shares of the Group.
The compensation of key management personnel (the Executive and Non Executive Directors) is set out on the Remuneration Report on page 18.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 55
Historical Financial Information
For the year ended 31 March 2021
Net Assets
Revenue
2021
£000
47,153
5,400
2020
£000
2018
£000
2017
£000
2016
£000
46,082
45,732
39,328
40,483
6,558
6,893
6,503
6,718
Operating profit before fair value adjustments,
impairments, costs of change in ownership and onerous leases
591
1,065
973
761
1,288
Fair value adjustments on investment
property and fixed assets
(2,211)
(977)
1,444
(626)
(105)
Impairment of assets, onerous leases
-
-
-
-
(173)
Operating profit/(loss) after fair value adjustments
and impairments
(1,620)
88
2,417
(1,605)
1,010
Net financing costs (excludes joint ventures/associates)
(753)
(844)
(901)
(897)
(957)
Profit/(loss) before tax on continuing activities
(2,373)
(756)
1,516
(2,502)
Profit/(loss) attributable to equity shareholders
(2,175)
(988)
1,831
(2,198)
Dividends paid
-
-
-
-
53
40
-
Basic earnings/(loss) per share
(1.88)p
(0.85)p
1.68p
(2.24)p
0.04p
Diluted earnings/(loss) per share
(1.88)p
(0.85)p
1.68p
(2.24)p
0.04p
56 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Fixed assets
Investments
Current assets
Debtors (including £23,426,000 due after more than one year)
Cash at bank and in hand
Current liabilities
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
Net assets
Capital and reserves
Called up share capital
Share premium account
Merger Reserve
Profit and loss account
Total shareholders’ funds
Company Balance Sheet
For the year ended 31 March 2021
Note
2021
£000
2020
£000
5
6
7
8
9
11
11
11
11,268
11,268
23,857
5
23,862
62
23,800
35,068
2,700
32,368
16,266
10,695
3,620
1,787
32,368
11,268
11,268
22,773
18
22,791
21
22,770
34,038
1,750
32,288
16,266
10,695
3,620
1,707
32,288
The notes on pages 59 to 63 are an integral part of these financial statements. In the year the Company made a profit of £80,000 (2020: profit of £419,000).
The Financial Statements were approved and authorised by the Board of Directors on 5 July 2021 and were signed on its behalf by:
N ATA S H A G A D S D O N
D I R E C T O R
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 57
Company Statement of Changes in Equity
For the year end 31 March 2021
Called up
capital
£000
Share premium
account
£000
Merger
reserve
£000
Profit and loss
account
£000
Total
£000
31,869
419
-
32,288
32,288
80
-
1,288
419
-
1,707
1,707
80
-
1,787
32,368
Balance at 1 April 2019
Profit for the year
Issues of shares
Balance at 31 March 2020
Balance at 1 April 2020
Profit for the year
Issue of shares
Balance at 31 March 2021
16,266
-
-
16,266
16,266
-
-
16,266
10,695
-
-
10,695
10,695
-
-
10,695
3,620
-
-
3,620
3,620
-
-
3,620
58 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Company Financial Statements
As at 31 March 2021
1. General information
Sutton Harbour Group plc, (“the Company”) is a public limited Company incorporated in the United Kingdom under the Companies Act 2006. These
financial statements cover the financial year from 1 April 2020 to 31 March 2021, with comparatives for the year 1 April 2019 to 31 March 2020 and are
compliant with FRS101. No income statement or statement of comprehensive income is presented by the Company as permitted by Section 408 of the
Companies Act 2006.
2. Accounting policies
Basis of preparation
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
These financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. The financial
statements have been prepared under the historical cost convention, and in accordance with the Companies Act 2006.
The preparation of financial statements in conformity with FRS101 requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.
The Company has taken advantage of the following disclosure exemptions under FRS 101:
• the requirements of IFRS 7 Financial Instruments: Disclosure;
• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
• the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement,
• the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative information in respect of
paragraph 79(a)(iv) of IAS 1;
• the requirements of paragraphs 10(d), 10(f ), 16,, 38(a), 38(b), 38(c), 38(d), 40(a), 40(b), 40(c), 40(d), 111 and 134-136 of IAS 1 Presentation
of Financial Statements;
• the requirements of IAS 7 Statement of Cash Flows;
• the requirements of paragraph 17 of IAS 24 Related Party Disclosures;
• the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a
group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member ; and
• the requirements of paragraphs 134(d)-134(f ) and 135(c)-135(e) of IAS 36 Impairment of Assets.
Going concern
The Company meets its day to day working capital requirements through intra-group funding and is therefore reliant on bank finance in the form of Group
wide term loan and revolving credit facilities. In December 2019, Sutton Harbour Group plc and subsidiary companies (the “Group”) renewed its banking
facilities until December 2023, with two term loans totalling £22.5m and a £2.5m revolving credit facility. A £2m extension to the revolving credit facility
was agreed in May 2020 to provide additional funding to manage the Group through the Covid-19 Lockdown and recovery period. The extension expires
in May 2022.
The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to
operate within the level of the facilities and covenants over a period of at least twelve months from the date of approval of these financial statements.
It has been confirmed that the intra-group balances in place will not be requested for repayment in the foreseeable future.
In light of the above and considering the Group’s forecast covenant compliance, in the Directors’ opinion it remains appropriate to adopt the going concern
basis of preparation for these financial statements.
Functional and presentation currency
The functional currency of the Company is pounds sterling and therefore balances are shown in the financial statements in thousands of pounds sterling,
unless otherwise stated.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 59
Notes to the Company Financial Statements
For the year ended 31 March 2021
Investments
Investments are carried cost less any provision for impairment in value.
Impairment
The carrying amounts of the Company’s assets are considered at each balance sheet date to determine whether there is any indication of impairment. If any
such indication exists, the asset’s recoverable amount is estimated. Where the asset does not generate cash flows that are independent from other assets,
the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where the carrying amount of an asset exceeds its
recoverable amount it is impaired and is written down to its recoverable amount.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period
of the borrowings on an effective interest basis.
Share capital
Ordinary and Deferred shares are classified as equity.
Taxation
Tax on the profit for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable profit for the year, using tax rates enacted or substantively enacted at the balance sheet date, and
any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of
assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
Deferred tax is recognised on all temporary differences except on the initial recognition of goodwill or on the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
Financial instruments
Trade and other debtors, trade and other creditors and all intra-group balances are financial instruments and are carried at amortised cost.
60 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Company Financial Statements
For the year ended 31 March 2021
3. Services provided by the Company’s auditors
During the year the Company obtained the following services from the Group’s auditors:
Current auditors:
Fees payable to Group’s auditor for the audit of Parent Company financial statements
Fees payable to the Group’s auditor for other services:
Tax services
2021
£000
21
-
2020
£000
21
1
For further details on other services provided by the Group’s auditors, see note 7 to the main Group consolidated financial statements.
4. Employees and Directors
The Company has no employees. The Directors are not remunerated for their services to the Company. Remuneration in respect of subsidiary undertakings is
disclosed in note 8 to the consolidated financial statements.
5. Investments
Cost and net book value
Investments in subsidiary undertakings
Subsidiary companies:
At 31 March 2021, the Company has the following investments in subsidiaries:
2021
£000
2020
£000
11,268
11,268
Subsidiaries
Sutton Harbour Company
Sutton Harbour Services Limited
Plymouth City Airport Limited
Sutton Harbour Property and Regeneration Limited
Sutton Harbour Commercial Limited
Sutton Harbour Projects Limited
Harbour Arch Quay Management Limited
Sutton Harbour Car Parks Limited
Sugar Quay Holdings Ltd
Sugar Quay Ltd
Sutton East Holdings Limited
Sutton East Developco No1 Limited
Class of Ownership
shares held
2021
2020
Nature of Business
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
Harbour Authority
Marine Leisure & Property
Property Developer
Property
Property
Property
Property
Car Park Operator
Investment Company
Property Developer
Property Developer
Property Developer
All of the above companies were incorporated in the United Kingdom and registered in England and Wales and for each the registered address is Sutton Harbour
Offices, Guy’s Quay, Plymouth PL4 0ES.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 61
Notes to the Company Financial Statements
For the year ended 31 March 2021
6. Debtors
Amounts owed by subsidiary undertakings
Deferred Tax
Other debtors and prepayments
Total debtors
Amounts owed by subsidiary undertakings are all due in more than one year.
7. Creditors: amounts falling due within one year
Other creditors
Total creditors
Security over the assets of the Company has been given in relation to the bank facilities.
8. Creditors: amounts falling due after more than one year
Amounts owing to subsidiary undertakings
Total creditors
Interest is charged at rates over LIBOR during the term of the bank facilities.
2021
£000
23,426
-
431
23,857
2021
£000
62
62
2021
£000
2,700
2,700
2020
£000
22,285
-
488
22,773
2020
£000
21
21
2020
£000
1,750
1,750
9. Called up share capital
Ordinary Shares Deferred Shares Total
Thousands of shares
2021
2020
2021
2020
2021
2020
In issue at the beginning of the
financial year – fully paid
Issued for cash
In issue at the end of the financial year – fully paid
115,944
-
115,944
115,944
-
115,944
62,944
-
62,944
62,944
-
62,944
178,888
-
178,888
178,888
-
178,888
Allotted, called up and fully paid
115,944,071 (2020: 115,944,071)
Ordinary shares of 1p each (2020: 1p each)
62,943,752 (2020: 62,943,752)
Deferred shares of 24p each (2020: 24p each)
1,160
1,160
-
-
1,160
1,160
-
1,160
-
1,160
15,106
15,106
15,106
15,106
15,106
16,266
15,106
16,266
62 Sutton Harbour Group plc – Annual Report & Financial Statements 2021
Notes to the Company Financial Statements
For the year ended 31 March 2020
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. On a winding up each Ordinary share shall rank in priority to the Deferred shares.
The holders of Deferred shares are not entitled to receive dividends nor are they entitled to vote at meetings of the Company. On a winding up each
Deferred share shall only be entitled to the nominal capital paid up or credited as paid up after paying the nominal capital paid up or credited as paid up on
the Ordinary shares, the Deferred shares and/or any other shares in issue, together with the sum of £1,000,000 on each Ordinary share.
10. Contingencies
The Company has given an unlimited guarantee in respect of bank borrowings of all subsidiary companies. At 31 March 2021, these borrowings amounted
to £25,200,000 (2020: £24,250,000).
11. Description of reserves
Called up share capital
The called up share capital account represents equity share capital (see note 26 to the consolidated financial statements).
Share premium account
The share premium account represents premiums paid over the nominal value of share capital issued less transaction costs (see note 26 to the consolidated
financial statements).
Merger reserve
The merger reserve was created when a cash box placing of shares occurred on 4 September 2009. In the opinion of the Directors, this reserve is
distributable (see note 26 to the consolidated financial statements).
Profit and loss account
The profit and loss account represents retained profits.
12. Ultimate controlling party
Sutton Harbour Group plc is the ultimate Parent Company of the Group. The ultimate controlling party is FB Investors LLP, which is owned jointly
by Beinhaker Design Services Limited and 1895 Management Group ULC, and owns 72.65% of the issued share capital of Sutton Harbour Group plc.
The consolidated financial statements of the Group headed by Sutton Harbour Group plc are presented separately on pages 26 to 32 of this document.
The results of the Group are not consolidated in any other group’s financial statements.
Sutton Harbour Group plc – Annual Report & Financial Statements 2021 63
Sutton Harbour Office | Guy’s Quay Office | Sutton Harbour | Plymouth | PL4 0ES
Tel: 01752 204186 | www.suttonharbourgroup.co.uk