2022
ANNUAL REPORT &
FINANCIAL STATEMENTS
C O N T E N T S
Strategic Report
2
3
4
7
9
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
12
Principal Business Risks
Governance
13
14
16
19
20
23
24
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
28
29
30
31
32
33
58
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
59
60
61
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
2 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 2
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 Marina at Sutton Harbour, together with
a number of operations related properties;
• A number of other ‘Sutton Harbour’ group
companies engaged in waterfront property
regeneration and investment including King Point
• 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 income
producing asset base by increasing and improving
the income earning asset portfolio of the Group.
• To build on the Group’s strength as a specialist in
waterfront destination and regeneration in the
South West region.
Marina, the development of Harbour Arch Quay,
• To provide asset-based value growth to
car park operating activities; and
shareholders in the medium term.
• Plymouth City Airport Limited, the company
holding legal interests in the former airport site.
G R O U P V I S I O N
The Group is the owner and custodian of a unique
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
new adjacent assets for investment and revenue
generation until they reach their full potential.
historic harbour asset adjacent to Plymouth city
• Realisation of inventory assets through development
centre to the north and Plymouth Sound to the south,
and sale of some assets which have attained their
connecting the sea to the South West of England.
full potential.
The Group owns property assets around the harbour
• Investment in infrastructure to increase capacity,
and directly supports the City’s objective to create
improve service and enhance quality.
the first National Marine Park, and to assist it to fulfil
its ambitions as the Ocean City thereby creating a
prime location for living, working, visiting and hosting
waterside events.
• Growth of earnings from core divisions, harbour,
marina, fisheries, leisure and retail and parking.
• Maintain strong reputation for quality and
customer service.
3 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 2
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 492 leisure and commercial vessels (as
of June 2022 was accommodating 488 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 99% occupied and is trading at capacity.
The King Point Marina, which opened in 2013,
has now transitioned into a mature business
with 99% 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 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 secured and in
preparation which will integrate 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 Old Barbican Market, the former
fishmarket which was converted to retail use
in 1998, is currently undergoing a major refit
to accommodate three new national covenant
tenants and is scheduled to be completed by
late Summer 2022.
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
This division focuses on development for revenue
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
development schemes on Sutton Harbour. These
schemes include; a 14 unit apartment building
(Harbour Arch Quay) which is currently under
construction and due for completion in Spring
2023; the iconic Sugar Quay tower, consisting
of a planned 170 units, 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 in
parallel with Sugar Quay.
The Group has also been working with the Local
Planning Authority to build 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.
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 upon the closure
of the former airport as of 23 December
2011, due to withdrawal of flight services and
unsustainable losses. The decision also resulted
in cancellation of the airport operating licence
and cancellation of the air space. In March 2019,
Plymouth City Council 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 but limited to five years,
which is due to end in March 2024. 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 uses or
re-opened as an airport, but in either case the
intrinsic value of the asset is represented by its
potential uses.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 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 2
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 a successful year’s results for the year ended 31 March 2022.
The year’s trading performance reflects the overall resilience of the mix of business activities and restoration of full operations following the Lockdowns imposed by the UK
Government throughout the previous trading year. As a result, the Group has achieved record earnings from its marina and car parking trading businesses and a 22.6%
uplift in the valuation of the owner occupied asset portfolio.
The broad mix of tenants occupying the Group’s investment properties and focus on the destination leisure property has protected the Group from void rates associated
with other sectors. The Group maintained its property occupancy rate at 89% and is currently converting the space vacated by Edinburgh Woollen Mill into three units
for new national covenant tenants, at materially improved £/sq ft rental rates.
Contract and financing preparations made during the previous year enabled the Group to press ahead with the construction of the Harbour Arch Quay development,
the first new build by the Group in almost a decade, which started in February 2022.
The Group has secured an updated unanimous planning consent for the 170 apartment Sugar Quay development and agreement to the s106 agreement by the
Local Authority.
To maintain progress with the development programme, the Company raised £3.417m net from the issue of 14 million new ordinary shares in August 2021.
This equity issue also allowed the purchase of certain development sites adjacent at Sutton Road, Plymouth.
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 profit before taxation for the year
was £0.366m (2021: £0.162m loss 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 2022. The profit before
taxation for the year under review as per the
consolidated income statement, inclusive of the
aforementioned adjustments, was £0.561m (2021:
£2.373m loss). The financial impact of the recovery
from the Covid-19 pandemic is evident in the
Gross Profit which is up by £0.586m to £2.348m
in the year to 31 March 2022 (year to 31 March
2021: £1.762m).
Net debt (including lease liabilities) decreased to
£24.408m as at 31 March 2022 from £26.874m at
31 March 2021, a fall of £2.466m. The net proceeds
of £3.417m from the new equity raise by way
of Open Offer in August 2021 were partly used
for the pre-construction costs of development
projects and the purchase of land at Sutton Road,
Plymouth. The increase in development property
inventory, including the aforementioned site
acquisition, was £2.586m during the year.
Gearing (net debt: net assets) as at 31 March 2022
stood at 43.4% (2021: 57.0%). Net finance costs of
£0.789m in the year (2021: £0.753m) are stated
after capitalisation of interest of £0.343m
(2021: £0.138m).
As at 31 March 2022, net assets were £56.211m
(2021: £47.153m), a net asset value of 43.3p per
ordinary share (2021: 40.6p per ordinary share).
The movement includes the valuation of the
Group’s property assets which gave rise to an
overall valuation surplus of £7.208m, as reconciled
in the table below, of which a £0.380m surplus
relates to the investment property portfolio and
a net £6.828m surplus relates to the owner-
occupied properties. The valuation surplus’ follow
further improvement in trading performance and
the restoration of car parks activity after the end
of the Lockdowns. The ongoing weaker level of
trading at Plymouth Fisheries has informed the
valuer’s lower overall Fisheries asset value.
VALUATION SURPLUS/(DEFICIT)
ACCOUNTING*
Owner Occupied Portfolio
Fisheries
(£0.185m)
Marinas
Car Parks
£5.526m
£1.487m
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
Credited to the Revaluation Reserve in the Balance Sheet
Investment Property Portfolio
£0.380m
Fair valuation adjustment recorded in the Income Statement
TOTAL
£7.208m
Financing
During the year the Company issued 14 million
new ordinary shares each at 25p and raised
£3.417m after costs pursuant to an Open Offer.
A loan from a private finance lender, which was
used to purchase land in December 2020, was
repaid after the year end and secured assets
were unencumbered. Funds to repay this loan
were made available by way of two unsecured
loans from major shareholders at a lower rate
of interest and on more flexible terms.
The full general banking facility with Nat West
reduced from £27m to £26.9m during the year
after a repayment was made from the proceeds
of a minor investment property, Unit 1 Penrose
House. After the year end the temporary £2m
Covid support facility expired reducing the full
committed facility to £24.9m. This facility expires
in December 2023 and the board is actively
considering whether to elect for a twelve month
extension, which is allowed for in the facility
agreement, or to enter into a new facility.
In accordance with the Dividend Policy, the board
does not recommend payment of a dividend on
the year’s results in order to preserve headroom
in the bank facility. 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.
Directors and Staff
There have been no Board changes during the
year. Headcount as at 31 March 2022 was 32
(31 March 2021: 31).
5 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
OPERATIONS REPORT
REAL ESTATE AND CAR PARKING
MARINE
Sutton Harbour Marina and King Point Marina have
enjoyed the busiest ever season with overall annual
berth sales up by 20.3% and overall occupancy up
to 98% by 31 March 2022 (92% by 31 March 2021).
Overall berthing revenue, including visitor berthing
across both marinas was up by £0.334m compared
to the previous year, with no berthing rate increases.
The new season has started strongly with more early
bookings than usual, as available berthing along the
South Coast of England has become scarcer. The
outlook for strong revenue growth is encouraging
after berthing rates were increased from 1 April
2022. Some changes were made to berthing
configuration over the Winter and opportunities to
maximise use of the water space are under review
for creation of additional berths in the future. Three
new positions have been created in the marina team
to allow the Company to maintain a high level of
customer service to a growing clientele.
Trading at Plymouth Fisheries has returned to a
level close to the pre-pandemic period, although
competition from other local ports and a declining
local fleet continue to lower the performance of the
port. Against a backdrop of rising fuel prices, which
makes it increasingly difficult for fishers to make
profitable trips to sea, the Company is working with
suppliers to try to improve fuel buying prices and
to pass savings on to customers. The Company’s
long-standing Harbour Master, Pete Bromley, retired
in December 2021 and he has been successfully
replaced by Mark Veale.
As at 31 March 2022 tenant occupancy across the
Company’s portfolio of real estate assets stood at
89% (31 March 2021: 97%). The Company supported
some tenants through the Covid crisis with extended
time to pay. These deferred rents were almost all
cleared by 31 March 2022 and with the exception
of two tenant failures, Edinburgh Woollen Mill and a
gym operator, tenants restored normal operations
during the year under review, many benefiting
from improved footfall around Sutton Harbour.
At the heart of the Sutton Harbour and Barbican
area, the Old Barbican (fish) Market, is undergoing
refurbishment and is due to open during summer
2022 with three new national covenant tenants.
After a slow start in April and May 2021, as visitors
to the area increased, the revenue from car parking
returned to the previous peak trading level recorded
before the pandemic. The resumption of local
events in Summer 2022, high marina occupancy
and continued popularity of UK based tourism are
conditions which are expected to underpin trading
performance in the current financial year.
REGENERATION
Sutton Harbour
The 14 apartment building known as Harbour Arch
Quay located on the north eastern quay of Sutton
Harbour is currently under construction with
completion currently due in Spring 2023. The agency
and digital marketing campaigns are in place and
to date reservations for five apartments, including
one of the penthouses, all at full asking price, have
been received. Contracts are currently with lawyers
Starting in Autumn 2022, the Environment Agency
pending exchange. The development is being financed
will embark on a six-month programme to replace
by a £5m development loan from Atelier Finance and
the cills of the Sutton Harbour lock. These works
partly by the Group.
The Group has secured planning consent and
s106 agreement for the updated plans for the
170 apartment Sugar Quay building. This will be a
landmark 20 storey building on the eastern quay of
Sutton Harbour. During the forthcoming year, the
Company will prepare pre-construction work and
source financing for this major new development.
The intention is to start the building by mid-2023
with completion to follow some 30 months later.
are necessary to ensure the proper working of
the lock, a flood defence for Plymouth, and flood
protection for a least a decade to come. This will
result in restrictions to harbour users at certain times
when passage through the lock will be constrained. A
comprehensive communications programme has been
organised to provide real time information to harbour
users such that activities of the fishing industry, marina
and public continue with minimal disruption. The
Group is arranging for interim alternatives to facilitate
some of the landing of fish at a nearby location which
can then be transported to the Plymouth Fisheries
complex for auction, processing and distribution, as
is currently the case with c. 50% fish which arrives at
the Plymouth Fisheries auction by road. This approach
integrates the lessons learned from the similar major
works that were completed some 13 years ago on
the lock gates.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 6
The Group has continued with planning work for the
With interest rises to date and the pressure to control
future development of the Sutton Road site, opening and
inflation with further interest rate rises, the Company
extending the eastern side of the Harbour and linking
will incur higher interest rate costs in the coming
with Plymouth city centre and residential communities to
year. Each additional 1% in bank base rate will cost an
the east of Gdynia Way. The original plans are now being
additional c. £263,000 per annum based on average
refined following the purchase during the year of a small
draw on the general banking facility. At the present
adjacent site which will enable improved road access and
time, the Group has not entered into any interest rate
site layout. The Group is working on a wider masterplan
swap agreements to manage exposure to rising rates
for a comprehensive housing led regeneration of the east
due to their high cost, however this a matter for close
of Sutton Harbour area and has engaged regularly with
and monthly review by the board. The development
the Local Planning Authority and potential partners.
loan for Harbour Arch Quay and the major
shareholders’ loan incur interest at fixed rates.
The Plymouth Fisheries complex is now 27 years old and
the Group recognises, as does the industry and Plymouth
City Council, that modernisation of the facility would
S U M M A R Y A N D O U T L O O K
support the future of fishing in Plymouth and improve
the port’s competitive position. Redevelopment of the
facility would require state support in the form of fishery
industry and other grants and the Company is working,
together with the local authority, on planning applications
and grant submissions
Former Airport Site
In 2019, when the new Local plan was agreed, a safeguard
of a maximum five years was supported by Government
Planning inspectors. More than three of the five years
have now passed and the Company has continued to
refine a masterplan for the alternative use of the 113 acre
brownfield site. The Company’s masterplan illustrates a
mixed use development to accommodate various types
of housing, institutional uses, business uses and areas of
green space providing links to integrate with established
surrounding neighbourhoods and institutions.
The Company has a unique mix of trading businesses
concentrated around Sutton Harbour, a strongly
supported visitor destination. Post Covid, the trading
businesses have recovered and continues to improve,
providing a growing cash inflow to the Company.
The resilience of the property asset portfolio is
shown in the valuation uplift. The strong asset base
and annuity incomes provide a secure platform from
which the Company has been able to restart property
construction and develop a new pipeline of consented
projects to follow. In time, the profits and investment
revenues achieved by new developments will enable
the Company the flexibility to reduce its borrowings.
The Group celebrates the 175th anniversary of its core
subsidiary this year and the stated strategic objectives
provide a long term plan for the Group’s future
success.
F I N A N C I A L O U T L O O K
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
The Company has emerged from the pandemic period
19 July 2022
with trading results and asset valuation showing resilience
and growth recovery. Like most businesses, emerging
inflationary conditions are beginning to bite. In order to
retain and attract good quality personnel the Company
has needed to increase pay and in some roles by more
than 10%. The Company is a major consumer of electricity
to power the Sutton Lock gates, ice making and chilling
plant at Plymouth Fisheries and lighting required for a large
estate. Boilers across company premises are gas powered
although consumption is less significant. The current
power contracts expire in September 2022, whereafter
the Company will experience a sharp increase. Much
of this consumption is recharged to tenants and berth-
holders, however the Company will need to raise the
prices it charges for some of its services. The Company has
already installed power efficient lighting at some locations,
upgraded fisheries boilers and modernised fisheries plant
to assist with consumption efficiency. Other costs are
expected to increase in line with general inflation.
7 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 2
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
ENGAGING WITH STAKEHOLDERS
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 and
operational matters are researched to ensure
communications to specific stakeholder groups
make clear the business reasons, the benefits and
the costs, as applicable.
The Group works closely with its key
stakeholders being bankers, major investors,
Plymouth City Council, other governance and
trade bodies and consults with these parties
where appropriate to ensure the ongoing success
of business activities. Key stakeholders are set
out in the table below.
Stakeholders
Marine - Marinas
Marine - Fisheries
Real Estate
Car Parking
Regeneration
Corporate
Service Users /
Customers
Berth-holders
Fishers
Fishing Industry
Trawler Agents
Tenants
General public
National Marine
Aquarium
Finance
Government &
Regulatory
Marine Management
Organisation
Plymouth City Council
Environment Agency
Marine Management
Organisation
Plymouth City
Council - Planning
Authority
Plymouth City
Council - Planning
Authority
Plymouth City
Council - Planning
Authority
AIM rules/
London Stock
Exchange compliance
Project Financiers
Association
Shareholders
Company Bankers
Staff
Trade Bodies
The Group’s board, management team and employed personnel. 3rd party contractors – advisors and operations delivery
British Marine
Industries Federation
Yacht Harbour
The British Ports
Association
British Parking
Association
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,
Plymouth City Council, other governance and
trade bodies and consults with these parties
where appropriate to ensure the ongoing success
of business activities. The Group has established
a forum to meet with the local fishing industry
customers of Plymouth Fisheries as well as
leaders and officers of Plymouth City Council
to discuss operational matters and proposals
to redevelop the Fisheries Complex to meet
the future needs of users. This has been a
constructive process to understand concerns,
address specific issues and to work collaboratively
on future developments to improve the facility.
Following consultation and in face of difficulties
presented to the fishers by the escalating cost of
fuel, the Group had agreed full transparency on
calculation of selling price of fuel and reduction of
the margin charged by the Group.
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,
regarding developments and operations.
The Group is available to talk directly to key
customers and tenants as matters arise.
Staff communications are managed informally
and more formally through monthly one to one
meetings and annual appraisals given the small
number of employees (currently 32).
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 8
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. 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
19 July 2022
The Board agreed to the disposal of Unit 1
Penrose House, a small investment property
peripheral to the core estate, on the basis that
the tenant’s offer exceeded the independent
valuation as at 31 March 2021.
The Board has considered disposal of other
assets peripheral to the core estate during the
year to raise funds however has not pursued
offers which are below valuation.
Staffing and Pay
Following two redundancies during the previous
year, the impact of the Covid pandemic did
not result in further reductions in headcount.
During the year the Group created roles for
two additional staff at the marinas to maintain
customer service to an increasing number of
berth-holders.
In order to retain and recruit staff, in operational
roles where the local market is short of available
personnel, the Board agreed to advance the
annual pay review from April to January 2022
and to increase pay by an average of more than
10% to remain competitive.
Dividend
The board does not recommend a dividend the
year’s results in line with its policy stated on page
11 in the Financial Review.
Board Composition
No changes to the Board’s composition have
occurred in the last year. The Board has
reconsidered its composition during the year 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
who has now served 8 years on the board, is
acceptable given his experience on other boards.
The Board also notes, that whilst Sean Swales has
served more than 10 years on the Board, that his
long term experience of the Group, knowledge
of property investment and financial specialism
are valuable contributions to the governance
of the Group.
KEY DECISIONS TAKEN IN THE YEAR
Financing
Following the difficulties of the Covid pandemic
and impact on revenues to the Group, yet with
the board’s decision to progress with consented
developments and planning costs of other
projects, together with the opportunity to
purchase of an additional site on Sutton Road,
the Company introduced new capital by way of
an Open Offer which raised a net £3.417m from
the issue of 14 million new ordinary shares in
August 2021.
To facilitate the start of the consented Harbour
Arch Quay development, the Group secured
a £5m development loan from Atelier Finance.
Consents were sought from the Group’s bankers
for the new loan to be secured against the land
and development asset, which were documented
in a facility revision in September 2021.
A secured loan taken out with another private
lender, MSP Finance, to fund the purchase of
the Sutton Road land was due to expire in May
2022. The board agreed, in the Group’s interests,
to replace this loan with two unsecured loans
totalling £2.3m from major shareholders on less
expensive and more flexible terms. The loan
repayment to MSP and draw down of the new
loans were completed in May 2022.
Continuity of Regeneration work
Following the new equity capital injection in
August 2021 and procurement of development
financing for the Harbour Arch Quay project,
the Board agreed to the start of construction
of the 14 apartment Harbour Arch Scheme.
Pre- construction works commenced in Autumn
2021 with construction on site following in
February 2022. Additionally, the re-application
to secure variations to the previously consented
Sugar Quay was submitted and approved with
unanimous Planning Committee approval in
April 2022. The section 106 agreement was
completed and signed by PCC and the Group in
June 2022.
The Group has continued with pre-planning and
master-planning work for other sites, including
Sutton Road, Fish Quay and the Former Airport
Site, during the year.
Property Transactions
The Board agreed to the purchase of another
site on Sutton Road, Plymouth, adjacent to land
already held, to assist with assembly of land for a
new residential led development in due course.
9 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 2
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
Profit/(Loss) before tax from continuing operations
Deduct fair value adjustment
Adjusted profit/(loss) before tax excluding fair value adjustments
(Loss) after tax
Basic (loss) after tax 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 2
£56.211m
43.3p
£0.561m
(£0.195m)
£0.366m
(£0.259m)
(0.02p)
0.0p
£5.638m
4.33p
£24.408m
43.4%
2 0 21
£47.153m
40.6p
(£2.373m)
£2.211m
(£0.162m)
(£2.175m)
(1.88p)
0.0p
£1.070m
0.92p
£26.874m
57.0%
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. 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.
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 2
A S AT 3 1 M A R C H
2 0 21
£54.320m
£36.125m
£18.195m
72
£1.385m
8.46%
8.96%
89%
£0.319m
8.3 years
£0.736m
£18.445m
£0.200m
£13.216m
£31.861m
£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
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 10
The Group assesses the performance of its
realisable value, with net realisable value including
The public hearing took place in early 2018, with
property assets through annual independent
developer’s return where applicable. The carrying
the Government Inspectors’ report subsequently
valuation and monthly review of the property
value of £13.216m is derived as follows:
issued in March 2019. The Government
metrics as above. Success is measured in terms of
occupancy rate, the number of vacant properties
available and the rent that letting voids could
yield. Car parking cash takings are monitored
weekly and are cross referenced to activity
levels in the harbour and compared to results
• The land and building asset was independently
valued twice yearly until 31 March 2013,
when the asset was transferred to
development inventory. The airport
closed in December 2011.
Inspectors supported a ‘safeguard’ of the former
airport site for a maximum of five years. The
Inspectors advised that a safeguarding period
longer than five years would not be appropriate
given the strategic value of this brown-field site
and based on their determination that five years
of previous comparative periods. The Group
• As at 31 March 2013 the land and building
should be more than enough time to realize a
is actively pursuing new planning consents, in
asset was transferred to development
viable business plan for aviation activity, if such
addition to the live consents already held, and
inventory and combined with the
activity was viable.
cost of the pre-construction work is capitalised
pre-existing inventory total, which included
to the carrying value.
the cost of building the Link Road and planning
D I S P O S A L O F A S S E T S
During the year the Group disposed of Unit 1,
Penrose House at a sales price of £260,000.
The Group sold the unit which was deemed
peripheral to the core estate at a price higher
than the valuation at 31 March 2021. £100,000
of the proceeds were used to repay part of the
committed loan facility from Nat West.
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 2022 construction work began on the
development of Harbour Arch Quay. This 14
apartment development is due for completion in
Spring 2023.
A S S E T V A L U AT I O N
During the year, independent valuation of
intellectual property costs.
• It was agreed at 31 March 2013 that the
transfer would be made at valuation, inclusive
of historic revaluations. As at 31 March 2013
the carrying value of the former airport asset
was £11.479m, inclusive of past revaluations
The Group has continued to prepare its
masterplan for alternative use of the site,
reflecting the guidance of the Government
Planning Inspectors that presided over the
2019 new Local Plan, for submission to the
Local Authority in good time to allow full
participation in the forthcoming 5-year
totalling £3.969m. The net increase in former
review of the Local Plan.
airport asset valuation from 31 March
2013 (£11.479m) to 31 March 2022 (£13.216m)
of £1.737m represents the capitalised costs
of developing the planning intellectual
property less the cost attributed to sales of
small plots. £13.216m represents the historic
cost of the airport asset as at 31 March 2022.
• In addition to the net cash expenditure on
the airport asset, the former aviation
operations, ongoing site maintenance
and security, together with interest costs
thereon (Present Value of total cash
The Group does not regard the carrying value
of the former airport site to be reflective of
its value for alternative use, which is in turn
significantly less than the value that can be earnt
from redevelopment of this strategic asset. The
Group regards the value that can be earned from
this strategic asset is significantly greater than
both the carrying value and the Present Value
of total cash expended.
expended) is more than double the £13.216m.
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 present audit firm
also reports the same ‘Emphasis of Matter’ in
the 2020, 2021 and 2022 Audit Reports.
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 Group’s investment and owner-occupied
In December 2016 the Department for
portfolio was undertaken as at 31 March 2022.
Transport published the ‘Plymouth Airport
This valuation gave rise to a net surplus of
Study Report’, which concluded that a lack of
£7.208m reconciled as £0.380m surplus on the
demand and a short runway mean commercially
investment portfolio and £6.828m surplus on the
viable passenger services could not be run out
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
The former airport site, a 113 acre site of which
the Group directly owns c.8 acres and holds
c.105 acres through an unexpired 135 year
leasehold interest, with a right to renew for a
further 150 years, totalling 285 years, is held
as development inventory at a carrying value
of £13.216m. 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
of the former Plymouth Airport site as it would
remain “financially vulnerable” in a “high risk
environment”.
PCC prepared its new local plan to for
submission to the Government Planning
Inspectorate in which they called for the
retention of the airport site for a possible
reopening.
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.
11 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
The bank facility and from time to time, new
The board decided to transition from LIBOR
equity capital, has been drawn upon to fund
based interest rate calculation to the SONIA
pre-construction costs of new regeneration
based rate calculation at the transition date of
projects. Other loan financing has been used to
31 December 2021 in respect of servicing of the
finance land purchases; in December 2020 a loan
interest on its Group banking facility . This took
from a private lender was taken out to fund the
place seamlessly on 31 December 2022. The
purchase of a site on Sutton Road, Plymouth,
Group has not identified any need to change the
After the year end, in May 2022, this loan was
approach to financial risk management as a result
repaid funded by two unsecured loans totalling
of the transition.
£2.3m were provided major shareholders on
less expensive and more flexible terms.
Separate development funding is sought for
the construction and project delivery costs.
The Group had total borrowing net of cash and
cash equivalents of £24.408m at 31 March 2022
(2021: £26.874m) with a gearing level of 43.4%
(2021: 57.0%). The Group has operated within
its authorised facilities. The bank facilities were
With the pipeline of consented development
projects to finance, the Group is having
discussions to put in place funds to progress to
construction as conditions allow.
Debt servicing costs continue to be a major
expense to the Group and the board considers
monthly the merits of entering into interest rate
swap arrangements to fix interest on part of the
amended in December 2020 to permit the carve
total debt. There are currently no interest rate
out of the Sugar Quay site provided as security
swap agreements in place.
to a different lender for the purchase of the
Sutton Road site. The facilities were amended
again in March 2021 to extend the additional
TA X AT I O N
£2m RCF until May 2022 and to amend certain
covenants in line with Covid crisis impacted
trading expectations. In September 2021 facilities
were amended to permit the transfer of the land
for the Harbour Arch Quay to be transferred to
the subsidiary undertaking the development and
to allow the development lender to take security
thereon. After the year end, the Group gained
the bank’s consent to allow two unsecured loans
with major shareholders to be taken out upon
conditions that the loan to purchase the Sutton
The standard rate of tax applicable to the Group
is 19% (2021: 19%). The overall tax charge for
the year is £0.820m (2021: credit of £0.198m).
£1.116m of deferred tax charges relating to the
revaluation of owner occupied property was
recognised through Other Comprehensive
Income. No current tax is due on the year’s
results with the tax charge resulting from
movements in timing differences.
Road site was repaid and evidenced by release
D I V I D E N D P O L I C Y
of security to that lender.
The bank facility of £26.9m at 31 March 2022
(2021: 27.0m) reduced to £24.9m in May 2022
after the £2m Covid support RCF expired.
The bank facility expires in December 2023. The
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
terms of the facility agreement provide for a 12
asset-based investment with its opportunities to
month extension of the committed facility. The
reduce bank debt and realise value vested in the
board is currently considering this option and
success of future development projects.
the alternative or renewal of the bank facility,
one of which will need be put in place before
31 March 2023.
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
19 July 2022
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 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 2
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 £24.9m expire in December 2023,
and negotiation of extension/renewal of facilities will start in Summer 2022 to have sufficient
future financing in place by March 2023.. Development is and will be funded through specific
loans and equity capital. The Group has raised £9.250m equity finance since January 2018 to
fund project and capital maintenance expenditure. Major shareholders have demonstrated
their ongoing support through their participation in new equity issue and in the provision of
unsecured loans (£2.3m) in May 2022 to support repayment of a loan.
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 £24m and any further material increase in
interest rates could have a significant impact on debt servicing costs. The Group regularly
reviews interest rates and its exposure. Interest 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.
Risk of materials cost rises and
ultimate disposal of apartments
to allow repayment of
development loans.
The Group secured priced contracts on all subcontractor packages for the development.
The apartments are due to be complete in Spring 2023. To date enquiries for the
apartments have been strong with reservation deposits already placed on five apartments,
including the penthouse at full asking price.
Construction Risk -
The Group is undertaking
a development project
of 14 apartments at
Harbour Arch Quay.
A P P R O V A L
The Strategic Report from pages 1 to 12 was approved by the Board of Directors on 19 July 2022 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
13 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 2
GOVERNANCE
D I R E C TO R S
A N D A D V I S O R S
Company Number
02425189
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 Advisor
Registrar
Bankers
Sutton Harbour Office
Guy’s Quay Office
Sutton Harbour
Plymouth
PL4 0ES
Tel: 01752 204186
www.suttonharbourgroup.com
PKF Francis Clark
Centenary House
Peninsula Park
Rydon Lane
Exeter
EX2 7XE
Strand Hanson Limited
26 Mount Row
Mayfair
London
W1K 3SQ
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 2022 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 2
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 2022.
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 19 July 2022 the Group’s register of shareholdings showed the following interests in 3% or more
of the Group’s share capital:
FB Investors LLP
Crystal Amber Fund Limited
Rotolok (Holdings) Limited
%
O R D I N A R Y S H A R E S
72.91
10.76
5.70
94,746,750
13,978,650
7,409,996
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 2022 are set out below.
Philip H. Beinhaker
Corey B. Beinhaker
Graham S. Miller
Natasha C. Gadsdon
Sean J. Swales
There has been no dividend paid or proposed in the year.
2 0 2 2
-
-
610,762
27,838
10,000
2 0 21
-
-
450,700
24,839
3,199
15 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 81. 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 52. 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 59. 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 54. 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 52. 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 Philip H. Beinhaker and Graham S. Miller 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 10.
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
19 July 2022
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 16
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 2
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
undertakes new developments on land it owns or redevelops existing assets to
realise the value of land holdings or to retain as investment assets. 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
17 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Philip Beinhaker has no personal shareholding in the
Group. FB Investors LLP, which owns 72.91% 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
610,762 shares in the Group and he is the Senior
Independent Director on the Board. Graham was
appointed a Director in 2013.
Sean Swales holds 10,000 shares in the Group. He
is also the corporate representative of Rotolok
(Holdings) Limited which has an interest in
7,409,996 (5.70%) 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 twelve 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 72.91% 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 27,838 shares in the Group
and has been an Executive Director since 2004. She
also holds options over 143,340 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
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
that such decisions can only be taken where
either Graham Miller or Sean Swales are present
with Philip Beinhaker and Corey Beinhaker.
now complete.
The Relationship Agreement dated 23
The key procedures which the Directors have
During the year, the Board has re-evaluated its
November 2017, addresses amongst other things,
established with a view to providing effective
composition and is satisfied with the current
the composition of the SHG Board providing FB
internal controls are as follows:
mix of experience of board members and
Investors with the ability to appoint up to two
representation of large, medium and minority
Directors to the SHG Board (one of whom may
size shareholder interests. The performance
be the Chairman for so long as it holds, directly
of the board is assessed from month to month
or indirectly, 50 per cent or more of the issued
by monitoring the progress made with specific
voting share capital of the Group). It contains
projects, with reference to achievement of
certain restrictions in relation to Directors
milestones (eg. Design, planning submission,
appointed by FB Investors voting at meetings of
planning consent, financing, project delivery,
the SHG Board on matters in which FB Investors
financial result) and for ongoing trading activities
is interested. Under the Relationship Agreement,
by reference to Key Performance Indicators.
FB Investors has agreed not to vote in relation
Project and trading outcomes are measured
to any resolution put to SHG Shareholders to
against original project appraisals and budgets,
cancel its admission to trading on AIM, pursuant
and in the context of the evolving business
to Rule 41 of the AIM Rules, for a minimum
conditions. The Non-Executive Directors’
period of two years following the Partial Offer
knowledge of the Group’s interests and
experience of other organisations in which
unless such resolution is recommended by those
Board members of the Board not appointed by
they hold board level positions, allows critical
FB Investors. FB Investors has nominated Philip
review of Group’s current operations and
Beinhaker and Corey Beinhaker to serve as
proposals for new projects and provides the
Directors of Sutton Harbour Group plc.
basis of appropriate challenge to the Group’s
management.
Philip Beinhaker is appointed Executive Chairman
(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
Board. He is the main contact to handle matters
where other Directors have a conflict of interest.
Sean Swales, a Non-Executive Director since
December 2009. A Chartered Accountant, he
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
9 full Board meetings were held in the financial
year to 31 March 2022 (attendances are
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
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 considers
its effectiveness annually and has concluded that
its present composition, taking into account the
size of the Company, its AIM listing, the skills and
experience it requires and current diversity of
continues to contribute actively to the Board due
Board personnel, is appropriately balanced with
to his financial specialism, property investment
experienced appointees.
and development expertise and regional
knowledge.
The Board is responsible for setting the strategy
to deliver shareholder value growth over the
Natasha Gadsdon, a Chartered Accountant, is
medium to long term. Decisions about financing,
appointed Finance Director and Group Secretary.
acquisitions and disposals, project and capital
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.
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
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
high recruitment standards and subsequent
training courses. High quality personnel are seen
as an essential part of the control environment.
Financial Reporting:
The Group has a comprehensive system for
reporting financial results to the Board and
monitoring of budgets.
Investment Appraisal:
Capital expenditure is regulated by authorisation
levels. For expenditure beyond specified levels,
detailed written proposals are submitted to the
Board.
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
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
colleagues and professional advisors is sought
are set out below.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 18
and any other matters pertaining to financial
Public Bodies
management, the statutory audit and tax
The Group maintains an active relationship
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
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. The Company
has established a communications forum to meet
with the local fishing industry on a quarterly
basis. Surveys of marina customer satisfaction are
undertaken annually.
Employees
is regularly updated with input from across the
The Group is committed to paying, as a
Group and external advice is taken if required.
Included in the monthly reports to the Board,
minimum, the living wage as recommended by
the Living Wage Foundation, to its employees.
new risks are identified together with proposals
Pay reviews are undertaken at least annually
to manage/mitigate the risk. Group Bankers
and Insurers are kept appraised of business
risks and vulnerabilities on an ongoing basis.
Annual independent health and safety audits
are undertaken with the results reported to
following a detailed review of market rates in
the area to ensure pay remains competitive and
attractive. The Group undertakes appraisals
for all employees annually, arranges monthly
contact meetings for all employees with their line
the Board. Advice from the appointed external
manager, sponsors their essential qualifications
Health and Safety Advisor is taken where
appropriate
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
and continuing professional development (as
appropriate to role) and has a schedule of
monthly function meetings with a Director
present at each.
C O R P O R AT E V A L U E S
Refer also to the Corporate, Social Responsibility
with major institutional investors and invites
and Environment Report on page 19. Senior
shareholders to open days, which are held
Managers are regularly invited to present at
from time to time, which include a tour of the
Board Meetings and to respond to questions
assets. The Board welcomes the participation
and this forum sets the cultural tone. At annual
of shareholders at the Annual General Meeting
appraisals performance of employees is reviewed
with the opportunity to answers questions of
against specific targets and conduct in line with
any Board member offered. The Annual Report
the Group’s standards of conduct as set out in
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
between the Board and shareholders. The Group
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
Secretary is normally the first point of contact for
19 July 2022
any general enquiries or arrangement regarding
shareholder meetings.
Email: n.gadsdon@sutton-harbour.co.uk
19 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 2
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
C O R P O R AT E C U LT U R E
The Group has a good health and safety
• Ensure that it meets and if plausible exceeds
record with no enforcement notices and no
environmental legislative requirements.
The Group’s executive management team sets
the tone of professionalism and proactivity.
Actions are prioritised daily in collaborative
meetings to make the most beneficial use of
management time to ensure trading progress
and project delivery are on track to achieve
performance targets. The Group has made
good use of virtual meeting technology to
prosecutions for breaches of Health and Safety
legislation to report.
P O R T M A R I N E S A F E T Y C O D E
Sutton Harbour Group, a Statutory Harbour
Authority, and a wholly owned subsidiary of the
improve efficiency and inclusiveness of sharing of
Group, is committed to undertaking statutory
information and ideas. This approach has allowed
duties in accordance with the standards defined
the Group to continue to make good progress
within the Port Marine Safety Code. To ensure
towards its targets during the last two years in
full compliance with the code an independent
which trading conditions were impacted by the
audit of the Sutton Harbour Safety Management
• Use and operate sound procedures to avert
water pollution in Sutton Harbour.
• Tackle the issues that arise from car travel by
introducing ways of reducing the impact of
travel to work and business mileage.
• Review its purchasing requirements and
practices also whenever possible to do so
make environmentally sound purchasing
decisions and increase local purchasing.
System is carried out annually. The Maritime
and Coastguard Agency audit took place in
March 2015.
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
difficulties presented by the Covid pandemic.
H E A LT H A N D S A F E T Y
The Board of Directors understands its
responsibility to the health and safety of
E N V I R O N M E N TA L I S S U E S
employees, customers and others who are
The Board has agreed the following
directly or indirectly affected by the Group’s
Environmental Statement:
operations.
The Group’s Health and Safety Committee
is chaired by Natasha Gadsdon and has
The environment plays a key role in the
continuing success of the Sutton Harbour Group
and the Group recognises that it needs to set
representation from all Group activities. The
itself achievable environmental standards.
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
Safety Officer and an Independent Health
and Safety Consultant. The Committee has a
The Group has looked at the areas of its business
which could have both positive and negative
impacts on the environment and has identified
the following policy aims to enhance its overall
environmental performance.
comprehensive agenda and is briefed on new
The Group is working to:
legislation or regulation by the Independent
Health and Safety Consultant.
The Group does not currently undertake direct
construction on site. An excellent Health and
Safety management record is a key criterion in
the selection of contractors.
• Reduce its Carbon Footprint by minimising
energy use and cutting out energy waste.
• Minimise the amount of waste it creates
and ensures that it recycles as much of the
waste generated as is feasible.
The area of Sutton Harbour is located in the
heart of Plymouth. The Group supports various
community and tourist initiatives. The Group
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.
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
19 July 2022
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 20
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 2
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 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 2022 were £5,000 in respect of Corey B. Beinhaker (2021: £nil) and £5,000 in respect of Natasha
C. Gadsdon (2021: £1,900).
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 23 June 2021, Natasha Gadsdon was awarded 12,000 share options with an
exercise price of 25p 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 2
£ 0 0 0
144
285
32
6
467
2 0 21
£ 0 0 0
144
275
32
2
453
21 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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 2
Philip H. Beinhaker
Graham S. Miller
Corey B. Beinhaker
Natasha C. Gadsdon
Sean J. Swales
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
101
-
261
-
-
-
14
-
14
-
-
5
5
-
10
-
-
-
6
-
6
101
23
-
-
20
144
Directors’
salaries
£000
Taxable
benefits
£000
Bonus
Payments
£000
Contractual
Payments
£000
Directors’
fees
£000
-
-
160
99
-
259
-
-
-
14
-
14
-
-
-
2
-
2
-
-
-
2
-
2
101
23
-
-
20
144
Total
£000
101
23
165
126
20
435
Total
£000
101
23
160
117
20
421
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 22
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 2
£ 0 0 0
-
32
32
2 0 21
£ 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
19 July 2022
23 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
GOVERNANCE
Statement of Directors’ Responsibilities
For the year ended 31 March 2022
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 UK adopted IAS, 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 UK adopted IAS 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
G R O U P S E C R E TA R Y
19 July 2022
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 24
GOVERNANCE
Independent Auditor’s Report
For the year ended 31 March 2022
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
2022 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 2022 and of the group’s loss for the year
then ended;
• The group financial statements have been properly prepared in accordance
with UK-adopted IAS;
• The parent company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted Accounting
Practice; and
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 £13.2m. 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.
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, Sutton East Holdings Limited and Harbour
Arch Quay Limited.
• We performed analytical review procedures on Sutton Harbour Property
and Regeneration Limited.
• Remaining components are dormant.
• The financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
The components within the scope of audit work covered 97% of group
revenue, 100% of group loss before tax and 97% of group net assets.
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.
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.
25 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
25 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
K E Y A U D I T M AT T E R
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 £18m and owner occupied
land and buildings are held at £34.4m. 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.
An external valuation has been performed at 31 March 2022.
R E S P O N S E A N D C O N C L U S I O N
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.
• Considering deferred tax treatment in respect of the valuations in line
with IAS 12.
• 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 2022, along with
other available information, in the Board’s determination of fair values at 31 March
2022 and are satisfied that the carrying values of investment properties and owner
occupied land and buildings are materially correct. We are satisfied that deferred tax
Valuation of Former Plymouth City Airport Site
Our work included
Within development inventory the group holds the former airport
site at a carrying value of £13.2m. 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.
• 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.
Valuation Of Development Sites
Our work included
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.
The development of Harbour Arch Quay commenced in the year
ended 31 March 2022.
• Focussing on the material balances within Group inventory, being Sugar Quay
(£10.7m), incorporating Sutton Road acquisition (£4m) and Harbour Arch
Quay (£2.2m).
• 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.
Specifically for the ongoing development at Harbour Arch Quay
• Reviewing third party reports on the progress of the development up to June
2022, including agreeing costs incurred per the report to the accounts and the
original budget. We have considered the risk in potential overruns in costs and
have confirmed that a significant portion of contracts with subcontractors are
fixed and agreed, meaning minimal risk in this area.
• We have also reviewed management’s considerations of expected book profit
on the development and headroom within this, suggesting no impairment
is required.
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 2022 25
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 23
OUR APPLICATION OF MATERIALITY
Materiality for the group financial statements as a whole was set at £890,000.
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 £26,700, in addition to
other identified misstatements that warrant reporting on qualitative grounds.
Materiality for the parent company financial statements was set at £363,000.
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 £10,890, 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 £133,000 - £481,000.
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:
• 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.
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.
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
• Reviewing and assessing the appropriateness of management’s sensitivity
analysis including changes in turnover and related cashflows.
• certain disclosures of Directors’ remuneration specified by law are not
made; or
• Reviewing the bank facility agreement dated 26 March 2021 which
confirmed £22.4m in term loans and a £2.5m revolving credit facility in
place until December 2023.
• Assessing the amount of available facilities and other options available to the
group 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.
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
• 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 23, 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.
26 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
24 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
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
19 July 2022
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.
• 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.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 27
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 25
Consolidated Income Statement
For the year ended 31 March 2022
Revenue
Cost of sales
Gross profit
Fair value adjustments on investment properties and fixed assets
Administrative expenses
Operating profit/(loss)
Finance income
Finance costs
Net finance costs
Profit/(loss) before tax from continuing operations
Taxation (charge)/credit on (loss)/profit from continuing operations
(Loss) for the year from continuing operations
(Loss) for the year attributable to owners of the parent
Basic and diluted earnings/(loss) per share
from continuing operations
Diluted earnings/(loss) 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.
28 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
26 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Note
5
13,14
5,6
9
9
10
2022
£000
7,194
(4,846)
2,348
195
(1,193)
1,350
-
(789)
(789)
561
(820)
(259)
(259)
2021
£000
65,400
(3,638)
1,762
(2,211)
(1,171)
(1,620)
-
(753)
(753)
(2,373)
198
(2,175)
(2,175)
12
(0.20p)
(1.88p)
(0.20p)
(1.88p)
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 2022
(Loss) for the year
Items that will not be reclassified subsequently to profit or loss:
Revaluation of property, plant and equipment
Deferred tax in respect of property revaluation
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 33 to 57 are an integral part of these consolidated financial statements.
Note
13
10
2022
£000
(259)
7,016
(1,116)
-
5,900
5,641
2021
£000
(2,175)
3,245
-
-
3,245
1,070
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 29
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 27
Consolidated Balance Sheet
As at 31 March 2022
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
Other Loans
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
20
22
23
21
25
20
23
21
16
25
26
2022
£000
36,398
18,195
13,216
67,809
18,734
1,810
9
970
21,523
89,332
2,275
1,880
165
2,225
-
6,545
22,863
75
646
2,992
-
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
-
26,576
29,363
33,121
33,109
56,211
47,153
16,406
13,972
22,180
3,653
56,211
16,266
10,695
16,280
3,912
47,153
The notes on pages 33 to 57 are an integral part of these consolidated financial statements.
The Financial Statements on pages 28 to 32 were approved and authorised by the Board of Directors on 19 July 2022 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
30 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
28 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Consolidated Statement of Changes in Equity
For the year ended 31 March 2022
Notes
Share
capital
Share
premium
£000
£000
Revaluation
reserve
Hedging
reserve
-------------- --- Other reserves ------------------
£000
Merger
reserve
£000
£000
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 1 April 2021
16,266
10,695
12,409
3,871
Comprehensive income
Loss for the year
Other comprehensive income
Share issue
Revaluation of property, plant and equipment 13
Deferred tax on revaluation
Total comprehensive income
Balance at 31 March 2022
-
140
-
-
-
3,277
-
-
140
3,277
16,406
13,972
-
7,016
(1,116)
5,900
18,309
-
-
-
-
3,871
-
-
-
-
-
-
-
-
-
-
The notes on pages 33 to 57 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
6,087
46,083
(2,175)
(2,175)
-
3,245
(2,175)
1,070
3,912
47,153
(259)
(259)
3,417
7,016
(1,116)
-
-
(259)
9,058
3,653
56,211
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 31
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 29
2022
£000
2021
£000
59
(2,536)
Consolidated Cash Flow Statement
For the year ended 31 March 2022
Cash generated/(used) from total operating activities
Cash flows from investing activities
Net expenditure on investment property
Expenditure on property, plant and equipment
Proceeds from disposal
Cash generated/ (used) in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Interest paid
Loan (repaid)/drawdown
Lease finance (paid)/received
Cash payments of lease liabilities
Grants received
Net cash (used)/ generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Note
28
14
13
19
19
(52)
(196)
262
14
3,417
(1,033)
(2,337)
62
(148)
8
(31)
42
928
970
Reconciliation of financing activities for the year ended 31 March 2022
Bank loans
Other loans
Lease liabilities
Long term debt
2022
£000
Cash
flow
£000
22,800 (2,400)
2,338
240
63
(87)
25,378 (2,424)
2021
£000
25,200
2,275
327
27,802
Cash
flow
£000
950
2,275
236
3,461
The notes on pages 33 to 57 are an integral part of these consolidated financial statements.
32 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
30 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
(10)
(161)
-
(171)
-
(754)
3,225
378
(142)
136
2,843
136
792
928
2020
£000
24,250
-
91
24,341
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
1. General information
Sutton Harbour Group plc, (‘the Group’) 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 Group 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 UK adopted IAS, 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 accounting standards this year. There are no changes to accounting standard expected in the coming 12 months that would have a
material impact on the accounts.
Going concern
The review of the Group’s business activities is set out in the combined Executive Chairman’s Report on pages 4 and 6. The financial position of the Group,
its cash flows and financing position are described in the Financial Review on page 10. 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 Directors have not identified any material uncertainties relating to events or conditions that individually or collectively may cast
significant doubt on the group’s ability to continue as a going concern for a period of at least twelve months from the financial statements are authorised for
issue.
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 2022 33
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 31
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
- 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.
The treatment of assets where the lessor maintains the risks and rewards of ownership is described in the lease payments accounting policy below
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.
34 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
32 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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 (i.e. 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 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 have 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 2022 35
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 33
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
Lease payments
The Directors have considered the application of IFRS16 on its leasing arrangements. 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 2022. 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.
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 of the Group; these awards are granted by the Group. 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
36 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
34 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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 2022 37
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 35
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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
Lease liabilities
Cash and cash equivalents
Net debt
Equity
Net debt to equity ratio
2022
£000
(25,138)
(240)
970
(24,408)
56,211
43.3%
2021
£000
(27,475)
(327)
928
(26,874)
47,153
57.0%
Bank borrowing facilities and financial covenants
The Group had total borrowing net of cash and cash equivalents of £24.408m at 31 March 2022 (2021: £26.874m) with a gearing level of 43.3% (2021:
57.0%). The Group has operated within its authorised facilities and has met all bank covenants during the year. The bank facilities were renewed in
December 2019, when the Group entered into an agreement which provides a maximum £24.9m committed facility with a confirmed expiry date of
December 2023 with the possibility of a further 12 month extension. Subsequently, in May 2021 the Group agreed an amendment with bankers to extend
the maximum facility to £27m for twelve months, which ended 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 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.
38 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
36 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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 2022:
Bank loans*
Other loans*
Trade and other payables*
Lease liabilities*
Derivatives financial instruments**
As at 31 March 2021:
Bank loans*
Other 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
(22,800)
(2,338)
(1,800)
(240)
-
-
(2,275)
(1,800)
(165)
-
(22,800)
(63)
-
(75)
-
(27,258)
(4,320)
(22,938)
-
-
-
-
-
-
Total
£000
0 to <1 years
£000
1 to < 2 years
£000
2 to <5 years
£000
(25,200)
(2,275)
(1,730)
(325)
-
(29,530)
-
-
(1,730)
(139)
-
(1,869)
(200)
(2,275)
-
(186)
-
(2,661)
(25,000)
-
-
-
-
(25,000)
* financial liabilities at amortised cost
** financial liabilities at fair value
Interest rate risk
There is currently no SONIA 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
2022
£000
48
383
127
558
2021
£000
56
422
334
812
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 2022, it is estimated that a general increase of 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 £263,000 (2021: £240,000). Net assets
would have decreased by the same amount.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 39
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 37
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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% – 11.21% with the average yield being 8.46%. Assuming all else stayed the
same; a decrease of 1.0% in the average yield would result in an increase in fair value of £2.72m. An increase of 1.0% in the average yield would result in a
corresponding decrease in fair value of £2.11m.
These assets were independently valued by Jones Lang LaSalle (“JLL”) at 31 March 2022. 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.
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 UK adopted IAS 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 2022 was £18,195,000 and £36,125,000 respectively; (2021:
£17.845,000 and £29,475,000 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. JLL noted that there was uncertainty around the effect of Brexit on the Fisheries business, as well as what could be
the effect of the conflict in Ukraine on the Global economy, but stated that their valuation figures could be relied on. Within the valuation of property held for use
in the business, judgment is required to allocate the valuation between land and buildings. Any impact upon the valuation is therefore unknown at present. Further
detail about the property valuation can be found in the Financial Review on page 10.
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 2022: £31,861,000 see note 17; (2021: £29,275,000)
• 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.
40 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
38 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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 2022 is as follows:
Year ended 31 March 2022
Revenue
Segmental Operating Profit before fair value
adjustment and unallocated expenses
Fair value adjustment on investment
properties and fixed assets
Marine
£000
4,771
1,199
(185)
Real Estate
£000
Car Parking
£000
Regeneration
£000
1,427
922
380
736
389
-
260
(162)
-
Unallocated:
Administrative expenses
Operating profit
Financial income
Financial expense
Profit before tax from continuing activities
Taxation
Loss for the year from continuing operations
Depreciation charge
Marine
Car Parking
Administration
Total
£000
7,194
2,348
195
2,543
(1,193)
1,350
-
(789)
561
(820)
(259)
335
40
17
392
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 41
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 39
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
Marine
£000
3,509
770
1,542
1,020
(1,061)
(1,150)
Real Estate
£000
Car Parking
£000
Regeneration
£000
349
110
-
-
(138)
-
Year ended 31 March 2021
Revenue
Gross profit prior to non-recurring items
Fair value adjustment on investment
properties and fixed assets
Unallocated:
Administrative expenses
Operating loss
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
42 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
40 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
Assets and liabilities
Segment assets:
Marine
Real Estate
Car Parking
Regeneration
Total segment assets
Unallocated assets:
Property, plant & equipment
Trade & other receivables
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
2022
£000
31,068
18,628
6,428
31,936
88,060
61
241
970
89,332
2022
£000
2,622
464
132
1,234
4,452
25,378
296
2,994
1
33,121
(171)
(1)
(24)
(196)
2021
£000
25,846
18,715
4,861
29,343
78,765
70
499
928
80,262
2021
£000
2,062
689
21
1,142
3,914
27,802
337
1,056
-
33,109
(161)
-
-
(161)
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
Sale of property
No revenues from any one customer represented more than 10% of the Group’s revenue for the year.
2022
£000
1,869
1,609
3,456
260
7,194
2021
£000
1,441
1,542
2,417
-
5,400
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 43
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 41
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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 re-measurement of investment property to fair value
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
2022
£000
1,467
(56)
(1,427)
(1)
547
(380)
183
392
-
2022
£000
25
31
-
2021
£000
1,441
(43)
(1,542)
3
522
1,150
1,061
399
196
2021
£000
22
25
-
44 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
42 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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
2021
2022
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
Details of the highest paid Director are detailed in the renumeration report on page 20
9. Finance income and finance costs
Finance income
Interest payable on bank loans and overdrafts
Interest payable on lease liabilities
Finance costs
Finance costs are net of borrowing costs capitalised in the year. See note 17.
24
1
7
32
2022
£000
1,172
121
174
1,467
2022
£000
144
285
32
2
463
21
1
9
31
2021
£000
1,098
110
175
1,383
2021
£000
144
275
32
3
453
2022
£000
2021
£000
-
652
137
789
-
643
119
753
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 45
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 43
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
10. Taxation
Deferred tax
Adjustments in respect of previous years
Origination and reversal of temporary differences
Change in tax rate
Total tax charge/(credit) in income statement
The tax assessed for the year uses the standard rate of corporation tax in the UK of 19% (2021: 19%).
Reconciliation of effective tax rate
Profit/(loss) before tax
Tax on profit at standard corporation tax rate of 19% (2021: 19%)
Expenses not deductible for tax purposes
Adjustments respect of prior periods
Movement on potential chargeable gain on revaluation
Change in deferred tax rate
Capital allowances in excess of depreciation
Creation of tax losses
Total tax charge/(credit) on continuing operations
11. Share based payment
Note
16
2022
£000
(5)
107
718
820
2022
£000
561
107
6
(6)
718
-
(5)
820
2021
£000
46
(244)
-
(198)
2021
£000
(2,373)
(451)
448
46
(217)
-
-
(24)
(198)
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 24,000 share options were granted with an exercise price of £0.25. 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 2022 was £8,134 (2021: £3,134).
A weight averaged volatility input to the Black Scholes of 48% was applied being the average % fluctuations (positive and negative) of the share price
compared to the grant price of share options issued.
Set out below is a summary of options granted under the CSOP plan:
Grant Date
Expiry Date
Exercise Price
Balance at
start of year
Granted
Exercised
Expired
Balance at
end of year
Life of options
remaining
27 Nov 2019
8 July 2020
23 Jun 2021
26 Nov 2029
8 July 2030
23 Jun 2031
22p
19p
25p
0
102,273
218,063
102,273
115,790
24,000
0
0
0
0
0
0
102,273
218,063
242,063
2,797 days
3,021 days
3,372 days
The weighted average exercise price at 31 March 2022 was 20.84pence (31 March 2021: 20.41pence)
46 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
44 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
12. Earnings per share
Continuing operations:
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
2022
Pence
(0.20p)
(0.20p)
2021
Pence
(1.88p)
(1.88p)
Basic earnings per share
Basic earnings per share have been calculated using the Loss for the year of £259,000 (2021: loss of £2,373,000) for the continuing operations.
Diluted earnings per share
Diluted earnings per share uses an average number of 125,710,426 (2021: 116,130,728) ordinary shares in issue in accordance with IAS 33 ‘Earnings per Share’.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 47
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 45
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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 2020
Additions
Revaluations to income statement
Revaluations to revaluation reserve
Impairment
Transfers
Disposals
Balance at 31 March 2021
Balance at 1 April 2021
Additions
Revaluations to income statement
Revaluations to revaluation reserve
Grants recieved
Transfers
Disposals
Balance at 31 March 2022
Accumulated depreciation
Balance at 1 April 2020
Depreciation charge for the year
Transfers
Disposals
Balance at 31 March 2021
Balance at 1 April 2021
Depreciation charge for the year
Transfers
Disposals
Balance at 31 March 2022
Net book value
At 31 March 2021
At 31 March 2022
24,925
90
(1,061)
3,245
-
475
-
27,674
27,674
57
(185)
7,016
-
-
-
34,562
487
164
-
-
651
651
145
-
-
796
27,023
33,766
686
-
-
-
(136)
(475)
-
75
75
3
-
-
-
-
-
78
-
-
-
-
-
-
-
-
-
-
75
78
5,033
71
-
-
-
-
(157)
4,947
4,947
135
-
-
-
-
(41)
5,041
2,199
235
-
(155)
2,279
2,279
248
-
(40)
2,487
2,668
2,554
Total
£000
30,644
161
(1,061)
3,245
(136)
-
(157)
32,696
32,696
195
(185)
7,016
-
-
(41)
39,681
2,686
399
-
(155)
2,930
2,930
393
-
(40)
3,283
29,766
36,398
Included in Land and Buildings is long leasehold land at a value of £2,200,000 (2021: £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 2022 (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. Further detail about property revaluation is included in the
Financial Review on page 10.
At 31 March 2022, 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 £23,775,000 (2021: £19,550,000).
48 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
46 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
At 31 March 2022, 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 (2021: £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 £519,000 (2021: £327,000).
14. Investment property
At fair value:
Balance at the beginning of the year
Additions during the year
Fair value adjustments
Disposals
Intercompany transfers
Balance at the end of the year
2022
£000
17,845
52
380
(232)
150
18,195
2021
£000
18,985
10
(1,150)
-
-
17,845
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 2022 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. Further detail
about property valuation is included in the Financial Review on page 10.
All of the Group’s investment property is held under freehold interests with the exception of four (2021: four) properties which are held under long leaseholds.
15. Investments
At 31 March 2022 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
Sutton Harbour Projects Limited
Harbour Arch Quay Management Company Limited
Sutton Harbour Car Parks Limited
Sugar Quay Holdings Limited
Sugar Quay Limited
Sutton East Holdings Limited
Sutton East Developco No1 Limited
Class of Ownership
shares held
2022
2021
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%
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 2022 49
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 47
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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
Employee benefits
Losses carried forward
2022
£000
2021
£000
-
-
-
509
509
-
-
-
453
453
1 April
2021
£000
(1,090)
(419)
-
453
(1,056)
2022
£000
(1,561)
(1,940)
-
-
(3,501)
Change in
deferred
tax rate
£000
2021
£000
(1,090)
(419)
-
-
(1,509)
2022
£000
(1,561)
(1,940)
-
509
2021
£000
(1,090)
(419)
-
453
(2,992)
(1,056)
Recognised
in income
£000
Recognised
in equity
£000
31 March
2022
£000
-
-
-
-
-
(538)
(1,048)
(133)
(217)
(1,936)
-
-
-
-
-
(1,628)
(1,467)
(133)
236
(2,992)
The Directors believe the deferred tax asset relating to losses carried forward will be utilised by future taxable profits.
17. Inventories
Stores and materials
Goods for resale
Development property
2022
£000
11
78
31,861
2021
£000
8
38
29,275
31,950
29,321
Included within inventories is £31,861,000 (2021: £29,275,000) expected to be recovered in more than 12 months. £13,216,000 (2021: £12,962,000) 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 £1,576,000 were recognised as an expense in the year (2021: £1,003,000).
Interest capitalised during the year in relation to development property was £343,000 (2021: £138,000). The capitalisation rate used to determine the
amount of borrowing costs eligible for capitalisation was 3.0% (2021: 3.2%).
In the course of the year, £nil of development property inventory was written down (2021: £nil).
50 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
48 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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
2022
£000
677
(119)
558
8%
50
1,202
1,810
2021
£000
885
(73)
812
8%
46
1,538
2,396
Included within trade and other receivables is £613,000 (2021: £794,000) expected to be recovered in more than 12 months.
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
2022
£000
970
970
2022
£000
-
2,100
-
2,100
2021
£000
928
928
2021
£000
-
1,800
-
1,800
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 51
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 49
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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
Current liabilities
2022
£000
22,863
2,275
25,138
2021
£000
25,200
2,275
27,475
Secured bank loans:
The current secured bank loans relate to a facility of £24.9m comprising two loans which incur interest at various rates over SONIA 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 £50.705m (2021: £47.320m) have
been pledged to secure borrowings of the Group.
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
2021
£000
2021
£000
2022
£000
2022
£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
1,819
-
(1,819)
2,225
2,225
1,544
-
(1,405)
1,680
1,819
646
-
-
-
646
646
-
-
-
646
50 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
52 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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. Lease liabilities
2022
£000
1,230
123
196
331
1,880
2022
£000
1,007
160
3
25
35
1,230
2021
£000
1,082
95
178
375
1,730
2021
£000
550
295
51
76
110
1,082
Capital element
Minimum lease payments of lease payments
2021
£000
2021
£000
2022
£000
2022
£000
Amounts payable under lease liabilities:
Within one year
In the second to fifth years inclusive
Less: future finance charges
Present value of lease obligations
Current
Non-current
175
85
260
(20)
240
141
207
348
(21)
327
175
65
240
n/a
240
165
75
240
141
186
327
n/a
327
141
186
327
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 (2021: 1.9 years). For the year
ended 31 March 2022, the average effective borrowing rate was 3.0% (2021: 3.2%). 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 2022 51
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 53
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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 £174,000 (2021: £175,000). There were no amounts outstanding or prepaid at the year end (2021: £nil).
25. Provisions
Balance at 1 April 2020
Provisions made during the year
Provision utilised during the year
Balance at 31 March 2021
Balance at 1 April 2021
Provisions made during the year
Provisions utilised during the year
Balance at 31 March 2022
Current
Non-current
Onerous
leases
£000
Total
£000
99
-
(43)
56
56
-
(56)
56
56
-
56
99
-
(43)
56
56
-
(56)
56
56
-
56
54 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
52 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
26. Capital and reserves
Share capital
Ordinary shares Deferred shares Total shares
Thousands of shares
2022
2022
2022
2021
2021
2021
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
14,000
115,944
-
62,944
-
62,944
-
178,888
14,000
178,888
-
129,944
115,944
62,944
62,944
192,888
178,888
Allotted, called up and fully paid
129,944,071(2021:115,944,071)
Ordinary shares of 1p each (2021: 1p each)
62,943,752 (2021: 62,943,752)
Deferred shares of 24p each (2021: 24p each)
2022
£000
1,300
-
1,300
2021
£000
1,160
-
1,160
2022
£000
-
15,106
15,106
2021
£000
-
15,106
15,106
2022
£000
2021
£000
1,300
15,106
16,406
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.
Following the difficulties of the Covid pandemic and impact on revenues to the Group, yet with the board’s decision to progress with consented
developments and planning costs of other projects, together with the opportunity to purchase of an additional site on Sutton Road, the Company introduced
new capital by way of an Open Offer which raised a net £3.417m from the issue of 14 million new ordinary shares in August 2021.
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 £3.873m (2021: £3.374m) in respect
of unrealised valuation surpluses on the Investment property assets.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 55
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 53
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
27. Leases
Leases
Non-cancellable lease rentals are payable as follows:
Less than one year
Between one and five years
Greater than five years
2022
£000
-
-
-
-
2021
£000
196
-
-
196
During the year £96,000 was recognised in respect of lease rentals in the income statement (2021: £191,000): £116,000 in cost of sales (2021: £172,000) and
£nil in administrative expenses (2021: £8,000).
Included within lease rentals is an amount of £nil (2021: £191,000) 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 two years
Between two and three years
Between three and four years
Between four and five years
More than five years
Owner-occupied properties:
Less than one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
More than five years
2022
£000
1,075
847
815
713
670
19,969
24,089
46
46
46
46
39
83
306
2021
£000
1,298
1,023
1,147
933
383
23,975
28,759
35
35
35
35
34
113
287
Total contingent rents recognised in the income statement in the year were £nil (2021: £89,000). Contingent rents are determined by reference to specific
clauses within the leases.
During the year ended 31 March 2022 £1,427,000 (2021: £1,542,000) was recognised as rental income in the income statement. Repair and maintenance
expense recognised in cost of sales for the year to 31 March 2022 was £133,000 (2021: £30,000).
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.
56 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
54 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Consolidated Financial Statements
For the year ended 31 March 2022
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
Profit on disposal of Investment property
Amortisation of Grants
Loss on sale of property, plant and equipment
Cash generated from continuing operations before changes in working capital and provisions
(Increase) in inventories
Transfer from Inventories to Investment property
Decrease in trade and other receivables
Increase in trade and other payables
Increase in deferred income
(Decrease) in provisions
Cash from continuing operations
29. Related parties
2022
£000
(259)
820
789
(380)
185
392
(28)
(9)
(1)
1,509
(2,629)
93
586
150
406
(56)
59
2021
£000
(2,175)
(198)
753
1,150
1,061
399
-
-
3
993
(4,294)
-
199
334
275
(43)
(2,536)
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 £180,000
(2021: £175,000).
Details of Related Party Loans which were drawn down after the year end are given in Note 30.
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% (2021 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 20.
30. Events after the reporting period
After the year end, the Group repaid loans to MSP Finance, totalling £2.275m. To meet the loan repayment two new unsecured Related Party Loans
were received :
£1.150m loan from Beinhaker Design Services Limited (a 50% owner of FB Investors LLP which owns 72.91% of Sutton Harbour Group plc’s share capital
£1.150m loan Rotolok (Holdings) Limited which owns 5.70% of Sutton Harbour Group plc’s share capital
The Related Party Loans are on flexible terms for repayment between May 2023 and May 2024 at a more competitive fixed interest rate than charged
by MSP Finance.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 57
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 55
Historical Financial Information
For the year ended 31 March 2022
Net Assets
Revenue
2022
£000
56,211
2021
£000
2020
£000
2019
£000
2018
£000
47,153
46,082
45,732
39,328
7,194
5,400
6,558
6,893
6,503
Operating profit before fair value adjustments,
impairments, costs of change in ownership and onerous leases
1,155
591
1,065
973
761
Fair value adjustments on investment
property and fixed assets
195
(2,211)
(977)
1,444
(626)
Operating profit/(loss) after fair value adjustments
and impairments
1,350
(1,620)
88
2,417
(1,610)
Net financing costs (excludes joint ventures/associates)
(789)
(753)
(844)
(901)
(897)
Profit/(loss) before tax on continuing activities
561
(2,373)
(756)
1,516
(2,502)
Profit/(loss) attributable to equity shareholders
(259)
(2,175)
(988)
1,831
(2,198)
Dividends paid
-
-
-
-
-
Basic earnings/(loss) per share
(0.20)p
(1.85)p
(0.85)p
1.68p
(2.24)p
Diluted earnings/(loss) per share
(0.20)p
(1.88)p
(0.85)p
1.68p
(2.24)p
58 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
56 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Fixed assets
Investments
Current assets
Debtors
Stock
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
As at 31 March 2022
Note
2022
£000
2021
£000
5
6
7
8
9
11
11
11
11,268
11,268
24,558
500
15
25,073
29
25,044
36,312
400
35,912
16,406
13,972
3,620
1,914
35,912
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
The notes on pages 61 to 65 are an integral part of these financial statements. In the year the Company made a profit of £127,000 (2021: profit of £80,000).
The Financial Statements were approved and authorised by the Board of Directors on 19 July 2022 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 2022 59
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 57
Company Statement of Changes in Equity
For the year end 31 March 2022
Called up
capital
£000
Share premium
account
£000
Merger
reserve
£000
Profit and loss
account
£000
Total
£000
32,288
80
-
32,368
32,368
127
3,417
1,707
80
-
1,787
1,787
127
-
1,914
35,912
Balance at 1 April 2020
Profit for the year
Issues of shares
Balance at 31 March 2021
Balance at 1 April 2021
Profit for the year
Issue of shares
Balance at 31 March 2022
16,266
-
-
16,266
16,266
-
140
16,406
10,695
-
-
10,695
10,695
-
3,277
13,972
3,620
-
-
3,620
3,620
-
-
3,620
60 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
58 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Company Financial Statements
For the year end 31 March 2022
1. General information
Sutton Harbour Group plc, (“the Company”) is a limited Company incorporated in the United Kingdom under the Companies Act 2006. These financial
statements cover the financial year from 1 April 2021 to 31 March 2022, with comparatives for the year 1 April 2019 to 31 March 2021 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 of the consolidated accounts.
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 £22.4m and a £2.5m revolving credit facility.
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.
Investments
Investments are carried cost less any provision for impairment in value.
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 61
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 59
Notes to the Company Financial Statements
For the year ended 31 March 2022
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.
Own shares
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.
62 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
60 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Company Financial Statements
For the year ended 31 March 2022
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
2022
£000
25
2021
£000
21
2
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 2022, the Company has the following investments in subsidiaries:
2022
£000
2021
£000
11,268
11,268
Subsidiaries
Sutton Harbour Company
Sutton Harbour Services Limited
Plymouth City Airport Limited
Sutton Harbour Property and Regeneration Limited
Harbour Arch Quay 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
2022
2021
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%
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 2022 63
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 61
Notes to the Company Financial Statements
For the year ended 31 March 2022
6. Debtors
Amounts owed by subsidiary undertakings
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
Bank borrowings
Total creditors
Interest is charged at rates over SONIA during the term of the bank facilities.
2022
£000
24,390
168
24,558
2022
£000
29
29
2022
£000
400
400
2021
£000
23,426
431
23,857
2021
£000
62
62
2021
£000
2,700
2,700
9. Called up share capital
Ordinary Shares Deferred Shares Total
Thousands of shares
2022
2021
2022
2021
2022
2021
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
14,000
129,944
115,944
-
115,944
62,944
-
62,944
62,944
-
62,944
178,888
14,000
192,888
178,888
-
178,888
Allotted, called up and fully paid
129,944,071 (2021: 115,944,071)
Ordinary shares of 1p each (2021: 1p each)
62,943,752 (2021: 62,943,752)
Deferred shares of 24p each (2021: 24p each)
1,300
1,160
-
-
1,300
1,160
-
1,300
-
1,160
15,106
15,106
15,106
15,106
15,106
16,406
15,106
16,266
64 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
62 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Notes to the Company Financial Statements
For the year ended 31 March 2022
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 2022, these borrowings amounted
to £22,800,000 (2021: £25,200,000).
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 73.0% 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 33 to 57 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 2022 65
Sutton Harbour Group plc – Annual Report & Financial Statements 2022 63
Notes
66 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
64 Sutton Harbour Group plc – Annual Report & Financial Statements 2022
Sutton Harbour Office | Guy’s Quay Office | Sutton Harbour | Plymouth | PL4 0ES
Tel: 01752 204186 | www.suttonharbourgroup.com