Tokyo Group Limited - Limited company accounts 20.1

REGISTERED NUMBER: 06462216 (England and Wales)

FOR

Page

Company Information  

1

Group Strategic Report  

2

Report of the Directors  

5

Report of the Independent Auditors  

7

Consolidated Statement of Comprehensive Income  

10

Consolidated Balance Sheet  

11

Company Balance Sheet  

12

Consolidated Statement of Changes in Equity  

13

Company Statement of Changes in Equity  

14

Consolidated Cash Flow Statement  

15

Notes to the Consolidated Financial Statements  

16

DIRECTORS:

Mr A Mellor

Mr M O'Sullivan

REGISTERED OFFICE:

1 City Road East

Manchester

M15 4PN

REGISTERED NUMBER:

06462216 (England and Wales)

AUDITORS:

Kay Johnson Gee Limited

Chartered Accountants and Statutory Auditors

1 City Road East

Manchester

M15 4PN

The directors present their strategic report of the company and the group for the year ended 31st December 2019.

REVIEW OF BUSINESS

Tokyo Group is the parent company of Tokyo Industries, operators of 35 of the UKs coolest bars, restaurants, music venues and festivals. We believe music should feel personal & independent and we've never really followed that 'cookie cutter' roll out model. Instead we chose individual venues in truly great buildings each with their own style, personality and their own reflection of local music requirements. This deliberate process keeps us fresh, boutique and musically savvy, whilst enjoying the back office synergy and group purchasing power of a national group.

In doing so, we chose the parent company to remain relatively silent and allow the individual brands to carry the profile and creativity, meaning that often our venues are better known than the company structure behind them. Our UK estate includes some of the most well known music venues in the UK, from DIGITAL Newcastle (voted 11th Best club in the World) to FACTORY251 in Manchester (set in the former Factory Records Head office) and IMPOSSIBLE Manchester (multi award winning Club, Bar & Restaurant). We have acquired a chain of BBQ restaurants called Reds True Barbecue and a craft brewery called Legitimate Worldwide which we are incorporating into the wider business to promote greater synergies and economies of scale. We also operate large format festivals from www.LostVillageFestival.com in Lincolnshire to www.LiveFromTimesSquare.com in Newcastle.

We continue to invest in our existing UK estate to keep our venues fresh and technologically advanced.  The majority of our UK estate is primarily student focused and we are continuingly seeing the challenging impact of increased student fees and abolition of maintenance grants. Too often price promotions are needed to compete locally and we negotiate robustly with suppliers in an attempt to maintain our margin.  We have realigned our strategy with Digital Newcastle commencing Q4 and are now outsourcing events to third party promoters in ordered to minimise our financial exposure. Due to the increased challenges and costs of securing international talent we had no option as in many cases we were not breaking even when putting on premium events.  The downside of this is decreased turnover (24% for Digital) as third party promoters were taking the door money in Q4 onwards. There is no requisite saving in talent and marketing costs in the period as we spent heavily in Q1 to Q2 in order to secure some big bookings. We expect to see the financial benefits of our new strategy come to fruition in 2020. The Brighton operation has been transferred out of the operating company and as a result only Digital Newcastle trades through here presently.

We pride ourselves on operating a lean and efficient head office structure and we continue to explore new technologies and systems that allow us to operate more effectively. We have restructured our sales and marketing team and have decentralised the function so we can be more nimble and reactive to local markets. We have also diverted much of our marketing spends towards online and social media to reflect the behaviours of our customers. We regularly experiment with different types of marketing initiatives and media to ensure resources are used as effectively as possible.

FINANCIAL RESULTS

2019

2018

Variance

Variance

£

£

£

%

Turnover (1 venue)

2,630,640

4,150,079

(1,519,439

)

(37%

)

Gross profit  (1 venue)

2,283,729

3,519,652

(1,235,923

)

(35%

)

Administrative expenses

3,532,242

3,549,716

(17,475

)

0%

EBITDA

(1,118,63

0

)

647,505

(1,482,691

)

(407%

)

The group has delivered another strong set of financial results in what continues to be a challenging and competitive market place.

It should be noted that Tokyo Group represents only 3 venues (3 trading) of the overall trading estate and further results can be viewed via the statutory accounts filed under their separate operating companies Tokyo Industries (Ultimate) Ltd, FAC251 Ltd, KJG126 Ltd, Tokyo Industries (Yorkshire) Ltd, Tokyo Industries (Leeds) Ltd, Stein Bierkeller Ltd, Brewhaus Ltd & Tiki-O (Bradford) Ltd.

Group turnover  is £4.2m which represents a decrease of £277k (7%) decrease year-on-year. The primary reason for the drop in turnover is due to the transfer of Huddersfield to Tokyo Industries Yorkshire effective Oct 2018. Despite the removal of Huddersfield trading from Q4 onwards we delivered 416 events versus 413 in the previous year. Average attendances declined to 701 versus 795 in the previous year but this was almost entirely attributable to the fact we operated significantly more live shows at Digital Newcastle which are typically a one room limited capacity operation. Spends per head were substantially improved and we achieved £12.62 versus £11.71 which represents an 8% year-on-year increase.

Overall Gross profit margin was 85% versus prior year of 82%. Direct costs and overheads continue to be well controlled with the majority of areas recognising savings year-on-year despite the impact of the national minimum wage and business rates hikes.

We continue to focus on some exciting international developments for the forthcoming year. Following the success of our Boogie in Wonderland concept in Ibiza last year a logical expansion strategy for the group has been to diversify the business and invest in a number of international projects. To this end we have invested in an events and exhibition space in Ibiza (Hangar 8289), an online and FM radio station in Ibiza (Openlabs), an events and exhibition space in uptown LA (Lot 613), a hotel and conference facility in Palm Springs and a F&B and events business servicing high end hotels in Dubai (Disrupt DXB). Furthermore we continue to support a Croatian holiday resort in partnership with the Hideout Festival operators (Obonjan) in its fourth season of operation.  In addition there are ambitious (but measured) expansion plans for the UK with a number of potential acquisitions in advanced negotiations.

Tokyo Group is committed to encouraging equality and diversity among our workforce, and eliminating unlawful discrimination in all forms. Our aim is for our workforce to be truly representative of all sections of society and our customers, and for each employee to feel respected and able to give their best.

Aaron Mellor, the Groups Managing Director, is pleased with the results and continues to look for further opportunities to expand the estate should the right openings present themselves. Aaron Mellor comments "These are exciting times for our industry, as music and entertainment become a more 'on-demand' service we need to give guests a more immersive production led experience, this is something we are really enjoying and our new 2020 projects are some of the best works we have ever created"

ON BEHALF OF THE BOARD:

Mr A Mellor - Director

29th January 2021

The directors present their report with the financial statements of the company and the group for the year ended 31st December 2019.

PRINCIPAL ACTIVITIES

DIVIDENDS

The total distribution of dividends for the year ended 31st December 2019 will be £2,000.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st January 2019 to the date of this report.

Mr A Mellor

Mr M O'Sullivan

DISCLOSURE IN THE STRATEGIC REPORT

The Company has chosen, in accordance with Section 414 C(ii) of the Companies Act 2006, and as noted in this Directors’ report, to include certain matters in its Strategic report that would otherwise be required to be disclosed in this Directors’ report. Specifically in regards to financial risk management objectives and risks, review of business and future developments.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year.  Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period.  In preparing these financial statements, the directors are required to:

-

select suitable accounting policies and then apply them consistently;

-

make judgements and accounting estimates that are reasonable and prudent;

-

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

Under section 487(2) of the Companies Act 2006  Kay Johnson Gee Limited,  will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

ON BEHALF OF THE BOARD:

Mr A Mellor - Director

29th January 2021

Opinion

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 Auditors' responsibilities for the audit of the financial statements section of our report.  We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-

the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.  We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-

the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-

the Group Strategic Report and the Report of the Directors 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 the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-

the parent company financial statements are not in agreement with the accounting records and returns; or

-

certain disclosures of directors' remuneration specified by law are not made; or

-

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 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 the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Roger Blaskey (Senior Statutory Auditor)

for and on behalf of Kay Johnson Gee Limited

Chartered Accountants and Statutory Auditors

1 City Road East

Manchester

M15 4PN

29th January 2021

TURNOVER

4

2,630,640

4,150,079

Cost of sales

(346,911

)

(630,427

)

GROSS PROFIT

2,283,729

3,519,652

Administrative expenses

(3,615,971

)

(3,549,717

)

(1,332,242

)

(30,065

)

Other operating income

274,031

200,000

OPERATING (LOSS)/PROFIT

6

(1,058,211

)

169,935

Interest receivable and similar income

26,973

17,796

(1,031,238

)

187,731

Amounts written off investments

7

-

196,604

Gain/loss on revaluation of investment

property

(51,922

)

-

(1,083,160

)

384,335

Interest payable and similar expenses

8

(1,702

)

(20,274

)

(LOSS)/PROFIT BEFORE TAXATION

(1,084,862

)

364,061

Tax on (loss)/profit

9

136,627

(184,305

)

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(948,235

)

179,756

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

1,102,220

1,271,371

Investments

14

-

-

Investment property

15

1,200,000

1,251,922

2,302,220

2,523,293

CURRENT ASSETS

Stocks

16

32,354

55,051

Debtors

17

744,696

1,802,112

Cash at bank and in hand

1,496,744

6,525,361

2,273,794

8,382,524

CREDITORS

Amounts falling due within one year

18

(2,725,096

)

(8,078,000

)

NET CURRENT (LIABILITIES)/ASSETS

(451,302

)

304,524

TOTAL ASSETS LESS CURRENT LIABILITIES

1,850,918

2,827,817

PROVISIONS FOR LIABILITIES

19

(9,638

)

(36,302

)

NET ASSETS

1,841,280

2,791,515

CAPITAL AND RESERVES

Called up share capital

20

50

50

Retained earnings

21

1,841,230

2,791,465

SHAREHOLDERS' FUNDS

1,841,280

2,791,515

The financial statements were approved by the Board of Directors and authorised for issue on 29th January 2021 and were signed on its behalf by:

Mr A Mellor - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

122,907

176,156

Investments

14

999,220

999,220

Investment property

15

-

-

1,122,127

1,175,376

CURRENT ASSETS

Debtors

17

6,928,574

7,700,170

Cash at bank

1,227,769

5,844,387

8,156,343

13,544,557

CREDITORS

Amounts falling due within one year

18

(2,613,303

)

(10,273,123

)

NET CURRENT ASSETS

5,543,040

3,271,434

TOTAL ASSETS LESS CURRENT LIABILITIES

6,665,167

4,446,810

PROVISIONS FOR LIABILITIES

19

(9,638

)

(13,480

)

NET ASSETS

6,655,529

4,433,330

CAPITAL AND RESERVES

Called up share capital

20

50

50

Retained earnings

6,655,479

4,433,280

SHAREHOLDERS' FUNDS

6,655,529

4,433,330

Company's profit for the financial year

2,224,199

635,300

The financial statements were approved by the Board of Directors and authorised for issue on 29th January 2021 and were signed on its behalf by:

Mr A Mellor - Director

Called up

share

Retained

Total

capital

earnings

equity

£   

£   

£   

Balance at 1st January 2018

50

2,761,709

2,761,759

Prior year adjustment

-

(150,000

)

(150,000

)

As restated

50

2,611,709

2,611,759

Profit for the year

-

179,756

179,756

Total comprehensive income

-

179,756

179,756

Balance at 31st December 2018

50

2,791,465

2,791,515

Deficit for the year

-

(948,235

)

(948,235

)

Total comprehensive income

-

(948,235

)

(948,235

)

Dividends

-

(2,000

)

(2,000

)

Balance at 31st December 2019

50

1,841,230

1,841,280

Called up

share

Retained

Total

capital

earnings

equity

£   

£   

£   

Balance at 1st January 2018

50

3,797,980

3,798,030

Profit for the year

-

635,300

635,300

Total comprehensive income

-

635,300

635,300

Balance at 31st December 2018

50

4,433,280

4,433,330

Profit for the year

-

2,224,199

2,224,199

Total comprehensive income

-

2,224,199

2,224,199

Dividends

-

(2,000

)

(2,000

)

Balance at 31st December 2019

50

6,655,479

6,655,529

Cash flows from operating activities

Cash generated from operations

24

(2,934,832

)

6,408,482

Interest paid

(995

)

(20,278

)

Interest element of hire purchase or finance

lease rental payments paid

(707

)

-

Tax paid

(21,772

)

(235,227

)

Net cash from operating activities

(2,958,306

)

6,152,977