REG - Worsley Investors Ld - Annual Report for the period ended 31 March 2025
22/07/2025 07:00
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RNS Number : 9527R Worsley Investors Limited 22 July 2025
Worsley Investors Limited
(the "Company")
Annual Report for the period ended 31 March 2025
The Company is pleased to announce the release of its annual report and
audited consolidated financial statements for the period ended 31 March 2025
(the "Annual Report"). A copy of the Annual Report will be posted to
shareholders and will be available to view on the Company's website shortly
at: www.worsleyinvestors.com
END
For further information, please contact:
Worsley Associates LLP (Investment Advisor)
Blake Nixon
Tel: +44 (0) 203 873 2288
Shore Capital (Financial Adviser and Broker)
Robert Finlay / Anita Ghanekar
Tel: +44 (0) 20 74080 4090
Apex Fund and Corporate Services (Guernsey) Limited (Administrator and
Secretary)
Matt Lihou / Aoife Bennett
Tel: +44 (0) 20 3530 3687
LEI: 213800AF85VEZMDMF931
Performance Summary
31 March 2025 31 March 2024 % Change
Net Asset Value ("NAV") per share 34.62p 43.45p -20.32%
Share price(1) 27.80p 24.80p 12.10%
Share price discount to NAV 19.70% 42.92%
Year ended Year ended
31 March 2025
31 March 2024
(Loss)/earnings per share(2) -8.33p 0.09p
NAV Total Return(3) -20.32% -1.07%
Share price Total Return(4)
- Worsley Investors Limited 12.09% -11.43%
- FTSE All Share Index 10.46% 8.43%
Worsley Associates LLP ("Worsley Associates") was appointed on 31 May 2019 as
Investment Advisor (the "Investment Advisor") to Worsley Investors Limited
(the "Company"). The Company's Investment Objective and Policy are set out
below.
Past performance is not a guide to future performance.
(1) Mid-market share price.
(2) (Loss)/earnings per share based on the net loss for the year of £2.81
million (31 March 2024: net profit £0.030 million) and the weighted average
number of Ordinary Shares in issue during the year of 33,740,929
(31 March 2024: 33,740,929).
(3) NAV Total Return is a measure showing how the NAV per share has performed
over a period of time, taking into account both capital returns and any
dividends paid to shareholders.
(4) A measure showing how the share price
(https://www.theaic.co.uk/aic/glossary/S?item=1057) has performed over a
period of time, taking into account both capital returns and any dividends
paid to shareholders.
Source: Worsley Associates LLP and FactSet/Morningstar.
Chairman's Statement
After a good first half to the year, the second half was much less so and our
NAV per share as reported in these financial statements fell by 20.32% over
the year as a whole. The reversal over the second half of 12.49p or 26.51%
per Worsley Investors share was predominantly the result of a major reduction
in the carrying value of the Group's cinema at Curno, Italy. Shareholders
who have been following our announcements to the stock market will already be
aware that the previous tenant, UCI, wilfully defaulted on its obligations
under the lease in January and, after the expiry of a grace period, that lease
consequently and automatically terminated by operation of Italian law on 25
February 2025.
Our Investment Advisor, Worsley Associates LLP, moved quickly in response to
this development and on 31 March 2025 successfully concluded a re-letting to
an Italian company, Notorious Cinema S.r.L, ("Notorious") a wholly-owned
subsidiary of a listed Italian group and the operator of a number of cinemas
in Italy. The Investment Advisor gives fuller detail in its report below but
in summary the new lease has an initial term of approximately 10 years to 31
August 2035 subject to a tenant option to extend for a further 8 years to 2043
and to a tenant break option on 31 August 2031. The rental is a turnover
rent based on percentages of sales achieved and subject to certain minimum
rentals which are partly linked to Italian inflation. Notorious has pledged
to invest approximately €2 million (plus VAT) in a substantial refurbishment
and upgrade of the property and a significant portion of this has already been
deployed ahead of the partial re-opening with five of the screens on 27 June
2025. The opening was well-received by the customer base and initial trading
was ahead of expectations although it is early days. This is an exciting
repositioning of the complex as a premium offering in line with the Notorious
brand. Multiplex, our Italian subsidiary, has agreed to a reduction in the
annual rental of €108,000 per year for the first 5 years of the lease as a
contribution to this significant capital investment. The remaining four
screens are due to re-open in the autumn in line with the Notorious business
plan.
Notorious is a successful operator of a significant number of cinemas in Italy
and has been steadily growing its market share for a number of years. Its
substantial enhancement of the Curno asset is, we feel, a tangible
demonstration of commitment to that local market, one that it should know well
given that earlier in his career the CEO of Notorious was responsible for the
management of that cinema on behalf of UCI. In contrast, we have found UCI's
approach to Curno in recent years to be very uninspiring. Only now, as we are
formulating our statement of claim against UCI for breach of our lease
contract, are we becoming more aware of the full extent of their neglect of
the building and of their contractual obligations in relation to its upkeep.
For the purposes of this set of financial statements, we have adopted the
International Financial Reporting Standards ('IFRS') Fair Value of the cinema
asset as determined by the Group's independent asset valuer, Knight Frank LLP
('KF') of €2.8 million, which compares to KF's IFRS Fair Value determination
at the interim stage six months earlier (i.e. 30 September 2024) of €7.3
million. The principal assumptions underpinning the KF figure of €2.8
million are that, notwithstanding Notorious's up-front investment of a €2
million upgrade, Notorious will not achieve their business plan targets and
will exit at their earliest possible opportunity in 2031 having paid no more
rental than their minimum contractual obligations in each of the intervening
years.
For the purposes of our quarterly announcement of our unaudited NAV as at 31
March 2025 (released on 9 June), we adopted at the advice of the Investment
Adviser, a directors' valuation of the cinema asset of €5.0 million
reflecting assumptions which are considered to be undemanding in respect of
achievable turnover under the Notorious business plan post the substantial
investment referred to above and that Notorious would remain in occupation on
the current contractual basis for at least the initial 10-year term and most
likely longer. See Note 19 for a reconciliation of the NAV under the IFRS and
non-IFRS bases. Of course, the actual month-to-month turnover outcomes will
depend to some degree on the timing and quality of the slate of film releases
and overall economic conditions amongst other factors and so there will
inevitably be some variability. If the volume plan targets are achieved, the
turnover rental will be materially higher than the contractual minima. This,
and the different assumption with regard to likely duration of occupancy, are
the principal reasons for the difference in valuations.
We expect that future quarterly NAV announcements will continue to be on the
same basis.
For the sake of completeness, I should say that we have not included in either
these financial statements or in our market NAV announcements, a valuation of
the claim for damages which the Group will be seeking from UCI. We are
currently working through a number of issues relating to the condition in
which the property was returned and we expect to have a discussion with UCI in
respect of these matters shortly. We shall update shareholders via market
announcements when it is appropriate to do so.
Our equity portfolio, which performed strongly in the first half, achieved
creditable returns in context of the second half, to give a return for the
year on the opening capital invested of +16.3% as compared to the FTSE Small
Capitalisation index which returned +6.0% and the FTSE All Share index which
generated +10.5%.
Our share (mid) price fell back slightly in the second half but still ended up
12.1% on the year and the share price discount to NAV continued to narrow.
The proportion of our NAV represented by the cinema fell from 42.9% last year
to 38.3% at the half-way point and ended at 20.1% in these financial
statements. We are now at the point where the current share price is backed by
the core equity strategy (including cash) with both the cinema asset and our
claim for damages against UCI 'in for free'.
The Investment Advisor, Worsley Associates LLP, summarises the market
background and outlook together with the developments in respect of our
principal investments succinctly in its report below and I shall not repeat
them here.
In the wider world, our financial year ended with the first 10 weeks or so of
the second Trump administration which in respect of international trading
arrangements has taken an unusual approach, which may be expected to have some
adverse consequences for global inflation and growth. There has been some
consequent scaling-back of expectations for interest rate reductions and
rising uncertainty domestically in the UK as this compounds upon the pressures
of rising public expenditure and indebtedness bumping against the government's
fiscal rules, all of which has implications for further tax rises. With
uncertainty, however, comes opportunity and that is all the more evident at
the small capitalisation end of the market where we operate.
As I have noted previously, Worsley invests in specific companies with their
own unique paths to the realisation of shareholder returns and not in broader
indices, which are relevant only as measures of the context in which we
operate, be they headwinds we face or tailwinds behind us. That general
dictum might be said to apply equally to Worsley Investments itself at this
juncture as we look to unlock the potential of the Curno cinema, realise our
recovery rights against UCI and pursue our core equity strategy. We maintain
a strong liquidity position and carry no debt.
On behalf of the Board, I would like to thank our Investment Advisor, Worsley
Associates LLP, for the continued steady progress they have made in developing
our equity portfolio and for the entrepreneurial spirit in which they have
addressed the challenges arising in Italy and, above all to thank you, our
shareholders, for your ongoing support.
William Scott
Chairman
18 July 2025
Investment Advisor's Report
Investment Advisor
The Investment Advisor, Worsley Associates LLP, is regulated by the FCA and is
authorised to provide investment management and advisory services.
In the year under review, the equities portfolio continued to be nearly fully
invested, and the Investment Advisor has concentrated on its development, and
the oversight of the dispute with the previous tenant of the Curno cinema and
the negotiation of an attractive lease with a replacement.
Curno Cinema Complex
The Group's Italian multiplex cinema complex, located in Curno, on the
outskirts of Bergamo, until 25 February 2025 was let in its entirety to UCI
Italia S.p.A. ("UCI").
Notorious Cinema lease
On 31 March 2025, the Group's wholly owned Italian subsidiary, Multiplex 1
S.r.l. ('Multiplex') entered into a new lease agreement with Notorious Cinema
S.r.l. ('Notorious'), an Italian company, for it to operate the cinema
complex.
The key rental terms of the lease are:
Rental
From the outset Notorious will pay Multiplex turnover rent comprising the sum
of: 23.5% of the revenues deriving from the sale of entrance tickets; 10% of
food and drink revenues; and 5% of all other revenues, subject to the
following minima:
From 1 September 2025 until 31 August 2026 -- €500,000
From 1 September 2026 until 31 August 2027 -- €525,000
From 1 September 2027 until 31 August 2028 -- €550,000
On 1 September 2028 and annually thereafter the minimum rental will increase
by 75% of the variation over the previous twelve months in the Italian ISTAT
consumer price index.
In recognition of Notorious's substantial expenditure on the refurbishment of
the cinema, described more fully below, from 1 September 2025 until 31 August
2030, the annual rental otherwise payable will be reduced each year by
€108,000.
Fundamental to the Group's decision to enter into the Notorious lease (the
'Lease') was the expectation that, once the revised cinema format had become
established, the level of turnover rental would exceed the minima by an
increasingly wide margin.
Duration
The Lease will have an initial termination date of 31 August 2035. Notorious
has a unilateral right on that date to renew the Lease for a further eight
years on the same terms and conditions.
In addition, Notorious has the right to withdraw from the lease on 31 August
2031. In the event of the lease renewing on 1 September 2035, each party has
the unilateral right to withdraw as of 31 August 2039.
Tenant Guarantee
Notorious has provided a first-demand guarantee issued by a primary bank, in
the amount of €250,000, which will renew annually on an inflation indexed
basis. After six years from the completion of the refurbishment, the tenant
will have the right to replace the bank guarantee with an equivalent
guarantee, issued by its parent company, Notorious Pictures S.p.A., in an
amount of €500,000.
The Notorious Pictures group as at 31 December 2024 reported consolidated net
worth of €33.6m.
Refurbishment
Pursuant to the new lease Notorious contracted to invest a sum of no less than
€2,000,000 plus VAT to undertake a refurbishment of all cinema rooms. The
foyer will be transformed into a 'cinema lounge', elegant and completely
digitalised, with interactive monitors replacing cardboard advertising, a
waiting area with leather armchairs, and an expanded food offer which, in
addition to the classic popcorn and nachos, will include pizza and hamburgers.
The cinema halls will see the installation of De Luxe reclining armchairs in
eco-leather, and the lavatories will be renovated.
Notorious has the following schedule of works:
- From March to end of June : refurbishment of five cinema halls and the foyer
- June 27th : opening of the five refurbished cinema halls with reclining
seats
- July - August : refurbishment of remaining four cinema halls
- September 4th: full opening of all nine cinema halls
The multiplex reopened on schedule on 27 June.
Trading
The Curno cinema was open for business until 19 January. Rentals have been
paid by UCI for the period up to 10 January.
The cinema in calendar 2024 again benefited from a significant increase in
total revenue per admission. Full year certified calendar 2024 ticket sales
were 207,376, slightly more than 95% of the 2023 level, notwithstanding the
significant impact on trading of the dispute with UCI.
The strong improvement in Italian cinema industry ticket sales from the
beginning of November, as previously reported, continued into December, when
ticket sales exceeded December 2019 levels, with children's features, most
notably Moana 2 and Mufasa: The Lion King, proving to be big hits. The
strength in sales continued into January 2025, reflecting the release of
several Italian titles, the most popular being Io sono la fine del mondo ('I
am the End of the World'). February and March activity weakened somewhat from
January levels, but the popularity of Italian titles continued, Follemente
('Madly'), a romantic comedy, being the most prominent. Ticket sales for the
June quarter have seen further weakening, with A Minecraft Movie and Lilo
& Stitch the strongest titles, ending only slightly higher than the
equivalent quarter last year, when the after effects of the US Actors' and
Screenwriters' strikes were still a major hindrance.
UCI Dispute
Following an extensive period of negotiation with UCI regarding the reshaping
of the lease signed in 2018, on 30 January 2025, UCI vacated the Curno
property. After UCI had not paid any rental for the period subsequent to 10
January, as of the close of business on 25 February, pursuant to Italian law,
the lease agreement automatically terminated for default.
The minimum unpaid rental on the lease until 30 June 2035, being the earliest
date UCI could have validly terminated is €11,259,771.
Multiplex retains the ability to recover damages from UCI for the net losses
suffered as a result of unpaid rental and other breaches of the lease
agreement. The Group is carefully considering all available alternatives in
order to assess how best to ensure that the Group's position is optimised.
Valuation
As at 31 March 2025, the Group's independent asset valuer, Knight Frank LLP
('KF'), has ascribed an IFRS Fair Value to the cinema of €2.8 million (30
September 2024: €7.3 million), and this figure has been adopted in these
Financial Statements.
The valuer, as at 31 March 2025, now assesses the estimated rental value
('ERV') to be €550,000 (down from €830,000) and the valuation yield was
decreased from 10.75% to 10.0%. In the 30 September valuation the annual
contractual rental was €1,063,436 -- although KF only recognised the excess
over its previous assessed ERV until 30 June 2035, the earliest date upon
which UCI could legally exit the previous lease. The substantial reduction in
the 31 March 2025 KF valuation is principally because of the major reduction
in minimum contractual rental, offset a little by the reduction in the
valuation yield.
In stark contrast, the valuer made no allowance for the obvious upside of
turnover rental under the Notorious lease. It has indicated to the Group that
credit for the turnover rental would only be recognised after it had been
achieved.
Notwithstanding the KF view, for the purposes of the RNS announcement on 9
June of the unaudited quarterly NAV as at 31 March 2025 the Directors, who are
of the opinion that over time significant turnover rental will be generated,
adopted, based on the advice of the Investment Advisor, and in particular its
projections for turnover rental, a valuation for the Curno property of
€5.0million.
The Directors' valuation adjudged normalised rental under the Notorious lease
to be €750,000, and the excess to the KF assumed ERV accounts for
approximately €1.66 million of the difference in the valuations, with lower
assumed operating expenses and no assumption of a tenant break in 2031 making
up the remainder.
We consider the external valuer's approach extraordinarily cautious, all the
more so considering its expectation that real estate markets will improve,
supported by additional European interest rate cuts throughout the year,
although it views any improvement as being likely to be gradual.
The 2024 year ended up as positive for the Italian cinema industry, given the
disruption early in the year caused to film releases by the Hollywood strikes
and the competition from major sporting events during the summer. Equally as
notable, industry box office takings have settled at a level some 16% below
the pre-Covid pandemic average for the 2017-2019 period.
This progressively regularising cinema trading, as underscored by strong
Italian box office takings seen since the beginning of November, bodes well
for a return of Italian cinema investor appetite, although restrained European
bank property lending continues to be a headwind. The Group will retain the
Curno cinema until a disposal can be effected at a price which the Board
believes properly reflects its medium term prospects.
Equity Investment Strategy
The Investment Advisor's strategy entails the taking of holdings in British
quoted securities priced at a deep discount to their intrinsic value, as
determined by a comprehensive and robust research process. Most of these
companies will have smaller to mid-sized equity market capitalisations, which
will in general not exceed £600 million. It is intended to secure influential
positions in such British quoted securities, with the employment of activism
as necessary to drive highly favourable outcomes.
After a mixed start to 2025, the London market soon settled into generally
upward trend, as anxieties around the threat of import tariffs being imposed
by the incoming Trump administration abated somewhat. Renewed fears of an
international trade war, after China had announced retaliatory tariffs against
the US, resulted in a sharp fall in worldwide equities to open February. The
U.K. market however brushed this off when the Bank of England decreased rates
by 0.25% at its 6 February meeting and on hopes that the worries concerning US
tariffs were overdone. However, mid month first U.K. CPI came in 50 b.p.
over December and then unease regarding the impact of a messy German general
election led to the British market weakening.
In the subsequent period, the impact of widespread US import tariffs, now an
actuality, has continued to be the largest influence on the London market,
with the Israeli attacks on Iran a new, very recent, concern.
In early March, the U.K. market dropped sharply on worries concerning the
growth impact of US tariffs, with doubled tariffs announced on Canadian steel
and aluminium imports. The following week saw a recovery, with Germany
announcing a €500bn defence fund, China a stimulus package and talks between
presidents Trump and Putin on Ukraine. The British market then went sideways
for a week, with the Bank of England holding rates at its March meeting and
the U.K. Spring Statement indicating constrained Government spending.
Nonetheless, March closed weaker with US PCE inflation 2.8% for February, up
from 2.7% in January, and Trump threatening tariffs on US imports from all
countries.
All this was overshadowed, by 'Liberation Day' on 2 April, when Trump detailed
the range and scope of the new tariffs. In the following three days the London
market, in step with global equities, plummeted more than 10%. After a one day
rebound, the FTSE:ASX on 9 April fell further to 4151, the low for the period.
Over the rest of April, the market recovered most of the plunge. First Trump
announced a 90 day pause in tariffs for countries other than China. Then a
temporary exemption for smartphones and computers was declared. A relatively
attractive U.K./US trade deal was agreed, the first with a major economy. US
China trade talks progressed, and global equities absorbed US Q1 GDP being
down 0.3% in their stride.
After May had started strongly, the U.K. market retraced when the Bank of
England cut rates by 0.25% at its May meeting, detailing a weaker outlook for
the U.K. economy. The upward trend resumed with positive signals in US China
trade talks, with a 90 day tariff pause announced on the 12th. U.K. Q1 GDP
come in above expectations at +0.7% and hopes of a ceasefire in the Ukraine
stoked the momentum. The month closed on a positive note with annual US PCE
inflation to April marked at 2.1%, down from the March reading of 2.3%.
In the first fortnight of June, the British market rose, although at a slower
pace, with a positive narrative on US China trade talks, US tariffs on imports
of U.K. steel and aluminium being less than feared, and May UK month-on-month
CPI of 0.1% being recorded. By 12 June the FTSE100 had reached another
all-time closing record.
However, the next day the market retreated on the news that Israel had
launched attacks on Iran and of both the UK Federal Reserve and the Bank of
England holding rates at their June meetings. The weakness continued after the
US on the night of 21 June bombed Iran's three main nuclear facilities. The
was a brief respite the following week after the oil price stabilised on a
perceived easing of geopolitical tensions, which was tested when the Israel
Iran ceasefire initially appeared to have been breached.
Since 25 June, Middle Eastern tensions have receded and attention resumed on
the negotiations in process on US import tariffs. There was a good upturn when
the US and China reached an accord on rare earth minerals and certain
technology imports, aided by May US PCE core inflation coming in at 2.7%
year-on-year. The momentum was short-lived after concerns about US Canada
trade negotiations arose, with the London market ending the June quarter also
impacted by poor U.K. economic data.
Trading in the third quarter has been choppy, continuing to be dominating by
US trade negotiations. The U.K market has managed to shrug off concerns that
the U.K. Government had lost control of welfare reforms. On 7 July, Trump
signed an executive order again delaying the commencement of country-specific
'reciprocal' tariffs from 9 July to 1 August. Since then, investor sentiment
has improved considerably on indications that a number of significant US trade
deals were imminent.
Despite earlier promising indications, on 14 July Trump suggested that the EU
would be hit with tariffs of 30% from the beginning of August, and May U.K.
GDP came in down a further 0.1% after a drop of 0.3% in April. Notwithstanding
that, at the close of trading the FTSE100 hit a further all-time high and the
FTSE:ASX reached 4824, the peak for the period, on a view that, having agreed
a benign trade deal with the US, the U.K. would benefit from any transfer of
US-bound production out of the EU.
Following the May cut, U.K. interest rates are now down 1.0% from their recent
peak of 5.25%, but, despite the mixed outlook for inflation, the market
consensus is now that the rate will be further cut to between 3.75% and 4.0%
before the end of 2025. After the US Federal Reserve at its December meeting
had cut its policy rate to the range of 4.25% to 4.50%, down 1.0% from the
peak, it has left rates unchanged in its four 2025 meetings to date. The US
Fed remains cautious regarding the impact of tariffs on US inflation, but most
market participants expect one or two 0.25% cuts over the rest of the year.
Despite the dip post the Israeli attack on Iran, the British stock market is
up 5.7% in the 2026 financial year to date. Within the Company's target
universe of British smaller companies, since the beginning of March share
prices in general have performed much more strongly than the market as a
whole, and since 31 March the small cap market is up 11.0%.
The Company's portfolio remained relatively fully invested during the
reporting period. This includes two undisclosed positions which we grew in the
last three months of calendar 2024. However, the share prices of both
companies subsequently increased significantly, despite near term operational
challenges, and we decided to pause purchasing. At this juncture it is not
considered to be in the Company's best interests to reveal the identity of the
holdings.
The largest portfolio position continues to be our shareholding of more than
4% in Smiths News plc, England's major distributor of newspapers and
magazines. At the beginning of May, the company published its 2025 interim
results, which were good, operating profit coming in slightly up on revenue
which was almost flat, with increased sales of trading card and sticker
collectables which attract higher margins. It was commendable that the
continuing cost reduction programme more than offset the impact of inflation
and defrayed the continuing decline in newspaper and magazine volume. Average
net debt for the half year was negligible at £1.1m, down from £12.5m in
2024.
Smiths News during its first half agreed another major contact renewal, with
91% of existing publisher revenues now secured to at least 2029, underpinning
both short and medium-term revenues and the expansion of its early morning
supply chain activities
The shares jumped 17% in the first three months of Worsley Investors' second
half, but, having gone ex the 2024 final and special dividends, over the final
quarter gave back nearly 19%. Post year end the shares have recovered, most
markedly in the period up to the release of the interims, being up a little
over 10% after adjustment for the interim dividend entitlement.
In mid-February, the share price of Daniel Thwaites PLC dropped significantly
on no company news, owing to a paucity of buyers, after other regional pub
companies had reported difficulties recovering input cost increases. On 17
June, Daniel Thwaites published its preliminary results, for the year to 31
March 2025, which revealed modest progress. We continue to add to our holding
when volume becomes available in the rarely traded stock.
The Northamber Plc shareholding remained unchanged in the second six months of
the 2025 year. The share price was down 25% over the course of the half, but
since 31 March is up some 17%, notwithstanding its reporting an increased
operating loss in the interim results to 31 December 2024. During the second
half we continued to engage with management, which appears out of its depth.
In mid-March LMS Capital plc announced a managed winddown of the group and
throughout the half we acquired further shares as they were offered to us.
Towards the end of the financial year, AssetCo PLC underwent a share
reorganisation and changed its name to River Global PLC, and we added to our
holding over the period. During the second half, we also added to three other
holdings, took part profits in one stock and exited another completely.
Preliminary (less than 2% of Net Assets) holdings are held in 7 other
companies.
Since 30 September, the Company's portfolio initially had a strong three
months, following which it has weakened, with the result that as at 14 July
2025 had a total cost of £6.54 million, a combined market value of £9.68
million, and comprised 16 stocks. The surplus on the portfolio was a little
over 48% of cost, and the annualised return on capital invested since the new
strategy was adopted remains very satisfactory, at just under 23%.
Results for the period
Cash rental revenue from Curno for the year to 31 March 2025 was €830,700
(£699,000) (31 March 2024: €1,058,700 (£915,000)). No ticket overage
revenue was earned.
Property operating expenses, mainly local Curno property taxes, of some
€192,400 (£162,000) ((31 March 2024: €173,900 (£150,000)), were
incurred, which in the second half were significantly in excess of budget.
This was a direct result of UCI defaulting on its lease, with €9,000 of
lease registration taxes being deemed as unrecoverable and unbudgeted costs of
€9,200 incurred on ad hoc security at Curno.
General and administrative expenses (including transaction charges) of
£689,000 (31 March 2024: £573,000) substantially exceeded the 2024 run rate,
and represented a large increment to budget. A sharp increase in Italian legal
expenses, as the Group dealt with legal manoeuvrings by its cinema tenant, in
net terms accounted for the entire overrun. Group General expenses, having
been considerably higher in the first six months, for the full year, as
foreshadowed, ended broadly in line with original expectations. As commented
on in the Interim Report, increased Net Assets resulted in higher AUM-based
fees compared to 2024.
Transaction charges incurred on equity acquisitions were £12,000 (31 March
2024: £7,000). As indicated in the Interim Report, this reflected higher
activity than usual, following a low level in the previous year.
In the forthcoming year the Group's ongoing operating costs are projected to
between the 2025 and 2024 levels, with the out turn heavily dependent on the
level of Italian legal expenses required to pursue the claim against UCI.
Prior to the ultimate sale of Curno there remains little scope for significant
reduction in the overall cost base.
The equities portfolio, having risen strongly in the first half, continued to
strengthen in the third quarter but weakened substantially in the fourth to be
down for the final six months, culminating for the year as a whole in a
marginal (£0.021 million) net investment mark-to-market gain (31 March 2024:
£0.510 million reduction). Investment Income for the year, entirely
dividends, was £863,000 and net investment gains realised added £356,000. In
consequence, the total annualised return on capital invested in the portfolio
over the year came out at 16.3%.
Taxation is payable on an ongoing basis on Italian income and in Luxembourg.
For the year, an operating tax charge of £89,000 (31 March 2024: £117,000)
was incurred. In addition, net VAT, predominantly in Luxembourg, of some
£3,000 was paid.
In the current year, the substantially lower Curno rental will be partly
offset by a nil tax rate at Multiplex, but, notwithstanding lower budgeted
legal expenses, operating cash flow (that is prior to allowance for equity
income and net purchases) is expected to be negative.
Financial Position
Net Assets at 31 March 2025 were £11.681 million, which compares with the
£15.895 million contained in the 30 September 2024 Interim Report. The
reduction arose mainly from the loss in the second half of £4.197 million,
after a €4.50 million (£3.79 million) reduction in the Euro valuation of
the Curno property, and a £17,000 decrease in the pound sterling fair value
of Euro-denominated assets, principally the property.
The Group's liquidity decreased slightly in the year, reflecting strong cash
flows which offset net portfolio purchases of £499,000, with £594,000 in
cash held at 31 March 2025 and no debt. Supplemented by the ample secondary
liquidity of the equity portfolio and positive ongoing cash flows, the Group's
financial position continues to be secure.
In due course, the sale of the Curno cinema will provide substantial
additional resources for equity investment.
Euro
As at 31 March 2025, some 22% of Total Assets were denominated in Euros, of
which the Curno property was 20.1% of Total Assets, down from 42% as at 31
March 2024. The pound sterling Euro cross rate moved circa 2% during the
period from 1.169 as at 31 March 2024 to 1.194 as at 31 March 2025. This cross
rate will continue to be a potentially significant influence on the level of
Group Net Assets until Curno's disposal.
Outlook
After just over six months of this year, U.K. stock market prices,
notwithstanding the extreme gyrations around the US administration's
'Liberation Day' announcement in early April of a vastly altered approach to
import tariffs, are up 9.4%. The market stands at an all-time high, with fears
that the new trade regime would lead to a recession in the US dissipating as
negotiations with the US's major trade partners have developed. This also has
had a beneficial impact on the outlook for US inflation, with obvious
implications for the path of Western Central Bank interest rates.
The strength of the British market is despite our observation in the Interim
Report, that employment related changes announced in the U.K. Budget would be
an earnings headwind until at least the end of the first half of calendar
2025, proving to be correct. Although positive factors for U.K. GDP growth
continue to build, albeit gradually, given the U.K. Government's inability to
secure control of its spending, smaller U.K. companies are exposed to
inevitable taxation increases in the Autumn Budget.
The Italian box office in 2024 was almost in line with 2023 with cinemas
taking €493.9m from admissions of 69.7 million. After a muted second
quarter, the movie slate will return to full strength beginning in July, with
a string of high-profile films being scheduled for release in the second six
months of the year and 2025 US box office receipts forecast to surpass 2024
levels by in excess of 13%.
The default by UCI on the previous lease of the Curno cinema will have a major
impact on the future cash flow of the Group, which we will look to recover via
the courts. On the positive side, we have managed to secure an excellent
tenant, which is growing strongly and taking market share from the largest
Italian chains. The refurbishment of the cinema has received a glowing
reception from the viewing public, with early trading exceeding expectations.
The ramp up of business at the revamped Curno cinema will inevitably require
some time before its full trading potential is achieved, meaning a disposal
cannot be considered imminent. From 1 September on the asset will once again
generate inflation adjusted cash flow, albeit materially lower, for the Group.
We regularly highlight that the Worsley investment strategy is essentially
unaffected by the shorter-term economic outlook, being driven by the
medium-term prospects of individual companies.
The preliminary earnings numbers for British companies published in the period
generally reflected previously diminished expectations, although there were
still 62 profit warnings in the March quarter, down from 71 in the December
quarter. Once again, the prices of numerous stocks with capitalisations below
£150 million fell sharply.
In the preponderance of instances such drops are the corollary of a material
worsening of the outlook for the relevant sector, technology and industrial
support services being the most prominent in the latest half. Nevertheless,
the prices of a number of well-established companies are often similarly
impacted, with a proportion becoming severely mispriced and, as such,
contenders for potential investment.
The Worsley equity portfolio is constructed on firm foundations, and, despite
heightened geopolitical and economic uncertainties, the Company continues to
be well positioned to produce very satisfactory returns.
Worsley Associates LLP
15 July 2025
Board of Directors
William Scott (Chairman), a Guernsey resident, was appointed to the board of
the Company as an independent Director on 28 March 2019. Mr Scott also
currently serves as an independent non-executive director of a number of
investment companies and funds, of which RTW Biotech Opportunities Fund
Limited is also listed on the Premium Segment of the LSE. He is also a
director of The Flight and Partners Recovery Fund Limited and a number of
funds sponsored by Man and Abron. From 2003 to 2004, Mr Scott worked as senior
vice president with FRM Investment Management Limited, which is now part of
Man Group plc. Previously, Mr Scott was a director at Rea Brothers (which
became part of the Close Brothers group in 1999) from 1989 to 2002 and
assistant investment manager with the London Residuary Body Superannuation
Scheme from 1987 to 1989. Mr Scott graduated from the University of Edinburgh
in 1982 and is a chartered accountant having qualified with Arthur Young (now
Ernst & Young LLP) in 1987. Mr Scott also holds the Securities Institute
Diploma and is a chartered fellow of the Chartered Institute for Securities
& Investment. He is also a chartered wealth manager. Mr. Scott is a member
of the Audit, Risk and Management Engagement Committees.
Robert Burke, a resident of Ireland, was appointed to the board of the Company
as an independent Director on 28 March 2019. He also serves as an independent
non-executive director of a number of investment companies which are domiciled
in Ireland as well as a number of companies engaged in retail activities,
aircraft leasing, corporate service provision and group treasury activities.
He is a graduate of University College Dublin with degrees of Bachelor of
Civil Law (1968) and Master of Laws (1970). He was called to the Irish Bar in
1969 and later undertook training for Chartered Accountancy with Price
Waterhouse (now PricewaterhouseCoopers) in London, passing the final
examination in 1973. He later was admitted as a Solicitor of the Irish Courts
and was a tax partner in the practice of McCann FitzGerald in Dublin from 1981
to 2005, at which point he retired from the partnership to concentrate on
directorship roles in which he was involved. He is a member of the Irish Tax
Institute. Mr. Burke is a member of the Audit, Risk and Management Engagement
Committees.
Blake Nixon was one of the pioneers of activism in the UK and has wide
corporate experience in the UK and overseas. Following three years at Jordan
Sandman Smythe (now part of Goldman Sachs), a New Zealand stockbroker, Mr
Nixon emigrated to Australia, where he spent three years as an investment
analyst at Industrial Equity Limited ("IEL"), then Australia's fourth largest
listed company. In 1989 he transferred to IEL's UK operation and early in 1990
led the takeover of failing LSE listed financial conglomerate, Guinness Peat
Group plc ("GPG"). The group was then relaunched as an investment company,
applying an owner orientated approach to listed investee companies. Mr Nixon
was UK Executive Director, responsible for GPG's UK operations and corporate
function, for the following 20 years, finally retiring as a non-executive
director in December 2015. He is a founding partner of Worsley Associates LLP,
an activist fund manager, and has served as a non-executive director of a
number of other UK listed companies, as well as numerous unlisted companies.
He is a British resident and was appointed to the Board on 23 January 2019.
Mr. Nixon is a member of the Risk Committee and attends Audit and Management
Engagement Committee meetings by invitation.
Report of the Directors
The Directors of the Company present their Annual Report together with the
Group's Audited Consolidated Financial Statements (the "Financial Statements")
for the year ended 31 March 2025. The Directors' Report together with the
Annual Report and the Consolidated Financial Statements give a true and fair
view of the financial position of the Group. They have been prepared properly,
in conformity with IFRS Accounting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB") and are in accordance with
any relevant enactment for the time being in force; and are in agreement with
the accounting records.
Principal Activity and Status
The Company is an Authorised closed-ended investment company domiciled in
Guernsey, registered under the provision of the Companies (Guernsey) Law,
2008. The Company trades on the Main Market of the London Stock Exchange.
Following the 29 July 2024 UK listing reforms, the Company was automatically
mapped into the Equity Shares (Commercial Companies) ("ESCC") category, having
previously held a premium listing on the Official List. Trading in the
Company's ordinary shares commenced on 18 April 2005. The Company and the
entities listed in note 2(f) to the Financial Statements together comprise the
"Group".
Investment Objective and Investment Policy
The investment objective and investment policy of the Company are described in
greater detail below.
Going Concern
These Financial Statements have been prepared on a going concern basis. The
Directors, at the time of approving the Financial Statements, have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for a period of at least twelve months from the date of
approval of these Financial Statements. The Group maintains a significant cash
balance and an extensive portfolio of realisable securities, and the dividend
income on this, allied to the property lease, generates sufficient cash flows
to pay on-going expenses and other obligations. The Directors have considered
the cash position and performance of the current capital invested by the
Group, the potential impact on markets and supply chains of geopolitical
risks, as well as continuing macro-economic factors and inflation, and
concluded that it is appropriate to continue to adopt the going concern basis
in the preparation of these Financial Statements.
Going concern is assessed over the period of at least 12 months from the
approval of these Financial Statements. Owing to the fact that the Group
currently has no borrowing, has a significant cash holding and that the
Company's equity investments predominantly comprise readily realisable
securities, the Board considers there to be no material uncertainty. Matters
relating to the going concern status of the Group are also discussed in the
long-term viability statement below.
Viability Statement
The Board has evaluated the long-term prospects of the Group, beyond the 12
month time horizon assumption within the going concern framework. The
Directors have conducted a review of the viability of the Group taking account
of the predictability of the key factors which influence the Group's
operations, its current position and the potential impact of risks likely to
threaten the Group's business model, future performance, solvency or
liquidity. For the purposes of this statement the Board has adopted a three
year viability period from the year end owing to this being the maximum period
over which the Board considers variances can reasonably be forecast and
estimated. Anything beyond that cannot be stated with reasonable confidence.
In reaching this conclusion, the Directors considered the Company's
expenditure projections, the fact that the Group currently has no borrowing,
has a significant cash holding, the cash flow derived from the equity
portfolio and the investment property provides sufficient liquidity with which
to meet the Group's cash flow requirements and that the Company's equity
investments predominantly comprise readily realisable securities, which in
extremis could be expected to be sold to meet funding requirements if
necessary, assuming usual market liquidity.
The Directors consider that a complete default on the lease rental obligations
from the Group's investment property in isolation would not have a fundamental
impact on the Company's ability to continue in operation over the next three
years.
In addition, the Board has assumed that the regulatory and fiscal regimes
under which the Group operates will continue in broadly the same form during
the viability period. The Board consults with its broker and legal advisers to
the extent required to understand issues impacting on the Group's regulatory
and fiscal environment. The Administrator also monitors changes to regulations
and advises the Board as necessary.
Based on the Company's processes for monitoring operating costs, internal
controls, the Investment Advisor's performance in relation to the investment
objective, the portfolio risk profile and liquidity risk, the Board has
concluded that there is a reasonable expectation that the Group will be able
to continue in operation and meet their liabilities as they fall due over the
three year period.
Results and Dividends
These Financial Statements are drawn up for the year ended 31 March 2025.
The results for the year are set out in the Consolidated Statement of
Comprehensive Income below.
No dividend payments were paid in the year (31 March 2024: none).
Details of the lease relating to the Group's investment property, and changes
in the tenancy, are set out in note 4 of the Financial Statements.
Directors and their interests
The Directors who served during the year and up to the date of this report and
their interests in the shares of the Company (all of which are beneficial)
were:
31 March 2025 31 March 2024
W. Scott (Chairman) 1,000,000 2.96% 933,311 2.77%
B. A. Nixon 10,118,126 29.99% 10,083,126 29.88%
R. H. Burke Nil Nil Nil Nil
No Director has any other beneficial interest in the Company, nor in any of
the Group entities.
The Directors' biographies are disclosed below.
Management
The Company is a self-managed AIF under the AIFM Directive and, as such, the
Board performs certain management functions, which include oversight of the
Company's investment strategy, and any necessary risk management and portfolio
management functions.
With effect from 31 May 2019 the Board appointed Worsley Associates LLP as its
Investment Advisor to oversee on a day-to-day basis the assets of the Company.
A summary of the financial terms of the contract between the Company and the
Investment Advisor in respect of the advisory services provided is given in
note 3 to the Financial Statements below.
In connection with this, the Investment Advisor undertakes certain of the
support functions in respect of the routine management of the Company's
investment portfolio, corporate structure and affairs and advises the Company
in relation to its investments and other ongoing services. The discretionary
portfolio management of substantially all of the Group's assets (including
uninvested cash), however, remains with the Board to be dealt with in
accordance with the Investment Objective and Investment Policy.
Listing Requirements
Throughout the year the shares of the Company were admitted to the Official
List of the London Stock Exchange maintained by the Financial Conduct
Authority ("FCA") and it has complied with the UK Listing Rules.
On 29 July 2024, the FCA published the final version of the new UK Listing
Rules, these reforms replaced the existing UK Listing Rules sourcebook in its
entirety. Following the new UK Listing Rules, the Company was automatically
mapped into the Equity Shares (Commercial Companies) ("ESCC") category, having
previously held a premium listing on the Official List.
Investee Engagement
The nature of the Company's investments is such that it often seeks to acquire
substantial shareholdings which provide a direct route via which to influence
investee companies. The Company's focus is on investees' medium-term financial
performance, and, if necessary, it will press them to adopt governance
practices which ensure that they are properly accountable to their
shareholders for the delivery of sustainable shareholder value. This active
involvement is outside the scope of many traditional institutional
shareholders. In matters which may affect the success of the Company's
investments the Board and the Investment Advisor work together to ensure that
all relevant factors are carefully considered and reflected in investment
decisions.
In carrying out its investment activities the Company aims to conduct itself
responsibly, ethically and fairly.
International Tax Reporting
For purposes of the US Foreign Accounts Tax Compliance Act, the Company is
registered with the US Internal Revenue Service ("IRS") as a Guernsey
reporting Foreign Financial Institution ("FFI"), has received a Global
Intermediary Identification Number (G0W47U.99999.SL.831), and can be found on
the IRS FFI list.
The Common Reporting Standard ("CRS"), is a global standard for the automatic
exchange of financial account information, developed by the Organisation for
Economic Co-operation and Development ("OECD"), and has been adopted by
Guernsey. The Board has taken the necessary action to ensure that the Company
is compliant with Guernsey regulations and guidance in this regard.
Significant Shareholdings
As at 1 July 2025, shareholders with 3% or more of the voting rights are as
follows:
Shares held % of issued
share capital
B.A. Nixon 10,118,126 29.99%
Transact Nominees Limited 3,094,773 9.17%
The Bank of New York (Nominees) Limited 3,000,000 8.89%
Chase Nominees Limited 2,522,420 7.48%
State Street Nominees Limited 2,075,804 6.15%
BBHISL Nominees Limited 1,800,000 5.33%
Winterflood Client Nominees Limited 1,770,704 5.25%
Lion Nominees Limited 1,214,847 3.60%
Guernsey Financial Services Commission Code of Corporate Governance
The Board of Directors confirms that, throughout the year covered by the
Financial Statements, the Company complied with the Code of Corporate
Governance issued by the Guernsey Financial Services Commission, to the extent
it was applicable based upon its legal and operating structure and its nature,
scale and complexity.
Anti-Bribery and Corruption
The Company adheres to the requirements of the Prevention of Corruption
(Bailiwick of Guernsey) Law, 2023. In consideration of the UK Bribery Act
2010, the Board abhors bribery and corruption of any form and expects all the
Company's business activities, whether undertaken directly by the Directors
themselves or by third parties on the Company's behalf, to be transparent,
ethical and beyond reproach.
Criminal Finances Act
The Directors of the Company have a zero-tolerance commitment to preventing
persons associated with it from engaging in criminal facilitation of tax
evasion. The Board has satisfied itself in relation to its key service
providers that they have reasonable provisions in place to prevent the
criminal facilitation of tax evasion by their own associated persons and will
not work with service providers who do not demonstrate the same zero-tolerance
commitment to preventing persons associated with them from engaging in
criminal facilitation of tax evasion.
Independent Auditor
BDO Limited served as the Company's Independent Auditor throughout the year
and has indicated its willingness to continue in office.
Annual General Meeting
The next AGM of the Company is scheduled to be held on 16 September 2025.
Directors' Responsibilities
The Directors of the Company are responsible for preparing, for each financial
year, an annual report and Financial Statements which give a true and fair
view of the state of affairs of the Group and of the respective results for
the period then ended, in accordance with applicable Guernsey law and IFRS as
issued by the IASB. In preparing these Financial Statements, the Directors are
required to:
· select suitable accounting policies and apply them consistently;
· make judgements and estimates which are reasonable and prudent;
· prepare the Financial Statements on a going concern basis unless it
is inappropriate to presume that the Group, or Company, will continue in
business; and
· state whether or not applicable accounting standards have been
followed, subject to any material departures disclosed and explained in the
Financial Statements.
The Directors confirm that they have complied with the above requirements in
preparing the Financial Statements.
The Directors are responsible for keeping proper accounting records which 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 its financial statements comply with the Companies
(Guernsey) Law, 2008. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial statements which
are free from material misstatement, whether owing to fraud or error, and have
general responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent and detect fraud and other
irregularities.
Disclosure of Information to Auditors
So far as each Director is aware, all relevant information has been disclosed
to the Company's Auditor; and each Director has taken all the steps which he
ought to have taken as a director to make himself aware of any relevant audit
information and to establish that the Company's Auditor is aware of that
information.
Responsibility Statement
Each of the Directors, whose names and functions are listed above, confirms to
the best of that person's knowledge and belief:
· the Financial Statements, prepared in accordance with IFRS as issued
by the IASB, give a true and fair view of the assets, liabilities, financial
position and loss/profit of the Group, as required by DTR 4.1.12R of the
Disclosure and Transparency Rules, and are in compliance with the requirements
set out in the Companies (Guernsey) Law, 2008;
· the Annual Report and Financial Statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
the shareholders to assess the Group's position, performance, business model
and strategy; and
· the Annual Report and Financial Statements including information
detailed in the Chairman's Statement, the Report of the Directors, the
Investment Advisor's report, the Corporate Governance report and the notes to
the Financial Statements, include a fair review of the development and
performance of the business and the position of the Group together with a
description of the principal risks and uncertainties that it faces, as
required by:
- DTR 4.1.8 and DTR 4.1.9 of the Disclosure and Transparency Rules,
being a fair review of the Group's business and a description of the principal
risks and uncertainties facing the Group; and
- DTR 4.1.11 of the Disclosure and Transparency Rules, being an
indication of important events which have occurred since the end of the
financial period and the likely future development of the Group.
Signed on behalf of the Board by:
W. Scott
Director
18 July 2025
Corporate Governance Report
On 18 December 2019, the Company became a member of the Association of
Investment Companies ("AIC") and except as noted herein complies with the 2019
AIC Code of Corporate Governance issued in February 2019 ("the AIC Code"),
effective for accounting periods commencing on or after 1 January 2019. By
complying with the AIC Code, the Company is deemed to comply with both the UK
Corporate Governance Code (July 2018) (the "UK Code") issued by the Financial
Reporting Council ("FRC") and the Code of Corporate Governance issued by the
Guernsey Financial Services Commission (the "GFSC Code").
The Board considers that reporting against the principles and recommendations
of the AIC Code provides appropriate information to shareholders and during
the period the Board has reviewed its policies and procedures against the AIC
Code.
The GFSC Code provides a governance framework for GFSC-licensed entities,
authorised and registered collective investment schemes. Companies reporting
against the UK Code or the AIC Code are deemed to comply with the GFSC Code.
The AIC Code is available on the AIC's website, www.theaic.co.uk.
For the year ended 31 March 2025, the Company has complied with the
recommendations of the AIC Code and the relevant provisions of the UK Code,
except for the following provisions relating to:
· the role of the Chief Executive
· Senior Independent Director;
· the need for an internal audit function;
· the whistle blowing policy;
· Remuneration Committee; and
· Nomination Committee.
The Board considers these provisions are not relevant given the nature, scale
and lack of complexity of the Company and its legal and operating structure as
a self-managed investment company. The Company has therefore not reported
further in respect of these provisions. Details of compliance are noted in the
following pages. The absence of an Internal Audit function is discussed in the
Audit Committee Report below.
The Directors are non-executive and the Company does not have any employees,
hence no Chief Executive, Executive Directors' remuneration nor
whistle-blowing policy is required. The Board is satisfied that any relevant
issues can be properly considered by the Board. Moreover, the Directors have
satisfied themselves that the Company's service providers have appropriate
whistle-blowing policies and procedures and have received confirmation from
the service providers that nothing has arisen under those policies and
procedures which should be brought to the attention of the Board.
Composition, Independence and Role of the Board
The Board currently comprises three non-executive Directors. Both Mr Scott and
Mr Burke are considered by the Board to be independent of the Company's
Investment Advisor. Mr Nixon is Founding Partner of the Investment Advisor and
is therefore not independent.
Whilst Mr Nixon is not an independent director, the presence of two other
directors who are independent and non-executive mitigates the risk of Mr Nixon
acting against the Company's interest.
Mr Scott was appointed to serve forthwith as Chairman of the Company on 28
March 2019. The Chairman of the Board must be independent for the purposes of
Chapter 11 of the UK Listing Rules. Mr Scott is considered independent because
he:
· has no current or historical employment with the Investment Advisor;
· has not provided professional services to the Investment Advisor; and
· has no current directorships in any other investment funds managed by
the Investment Advisor.
Notwithstanding the Articles of Association of the Company not specifying any
limit to the tenure of any director, although triennial re-election is
required, the Board has adopted a policy whereby the Directors, including the
Chairman, are subject to biennial re-election by shareholders (apart from Mr.
Nixon, who is subject to annual re-election) and, subject to there being no
change in his or her status in respect of the independence criteria set out
above, the Chairman may freely stand for re-election until his or her tenure
would in the aggregate exceed nine years. At that point, the Board will
consider, in accordance with the AIC Code, whether or not the Chairman remains
independent and, if so, if it would be appropriate for them to stand for
annual re-election bearing in mind the countervailing benefits of board
refreshment and continuity.
The Board has overall responsibility for maximising the Company's success by
directing and supervising the affairs of the business and meeting the
appropriate interests of shareholders and relevant stakeholders, while
enhancing the value of the Company and also ensuring protection of investors.
A summary of the Board's responsibilities is as follows:
· statutory obligations and public disclosure;
· strategic direction and financial reporting;
· risk assessment and management including reporting compliance,
governance, monitoring and control; and
· other matters having a material effect on the Company.
The Board is responsible to shareholders for the overall management of the
Company.
The Board needs to ensure that the Annual Report and Financial Statements,
taken as a whole, are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Company's position and
performance, business model and strategy. In seeking to achieve this, the
Directors have set out the Company's investment objective and policy and have
explained how the Board and its delegated Committees operate and how the
Directors review the risk environment within which the Company operates and
set appropriate risk controls. Furthermore, throughout the Annual Report and
Financial Statements the Board has sought to provide further information to
enable shareholders better to understand the Company's business and financial
performance.
The Board's responsibilities for the Annual Report are set out in the
Directors' Responsibility Statement below.
The Board is also responsible for issuing half yearly reports, NAV updates and
other price sensitive public reports.
The Board does not consider it appropriate to appoint a Senior Independent
Director. The Board believes it has a good balance of skills and experience to
ensure it operates effectively. The Chairman is responsible for leadership of
the Board and ensuring its effectiveness.
The Board has engaged external businesses to undertake the investment advisory
and administrative activities of the Company. Documented contractual
arrangements are in place with these businesses and these define the areas
where the Board has delegated responsibility to them. The Board has adopted a
schedule of matters specifically reserved for its decision-making and
distinguished these from matters it has delegated to the Company's key service
providers.
The Company holds regular board meetings to discuss general management,
structure, finance, corporate governance, marketing, risk management,
compliance, asset allocation and gearing, contracts and performance. The
quarterly Board meetings are the principal source of regular information for
the Board enabling it to determine policy and to monitor performance,
compliance and controls which are supplemented by communication and
discussions throughout the year.
A representative of each of the Investment Advisor and Administrator attends
each Board meeting either in person or by telephone, thus enabling the Board
fully to discuss and review the Company's operation and performance. Each
Director has direct access to the Investment Advisor and Company Secretary and
may at the expense of the Company seek independent professional advice on any
matter. The Company maintains appropriate Directors' and Officers' liability
insurance.
Conflicts of interest of directors
Directors are required to disclose all actual and potential conflicts of
interest as they arise for approval by the Board, who may impose restrictions
or refuse to authorise conflicts. The process of consideration and, if
appropriate, approval will be conducted only by those Directors with no
material interest in the matter being considered. The Board maintains a
Conflicts of Interest policy which is reviewed periodically and a Business
Interests and Potential Conflicts of Interest register which is reviewed by
the Board at each quarterly Board meeting.
Re-election of Directors
There are provisions in the Company's Articles of Incorporation which require
Directors to seek re-election on a periodic basis. There is no limit on length
of service, nor is there any upper age restriction on Directors. The Board
considers that there is significant benefit to the Company arising from
continuity and experience among directors, and accordingly does not intend to
introduce restrictions based on age or tenure. It does, however, believe that
shareholders should be given the opportunity to review membership of the Board
on a regular basis.
The Board believes that, while regular rotation is in keeping with good
governance, the unquestionable benefits of ensuring that there is some
continuity mean that it is in the best interests of the Company that not all
Directors offer themselves for re-election each year. The Company may
terminate the appointment of a Director immediately on serving written notice
and no compensation is payable upon termination of office as a director of the
Company becoming effective.
In accordance with the Company's Articles of Incorporation, at each AGM all
Directors who held office at the two previous AGM's and did not retire shall
retire from office and shall be available for re-election. Messrs. Burke and
Nixon will stand for re-election at this year's AGM. Mr Nixon as Founding
Partner and a Designated Member of Worsley Associates LLP stands annually.
Further details regarding the experience of each of the Directors are set out
above.
Board Diversity
The Company is ESCC Listed on the Main Market of the London Stock Exchange and
is subject to the UK Listing Rules promulgated by the FCA. The Company has
three directors, all of whom are male and none of whom is from a minority
ethnic background. As at the Reference Date of 31 March 2025 and throughout
the year then ended, the targets set out at UK Listing Rule 6.6.6R(9) were not
met.
Worsley Investors Limited is a very small company with a market capitalisation
of less than £10 million and an audited net asset value of approximately £12
million. It is not a constituent of the FTSE350 Index, nor the FTSE Small
Cap Index, and so is out of scope with regard to the Davies Report on "Women
on Boards", the Parker review into ethnic diversity and the Hampton-Alexander
review on gender balance in FTSE leadership. However, the Board is
cognisant of the practices codified in these reports and, as recommended in
the Davies Report, the Board has reviewed its composition. The Board's
conclusion from this review is that it believes that the current appointments
provide an appropriate and broad range of skills and experience, are in the
interests of shareholders and, in light of this and the disproportionate
effect on the expense ratio for such a small company of appointing additional
directors, no plans to appoint further directors are in contemplation.
Board Evaluation and Succession Planning
The Board conducts an annual self-evaluation of its performance and that of
the Company's individual Directors, which is led by the Chairman and, as
regards the Chairman's performance evaluation, by the other Directors. The
annual self-evaluation considers how the Board functions as a whole taking
balance of skills, experience and length of service into consideration and
also reviews the individual performance of its members.
To facilitate this annual self-evaluation, the Company Secretary circulates a
detailed questionnaire to each Director and a separate questionnaire for the
evaluation of the Chairman. The questionnaires, once completed, are returned
to the Company Secretary who collates responses, prepares a summary and
discusses the Board evaluation with the Chairman prior to circulation to the
remaining Board members. On occasions, the Board may seek to employ an
independent third party to conduct a review of the Board.
The Board considers it has a breadth of experience relevant to the Company,
and the Directors believe that any changes to the Board's composition can be
managed without undue disruption. An induction programme has been prepared for
any future Director appointments and all Directors receive other relevant
training as necessary.
Board and Committee Meetings
The table below sets out the number of scheduled Board, Audit Committee, Risk
Committee and Management Engagement Committee meetings held during the year
ended 31 March 2025 and, where appropriate, the number of such meetings
attended by each Director who held office during the same period.
Risk Committee Management Engagement Committee
Board of Directors Audit Committee
Scheduled Attended Scheduled Attended Scheduled Attended Scheduled Attended
W. Scott 4 4 3 3 3 3 1 1
(Chairman)
R. H. Burke 4 4 3 3 3 3 1 1
B. A. Nixon 4 4 3 3* 3 3 1 1*
*In attendance as a non-voting guest.
In normal circumstances the Board intends to meet not less than four times per
year on a quarterly basis in addition to such ad hoc meetings as may be
necessary.
Audit Committee
The Company has established an Audit Committee with formal duties and
responsibilities. The Audit Committee meets formally at least twice a year and
each meeting is attended by the Independent Auditor and Administrator. The
Company's Audit Committee is comprised of Mr Burke and Mr Scott. At the
invitation of the Audit Committee, Mr. Nixon may attend meetings of the
Committee. The Audit Committee is chaired by Mr Burke. The Company does not
maintain an internal audit function, and, given that there are only three
Directors, the Chair of the Board is a member of the Committee.
The Audit Committee monitors the performance of the Independent Auditor and
also examines the remuneration and engagement of the Auditor, as well as its
independence and any non-audit services provided by it. A report of the Audit
Committee detailing its responsibilities and its key activities is presented
below.
Risk Committee
The Company has established a Risk Committee with formal duties and
responsibilities. The Risk Committee meets formally at least twice a year. The
Risk Committee is comprised of the entire Board and is chaired by Mr Scott.
The principal function of the Risk Committee is to identify, assess, monitor
and, where possible, oversee the management of risks to which the Company's
investments are exposed, with regular reporting to the Board. The Directors
have appointed the Risk Committee to manage the additional risks faced by the
Company as well as the disclosures to be made to investors and the relevant
regulators.
The Risk Committee reviews the robustness of the Company's risk management
processes, the integrity of the Company's system of internal controls and risk
management systems, and the identification and management of risks through the
use of the Company's risk matrix. The Risk Committee reviews the principal,
emerging, and other risks relevant to the Company.
The Risk Committee reports on the internal controls and risk management
systems to the Board of Directors. The Board of Directors is responsible for
establishing the system of internal controls relevant to the Company and for
reviewing the effectiveness of those systems. The review of internal controls
is an on-going process for identifying and evaluating the risks faced by the
Company, designed to manage effectively rather than attempt to eliminate
business risks, to ensure the Board's ability to achieve the Company's
business objectives.
It is the responsibility of the Board to undertake the risk assessment and
review of the internal controls in the context of the Company's objectives in
relation to business strategy, and the operational, compliance and financial
risks facing the Company. These controls are operated in the Company's main
service providers: the Investment Advisor and Administrator. The Board
receives regular updates and undertakes an annual review of each service
provider.
The Company is a closed-ended investment company which has no employees. The
Company operates by outsourcing significant elements of its operations to
reputable professional companies, which are required to comply with all
relevant laws and regulations.
The Board of Directors considers the arrangements for the provision of
Investment Advisor and Administration services to the Company and as part of
the annual review the Board considered the quality of the personnel assigned
to handle the Company's affairs, the investment process and the results
achieved to date.
The Board is satisfied that each service provider has effective controls in
place to control the risks associated with the services which they are
contracted to provide to the Company and therefore the Board is satisfied with
the internal controls of the Company.
Management Engagement Committee
The Company has established a Management Engagement Committee (the "MEC") with
formal duties and responsibilities. The MEC meets formally at least once a
year. The MEC is comprised of Mr Burke and Mr Scott. The principal function of
the MEC is to ensure that the Company's investment advisory arrangements are
competitive and reasonable for the shareholders, along with the Company's
agreements with all other third party service providers (other than the
external auditor).
During the period the MEC has reviewed the services provided by the Investment
Advisor and other service providers and recommended that the continuing
appointments of the Company's service providers was in the best interests of
the Company. The MEC is chaired by Mr Scott.
Nomination Committee
The Board does not have a separate Nomination Committee. The Board as a whole
fulfils the function of a Nomination Committee. Any proposal for a new
Director will be discussed and approved by the Board, giving full
consideration to succession planning and the leadership needs of the Company.
Remuneration Committee
In view of its non-executive nature, the Board considers that it is not
appropriate for there to be a separate Remuneration Committee, as anticipated
by the AIC Code, because this function is carried out as part of the regular
Board business. A Remuneration Report prepared by the Board is contained in
the Financial Statements below.
Terms of Reference
All terms of reference for committees are available from the Company's website
(www.worsleyinvestors.com).
Internal Controls
The Board is ultimately responsible for establishing and maintaining the
Company's system of internal controls and for maintaining and reviewing its
effectiveness. The system of internal controls is designed to manage rather
than to eliminate the risk of failure to achieve business objectives and by
its nature can only provide reasonable and not absolute assurance against
misstatement and loss. These controls aim to ensure that assets of the Company
are safeguarded, proper accounting records are maintained and the financial
information for publication is reliable.
The Board has delegated the day-to-day management of the Company's investment
portfolio and the administration, registrar and corporate secretarial
functions including the independent calculation of the Company's NAV and the
production of the Annual Report and Financial Statements, which are
independently audited. Whilst the Board delegates responsibility, it retains
accountability for the functions it delegates and is responsible for the
systems of internal control.
Formal contractual agreements have been put in place between the Company and
providers of these services. On an ongoing basis, board reports are provided
at each quarterly board meeting from the Investment Advisor, Administrator and
Company Secretary and Registrar; and a representative from the Investment
Advisor is asked to attend these meetings.
In accordance with UK Listing Rule 11.7.2 (2) R the Directors formally
appraise the performance and resources of the Investment Advisor on an annual
basis. In the opinion of the Directors the continuing appointment of the
Investment Advisor on the terms agreed is in the interests of the Company and
the shareholders.
The Investment Advisor was appointed on 31 May 2019.
The Board has reviewed the need for an internal audit function and owing to
the size of the Company and the delegation of day-to-day operations to
regulated service providers, an internal audit function is not considered
necessary. The Directors will continue to monitor the systems of internal
controls in place in order to provide assurance that they operate as intended.
Principal Risks and Uncertainties
In respect of the Company's system of internal controls and its effectiveness,
the Directors:
· are satisfied that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that would
threaten its business model, future performance, solvency or liquidity; and
· have reviewed the effectiveness of the risk management and internal
control systems including material financial, operational and compliance
controls (including those relating to the financial reporting process) and no
significant failings or weaknesses were identified.
The principal risks and uncertainties which have been identified have remained
unchanged in both the nature and the level of risk during the year and the
steps which are taken by the Board to mitigate them are as follows:
Investment Risks
The Company is exposed to the risk that its investment portfolio and the
remaining investment property fail to perform in line with the Company's
objectives. The Company is exposed to the risk that markets move adversely.
The Board reviews reports from the Investment Advisor at each quarterly Board
meeting and at other times when expedient, paying particular attention to the
diversification of the portfolio and to the performance and volatility of
underlying investments. If any risks are identified the Board will ensure that
any remediation required is actioned on a timely basis.
Operational Risks
The Company is exposed to the risk arising from any failures of systems and
controls in the operations of the Investment Advisor and Administrator. The
Board and its Committees regularly review reports from the Investment Advisor
and the Administrator and Corporate Broker on their internal controls. If any
risks are identified the Board will ensure that any remediation required is
actioned on a timely basis.
Accounting, Legal and Regulatory Risks
The Company is exposed to the risk that it may fail to maintain accurate
accounting records, fail to comply with requirements of its Prospectus or fail
to adapt its processes to changes in law or regulations. The accounting
records prepared by the relevant service providers are reviewed by the
Investment Advisor. The Administrator, Corporate Broker and Investment Advisor
provide regular updates to the Board on compliance with the Prospectus and any
changes in regulation.
Financial Risks
The financial risks, including market, credit, liquidity and interest rate
risk faced by the Company are set out in note 14 of the Financial Statements
below. These risks and the controls in place to reduce the risks are reviewed
at the quarterly Board meetings.
Foreign Exchange Risk
The Company is exposed to currency risk given that the assets of its
subsidiaries are predominantly denominated in Euro but the presentation
currency of the Company is Pounds Sterling. The Investment Advisor reports at
least quarterly to the Board on the strategy for managing this risk. Although
the Company has the ability to hedge this risk, it has not to date chosen to
do so and has no plans to make such arrangements.
Geopolitical Risk
The Directors regularly contemplate the potential impact which geopolitical
risks may have on the financial markets in which the Company operates but
consider at present that such risks are not significant to the Group.
Emerging Risks
The Board is alert to the identification of any new or emerging risks through
the ongoing monitoring of the Company's investment portfolio and by conducting
regular reviews of the Company's risk assessment matrix. Should an emerging
risk be identified the risk assessment matrix is updated and appropriate
mitigating measures and controls will be agreed.
Non-Audit Services Policy
The Company has implemented a policy in relation to the engagement of the
external auditor, BDO Limited, to perform non-audit services. As a Market
Traded Company ("MTC"), since March 2020, the Company is classified as an
EU/UK Public Interest Entity ("PIE") for the purposes of FRCs Ethical
Standard. Accordingly, the Audit Committee must consider whether or not the
provision of such non-audit services is compatible with the list of
permissible services under the FRC's UK Ethical Standards:
The Audit Committee reviews the need for non-audit services, authorises such
on a case-by-case basis, and recommends an appropriate fee for such non-audit
services to the Board.
The Board considers the actual, perceived and potential impact upon the
independence of the external auditor prior to engaging the external auditor to
undertake any non-audit service, as well as confirming that any non-audit
services are included on the list of permissible services, as amended from
time to time by the FRC.
The Board reserves the right to review the policy periodically and, if
required, amend it to ensure that the policy is compliant with all applicable
law and regulation and best practice.
Promotion of the success of the Company
The Board acts in a manner which is considered to be:
· in good faith;
· likely to promote the continuing success of the Company; and
· to the benefit of its shareholders as a whole.
Whilst the primary duty of the Directors is owed to the Company, the Board
considers as part of its discussions and decision making process the interests
of all stakeholders.
The Board is committed to maintaining high standards of corporate governance
and accountability.
As an investment company, the Company does not have any employees and conducts
its core operations through third party service providers, which apart from
the shareholders are the only significant stakeholders. Each provider has an
established track record and, through regulatory oversight and control, is
required to have in place suitable policies and procedures to ensure it
maintains high standards of business conduct, treats customers fairly, and
employs corporate governance best practice.
Relations with Shareholders
The Board welcomes shareholders' views and places great importance on
communication with its shareholders. The Board receives regular reports on the
views of shareholders and the Chairman and other Directors are available to
meet shareholders if required. The Investment Advisor meets with major
shareholders on a regular basis and reports to the Board on these meetings.
Issues of concern can be addressed by any shareholder in writing to the
Company at its registered address. The AGM of the Company provides a forum for
shareholders to meet and discuss issues with the Directors and Investment
Advisor of the Company. In addition, the Company maintains a website
(www.worsleyinvestors.com) which contains comprehensive information, including
regulatory announcements, share price information, financial reports,
investment objectives and strategy and investor contacts.
Relations with other stakeholders
Specific consideration is given to the continued alignment between the
activities of the Company and those which contribute to delivering the Board's
strategy, which include the Investment Advisor, the Corporate Broker and the
Administrator.
In particular, open and collaborative dialogue is maintained between the Board
and the Investment Advisor, a representative of which is required to attend
all Board meetings. In addition, each Director has direct access to the
Investment Advisor.
The Board receives regular updates from and undertakes an annual review of
each service provider.
In its relationship with suppliers, the Company aims to conduct itself
responsibly, ethically and fairly.
The Management Engagement Committee (see below) is charged by the Board with
ensuring that the Company's investment advisory arrangements are competitive
and reasonable for the shareholders, along with the Company's agreements with
all other third party service providers (other than the external auditor).
The Board respects and welcomes the views of all stakeholders. Any queries or
areas of concern regarding the Company's operations can be raised with the
Company Secretary.
Signed on behalf of the Board by:
W. Scott
Chairman
18 July 2025
Audit Committee Report
Dear Shareholders,
I am pleased to present the Audit Committee's Report for the year ended 31
March 2025, which covers the following topics:
· Responsibilities of the Audit Committee and its key activities during
the period,
· Financial reporting and significant areas of judgement and
estimation,
· Independence and effectiveness of the external auditor, and
· Internal control and risk management systems.
The Company remains in a transition period until the Curno investment property
is disposed of. The Audit Committee's activities during the year have
therefore concentrated on maintaining an appropriate risk and control
environment, providing suitable disclosure of progress and residual risks in
the Financial Statements, ensuring ongoing engagement from service providers
and maintaining sufficient liquid funds to meet expenditure for essential or
justified items.
Responsibilities
The Audit Committee reviews and recommends to the Board for approval or
otherwise, the Financial Statements of the Company and is the forum through
which the independent external auditor reports to the Board of Directors. The
independent external auditor and the Audit Committee, if either considers this
to be necessary, will meet together without representatives of either the
Administrator or Investment Advisor being present.
The responsibilities of the Audit Committee include:
1. Monitoring the integrity of the Financial Statements of the Company
covering:
· formal announcements relating to the Company's financial
performance;
· significant financial reporting issues and judgements;
· matters raised by the external auditor; and
· appropriateness of accounting policies and practices.
2. Reviewing and considering the AIC Code and FRC Guidance on Audit
Committees.
3. Monitoring the quality and effectiveness of the independent external
auditor, which includes:
· meeting regularly to discuss the audit plan and the subsequent
findings;
· considering the level of fees for both audit and non-audit work;
· reviewing independence, objectivity, expertise, resources and
qualification; and
· making recommendations to the Board on their appointment,
reappointment, replacement and remuneration.
4. Reviewing the Company's procedures for prevention, detection and
reporting of fraud, bribery and corruption, and
5. Monitoring and reviewing the internal control and risk management
systems of the service providers together with the need for a Company Internal
Audit function.
The Audit Committee's full terms of reference can be obtained from the
Company's website (www.worsleyinvestors.com).
Financial Reporting
The Audit Committee's review of the Audited Annual Report and Financial
Statements focused on the following significant risks and areas of judgement
and estimation:
Valuation of Investments and Investment Property
The Group's sole remaining investment property was independently valued at
£2.35 million (€2.8 million) as at 31 March 2025 (31 March 2024: £6.29
million (€7.35 million) independently valued). The property comprises a
cinema complex in Curno, Italy, owned via an intermediate holding company. The
valuation of this investment is in accordance with the requirements of IFRS as
issued by the IASB. The valuation estimate is provided by Knight Frank LLP
(refer to note 2(d) and note 7 for further details regarding the valuation of
the investment property), an external independent valuer. All valuations are
also subject to review and oversight by the Investment Advisor.
The Company's non-property investments had a fair value of £8.89 million as
at 31 March 2025 (31 March 2024: £8.01 million). The Committee considered
the fair value of the investments held by the Company as at 31 March 2025 to
be reasonable based on information provided by the Investment Advisor and
Administrator. All prices are confirmed to independent pricing sources as at
31 March 2025 by the Administrator and are subject to a review process at the
Administrator and oversight at the Investment Advisor (refer to note 8 for
further details regarding the valuation of the equity portfolio).
Audit Findings Report
The independent external auditor reported to the Audit Committee that no
material unadjusted misstatements were found in the course of their work.
Furthermore, the Investment Advisor and Administrator confirmed to the Audit
Committee that they were not aware of any material unadjusted misstatements
including matters relating to the Financial Statements presentation.
Accounting Policies & Practices
The Audit Committee has assessed the appropriateness of the accounting
policies and practices adopted by the Group together with the clarity of
disclosures included in the Financial Statements. Following a review of the
presentations and reports from the Administrator and consulting where
necessary with the independent external auditor, the Audit Committee is
satisfied that the Financial Statements appropriately address the critical
judgements and key estimates (both in respect to the amounts reported and the
disclosures). It is also satisfied that the significant assumptions used for
determining the value of assets and liabilities have been appropriately
scrutinised, challenged and are sufficiently robust.
The Audit Committee advised the Board that this Annual Report and Financial
Statements, taken as a whole, is fair, balanced and understandable.
Fraud, Bribery and Corruption
The Audit Committee continues to monitor the fraud, bribery and corruption
policies of the Group. The Board receives a confirmation from all service
providers that there have been no instances of fraud or bribery.
The Independent External Auditor
BDO Limited served as the Company's Independent Auditor throughout the year
and has indicated its willingness to continue in office.
The independence and objectivity of the external auditor is reviewed by the
Audit Committee, which also reviews the terms under which the independent
external auditor is appointed to perform non-audit services. The Audit
Committee has established pre-approval policies and procedures for the
engagement of the auditor to provide non audit services.
The following table summarises the remuneration payable to BDO Limited for
audit and non-audit services provided to the Company during the year ended 31
March 2025 and the year ended 31 March 2024:
31 March 2025 31 March 2024
£ £
Statutory audit 45,800 44,500
Total fees 45,800 44,500
The following table summarises the remuneration payable to BDO Italia S.p.A
for audit and non-audit services provided to the Group during the year ended
31 March 2025 and the year ended 31 March 2024:
31 March 2025 31 March 2024
£ £
Statutory audit 45,800 44,500
Total fees 45,800 44,500
Performance and Effectiveness
During the period, when considering the effectiveness of the independent
external auditor, the Audit Committee has taken into account the following
factors:
· the audit plan presented to them before the audit;
· changes in audit personnel;
· the post audit findings report;
· the independent external auditor's own internal procedures to
identify threats to independence; and
· feedback received from both the Investment Advisor and Administrator.
The Audit Committee reviewed and, where appropriate, challenged the audit plan
and the audit findings report of the independent external auditor and
concluded that the audit plan sufficiently identified audit risks and that the
audit findings report indicated that the audit risks were sufficiently
addressed with no significant variations from the audit plan. The Audit
Committee considered reports from the independent external auditor on their
procedures to identify threats to independence and concluded that the
procedures were sufficient.
Appointment of External Auditor
Consequent to this review process, the Audit Committee recommended to the
Board that a resolution be put to the next AGM to confirm the reappointment of
BDO Limited as independent external auditor.
Internal Control and Risk Management Systems
The Board of Directors considers the arrangements for the provision of
Investment Advisory, Investment Management, Administration and Custody
services to the Company on an on-going basis and a formal review is conducted
annually. As part of this review the Board considered the quality of the
personnel assigned to handle the Company's affairs, the investment process and
the results achieved to date.
The Audit Committee has reviewed the need for an internal audit function and
has decided that the systems and procedures employed by the Investment Advisor
and the Administrator provide sufficient assurance that a sound system of
internal control, which safeguards the Company's assets, is maintained. An
internal audit function specific to the Group is therefore considered
unnecessary.
In finalising the Annual Report and Financial Statements for recommendation to
the Board for approval, the Audit Committee has satisfied itself that the
Annual Report and Financial Statements taken as a whole are fair, balanced and
understandable, and provide the information necessary for shareholders to
assess the Company's position and performance, business model and strategy.
A member of the Audit Committee will continue to be available at each AGM to
respond to any shareholder questions on the activities of the Audit Committee.
R.H. Burke
Chairman, Audit Committee
18 July 2025
Directors' Remuneration Report
Introduction
An ordinary resolution for the approval of the Directors' Remuneration Report
will be put to the shareholders at the forthcoming AGM.
Remuneration Policy
All Directors are non-executive and a Remuneration Committee has not been
established. The Board as a whole considers matters relating to the Directors'
remuneration. No advice or services were provided by any external person in
respect of its consideration of the Directors' remuneration.
The Company's policy is that the fees payable to the Directors should reflect
the time spent by the Directors on the Company's affairs and the
responsibilities borne by the Directors and be sufficient to attract, retain
and motivate directors of a quality required to run the Company successfully.
The Chairman of the Board is paid a higher fee in recognition of his
additional responsibilities. The policy is to review fee rates periodically,
although such a review will not necessarily result in any changes to the
rates, and account is taken of fees paid to directors of comparable companies.
The Directors of the Company are remunerated for their services at such a rate
as the Directors determine provided that the aggregate amount of such fees
does not exceed £120,000 per annum.
There are no long-term incentive schemes provided by the Company and no
performance fees are paid to Directors.
None of the Directors has a service contract with the Company but each of the
Directors is appointed by a letter of appointment which sets out the main
terms of their appointment. Directors hold office until they retire by
rotation or cease to be a director in accordance with the Articles of
Incorporation, by operation of law or until they resign.
Remuneration
Directors are remunerated in the form of fees, payable quarterly in arrears,
to the Director personally. No Directors have been paid additional
remuneration outside their normal Directors' fees and expenses.
The current annual Directors' fees comprise £20,000 per annum payable to the
Chairman and £15,000 per annum payable to each of the other Directors.
Upon appointment of Worsley Associates as Investment Advisor on 31 May 2019,
Mr Nixon waived any future Directors' fee for as long as he is a member of the
Investment Advisor.
For the year ended 31 March 2025 and the year ended 31 March 2024 Directors'
fees incurred were as follows:
For the year ended For the year ended
31 March 2025 31 March 2024
£ £
W. Scott (Chairman) 20,000 20,000
B.A. Nixon - -
R. H. Burke 15,000 15,000
35,000 35,000
In addition to the Directors named above, the directors of the subsidiaries of
the Group received emoluments amounting to £10,830 (31 March 2024: £11,103).
Total fees paid to Directors and directors of the subsidiaries were £45,830
(31 March 2024: £46,103).
Signed on behalf of the Board by:
W. Scott
Director
18 July 2025
Independent Auditor's Report to the Members of Worsley Investors Limited
Opinion on the financial statements
In our opinion, the consolidated financial statements of Worsley Investors
Limited ("the Parent Company") and its subsidiaries ("the Group"):
· give a true and fair view of the state of the Group's affairs as at
31 March 2025 and of its loss for the year then ended;
· have been properly prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued by the International
Accounting Standards Board; and
· have been properly prepared in accordance with the requirements of
the Companies (Guernsey) Law, 2008.
We have audited the consolidated financial statements of the Group for the
year ended 31 March 2025 (the "financial statements") which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated Statement of
Changes in Equity, the Consolidated Statement of Financial Position, the
Consolidated Statement of Cash Flows and notes to the financial statements,
including a summary of the material accounting policy information.
The financial reporting framework that has been applied in their preparation
is applicable law and IFRS as issued by the International Accounting Standards
Board.
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 believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion. Our audit opinion is consistent with the additional
report to the audit committee.
Independence
We remain independent of the Group in accordance with the ethical requirements
that are relevant to our audit of 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 these
requirements.
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 the Parent Company's ability to continue to
adopt the going concern basis of accounting included:
· Obtaining the paper prepared by those charged with governance and
management in respect of going concern and discussing this with both the
Directors and management.
· Consideration and challenge of the going concern paper and assessing
it for reasonableness, based on our knowledge of the Group gained throughout
the audit.
· Consideration of the cash available, the liquidity of the equity
portfolio held, and the expected profit generated by the property holding
subsidiary, together with the expected annual running costs of the Group and
determining whether these assumptions were reasonable, based on our knowledge
of the Group.
· Performing our own sensitivity analysis of the headroom of the
investment portfolio over the annual running expenses.
· Reviewing the minutes of meetings of those charged with governance,
the Group's RNS announcements and the compliance reports for any indicators of
concern with respect to going concern.
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 or 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.
In relation to the Parent Company's reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or draw attention
to in relation to the Directors' statement in the financial statements about
whether the Directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Overview
Ø Valuation of Investment Property (2024 and 2023)
Ø Valuation and Ownership of Listed Investments (2024 and 2023)
Key audit matters
Ø Rental income recognition (2024)
Group financial statements as a whole
Materiality
£210,000 (2024:£264,000) based on 1.75% (2024: 1.75%) of total assets.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
We carried out a full scope audit of the Group, which was tailored to take
into account the nature of the Group's investments, the accounting and
reporting environment and the industry in which the Group operates.
In designing our overall audit approach, we determined materiality and
assessed the risk of material misstatement in the financial statements.
This assessment took into account the likelihood, nature, and potential
magnitude of any misstatement. As part of this risk assessment, we considered
the Group's interaction with the Investment Advisor and the Administrator. We
obtained an understanding of the control environments in place at the
Investment Advisor and the Administrator to the extent that they were relevant
to our audit. Following this assessment, we applied professional judgement to
determine the extent of testing required over each balance in the financial
statements.
We concluded that the most effective audit approach for the Group was to audit
the financial statements as if the Group was one entity.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of investment property The Group holds a single investment property which is fair valued. For the independent property valuation, we evaluated the competence and
independence of the external valuer, which included consideration of their
qualifications and expertise. We read the terms of their engagement with the
Group to determine whether there were any matters that might have affected
Refer to accounting policies 2(d) and 2(j) and the disclosure in note 7 The fair value has been determined by the Directors based on an independent their objectivity or may have imposed scope limitations upon their work.
Royal Institute of Chartered Surveyors "RICS" valuation performed by
independent valuers.
We also read the valuation report for the property to understand the process
undertaken by the valuer and confirmed that the valuation was prepared in
Such property valuations are a highly subjective area as they require the accordance with professional valuation standards and IFRS.
valuer to make judgements on property yields, the quality of the tenant and
other variables in order to arrive at the current fair value of the property.
We considered the reasonableness of the inputs used by the valuer in the
valuation, such as the rental terms and other assumptions that impact the
Such subjectivity and judgements are increased given the wider economic value. This included discussions with and challenge of the valuer around the
impacts of inflation, interest rate movements and the lower spending power of impact of economic variables and the resulting adjustments to yields and
the average consumer. overall consideration of the resulting valuation. In addition, we agreed a
sample of the significant inputs into the valuation, such as the rental
details, to supporting documentation.
Any input inaccuracies or unreasonable bases used in the valuation judgements
(such as with respect to the rental value or yield profile applied) could
result in a material misstatement in the financial statements. Key observation:
Based on the procedures performed, we did not identify any indications to
suggest that the judgements made with respect to the property valuation are
unreasonable.
Valuation and ownership of listed investments The investment portfolio as at 31 March 2025 comprises listed investments For all investments, we agreed the ownership of the investment portfolio
whose price is readily available. holdings to the respective independently obtained Custodian confirmation.
Refer to accounting policies 2(l) and the disclosure in note 8
The investments represent a material proportion of the net asset value as We tested the valuation of all listed investments held by agreeing the prices
disclosed in the Consolidated Statement of Financial Position. Therefore, we used in the valuation to independent third-party sources, such as Refinitiv,
consider this to be a key audit matter. and then recalculating the valuation based on the number of shares held.
Key observation:
Based on the procedures performed, we did not identify any matters to indicate
that the valuation and ownership of the listed investments are inappropriate.
Rental income recognition Rental income is the main revenue source of the Group alongside dividend Rental income for the pre-existing lease was recalculated in full with
income and so is a key balance in the financial statements. Given the lease reference to the lease agreement and considering the lease termination date.
termination during the period, there was extra consideration required in The circumstances of the lease termination were considered and the
assessing the impact of the lease termination on rental income for the period. requirements of IFRS 16 considered, to determine the correct lease termination
Refer to accounting policies 2(g) and the disclosure in note 4
date.
Furthermore, a new lease was signed at year end for which we also needed to
consider the impact on current year rental income. For the new lease, signed as at 31 March 2025, terms were considered and
effective date determined based on the terms of the agreement. We then
considered the impact of the new lease on current year rental income,
considering the effective date of the lease.
For these reasons, rental income recognition was considered a key audit
matter.
Key observation:
Based on the procedures performed, we did not identify any matters to indicate
that the recognition of rental income is inappropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial, as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group financial statements
2025 2024
£m £m
Materiality £210,000 £264,000
Basis for determining materiality 1.75% of total assets
Rationale for the benchmark applied Due to the Parent Company being an investment fund with the objective of
long-term capital growth, with investment values being a key focus for users
of the financial statements.
Performance materiality £157,500 £198,000
Basis for determining performance materiality 75% (2024: 75%) of materiality
This was determined using our professional judgements and took into account
the complexity of the Group and our knowledge of the audit engagement,
together with a history of minimal errors and adjustments.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of £8,400 (2024: £10,560). We also agreed to
report differences below this threshold that, in our view, warranted reporting
on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information
comprises the information included in the Annual Report and Consolidated
Financial Statements, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. 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 course of 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 this gives rise to a material misstatement in the financial
statements themselves. 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.
Corporate governance statement
The UK Listing Rules require us to review the Directors' statement in relation
to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Parent Company's compliance with the
provisions of the UK Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit.
Going concern and longer-term viability · The Directors' statement with regards the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified set out above; and
· The Directors' explanation as to its assessment of the entity's
prospects, the period this assessment covers and why this period is
appropriate set out above.
Other Code provisions · Directors' statement on fair, balanced and understandable set out
above;
· Board's confirmation that it has carried out a robust assessment of
the emerging and principal risks set out above;
· The section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out above;
and
· The section describing the work of the Audit Committee set out above
Other Companies (Guernsey) Law, 2008 reporting
We have nothing to report in respect of the following matters where the
Companies (Guernsey) Law, 2008 requires us to report to you if, in our
opinion:
· proper accounting records have not been kept by the Parent Company;
or
· the financial statements are not in agreement with the accounting
records; or
· we have failed to obtain all the information and explanations which,
to the best of our knowledge and belief, are necessary for the purposes of our
audit.
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities statement within
the Report of the Directors, 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 consolidated 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 or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including
fraud
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:
Non-compliance with laws and regulations
Based on:
· Our understanding of the Group and the industry in which it operates;
· Discussion with management and those charged with governance and the
administrator; and
· Obtaining an understanding of the Group's policies and procedures
regarding compliance with laws and regulations;
we considered the significant laws and regulations to be those that relate to
the reporting framework such as IFRS as issued by the International Accounting
Standards Board and the Companies (Guernsey) Law, 2008.
The Group is also subject to laws and regulations where the consequence of
non-compliance could have a material effect on the amount or disclosures in
the financial statements, for example through the imposition of fines or
litigations. We identified such laws and regulations to be the Protection of
Investors (Bailiwick of Guernsey) Law, 2020, the London Stock Exchange UK
Listing Rules and those related to the Group's investment property activities
in the jurisdictions in which it operates.
Our procedures in respect of the above included:
· Review of minutes of meetings of those charged with governance,
compliance reports and RNS announcements for any instances of non-compliance
with laws and regulations;
· Review of correspondence with tax authorities for any instances of
non-compliance with laws or regulations;
· Discussion with and enquiry of management and those charged with
governance concerning known or suspected instances of non-compliance with laws
or regulations;
· Review of financial statement disclosures and agreeing to supporting
documentation; and
· Review of legal expenditure accounts to understand the nature of
expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material
misstatement, including fraud. Our risk assessment procedures included:
· Enquiry with management and those charged with governance regarding
any known or suspected instances of fraud;
· Obtaining an understanding of the Group's policies and procedures
relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud;
· Review of minutes of meetings of those charged with governance for
any known or suspected instances of fraud;
· Discussion amongst the engagement team as to how and where fraud
might occur in the financial statements; and
· Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material misstatement due
to fraud.
Based on our risk assessment, we considered the areas most susceptible to
fraud to be management override of controls, rental income recognition and the
valuation of investment properties.
Our procedures in respect of the above included:
· Testing all materials balances substantively;
· Recalculating the rental income in full based on the agreements,
comparing the recalculated amounts with that of management and challenging
management on any resulting differences; and
· Challenging the valuation method and assumptions used by management
and those charged with governance in connection with the significant
accounting estimates, in particular in relation to the investment property
valuation and the inputs and judgements adopted therein.
We also communicated relevant identified laws and regulations and potential
fraud risks to all engagement team members who were all deemed to have
appropriate competence and capabilities and remained alert to any indications
of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that 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 by, for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we are
to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council's website at:
https://www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor's report.
The engagement director on the audit resulting in this independent auditor's
opinion is Simon Hodgson.
Use of our report
This report is made solely to the Parent Company's members, as a body, in
accordance with Section 262 of the Companies (Guernsey) Law, 2008. 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.
For and on behalf of BDO Limited
Chartered Accountants and Recognised Auditor
Second Floor
Plaza House
Admiral Park
St Peter Port
Guernsey
21 July 2025
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2025
For the For the
year ended year ended
31 March 2025 31 March 2024
Notes £000s £000s
Rental income 4 699 823
Rental receivable write-off 4 (44) -
Property operating expenses 4 (162) (150)
Net property income 493 673
Net gain on investments at fair value through profit or loss 8 1,240 183
Unrealised valuation loss on investment property 7 (3,197) (211)
Lease incentive write-off 4,7 (568) -
General and administrative expenses 5 (689) (573)
(Loss)/profit before tax (2,721) 72
Income tax expense 11 (89) (117)
Deferred tax credit 11 - 75
(Loss)/profit for the year (2,810) 30
Other comprehensive loss
Foreign exchange translation loss (170) (188)
Total items that are or may be reclassified to profit or loss (170) (188)
Total comprehensive loss for the year (2,980) (158)
Basic and diluted (loss)/earnings per ordinary share (pence) 6 (8.33) 0.09
The accompanying notes form an integral part of these Financial Statements
Consolidated Statement of Changes in Equity
For the year ended 31 March 2025
Revenue reserve Capital reserve Foreign currency reserve Total equity
£000s £000s £000s £000s
Balance at 1 April 2023 (44,446) 47,263 12,002 14,819
Profit for the year 30 - - 30
Other comprehensive loss - - (188) (188)
Balance at 31 March 2024 (44,416) 47,263 11,814 14,661
Balance at 1 April 2024 (44,416) 47,263 11,814 14,661
Loss for the year (2,810) - - (2,810)
Other comprehensive loss - - (170) (170)
Balance at 31 March 2025 (47,226) 47,263 11,644 11,681
The accompanying notes form an integral part of these Financial Statements
Consolidated Statement of Financial Position
As at 31 March 2025
31 March 2025 31 March 2024
Notes £000s £000s
Non-current assets
Investment property 7 2,345 5,661
Lease incentive 4 - 570
Current assets
Cash and cash equivalents 594 657
Investments held at fair value through profit or loss 8 8,885 8,009
Lease incentive 4 - 56
Trade and other receivables 9 83 32
Tax receivable 20 -
Total assets 11,927 14,985
Current liabilities
Trade and other payables 10 246 268
Tax payable - 56
Total liabilities 246 324
Total net assets 11,681 14,661
Equity
Revenue reserve 15 (47,226) (44,418)
Capital reserve 15 47,263 47,263
Foreign currency reserve 15 11,644 11,816
Total equity 11,681 14,661
Number of ordinary shares 12 33,740,929 33,740,929
Net asset value per ordinary share (pence) 13 34.62 43.45
The Consolidated Financial Statements were approved by the Board of Directors
and authorised for issue on 18 July 2025. They were signed on its behalf by:
W.
Scott
Director
The accompanying notes form an integral part of these Financial Statements
Consolidated Statement of Cash Flows
For the year ended 31 March 2025
For the For the
year ended year ended
31 March 2025 31 March 2024
Notes £000s £000s
Operating activities
(Loss)/profit before tax (2,721) 72
Adjustments for:
Unrealised valuation loss on investment property 7 3,242 303
Lease incentive write-off 7 568 -
Net gains on investments held at fair value through profit or loss 8 (1,240) (183)
Dividend income received 8 804 592
Decrease in trade and other receivables 8 22
(Decrease)/increase in trade and other payables (22) 90
Purchase of investments held at fair value through profit or loss 8 (1,207) (793)
Proceeds on sale of investments held at fair value through profit or loss 8 708 214
Net cash from operations 140 317
Tax paid (168) (192)
Net cash (outflow)/inflow from operating activities (28) 125
Effects of exchange rate fluctuations (35) (9)
(Decrease)/increase in cash and cash equivalents (63) 116
Cash and cash equivalents at start of the year 657 541
Cash and cash equivalents at the year end 594 657
The accompanying notes form an integral part of these Financial Statements
1. Operations
Worsley Investors Limited (the "Company") is a limited liability, closed-ended
investment company incorporated in Guernsey. The Company historically invested
in commercial property in Europe held through subsidiaries. The Company's
current investment objective is to provide Shareholders with an attractive
level of absolute long-term return, principally through the capital
appreciation and exit of undervalued securities. The existing real estate
asset of the Company will be realised in an orderly manner, that is with a
view to optimising the disposal value of such asset.
The Consolidated Financial Statements (the "Financial Statements") of the
Company for the year ended 31 March 2025 comprise the Financial Statements of
the Company and its subsidiaries (together referred to as the "Group").
Please refer to the Investment Policy below. The Company's registered office
is included below.
2. Material accounting policies
(a) Basis of preparation
The Financial Statements, which show a true and fair view, have been prepared
in accordance with IFRS Accounting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB") and are in compliance with
the Companies (Guernsey) Law, 2008. The Financial Statements have been
prepared on a going concern basis, and the accounting policies, presentation
and methods of computation are consistent with this basis, as disclosed in the
going concern paragraph below.
The Directors believe that the Financial Statements contain all of the
information required to enable shareholders and potential investors to make an
informed appraisal of the investment activities and profits and losses of the
Group for the period to which they relate and do not omit any matter or
development of significance.
(b) Going concern
These Financial Statements have been prepared on a going concern basis. The
Directors, at the time of approving the Financial Statements, have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for a period of at least twelve months from the date of
approval of these Financial Statements. The Group maintains a significant cash
balance and an extensive portfolio of securities, and the dividend income on
this, allied to the property lease generates sufficient cash flows to pay
on-going expenses and other obligations. The Directors have considered the
cash position and performance of the current capital invested by the Group,
the potential impact on markets and supply chains of geopolitical risks, as
well as continuing macro-economic factors and inflation and concluded that it
is appropriate to adopt the going concern basis in the preparation of these
Financial Statements.
Going concern is assessed over the period of at least 12 months from the
approval of these Financial Statements. Owing to the fact that the Group
currently has no borrowing, has a significant cash holding and that the
Company's equity investments predominantly comprise readily realisable
securities, the Board considers there to be no material uncertainty.
(c) Adoption of new standards and its consequential amendments
New Accounting Standards interpretations and amendments adopted in the
reporting period
· IAS 1 (amended), "Presentation of Financial Statements" (amendments
regarding the classification of debt with covenants, effective for periods
commencing on or after 1 January 2024).
· IAS 1 (amended), "Presentation of Financial Statements" (amendments
regarding the classification of liabilities as current or non-current),
effective for periods commencing on or after 1 January 2024).
· IFRS 16 (amended), "Leases" (amendments regarding lease liabilities
in a sale and leaseback), effective for periods commencing on or after 1
January 2024).
The adoption of these amended standards has had no material impact on the
financial statements of the Company.
New and amended accounting standards applicable to future reporting periods
The following relevant standards, which have not been applied in these
Financial Statements, were in issue at the reporting date but not yet
effective:
· IFRS 7 (amended), "Financial Instruments: Disclosures" (effective for
accounting periods commencing on or after 1 January 2026); and
· IFRS 9 (amended), "Financial Instruments" (effective for accounting
periods commencing on or after 1 January 2026); and
· IFRS 18, "Presentation and Disclosures in Financial Statements"
(effective for accounting periods commencing on or after 1 January 2027).
The amendments to IFRS 7 and IFRS 9 were published in May 2024 and relate to
the classification and measurement of financial instruments.
IFRS 18 sets out requirements for the presentation and disclosure of
information in financial statements to help ensure they provide relevant
information that faithfully represents an entity's assets, liabilities,
equity, income and expenses.
With the exception of IFRS 18, the Directors do not anticipate that the
adoption of these new and amended standards in future periods will have a
material impact on the financial statements of the Company.
(d) Significant estimates and judgements
The preparation of the Group's Financial Statements requires management to
make judgements, estimates and assumptions which affect the reported amounts
of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates could result in outcomes which require a
material adjustment to the carrying amount of assets or liabilities affected
in future periods.
(i) Judgements:
In the process of applying the Group's accounting policies, management made no
judgements which had an effect on the amounts recognised in the Financial
Statements.
(ii) Estimates and assumptions:
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, which have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions
and estimates on parameters available when the Financial Statements were
prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising which are
beyond the control of the Group.
Revaluation of investment property
The Group carries its investment property at fair value, with changes in fair
value being recognised in the Consolidated Statement of Comprehensive Income.
The investment property is valued quarterly by an external independent valuer
as at the end of each calendar quarter. Their valuations are reviewed
quarterly by the Board.
For the year ended 31 March 2025, quarterly valuations of the investment
property were carried out by Knight Frank LLP, external independent valuers to
the Group, in accordance with the Royal Institution of Chartered Surveyors'
("RICS") Appraisal and Valuation Standards. The property has been valued in
accordance with the definition of the RICS Valuation which is defined as the
price which would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.
The valuation is based on the highest and best use of the investment property.
The key assumptions used to determine the market value of the investment
property are explained further in note 7.
(e) Foreign currency translation
Functional currency
The Company's functional currency is pounds sterling and the subsidiaries'
functional currency is Euro. The Board of Directors considers that the Group's
functional currency is pounds sterling, as the capital raised, return on
capital and any distributions paid by the Parent Company are in pounds
sterling. The Euro most faithfully represents the economic effect of the
underlying transactions, events and conditions of the subsidiaries. The Euro
is the currency in which the subsidiaries measure their performance and report
their results.
Foreign currency transactions
Transactions in foreign currencies are translated to presentation currency at
the spot foreign exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the Consolidated
Statement of Financial Position date are translated to presentation currency
at the foreign exchange rate ruling at that date. Foreign exchange differences
arising on translation are recognised in the Consolidated Statement of
Comprehensive Income. Non-monetary assets and liabilities which are measured
at historical cost in a foreign currency are translated using the exchange
rate at the date of the original transaction. Non-monetary assets and
liabilities denominated in foreign currencies which are stated at fair value
are translated to presentation currency at foreign exchange rates ruling at
the dates the fair value was determined.
Exchange differences on foreign operations
The assets and liabilities of foreign operations, arising on consolidation,
are translated to presentation currency at the foreign exchange rates ruling
at the Consolidated Statement of Financial Position date. The income and
expenses of foreign operations are translated to presentation currency at an
average rate where this is considered reasonably to represent the foreign
exchange rate for the period. Foreign exchange differences arising on
retranslation are recognised in other comprehensive income and as a separate
component of equity.
(f) Basis of consolidation
(i) Subsidiaries
The Financial Statements comprise the Financial Statements of the Company and
its subsidiaries as at 31 March each year. Subsidiaries are fully consolidated
from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date when such control
ceases.
(ii) Transactions eliminated on consolidation
All intra-group balances, transactions and unrealised gains and losses
resulting from intra-group transactions are eliminated in preparing the
Financial Statements.
Worsley Investors Limited, the Company, is the parent of the Group. It was
incorporated in Guernsey on 5 April 2005. The Company owned the following
subsidiary as at the reporting date:
Subsidiaries Country of incorporation Date of incorporation Ownership interest % Principal activities Financial year end
Property Trust Luxembourg 2 S.à r.l. Luxembourg 24 November 2005 100.00% Holding Company 31 March
The company shown in the table below was directly owned by Property Trust
Luxembourg 2 S.à r.l. as at the reporting date:
Indirect subsidiaries and joint ventures Country of incorporation Ownership interest % Financial year end
Multiplex 1 S.r.l. Italy 100.00% 31 December
Multiplex 1 S.r.l. has a reporting date of 31 December owing to legacy set up,
however, the consolidation incorporates results up to 31 March.
(g) Income recognition
Rental income is income from the investment property leased out under
operating leases and is recognised in the Consolidated Statement of
Comprehensive Income on a straight-line basis over the term of the lease.
Lease incentives are amortised over the whole lease term and derecognised on
expiry of the lease term, or termination of the lease.
Dividend income from equity investments is recognised on the ex-dividend date
when the relevant investment is declared ex-dividend and is included gross of
withholding tax.
(h) Expenses/other Income
Expenses are accounted for on an accruals basis.
(i) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits carried at
amortised cost. Cash equivalents are short-term, highly liquid investments
which are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value.
Purchases and sales of investments are considered to be operating activities
of the Company, given its purpose, rather than investing activities. The cash
flows arising from these activities are shown in the Consolidated Statement of
Cash Flows as operating activities.
(j) Investment property
Investment property is held to earn rental income and capital appreciation and
is recognised as such. Investment property is initially recognised at cost,
being the fair value of consideration given, including associated transaction
costs.
After initial recognition, investment property is measured at fair value using
the fair value model with unrealised gains and losses recognised in the
Consolidated Statement of Comprehensive Income. Realised gains and losses upon
disposal of the property are recognised in the Consolidated Statement of
Comprehensive Income. Quarterly valuations are carried out by Knight Frank
LLP, external independent valuers, in accordance with the RICS Appraisal and
Valuation Standards. The property has been valued in accordance with the
definition of the RICS Valuation which is defined as the price which would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The valuation
is based on the highest and best use of the investment property.
Lease incentive assets are deducted from the independent valuation to arrive
at fair value for accounting purposes (refer to note 7 for further details).
Subsequent expenditure is charged to the asset's carrying amount only when it
is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other
repairs and maintenance costs are charged to the Consolidated Statement of
Comprehensive Income during the financial period in which they are incurred.
Investment property is derecognised when it has been disposed of. Where the
Group disposes of a property at fair value in an arm's length transaction, the
carrying value immediately prior to the sale is adjusted to the transaction
price, and the adjustment is recorded in the income statement within
gain/(loss) on disposals of subsidiaries and investment property.
(k) Operating leases (lessor)
The determination of whether or not an arrangement is, or contains, a lease is
based on the substance of the arrangement at the inception date. The
arrangement is assessed to establish if fulfilment of the arrangement is
dependent on the use of a specific asset or assets or the arrangement conveys
a right to use the asset or assets, even if that right is not explicitly
specified in an arrangement.
Leases in which the Group does not transfer substantially all the risks and
benefits of ownership of an asset are classified as operating leases. Initial
direct costs incurred in negotiating an operating lease are added to the
carrying amount of the leased asset and recognised over the lease term on the
same basis as rental income. Contingent rents are recognised as revenue in the
period in which they are earned. Where an operating lease is modified it is
accounted for as a new lease with any prepaid or accrued lease payments
relating to the original lease being treated as part of the lease payments for
the new lease.
(l) Financial instruments
Financial assets and financial liabilities are recognised in the Consolidated
Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and financial
liabilities are only offset and the net amount reported in the Consolidated
Statement of Financial Position and Consolidated Statement of Comprehensive
Income when there is a currently enforceable legal right to offset the
recognised amounts and the Group intends to settle on a net basis or realise
the asset and liability simultaneously.
On initial recognition, the Group classifies financial assets as measured at
amortised cost or at fair value through profit or loss ("FVTPL").
A financial asset is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
· it is held within a business model whose objective is to hold assets
to collect contractual cash flows; and
· its contractual terms give rise on specified dates to cash flows
which are solely payments of principal and interest.
In making an assessment of the objective of the business model in which a
financial asset is held, the Group considers all of the relevant information
about how the business is managed.
The Group has determined that it has two business models:
· Held-to-collect business model: this includes cash and cash
equivalents and other receivables. These financial assets are held to collect
contractual cash flows.
· Other business model: this includes investments in listed equities
and investment funds. These financial assets are managed, and their
performance is evaluated, on a fair value basis, with sales taking place
routinely.
Investments at fair value through profit or loss ("investments")
Recognition
Investments are recognised in the Company's Statement of Financial Position
when the Company becomes a party to the contractual provisions of the
instrument.
Purchases and sales of investments are recognised on the trade date (the date
on which the Company commits to purchase or sell the investment). Investments
purchased are initially recorded at fair value, being the consideration given,
excluding transaction or other dealing costs associated with the investment.
Measurement
Subsequent to initial recognition, investments are measured at fair value.
Gains and losses arising from changes in the fair value of investments and
gains and losses on investments that are sold are recognised through profit or
loss in the Consolidated Statement of Comprehensive Income within net changes
in fair value of financial assets at fair value through profit or loss.
Investments traded in active markets are valued at the latest available bid
prices ruling at midnight on the reporting date. The Directors are of the
opinion that the bid-market prices are the best estimate of fair value.
Investments consist of listed or quoted equities or equity-related securities,
options and bonds which are issued by corporate issuers, supra-nationals or
government organisations, and investment in funds.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. Gains and losses arising from changes in the fair value
of financial assets/(liabilities) are shown as net gains or losses on
financial assets through profit or loss and recognised in the Consolidated
Statement of Comprehensive Income in capital in the period in which they
arise.
Realised gains and losses arising on disposal of investments are calculated by
reference to the proceeds received on disposal and the average cost
attributable to those investments and are recognised in the Consolidated
Statement of Comprehensive Income. Unrealised gains and losses on investments
are recognised in the Consolidated Statement of Comprehensive Income.
Capital
Financial instruments issued by the Group are treated as equity if the holder
has only a residual interest in the assets of the Group after the deduction of
all liabilities. The Company's Ordinary Shares are classified as equity
instruments.
The Group's capital is represented by the Ordinary Shares, revenue reserve,
capital reserve and foreign exchange reserve. Share premium is included in the
capital reserve presented in the Consolidated Statement of Changes in Equity.
The capital of the Company is managed in accordance with its investment policy
in pursuit of its investment objective, both of which are set out below. It is
not subject to externally imposed capital requirements. The Ordinary shares
carry rights regarding dividends, voting, winding-up and redemptions, which
are detailed in full in the Company's Memorandum and Articles of
Incorporation.
(m) Taxation
The Company has obtained exempt company status in Guernsey under the terms of
the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and accordingly is
subject to an annual fee of £1,600 (2024: £1,600). The Directors intend to
conduct the Group's affairs such that it continues to remain eligible for
exemption.
The Company's subsidiaries are subject to income tax on any income arising on
investment property, after deduction of debt financing costs and other
allowable expenses. However, when a subsidiary owns a property located in a
country other than its country of residence the taxation of the income is
defined in accordance with the double taxation treaty signed between the
country where the property is located and the residence country of the
subsidiary.
Income tax on the profit or loss for the period comprises current and deferred
tax. Current tax is the expected tax payable on the taxable income for the
year as determined under local tax law, using tax rates enacted or
substantially enacted at the Consolidated Statement of Financial Position
date, and any adjustment to tax payable in respect of previous periods.
Deferred income tax is provided using the liability method, providing for
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amount 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 substantially enacted at the Consolidated Statement
of Financial Position date, except in the case of investment property, where
deferred tax is provided for the effect of the sale of the property.
Deferred tax assets are recognised only to the extent that it is probable that
future taxable profits will be available against which the asset is utilised.
Details of current tax and deferred tax assets and liabilities are disclosed
in note 11.
(n) Determination and presentation of operating segments
The Company has entered into an Investment Advisory Agreement with the
Investment Advisor, under which the Board has appointed the Investment Advisor
to oversee on a day-to-day basis the assets of the Company, subject to their
review and control and ultimately the overall supervision of the Board. The
Board retains full responsibility to ensure that the Investment Advisor
adheres to its mandate. Moreover, the Board is fully responsible for the
appointment and/or removal of the Investment Advisor. Accordingly, the Board
is deemed to be the "Chief Operating Decision Maker" of the Company.
The Board has considered the requirements of IFRS 8, "Operating Segments". The
Board is of the view that the Group has two segments of business (see note
18).
3. Material agreements
Investment Advisory Agreements
Worsley Associates LLP
The Investment Advisory Agreement had an initial term of two years, with
either Worsley Associates LLP or the Company being able to terminate the
agreement by giving 12 months' notice from 1 June 2020 and thereafter on a
rolling 12 months' notice basis. On giving the requisite 12 months' notice
there is no compensation on termination (save in respect of any payment made
in lieu of notice where Worsley Associates and the Company agree to terminate
the Investment Advisory Agreement on less than 12 months' notice). In
addition, the Company and Worsley Associates may terminate the Investment
Advisory Agreement in certain limited circumstances.
Pursuant to the Investment Advisory Agreement, Worsley Associates is entitled
to an annual advisory fee of 1.25 per cent. of the Company's Net Asset Value,
to the extent that the Company's Net Asset Value is £40 million or less, but
subject to a minimum fee of £150,000 per annum. If the Company's Net Asset
Value exceeds £40 million, the Company will pay Worsley Associates a fee
equal to 1.25 per cent. of £40 million and 1.00 per cent. of the amount by
which the Company's Net Asset Value exceeds £40 million.
In accordance with an addendum to the Investment Advisory Agreement entered
into during the prior year, with effect from 1 October 2022 the Company agreed
that it would reimburse Worsley Associates for the costs it incurs using the
FactSet financial market information system for dealing and research on behalf
of the Company for so long as the Investment Advisory fees paid to Worsley
Associates are below £200,000 per annum, such re-imbursement tapering to zero
at the rate of 50p per £1 of annual Investment Advisory fees above £200,000
per annum.
During the year, Worsley Associates was due Investment Advisory fees of
£197,328 (31 March 2024 £187,057). Fees of £18,687 were outstanding as at
31 March 2025 (31 March 2024: £18,825).
Broker Agreement
Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited
On 18 April 2019, Shore Capital and Corporate Limited and Shore Capital
Stockbrokers Limited (together "Shore Capital") were appointed as the
Company's financial adviser and broker. Fees expensed in the year ended 31
March 2025 totalled £25,000 (31 March 2024 £25,000) of which none was
outstanding as at 31 March 2025 (31 March 2024: £nil).
Administrator Agreement
Effective 31 January 2025, the Company's appointed Administrator, Sanne Fund
Services (Guernsey) Limited completed an amalgamation of corporate bodies
pursuant to Part VI of the Companies (Guernsey) Law, 2008 with Apex Fund and
Corporate Services (Guernsey) Limited (the "Amalgamation"). As a result of the
Amalgamation, the name of the Administrator changed to Apex Fund and Corporate
Services (Guernsey) Limited. There are no further material changes arising
from the Amalgamation and all pre-existing contractual arrangements in place
between the Company and the Administrator remain in force.
With effect from 28 June 2019, the Administrator has been entitled to an
annual fee payable by the Company as follows:
· Where the Net Asset Value ("NAV") is up to £20 million a fixed fee
of £70,000 per annum applies. This fee is subject to annual adjustment for
inflation; and
· Where the NAV is over £20 million but up to £100 million a further
fee equating to 0.025% of NAV per annum will be charged on the excess; and
· Where the NAV is over £100 million, a further fee equating to 0.06%
per annum of the NAV in excess of £100 million will be charged.
During the year, the Administrator was due fees of £84,463 (31 March 2024:
£79,446) of which £24,245 was outstanding as at 31 March 2025 (31 March
2024: £44,470).
Fees totalling £38,641 were also paid to the administrators of the
subsidiaries (31 March 2024: £45,986).
Custody Agreement
With effect from 5 July 2019, Butterfield Bank (Guernsey) Limited was
appointed as Custody Agent to the Company. Butterfield Bank (Guernsey) Limited
is entitled to an annual fee payable by the Company at the rate of 0.1% per
annum of the gross value of the investments held, subject to a minimum fee of
£400 per annum.
During the year, Butterfield Bank (Guernsey) Limited was due a custody agency
fees of £9,392 (31 March 2024: £8,256). Fees of £2,318 were outstanding as
at 31 March 2025 (31 March 2024: £2,084).
During the year, Butterfield Bank (Guernsey) Limited was due transaction fees
of £11,634 incurred as a result of investment trading (31 March 2024:
£1,150). No transaction fees were outstanding as at 31 March 2025 (31 March
2024: £nil).
4. Rental income
Gross rental income for the year ended 31 March 2025 amounted to £0.70million
(31 March 2024: £0.82 million). The Group leases out its investment
property, a cinema complex, under an operating lease which is structured in
accordance with local practices in Italy.
UCI lease
The UCI lease was originally signed in December 2018, but after negotiations
necessitated by COVID-19 a lease amendment was signed on 11 September 2020.
The summary lease terms were as follows:
- Term
17.5 years fixed, from 1 January 2019 until 30 June 2035 with an automatic
nine-year extension unless cancelled by the tenant with a minimum 12-month
notice period.
- Base Rent
From 1 March 2021 to 31 December 2021 - €915,000, and from 1 January 2022
indexed to 100% of the ISTAT Consumer Index on an upwards-only basis. On 1
January 2024 annual rental increased to €1,063,437 and on 1 January 2025
annual rental increased to €1,075,134.
- Variable Rent
An incremental rent of between €1.50 and €2.50 per ticket sold above a
minimum threshold of 350,000 tickets per calendar year. There was no variable
rent earned in the year ended 31 March 2025 (31 March 2024: none).
On 17 January 2025, the Company announced that UCI had informed the Group that
it would vacate the property on 30 January 2025. After UCI failed to pay any
rental for the period subsequent to 10 January, as of the close of business on
25 February, pursuant to Italian law, the lease agreement automatically
terminated for default. For the purposes of IFRS 16 "Leases", the accounting
date for the termination of the lease has been determined as 30 January 2025,
as this is the date until which UCI had access to the right of use of the
cinema.
Notorious lease
The Company has entered into a new lease agreement with Notorious Cinema
S.r.l. ("Notorious"), an Italian company, for it to operate the cinema
complex. Notorious is a wholly owned subsidiary of Notorious Pictures S.p.A.,
an Italian company, whose shares are listed on the Euronext Growth Milan
market, and which through its group of companies is an international movie
producer and distributor and one of Italy's leading cinema operators.
Notorious has pledged to invest approximately €2 million (plus VAT) in a
substantial refurbishment and upgrade of the property. The lease was signed on
31 March 2025, however, the effective date of the lease agreement is 3 April
2025. The Notorious lease terms are summarised as follows:
- Term
The Lease will have an initial termination date of 31 August 2035. Notorious
has a unilateral right to renew the Lease for a further eight years under the
same terms and conditions.
In addition, Notorious has the right to withdraw from the lease on 31 August
2031. In the event of the lease renewing on 1 September 2035, each party has
the unilateral right to withdraw as of 31 August 2039.
- Rent
From the outset Notorious will pay Multiplex turnover rent, subject to the
following minima: From 1 September 2025 until 31 August 2026 - €500,000,
from 1 September 2026 until 31 August 2027 - €525,000, from 1 September 2027
until 31 August 2028 - €550,000.
On 1 September 2028 and annually thereafter the minimum rental will increase
by 75% of the variation over the previous twelve months in the Italian ISTAT
consumer price index.
In recognition of Notorious's expenditure on the refurbishment of the cinema,
from 1 September 2025 until 31 August 2030, the annual rental payable, noted
above, will be reduced each year by €108,000.
Minimum Lease Payments (based on actual cash flows)
31 March 2025 31 March 2024
EUR €000s £000s €000s £000s
Less than 1 year 229 193 1,063 895
1-2 years 407 343 1,063 895
2-3 years 431 364 1,063 895
3-4 years 442 372 1,063 895
4-5 years 442 372 1,063 895
After 5 years 734 618 6,646 5,599
The minimum lease payment as at 31 March 2025 reflects the minimum cash flows
under the lease agreement with Notorious (2024: UCI).
Lease incentive
Year ended Year ended
31 March 2025 31 March 2024
£000s £000s
Lease incentive at beginning of year 626 737
Lease incentive movement for the year (45) (92)
Foreign exchange translation (13) (19)
Lease incentive write-off (568) -
Lease incentive at end of year - 626
The lease incentive in relation to the rental agreement with UCI was written
off as at the lease termination date of 30 January 2025 for accounting
purposes. See note 7 for further details.
The amounts recognised in the Consolidated Statement of Comprehensive Income
of the Group in relation to the investment property are as follows:
Rental income
Year ended Year ended
31 March 2025 31 March 2024
£000s £000s
Base rental income* 744 915
Straight lining of lease incentives (45) (92)
Rental income (net of lease incentives) 699 823
*Base rental income included £44,000 of accrued income from UCI which has
been written-off on the Statement of Comprehensive Income
Expense from services to tenants, other property operating and administrative
expenses
Year ended Year ended
31 March 2025 31 March 2024
£000s £000s
Property expenses arising from investment property 162 150
Lease incentive write-off 568 -
Rental income receivable write-off 44 -
Total property 774 150
expenses
5. General and administrative expenses
Year ended Year ended
31 March 2025 31 March 2024
£000s £000s
Administration fees (note 3) 123 125
General expenses 101 86
Audit fees 54 55
Legal and professional fees 121 25
Directors' fees and expenses (note 16) 46 46
Insurance fees 22 24
Corporate Broker fees (note 3) 25 25
Investment Advisor fees (note 3 and note 16) 197 187
Total 689 573
6. Basic and diluted (loss)/earnings per Share
The basic and diluted earnings per share for the Group is based on the net
loss for the year of £2.81 million (31 March 2024: net profit of £0.030
million) and the weighted average number of Ordinary Shares in issue during
the year of 33,740,929 (31 March 2024: 33,740,929). There are no instruments
in issue which could potentially dilute earnings or loss per Ordinary Share.
7. Investment property
Year ended Year ended
31 March 2025 31 March 2024
£000s £000s
Value of investment property before lease incentive adjustment 6,287 6,770
at beginning of the year
Fair value adjustment (3,810) (303)
Foreign exchange translation (132) (180)
Independent external valuation 2,345 6,287
Adjusted for: Lease incentive (note 4)* - (626)
Fair value of investment property at the end of the year 2,345 5,661
Fair value adjustment on property (3,810) (303)
Lease incentive write-off (note 4) 568 -
Adjustment to fair value for lease incentive movement (note 4) 45 92
Total unrealised valuation loss on investment property (3,197) (211)
* The Lease incentive was previously separately classified as a non-current
and current asset within the Consolidated Statement of Financial Position and
to avoid double counting was deducted from the property valuation to arrive at
fair value for accounting purposes. The property is carried at fair value. The
lease incentive granted to the tenant was being amortised over the term of the
lease. In accordance with IFRS, the valuation is reduced by the carrying
amount of the lease incentive as at the valuation date. Quarterly valuations
are carried out at 31 March, 30 June, 30 September and 31 December by Knight
Frank LLP, external independent valuers.
The resultant fair value of investment property is analysed below by valuation
method, according to the levels of the fair value hierarchy. The different
levels have been defined as follows:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included within Level 1 which are
observable for the asset or liability, either directly (i.e., as prices) or
indirectly (i.e. derived from prices);
Level 3: inputs for the asset or liability which are not based on observable
market data (unobservable inputs).
The investment property (Curno) is classified as Level 3.
The significant assumptions made relating to its independent valuation are set
out below:
Significant assumptions 31 March 2025 31 March 2024
Gross estimated rental value per sqm p.a. 75.45€ 113.85€
Equivalent yield 10.00% 10.75%
The external valuer has carried out its valuation using the comparative and
investment methods. The assessment was made on the basis of a collation and
analysis of appropriate comparable investment and rental transactions. The
market analysis has been undertaken using market knowledge, enquiries of other
agents, searches of property databases, as appropriate and any information
provided to them. The external valuer has adhered to the RICS Valuation -
Professional Standards.
An increase/decrease in assumed rentals will increase/decrease valuations,
while an increase/decrease to yield decreases/increases valuations. The
information below sets out the sensitivity of the independent property
valuation to changes in Fair Value.
If no tenant break is assumed then property value increases by €261,793
(2024: no comparative).
If assumed rental values increases by 50% then property value increases by
77.98%, being €2,183,483 (31 March 2024: if rental value increased by 10%
then property value increased by 3.22%, being €236,670).
If assumed rental values increases by 25% then property value increases by
38.25%, being €1,070,869 (31 March 2024: if rental value decreased by 10%
then property value decreased by 3.22%, being €236,670).
If yield increased by 0.5% then property value decreases by 5.76%, being
€161,280 (31 March 2024: if yield increased by 0.5% then property value
decreased by 3.73%, being €273,940).
If yield decreased by 0.5% then property value increases by 6.41%, being
€179,480 (31 March 2024: if yield decreased by 0.5% then property value
increased by 4.09%, being €532,021).
Property assets are inherently difficult to value due to the individual nature
of each property. As a result, valuations are subject to uncertainty. There is
no assurance that estimates resulting from the valuation process will reflect
the actual sales price even where a sale occurs shortly after the valuation
date. Rental income and the market value for properties are generally affected
by overall conditions in the local economy, such as growth in Gross Domestic
Product ("GDP"), employment trends, inflation and changes in interest rates.
Changes in GDP may also impact employment levels, which in turn may impact the
demand for premises. Furthermore, movements in interest rates may affect the
cost of financing for real estate companies.
Both rental income and property values may be affected by other factors
specific to the real estate market, such as competition from other property
owners, the perceptions of prospective tenants of the attractiveness,
convenience and safety of properties, the inability to collect rents because
of the bankruptcy or the insolvency of tenants, the periodic need to renovate,
repair and release space and the costs thereof, the costs of maintenance and
insurance, and increased operating costs., Factors specific to the real estate
market for cinemas include changes in movie consumer viewing habits and
variation in the number and quality of movie releases. The Investment Advisor
addresses market risk through a credit evaluations of tenants, ongoing
monitoring of tenants and through effective management of the property.
8. Investments at fair value through profit or loss
Year ended Year ended
31 March 2025 31 March 2024
£000s
Fair value of investments at beginning of the year 8,009 7,839
Purchases 1,207 793
Sales (708) (214)
Realised gains 356 101
Unrealised gains/(losses) 21 (510)
Fair value at the end of the year 8,885 8,009
As at 31 March 2025, the cost of the Investments at FVTPL was £6.443 million
(31 March 2024: £5.588 million).
Year ended Year ended
31 March 2025 31 March 2024
£000s £000s
Realised gains 356 101
Unrealised gains/(losses) 21 (510)
Dividend income 863 592
Net gains on investments at FVTPL 1,240 183
The fair value of investments at FVTPL are analysed below by valuation method,
according to the levels of the fair value hierarchy. The different levels are
defined in note 14.
The following table analyses within the fair value hierarchy the Company's
financial assets at fair value through profit or loss:
31 March 2025 Level 1 Level 2 Level 3 Total
£000s £000s £000s £000s
Fair value through profit or loss
- Investments 6,726 2,111 48 8,885
Within the Company's financial assets classified as Level 2, securities
totalling £1,483,849 are traded on the London Stock Exchange or AIM Market
and securities of £627,000 are traded on the Aquis Exchange. The Level 2
securities are valued at the traded price as at the year end and no adjustment
has been deemed necessary to these prices. However, although these are traded,
they are not regularly traded in significant volumes and hence have been
classified as level 2.
31 March 2024 Level 1 Level 2 Level 3 Total
£000s £000s £000s £000s
Fair value through profit or loss
- Investments 5,705 2,304 - 8,009
Within the Company's financial assets classified as Level 2, securities
totalling £1,265,077 were traded on the London Stock Exchange or AIM Market
and securities of £1,039,375 were traded on the Aquis Exchange. The Level 2
securities were valued at the traded price as at the year end and no
adjustment was deemed necessary to these prices. However, although these were
traded, they were not regularly traded in significant volumes and hence were
classified as level 2.
The valuation and classification of the investments are reviewed on a regular
basis. The Board determines whether or not transfers have occurred between
levels in the hierarchy by re-assessing categorisation (based on the lowest
level input which is significant to the fair value measurement as a whole) at
the end of each reporting period.
The following transfers between levels occurred during the reporting period
(31 March 2024: None):
31 March 2025 Level 1 Level 2 Level 3 Total
£000s £000s £000s £000s
Opening fair value 5,705 2,304 - 8,009
Purchases 165 1,042 - 1,207
Sales (632) (76) - (708)
Realised gains/(losses) 363 (7) - 356
Unrealised gains/(losses) 326 (305) - 21
Transfers from level 2 to level 1 799 (799) - -
Transfers from level 2 to level 3 - (48) 48 -
Closing fair value 6,726 2,111 48 8,885
During the year, Caledonian Trust Plc shares ceased trading on the London
Stock Exchange and have been reclassified from Level 2 to Level 3 at the year
end. AssetCo PLC shares, which previously traded on the London Stock Exchange,
underwent a reorganisation and was subdivided into River Global PLC A shares
and River Global PLC B shares. Both share classes were subsequently
reclassified from Level 2 to Level 1 at the year end.
9. Trade and other receivables
31 March 2025 31 March 2024
£000s £000s
Prepayments 24 32
Dividends receivable 59 -
Total 83 32
The carrying values of trade and other receivables are considered to be
approximately equal to their fair value.
10. Trade and other payables
31 March 2025 31 March 2024
£000s £000s
Investment Advisor fee (note 3 and note 16) 19 19
Administration fees (note 3) 24 44
Audit fees 49 46
Director fees payable 2 2
Other 152 157
Total 246 268
Trade and other payables are non-interest bearing and are normally settled on
30-day terms. The carrying values of trade and other payables are considered
to be approximately equal to their fair value.
11. Taxation
Year ended Year ended
31 March 2025 31 March 2024
£000s £000s
Effect of:
Current tax
Guernsey - -
Luxembourg (4) (5)
Italy (85) (112)
Total current tax (89) (117)
Deferred tax credit ` - 75
Total deferred tax - 75
Tax charge during the year (89) (42)
The Company is exempt from Guernsey taxation.
Movement in temporary differences
Foreign exchange loss on translation 31 March 2025
Recognised in profit or loss
1 April 2024
£000 £000 £000 £000
Deferred tax liabilities - - - -
Foreign exchange loss on translation 31 March 2024
Recognised in profit or loss
1 April 2023
£000 £000 £000 £000
Deferred tax liabilities 75 (75) - -
Which consists of:
31 March 2024
£000
Revaluation of investment property (131)
Other timing difference 206
Total 75
12. Share capital
Year ended Year ended
31 March 2025 31 March 2024
Number of shares Number of shares
Shares of no par values issued and fully paid
Balance at the start of the year 33,740,929 33,740,929
Balance at the end of the year 33,740,929 33,740,929
No shares were issued by the Company during the year (31 March 2024: none).
13. Net asset value per ordinary share
The Net Asset Value per Ordinary Share at 31 March 2025 is based on the net
assets attributable to the ordinary shareholders of £11.681 million (31 March
2024: £14.461 million) and on 33,740,929 (31 March 2024: 33,740,929) ordinary
shares in issue at the Consolidated Statement of Financial Position date.
14. Financial risk management
The Group is exposed to various types of risk which are associated with
financial instruments. The Group's financial instruments comprise investments,
bank deposits, cash, receivables and payables which arise directly from its
operations. The carrying value of financial assets and liabilities
approximates the fair value. The main risks arising from the Group's financial
instruments are credit risk, liquidity risk, interest risk, concentration
risk, foreign currency risk, market risk and market price risk.
Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or
unwilling to meet a commitment which it has entered into with the Group.
Failure of any relevant counterparty to perform its obligations in respect of
these items may lead to a financial loss. The Group is principally exposed to
credit risk in respect of cash and cash equivalents and trade and other
receivables. The credit risk associated with debtors is limited to trade and
other receivables. It is the opinion of the Board of directors that the
carrying amounts of these financial assets represent the maximum credit risk
exposure as at the reporting date.
The credit risk on cash and cash equivalents is considered limited because the
counterparties are banks with acceptable credit-ratings assigned by
international credit-ratings agencies.
As at 31 March 2025 the Group held £510,702 (31 March 2024: £291,475) with
Butterfield Bank (Guernsey) Limited, which has a Standard & Poor's rating
of BBB+ (31 March 2024: BBB+), and €97,538 (£81,683) (31 March 2024:
€426,292 (£364,632)) with Banco di Desio e della Brianza S.p.A with a Fitch
rating of BBB- (31 March 2024: BB+).
Property Trust Luxembourg 2 S.à r.l., held £1,662 (31 March 2024: £1,230)
in a current account with Alpha Group International (formerly Alpha FX Group
plc) ("Alpha Group"), an Electronic Money Institution authorised and regulated
by the UK Financial Conduct Authority. Whilst Alpha Group does not have a
credit rating, the underlying funds held in the subsidiary's current account
are held with Citibank International Limited, Luxembourg Branch, a subsidiary
of Citigroup Inc, which has a Standard & Poor's credit rating of BBB+ (31
March 2024: BBB+).
Cash and cash equivalents, investments held at fair value through profit or
loss and trade and other receivables presented in the Consolidated Statement
of Financial Position are subject to credit risk with maturities within one
year. The Company's maximum credit exposure is limited to the carrying amount
of financial assets recognised as at the Consolidated Statement of Financial
Position date.
At the reporting date, the carrying amounts of the financial assets, excluding
prepayments exposed to credit risk were as follows:
Within
one year 1-3 years Total
As at 31 March 2025 £000s £000s £000s
Cash and cash equivalents 594 - 594
Trade and other receivables 59 - 59
Total 653 - 653
Within
one year 1-3 years Total
As at 31 March 2024 £000s £000s £000s
Cash and cash equivalents 657 - 657
Total 657 - 657
Liquidity risk
Liquidity risk is the risk that the Group will encounter in realising assets
or otherwise raising funds to meet financial commitments in a reasonable time
frame or at a reasonable price.
The Group is invested in two asset types, one investment property (20.08% of
Net Assets), which is relatively illiquid, and investments held at fair value
through profit or loss, which are relatively liquid. The Group prepares
forecasts which enables the Group's operating cash flow requirements to be
anticipated and ensures that sufficient liquidity is available to meet
foreseeable needs and to allow any surplus cash assets to be invested safely
and profitably. The Group also monitors the cash position in all subsidiaries
to ensure that any working capital requirements are addressed as early as
possible. As at 31 March 2025 and 31 March 2024, the Group had no significant
financial liabilities other than short-term payables.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. The Group's interest-bearing financial assets and liabilities expose it
to risks associated with the effects of fluctuations in the prevailing levels
of market interest rates on its financial position and cash flows. As at the
year end, the Group's overall interest rate risk is monitored on a quarterly
basis by the Board. As the vast majority of the Group's investments held at
fair value through profit or loss are not interest-bearing and are not
directly subject to interest rate risk, the exposure to interest rate risk is
not significant.
As at 31 March 2025, the Group held one Investment Property representing
20.08% of NAV (31 March 2024: 42.89%). The Company also held various
investments, more details of which are set out below. The largest investment
exposure was to Smith News Plc, representing 46.79% of NAV (31 March 2024:
33.98%).
The Group pursues a policy of diversifying its risk in accordance with its
Investment Policy, which is detailed below. Save for the Curno Asset until
such time as it is realised, the Group intends to adhere to the investment
restrictions set out therein.
Foreign currency risk
The Group is invested in assets denominated in a currency other than pounds
sterling (that is Euros), the Company's functional and presentation currency,
and the Consolidated Statement of Financial Position may be significantly
affected by movements in the exchange rate of such currencies against pounds
sterling. The following table sets out the total exposure to foreign currency
risk and the net exposure to foreign currency of the Group's monetary and
non-monetary assets and liabilities based on notional amounts.
Net
Assets Liabilities exposure
£000s £000s £000s
At 31 March 2025 Euro 2,673 (241) 2,432
At 31 March 2024 Euro 6,769 (252) 6,517
Foreign currency risk sensitivity
The following table demonstrates the sensitivity to potential fluctuations in
the Euro exchange rate (ceteris paribus) of the Group's equity.
Increase/decrease Effect on equity
in exchange and income
rate £000s
At 31 March 2025 Euro +5% 122
Euro -5% (122)
At 31 March 2024 Euro +5% 326
Euro -5% (326)
The sensitivity rate of 5% for Euros as at 31 March 2025 (31 March 2024: 5%
for Euros) is regarded as reasonable in light of the recent volatility of
pounds sterling vs the Euro. Any changes in the foreign exchange rate will
directly affect the profit and loss, allocated to the foreign currency reserve
of the Consolidated Statement of Changes in Equity.
Market risk
Market risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices. The
Group's activities expose it primarily to the market risks of changes in
market prices.
Market price risk
Market price risk arises mainly from the uncertainty about future prices of
the financial instruments held by the Group. It represents the potential loss
the Group may suffer through holding market positions in the face of price
movements.
The Group's investment portfolio is exposed to market price fluctuations,
which are monitored by the Investment Advisor in pursuance of the investment
objectives and policies.
Market price sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to
equities risks at the reporting date. The 20% reasonably possible price
movement for equity-related securities (31 March 2024: 20%) is based on the
Investment Advisor's best judgement. The sensitivity rate for equity-related
investments of 20% is regarded as reasonable, as in the Investment Advisor's
view there is expected to be considerable volatility in equity markets in the
coming year.
A 20% increase in the market prices of equity-related investments as at 31
March 2025 would have increased the net assets attributable to shareholders by
£1,776,996 (31 March 2024: £1,601,780) and a 20% change in the opposite
direction would have decreased the net assets attributable to shareholders by
an equal but opposite amount.
Actual trading results may differ from the above sensitivity analysis and
these differences could be material.
Fair value
Financial assets at fair value through profit or loss are carried at fair
value. Other assets and liabilities are carried at cost which approximates
fair value.
IFRS 13 requires the Group to classify a fair value hierarchy which reflects
the significance of the inputs used in making the measurements. IFRS 13
establishes a fair value hierarchy which prioritises the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of the fair value hierarchy
under IFRS 13 are defined below.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement in its entirety. For
this purpose, the significance of an input is assessed against the fair value
measurement in its entirety. If a fair value measurement uses observable
inputs which require significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability.
The determination of what constitutes 'observable' requires significant
judgement by the Directors. The Directors consider observable data to be
market data that is readily available, regularly distributed or updated,
reliable and verifiable, not proprietary, and provided by independent sources
which are actively involved in the relevant market.
Assets classified in Level 1 consist of listed or quoted equities or
equity-related securities, options and bonds which are issued by corporate
issuers, supra-nationals or government organisations.
Assets classified in Level 2 are investments such as funds fair-valued using
the official NAV of each fund as reported by each fund's independent
administrator at the reporting date. Assets invested in quoted equity-type
products in a less active market are classified as level 2 (see note 8).
Options and foreign exchange forward contracts are fair valued using publicly
available data. Foreign exchange forward contracts would be shown as
derivative financial assets and liabilities.
Assets classified in Level 3 consist of investments for which no market exists
for trading, for example investments in liquidating or illiquid funds, which
would be reported using the latest available official NAV less dividends
declared to date of each fund as reported by each fund's independent
administrator at the last reporting date. Where a market exists for trading in
illiquid funds, these are classified in Level 2.
The Group recognises any transfers between levels of fair value hierarchy as
of the end of the reporting period during which the transfer has occurred.
Refer to note 8 for details on transfers during the year ended 31 March 2025
and the year ended 31 March 2024.
15. Reserves
(a) Revenue reserves
Revenue reserves arise as a result of the profit or loss created by the Group.
(b) Capital reserves
Capital reserves arose from the cancellation of the share premium account
pursuant to the special resolution passed at the EGM on 13 April 2005 and
approved by the Royal Court of Guernsey on 24 June 2005.
(c) Foreign currency reserves
Foreign currency reserves arise as a result of the translation of the
Financial Statements of foreign operations, the functional and presentation
currency of which is not pounds sterling.
Under the Companies (Guernsey) Law, 2008, there is no restriction on the type
of reserves from which distributions can be made provided the Company is
solvent.
16. Related party transactions
The Directors are responsible for the determination of the Company's
investment objective and policy and have overall responsibility for the
Group's activities including the review of investment activity and
performance.
Mr Nixon, a Director of the Company, is also Founding Partner and a Designated
Member of Worsley Associates LLP. The total charge to the Consolidated
Statement of Comprehensive Income during the year in respect of Investment
Advisor fees to Worsley Associates was £197,328 (31 March 2024: £187,057) of
which £18,687 (31 March 2024: £18,825) remained payable at the year end.
The fees and expenses payable to the Investment Advisor are explained in note
3.
Upon appointment of Worsley Associates as Investment Advisor (31 May 2019), Mr
Nixon waived his future Director's fee for so long as he is a member of the
Investment Advisor.
As at 31 March 2025, Mr Nixon held 29.99% of the shares in the Company (31
March 2024: 29.88%).
As at 31 March 2025, Mr Scott held 2.96% of the shares in the Company (31
March 2024: 2.77%).
The aggregate remuneration and benefits in kind of the Directors and directors
of the Company's subsidiaries in respect of the year ended 31 March 2025
amounted to £45,830 (31 March 2024: £46,103) in respect of the Group of
which £35,000 (31 March 2024: £35,000) was in respect of the Company. Please
refer to the above for further details on the Directors' fees.
17. Commitments and contingent liability
As at 31 March 2025 the Company had no commitments.
18. Segmental analysis
As at 31 March 2025, the Group has two segments (31 March 2024: two). The
following summary describes the operations in each of the Group's reportable
segments for the current year:
Property Group Management of the Group's property asset.
Parent Company Parent Company, which holds listed equity investments
Information regarding the results of each reportable segment is shown below.
Performance is measured based on segment profit/(loss) for the year, as
included in the internal management reports that are reviewed by the Board,
which is the Chief Operating Decision Maker ("CODM"). Segment profit is used
to measure performance as management believes that such information is the
most relevant in evaluating the results of certain segments relative to other
comparable operators.
The accounting policies of the reportable segments are the same as the Group's
accounting policies described in note 2.
Continuing Operations
31 March 2025 Property Group Parent Company Total
£000 £000 £000
External revenue
Rental income 699 - 699
Property income write-off (44) - (44)
Property operating expenses (162) - (162)
Unrealised loss on investment property (3,197) - (3,197)
Lease incentive write-off (568) - (568)
Net gain on investments at fair value through profit or loss - 1,240 1,240
Total segment revenue (3,272) 1,240 (2,032)
Expenses
General and administrative expenses (223) (466) (689)
Total operating expenses (223) (466) (689)
(Loss)/profit before tax (3,495) 774 (2,721)
Income tax charge (89) - (89)
Deferred tax credit - - -
(Loss)/profit after tax (3,584) 774 (2,810)
(Loss)/profit for the year (3,584) 774 (2,810)
Total assets 2,557 9,473 12,030
Total liabilities (241) (108) (349)
Continuing Operations
31 March 2024 Property Group Parent Company Total
£000 £000 £000
External revenue
Rental income 823 - 823
Property operating expenses (150) - (150)
Unrealised loss on investment property (211) - (211)
Net gain on investments at fair value through profit or loss - 183 183
Total segment revenue 462 183 645
Expenses
General and administrative expenses (143) (430) (573)
Total operating expenses (143) (430) (573)
(Loss)/profit before tax 319 (247) 72
Income tax charge (117) - (117)
Deferred tax credit 75 - 75
(Loss)/profit after tax 277 (247) 30
(Loss)/profit for the year 277 (247) 30
Continuing Operations
31 March 2024 Property Group Parent Company Total
£000 £000 £000
Total assets 6,769 8,319 15,088
Total liabilities 234 193 427
(b) Geographical information
The Company is domiciled in Guernsey. The Group has subsidiaries incorporated
in Europe.
The Group's revenue from external customers from continuing operations and
information about its segment non-current assets by geographical location (of
the country of incorporation of the entity earning revenue or holding the
asset) are detailed below:
Revenue from External Customers Non-Current Assets
31 March 2025 31 March 2025
£000 £000
Europe 699 2,345
Revenue from External Customers Non-Current Assets
31 March 2024 31 March 2024
£000 £000
Europe 823 6,231
19. Net asset value reconciliation
Adjustments were made to the Company's net asset value ("NAV") following the
publication to LSE on 9 June. This following reconciliation shows the
adjustments made between the Financial Reporting NAV and the published NAV:
31 March 2025 31 March 2024
NAV per share (pence) £000 NAV per share (pence) £000
Published NAV per LSE 40.08 13,523 43.45 14,661
Difference between Directors' non-IFRS valuation and IFRS Fair Value 5.46 1,842 - -
Financial reporting NAV 34.62 11,681 43.45 14,661
For the purposes of the previously published unaudited Net Asset Value (NAV),
the Directors adopted a valuation of the property on a non-IFRS fair value
basis. This approach reflected the Directors' internal assessment, which
incorporated commercial assumptions regarding the future performance and
prospects of the property.
In contrast, the valuation adopted in these Financial Statements is prepared
on an IFRS fair value basis, in accordance with IFRS, and has been determined
by the independent external valuer, as detailed in notes 2(d) and 7. The
difference between the two valuations arises from differing assumptions, with
the valuation adopted in the RNS announcement reflecting a more favourable
outlook compared to the more conservative assumptions applied by the external
valuer.
The Directors acknowledge the importance of consistency with accounting
standards and transparency for financial reporting purposes. Accordingly, the
fair value determined by the independent external valuer has been adopted in
these Financial Statements as the appropriate and reliable measure of the
property's value in accordance with IFRS for the purposes of these Financial
Statements.
20. Subsequent events
On 31 March 2025, the Company entered into a new lease agreement with
Notorious (see note 4 for further details), an Italian company, for it to
operate the cinema complex. Notorious is a wholly owned subsidiary of
Notorious Pictures S.p.A., an Italian company, whose shares are listed on the
Euronext Growth Milan market, and which through its group of companies is an
international movie producer and distributor and one of Italy's leading cinema
operators. The effective date of the lease agreement is 3 April 2025.
There were no other post year end events which require disclosure in these
Financial Statement.s
Investment Objective and Policy
Investment Objective
The Company's investment objective is to provide shareholders with an
attractive level of absolute long-term return, principally through the capital
appreciation and exit of undervalued securities. The existing real estate
asset of the Company will be realised in an orderly manner, that is with a
view to optimising the disposal value of such asset.
Investment Policy
The Company aims to meet its objectives through investment primarily, although
not exclusively, in a diversified portfolio of securities and related
instruments of companies listed or admitted to trading on a stock market in
the British Isles (defined as (i) the United Kingdom of Great Britain and
Northern Ireland; (ii) the Republic of Ireland; (iii) the Bailiwicks of
Guernsey and Jersey; and (iv) the Isle of Man). The majority of such companies
will also be domiciled in the British Isles. Most of these companies will have
smaller to mid-sized equity market capitalisations (the definition of which
may vary from market to market but will in general not exceed £600 million).
It is intended to secure influential positions in such British quoted
securities with the deployment of activism as required to achieve the desired
results.
The Company, Property Trust Luxembourg 2 SARL and Multiplex 1 SRL ("the
Group") may make investments in listed and unlisted equity and equity-related
securities such as convertible bonds, options and warrants. The Group may also
use derivatives, which may be exchange traded or over the counter.
The Group may also invest in cash or other instruments including but not
limited to: short, medium or long term bank deposits in pounds sterling and
other currencies, certificates of deposit and the full range of money market
instruments; fixed and floating rate debt securities issued by any corporate
entity, national government, government agency, central bank, supranational
entity or mutual society; futures and forward contracts in relation to any
other security or instrument in which the Group may invest; put and call
options (however, the Group will not write uncovered call options); covered
short sales of securities and other contracts which have the effect of giving
the Group exposure to a covered short position in a security; and securities
on a when-issued basis or a forward commitment basis.
The Group pursues a policy of diversifying its risk. Save for the Curno Asset
until such time as it is realised, the Group intends to adhere to the
following investment restrictions:
· not more than 30 per cent. of the Gross Asset Value at the time of
investment will be invested in the securities of a single issuer (such
restriction does not, however, apply to investment of cash held for working
capital purposes and, pending investment or distribution, in near cash
equivalent instruments, including securities issued or guaranteed by a
government, government agency or instrumentality of any EU or OECD Member
State or by any supranational authority of which one or more EU or OECD Member
States are members);
· the value of the four largest investments at the time of investment
will not constitute more than 75 per cent of Gross Asset Value;
· the value of the Group's exposure to securities not listed or
admitted to trading on any stock market will not exceed in aggregate 35 per
cent. of the Net Asset Value;
· the Group may make further direct investments in real estate but only
to the extent such investments will preserve and/or enhance the disposal value
of its existing real estate asset. Such investments are not expected to be
material in relation to the portfolio as a whole, but in any event will be
less than 25 per cent. of the Gross Asset Value at the time of investment.
This shall not preclude Property Trust Luxembourg 2 SARL and Multiplex 1 SRL
(the "Subsidiaries") from making such investments for operational purposes;
· the Company will not invest directly in physical commodities, but
this shall not preclude its Subsidiaries from making such investments for
operational purposes;
· investment in the securities, units and/or interests of other
collective investment vehicles will be permitted up to 40 per cent. of the
Gross Asset Value, including collective investment schemes managed or advised
by the Investment Advisor or any company within the Group; and
· the Company must not invest more than 10 per cent. of its Gross Asset
Value in other listed investment companies or listed investment trusts, save
where such investment companies or investment trusts have stated investment
policies to invest no more than 15 per cent. of their gross assets in other
listed investment companies or listed investment trusts.
The percentage limits above apply to an investment at the time it is made.
Where, owing to appreciation or depreciation, changes in exchange rates or by
reason of the receipt of rights, bonuses, benefits in the nature of capital or
by reason of any other action affecting every holder of that investment, any
limit is breached by more than 10 per cent., the Investment Advisor will,
unless otherwise directed by the Board, ensure that corrective action is taken
as soon as practicable.
Borrowing and Leverage
The Group may engage in borrowing (including stock borrowing), use of
financial derivative instruments or other forms of leverage provided that the
aggregate principal amount of all borrowings shall at no point exceed 50 per
cent. of Net Asset Value. Where the Group borrows, it may, in order to secure
such borrowing, provide collateral or security over its assets, or pledge or
charge such assets.
Corporate Information
Directors (All non-executive) Registered Office
W. Scott (Chairman) 1 Royal Plaza
R. H. Burke
B. A. Nixon Royal Avenue
St Peter Port
Guernsey, GY1 2HL
Investment Advisor Administrator and Secretary
Worsley Associates LLP Apex Fund and Corporate Services (Guernsey) Limited
First Floor (formerly Sanne Fund Services (Guernsey) Limited)*
Barry House 1 Royal Plaza
20 - 22 Worple Road Royal Avenue
Wimbledon, SW19 4DH St Peter Port
United Kingdom Guernsey, GY1 2HL
Financial Adviser Corporate Broker
Shore Capital and Corporate Limited Shore Capital Stockbrokers Limited
Cassini House Cassini House
57 St James's Street
57 St James's Street
London, SW1A 1LD
London SW1A 1LD
United Kingdom
United Kingdom
Independent Auditor Registrar
BDO Limited Computershare Investor Services (Guernsey) Limited
Plaza House 1(st) Floor
2(nd) Floor Tudor House
St Peter Port Le Bordage
Guernsey, GY1 3LL St Peter Port
Guernsey, GY1 1DB
Registration Number
43007
*Effective 31 January 2025, the Company's appointed Administrator, Sanne Fund
Services (Guernsey) Limited completed an amalgamation of corporate bodies
pursuant to Part VI of the Companies (Guernsey) Law, 2008 with Apex Fund and
Corporate Services (Guernsey) Limited (the "Amalgamation"). As a result of the
Amalgamation, the name of the Administrator changed to Apex Fund and Corporate
Services (Guernsey) Limited. There are no further material changes arising
from the Amalgamation and all pre-existing contractual arrangements in place
between the Company and the Administrator remain in force.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
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or visit
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.
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. END FR PPUCUMUPAPUGRecent news on Worsley Investors
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