LEEDS CASTLE Company Re¥istration Nv. 1172263 (Englalld and Wales) Charity Registered No. 268354 (England and Wales) LEEDS CASTLE FOUNDATION REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 28 MARCH 2024 Tèlephone.. +44 IU)1622 Jof400 Fac51mllÈ: *4J 10)622 73-616 Webslte.. YVI*I;: joh￿￿?.1*(..cJ-',.. .17ry4IATI4..3038IOJe4i ## **LEEDS CASTLE FOUNDATION** |**CONTENTS**|**Page**| |---|---| |Trustees' annual report|4| |Independent auditors' report|17| |Consolidated statement of financial activities|21| |Consolidated balance sheet|22| |Foundation balance sheet|23| |Consolidated cash flow statement|24| |Notes to the financial statements|25| LEEDS CASTLE FOUNDATIor4 ADMINISTRATIVE DETAILS Trustee Ms Ros Kerslake, CBE (CkLair) Ms Judith Armitt Ms Helen Dccble, CBE Ms Anna Eavis Ms Ruth Knight Ms Sarah Masolli M$ sarah Roots Mr Julian Smith, CVO Mr Adrian J Tinniswood, OBE Mr Thomas C Wright, CBE Company Secretary Mr R Richman Charity Number 268354 Company number 1172263 Registered Office Lccds Castlc Broomfield Nr. Maidstone Kent ME17 IPL Statutory Auditors Crowe U.K. LLP Riverside House 40-46 Eligh Street Maidstone Kent Bankers Royal Bank of Scotland 38 Market Place Wigan wi IPJ Investment managers Ruffer LLP 80 Victoria Street London SWIE 5JL Sarasin & Partners 100 St PLul's Churchyard London EC4M 8BU LEEDS CASTLE FOUNDATION ADMINISTRATIVE DETAILS Sub-committee membership Filla￿e￿ Audit and Risk Committee Ms J Arniitt MT J Siniih, CVO Mr T C Wrigh¢ CBE Chair luvestment Committee Ms H r)¢cblc, CBE Chair NomiDatioJJs Committee Ms R Kerslake, CBF. Mr J Smith CVO Ms A Eavis Chair Dire¢tOT8, L*ed$ Ca8tle Ellterpri8es Ltd Mr T C WrigbL CBE Ms R Kerslake, CBB Mr D Bridgford Ms S Roots Ms H Bonser-wilton Mr R Richman Chair Chicf Executive Trinance Director and S¢cr¢tary Senior iM&J)agement Team of the Foundatio Ms H Bonser-wilton Mr R Richman Mr5 D Maiihews Chief r,xecutive Financc Director Head of Audience Development & Fundraising Ilead Curator Commercial Operations Dir¢etor interim Ilead of Eslu Serviees MArketing Director Ms S Prichard Ms L Hutchings Mr N Johnstonc Mr M Dclin LEEDS CASTLE FOUF4DATION TRUSTEES, ANNUAL REPORT FOR THE TrTAR ENDED 28 MARCH 2024 The Trustees of the Leeds C&%tle Fnundation, (C.harity number: 268354 and company registration number.. 1172263). who arc also the directors of the charity, present their report and the fLnalleial ytatement5 for die Follndation and its trading subsidiary (th¢ group) kor the period ended 28th MurLh 2024. These have been prepared in ￿COrdance with th¢ A¢¢ounting and Reporting by Chariti¢s: Statement of Recommended l)ractice applicable to charitles prepariiig their &ccourtts in &ccordance with the Financial R¢porting Standard applicable in the UK and Republic of Ireland (FRSI 02) (¢ffe¢tive 1st January 2015) and the Companics Act 2006. Accounts have been prepared this year tor the period Irom 1st April 2023 10 28th March 2024. The Foundation regularly alters its financial year end to ensurethere is only one E￿¢r Bank Holiday weekend within each financial year, this was necessary for 2023124 but not the comparativc year of 2022123 which are covered by thi5 repurt. Objects The Foundalion's objects are wide rangin& llnd are set out in fvll in the memorandum and articles. However. the key focus of the eharity is summ&rised as follows: l. To preserve the Castle and its estate for public benefit. 2. To provide an excellent, enjoyable and authentic exp¢rienee for every visitor. 3. To inspire visitors of &ll a8¢s through edu¢alional r#sourc¢s and facilities. 4. To promote health and other charitable purposes. Trustees 'I'he following'l'rnstees have held olTice in the twelve months from 1st April 2023. Ms R Kerslake, CBE Ms J Arfflitt (uppoint¢d 29, Scptember 2023) Ms H Dccblc, CBE Ms A Eavis Ms R Knight (appoint¢d 29, Scplember 2023) Mr R Laing (retired 15 December 2023) Ms S Masotti {appointcd 29, September 2023) Ms L Nesfield (retired 15 December 2023) Ms S Roots (appointed 29 September 2023) Mr J Smith, CVO Mr A Tinniswood. OBE Mr T Wright, CBE Strategic Report Sections in this Teport noted below constitute the Strategic Report for the purw>5cs of the Companies Act 2006: Review of the year. Incoming r¢sources. Costs and application of operating surpluses. Reserves Policy. Investmeni Policy and Objectives Core Aclivitics- Public Benefit. Plans for the Future. Risk. Section 172 Statement. LEEDS CASTLE FOUNDATION TRUSTEES, ANNUAL RII PORT FOR THE YEAR EIYDED 28 MARCH 2024 Review of the year The year saw a.qignificant recovery in visitors to the Castlc which were up by thirteen percent year on y¢aT. This largcly r¢$ult¢d from th¢ 5ULC¢55 of value-a(Ided events reintroduced into the day visilor programme. Of notable succcss was the Christmas prcscntation of N8Jll?a in the Castle which achieved more than twice the number of visitors to the previous year. Overall, during the year we welcomed 399.604 gucsts to thc site, which reversed the fall in visitor numbers sccn in 2022ll3 and was 15.000 mor¢ than in 2021122. 'Iliis number benefffted greatly trom group visitors which have returned more quickly and more Strongly than most in thc scctor had anticipated. Ln July RA Venues ceased to b¢ the exclusive catering provider LO the site. After a thorou￿ tendering process Grayson's We￿ awarded the cOn￿¢t. While a less than ideal time to makc such & change, their mobiiis&tion was efficient and successful wilh no interruption to thc provision of seryices. 'I'here followed a steady increa8e in turnover from all ¢at¢ring outlets. The annual Leeds Castle Con¢¢rt was well attended. Heritage Events have a furth¢r two years on the contract for the event. The Fireworks Spectacular went ahead in November. in spite of EK)or weather attracting sell out audiences both nigbts and receiving highly lavourablc revicws, Trustc¢s agaiD took the d¢¢ision lo self-insure this ¢v¢nt as insurance mark¢t rat¢s were prohibitive. The major new activity introduced in 2022123 was a joint venture with Raymond Gubbay Limited, a subsidiary of Sony Music, to run a Christmas Lights Trail through the grounds. In its second year it attracted over 85,000 visitors, up from 66,500. This produced a positive return in the second year of a fiv¢-year contract ¢quivalellt to that generated alluually from ihe Fireworks Spectacular. Hospitality Function5 and Accommodation both had less successful years. Hospitality had benefitted from a carry forward of events from the Covid-19 period in 2022123, but with less advance bookings carried fonvard. coupled with a tightening of the inarket following the cost of living crisis, the year failed to match budget expectations. 11 was also noti￿ablE thai function5 thai did take place were utilising l¢ss on-51t¢ accommodation than that .8een in recent years. However , the year saw the investEnent in the I,akeside Lodgcs aceommodation product. The Leeds Castle (Folf Club has continued to benefit from the desire to partake in outdoor exercise whi¢h saw a resurgellce in the pandemi¢ period. Establishing as a Membership club has reduced thc dependence on green f¢¢ incom¢, whi¢h can be heavily w¢ath¢r and compclitor activity dependent. Golf generates 8 modes1 profit, sufficient to pay b&ck the earlier capital inv¢stment made in the course. This return to a surplus was pleasing affinnation of the investment in thc coursc 2nd facilities, as well as thc WQTk of the PGA Prof¢5sional to establish an ¢njoyable club ¢xp¢rience for members. In another uncertain year, the business overall was manag¢d with agililv and car¢fully controlled costs. but difficulties surrounding ihe borehole water supply and a major leak on site added to the ¢ost of utilities. The current gas and electricity supply contracts will tsrn?in&te in Oetobcr 2024 and a signifLcant redu¢tion in cost 15 anticipated, as Whole￿Ie price5 are consid¢rably low¢r than at th¢ previous renewal. Volunteers havc bccome an essential part of the C&stle's worK providing learning & social inclusion, with 80 people currently volunteering across ￿eaS such as falconryj gardens, grounds. wildlife & conservation, education. visitor operations and, of course, the main Trustee Board. Financial modelling using prudent ￿o￿th assumptions confirtns that the estate can generate sufficient cash to invest in herit2gc assets, facilities and ¢xpcricnccs ovcr the next few years, although larger projects will require drawing on R¢s¢rv¢s. LEEDS CASTLE FOUNDATION TRUSTEES, ANNUAL RF.PORT FOR THE YEAR ELYDED 28 MARCH 2024 Chief Ex¢cutiv¢ Helen Bonser-wilton has continued to lead WOTk to review the Foundation's business model & to deliver the approved strategy with Board and staff team in year. Incoming resources Total incoming resources increased by £1,099,000 over the previous year as operations continue lo relum to more regular levels than those seen during ihe pandemic. However, wtth incre&ses in costs thc tr&ding result was a relatively sm211 surplus and a loss aftcr cxrxptional ilen￿. The Fireworks Spectacular, Lccds Castlc Concert and the Christmas Lights Trail continuc to suppl¢m¢nt th¢ standard visitor and hospitaIity income streams. IIospitality and accommodation ix)th had a siguifIcantty less successful year, but remain alM)ve pr¢-pandemi¢ l¢v¢15 ol¢ontribution. "I'he inv¢stm¢nt portfolio benefited frorn the division of the fund to two inveslm¢nt manager3 as Ruffer, nusually, rethrned a signlficant los4 however this was largely offsct by Sarasin's perforniance. The inv¢stment Properties were revalued. but Saw a significant fall in values. Costs and appIl￿tion of operating surpluses Our focus remained on managing the cost base in a climatc ofcxtrcmc cconomic uncertainty. while ensuring visitor and guest service levels were maintain¢d and investment in the product continued. Further lo the heavy reduction in stalTing numbers that took place in 2020 as a result of th¢ d¢vastating financial impact nf thc pandemic, we continued to gradually increase staff numbers to cope with the restoration of year round full tradin& but vacancies &$ a result of the challenging recruiting environm¢nt r¢suSted in I l O full lime equivalent st&tT in the year whi¢h was identical to the 2022123 full tim¢ equivalent staff. There will dlwdys be a need for considerable investment pmgr8mmes. not le&qt in the fabric of the C&qtle buildings. In addition to planned and prcvcntativc mainlenance, there are times when unexpected repairs ar¢ required. The opcrattng surplus will be used to continue the preservation of the Castle, th¢ ¢stale and the collections, aT]d the ongoing enhanccmcnt of the visitor experience, which ne¢ds regular r¢freshment to cnsure that there is always a new reason to visit and to updatelreplace facilities as needed. In line with the agreed three-year pension deficit reduction plan, there was a thrther speciaI contribution of £140,000 towards th¢ L¢¢ds Castlc Rctircment Benefits Scheme. 'I'he scheme has been clused to new membe since 2005. A triennial revaluation was undcrtakcn as al 1° April 2022 and contributi()n8 remain at £140,000 which are planned to eliminate the scheme liability on the technical provisions basis by 31. October 2024. Rescrve8 policy Th¢ reseryes policy is r¢viewed annually by the Trustees, taking into 8ccount the predominant risks to the Foundation and its anticipated working Capilal requirements. The r¢view of risk hi￿lIghtS major ¢v¢nts. (e.g. a fjre), causing severe impact on tncome. mitigated by Ix)th dityct and bu.sine￿* Inte￿uption iniurance cover. The impact on incomc of othw risks, such as closur¢ or periods of low visitor numbers due to prulonged bad weather or oth¢r factors, are uninsurable. In recent years. to mitigate these risks. Trustses have invested to diversify income generation, r¢ducing the dependence on d&y visitors. Thc Trustees have concluded that funds are required to be held as free reserves to ¢nable us lo me¢t regul￿ Cornmitmenls und working capital requirements, should there be short terni volatility in revenues. LEEDS CASTLE FOUNDATION TRUSTEES, AThNUAL REPORT FOR THE YEAR FNDED 28 TrIARCH 2024 Taking into accoullt core cost needs. the Trustees consider it is appropriate to hold free rescrvcs representing two year5 of charitable activities expenditure. At 3 IstMar¢h 2024 th¢ total coDsolidatcd funds in the accounts sLqDd at £22.2m (2023 - £22.7Jn). of which £2.8m (2023 - £2.8m) is restricted and £1.8m (2023 - £ l.Ilm) relates to unrestricted tangible fixed assets. After deducting these amounts and the designated funds of £3.8m (2023 - £5.7m), this leaves general frc¢ rescrves of £13.8m (2023 £13.2m), which is in line with the aiin of holding two year5 of charitable activities rxpenditure, currently rwwing at £5.4m (2023 £5.2m) per Ye￿ as general free reserves. The free reserves includc invcsttnent prop¢rties with a value of £9m {2023 £9.6m} which are not readily rcalisablc, thus Icaving £4.8m (2023 - £3.6m) as liquid free rescrvcs. This in lin¢ with thc TrustC¢S target of holding £1.4m {2023 - £1.3m), based on three months of charitable activitics expendi￿r¢. The Foundalion's funds coJnprise a number vf restricted and unrestricted funds, within which a number of designations have been made by the Tru.8tees. Restricted fund8 comprisc thc Hcritage and Development F¢und and th¢ Chattels Fund. The H¢rilag¢ and Dcv¢lopm¢nt Fund is an Expendable Endowm¢nt Fund and represents frcchold land and buildings classificd as functional tangible asscts, considered to be integral to the bequeathed estate. The Heritage and Development Fund relates entirely to the Foundation. The Chattels Trund represents proc¢¢ds froTll th¢ disposal of h¢ritage assets. These proceeds are to be used solely for the purpose of &Gquiring replacement heritage assets. The Trustees have concluded that Designated Reserves should be set up to cover the estimate of potential spcnding on spe¢ifi¢ projects which have been identified as part of the five-year planning process. in ordcr to.. Fund the Found&tion's primary rcsponsibility of pffserving the Castlc and its collection5 forpublic benefit. tnvest in developments to enhance the visitor expeTience and enjoyment of the Castle. Develop inc<)me generating opportunilies. Improve or replace operating facilitics and infrastructure. As at 28th March 2024, the Designated Reserves have been assigned to.. Income generating Accommodatian Development- Pods to r¢pla¢e glamping tents (£1,500k). Continuing th¢ r¢maining phases of Castle stonework repairs, initially the West and Southwest elevation8 (£2,250k). In &ddition, the Foundation carries business intemiption insurance to cover the cost of core liabilitlcs Ill the event that the Castle was unable to generate income as a consequence of exceptional insurable incidents. In discussion with Trustees of the Lee