OpenCharities

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

2026-03-31-accounts

PORTSMOUTH HISTORIC QUARTER TRUST

ANNUAL REPORT

FOR THE YEAR ENDED 31 MARCH 2026

A COMPANY LIMITED BY GUARANTEE COMPANY REGISTERED NUMBER 01959490 (ENGLAND AND WALES) CHARITY REGISTERED NUMBER 293188

1

CONTENTS

Message From Our Chair ................................................................................................... 4 Message From Our CEO .................................................................................................... 4 Trustees’ Report ................................................................................................................ 5 Our Vision ..................................................................................................................... 5 Our Strategic Aims ..................................................................................................... 5 Our Charitable Purpose ............................................................................................. 5 Our Impact in Numbers ................................................................................................. 6 Our Work in Action: Preserve ......................................................................................... 7 Built Heritage ............................................................................................................ 7 Historic Vessels ......................................................................................................... 7 Regeneration ............................................................................................................. 8 Our Work in Action: Educate & Enjoy .............................................................................. 9 Enhancing our Visitor Destination .............................................................................. 9 Free-Entry Exhibitions .............................................................................................. 10 Free-Entry Events .................................................................................................... 11 Historic Vessels in Action ......................................................................................... 12 Our Volunteers ........................................................................................................ 13 Our Work in Action: Develop ........................................................................................ 14 Investing in our People ............................................................................................. 14 Investing in our Infrastructure ................................................................................... 14 Partnerships and Stakeholders ................................................................................ 15 Looking Ahead…………………………………………………………………………………………………..16 Financial Review ......................................................................................................... 17 Current Underlying Financial Performance ............................................................... 17 Investments ............................................................................................................ 17 Valuation of Fixed Assets ......................................................................................... 17 financial Result ........................................................................................................ 17 Balance Sheet ......................................................................................................... 18 Going Concern ........................................................................................................ 18 Structure and Governance ........................................................................................... 19 Governance ............................................................................................................. 19 Management ........................................................................................................... 21 Group Structure and Subsidiaries ............................................................................ 21 Key Land Holdings and Heritage Assets .................................................................... 21 Public Benefit Statement ......................................................................................... 22 Policies and Disclosures .......................................................................................... 22 Trustees' Responsibilities Statement ........................................................................ 24 Statement of Disclosure to Auditor ........................................................................... 24 Independent Auditor’s Report to the Members of Portsmouth Historic Quarter Trust ......... 25 Financial Statements for the Year Ended 31 March 2026 .................................................. 28 Notes to the Financial Statements for the Year Ended 31 March 2026 ............................... 31

2

TRUSTEES, EXECUTIVE AND ADVISORS

CHARITY STATUS

Portsmouth Historic Quarter Trust is a private company limited by guarantee and a registered charity.

REGISTERED OFFICE

19 College Road HM Naval Base Portsmouth Hampshire PO1 3LJ

BANKERS

The Royal Bank of Scotland plc London Corporate Centre 62-63 Threadneedle Street London EC2R 8LA

SOLICITORS

Macfarlanes LLP 20 Cursitor Street London EC4A 1LT

EXECUTIVE TEAM

Hannah Prowse (Chief Executive) Neil Pearce (Finance Director) Jennifer Hopkins (Operations Director)

Blake Morgan LLP New Kings Court Tollgate Chandler’s Ford Eastleigh, Hampshire SO53 3LJ

AUDITOR

Sumer Audit Suite 002 Central Ground Floor Building1000 Lakeside North Harbour Portsmouth. Hampshire PO6 3EN

DMH Stallard LLP 3rd Floor Origin One 108 High Street Crawley, West Sussex RH10 1BD

INVESTMENT MANAGERS

Cazenove Capital 1 London Wall Place London EC2Y 5AU

DIRECTORS AND TRUSTEES

Helen Green (Chair) Rear-Admiral Rex Cox (Vice Chair) James Croser Benjamin French Professor Virginia Gibson Mark Goulding

Graham Morrison Steve Pitt Tarek Teba Jonathan Trice Simon Verdon

3

PHQ – LEGAL AND ADMINISTRATIVE INFORMATION

MESSAGE FROM OUR CHAIR

This year has been one of continued progress for Portsmouth Historic Quarter, as we have built confidence in our new identity and continued to care for some of Portsmouth Harbour’s most significant historic buildings, vessels and spaces.

The completion of Carpenters’ Yard, the improvements to Boathouse 5, and the continued development of Storehouse 9 each reflect PHQ’s long-term approach: preserving heritage by giving it active and sustainable purpose. Together, these developments show how thoughtful regeneration can protect historic places, support creativity and enterprise, and create wider public benefit.

As I take on the role of Chair on a permanent basis, I do so with great confidence in PHQ’s leadership, people and direction. I want to thank my fellow Trustees, our Chief Executive Hannah Prowse, and the whole PHQ team of staff and volunteers for their commitment throughout the year. Their work ensures that our heritage is not only protected, but active, useful and able to serve Portsmouth and its communities for generations to come.

Helen Green Chair

MESSAGE FROM OUR CEO

This year, we have opened up Portsmouth Harbour’s heritage in new ways, diversifying activity on our sites to make them more active and accessible.

Free exhibitions and events, Groundlings theatre productions, pontoon open weekends and activities out on the water have created more ways for people to experience the places and stories in our care. We have issued 77,365 free Historic Quarter Passes, welcomed over 120,000 visitors to our free exhibitions, and carried 1,929 passengers on our operational historic craft.

We have also continued to give historic spaces active and meaningful purpose. Boathouse 5 now offers improved visitor facilities and a new theatre space, Carpenters’ Yard has created a new home for artists and makers at Priddy’s Hard, and Storehouse 9 remains the next major focus of our regeneration ambitions.

I am grateful to our staff, volunteers, Trustees and partners for the skill, care and energy they bring to that work every day. Together, we are creating places where more people can learn, create, contribute, remember, enjoy and belong.

Hannah Prowse Chief Executive

4

PHQ – MESSAGES FROM CHAIR AND CEO

TRUSTEES’ REPORT

OUR VISION

Portsmouth Historic Quarter (PHQ) is the charity responsible for caring for and operating key heritage sites across Portsmouth Harbour, including Portsmouth Historic Dockyard and Priddy’s Hard.

As custodians of historic buildings, boats and spaces in and around Portsmouth Harbour, we breathe new life into this Naval heritage, creating energy and vibrancy, ensuring that it is accessible for all. We are an ambitious and collaborative charity.

We actively create and curate authentic, educational, sustainable and enjoyable places, experiences and opportunities.

OUR STRATEGIC AIMS

PRESERVE

Being active in the conservation, restoration and regeneration of important assets and places which are at risk, or under-utilised

DEVELOP

Operating a sustainable charity with a long-term vision and sufficient reserves to intervene and make a difference

EDUCATE

Achieving and maintaining high standards in interpretation and education

ENJOY

Working with heritage and other partners to develop and manage a world class visitor destination, centred on Portsmouth Historic Dockyard; developing a thriving and happy community at Priddy’s Hard

OUR CHARITABLE PURPOSE

Our Vision and Strategic Aims are derived from our Charitable Purpose “the preservation of buildings, structures, vessels, docks and berths of national interest or architectural or historic interest or historically associated with His Majesty's Naval Base at Portsmouth and the protection and augmentation of the amenities of such buildings, structures, vessels, docks and berths and their surroundings for the public benefit including for the advancement of culture and the access to and enjoyment of the Naval Base buildings by the public for the purposes of education in naval history and other matters related to the Defence of the Realm.”

5

PHQ – TRUSTEES’ REPORT – OUR VISION

OUR IMPACT IN NUMBERS

77,365

168

6 FREE

FREE FREE Historic EXHIBITIONS Quarter Passes

DAYS OF

FREE PUBLIC EVENTS & ACTIVITIES

OVER

120,000 VISITS TO OUR FREE EXHIBITIONS

£3,947,000

Invested in Conservation

1,929

Trips on Our Operational Historic Craft

9

New

140 VOLUNTEERS

Artists’ Studios

3,032

VOLUNTEER DAYS

771

HOURS OF STAFF TRAINING

6

PHQ – TRUSTEES’ REPORT – OUR IMPACT IN NUMBERS

OUR WORK IN ACTION: PRESERVE

Being active in the conservation, restoration and regeneration of important assets and places which are at risk, or under-utilised

This year we have invested £3,947,000 into the preservation and restoration of our heritage.

BUILT HERITAGE

Our ongoing investment in the care and maintenance of our historic buildings ensures that they remain safe, functional, and welcoming for visitors, tenants, staff and volunteers.

This year’s work combined key repairs with targeted improvements across the estate.

REFURBISHMENT AND REDECORATION

REPAIR AND MAINTENANCE

We completed approximately 850 reactive jobs across the year, alongside 307 statutory and compliance works and several significant improvement projects across the Dockyard estate and at Priddy’s Hard:

HISTORIC VESSELS

Our collection of historic vessels comprises three operational craft available for trips, charters and events; a further three operational vessels not currently in service for public use; eleven boats exhibited and interpreted across the site; six vessels under active restoration, including projects in rolling conservation; and two vessels awaiting future restoration.

7

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

VOLUNTEER-LED WORKS

Our Boathouse 4 volunteer team continues to undertake most conservation and restoration activity, supported by our Shipwright & Workshop Manager. This year’s work included:

SPECIALIST AND PROGRAMMED WORKS

WORKSHOP AND FACILITIES

REGENERATION

Alongside the improvements delivered across our sites this year, we have continued to develop the next phase of our regeneration pipeline, with Storehouse 9 at the centre of our future plans.

Storehouse 9 is a Grade II listed Georgian warehouse in Portsmouth Historic Dockyard and the last building in the Dockyard in our care still awaiting full restoration. Our ambition is to bring this remarkable building back into active use as a vibrant new destination, including a flexible events venue, The Attic, lettable workspaces, shops, and a free permanent public exhibition telling the Dockyard’s own story.

This is a major capital project and will require significant external investment. During the year, we continued to develop our plans and submitted a development round application to the National Lottery Heritage Fund to support the next stage of work.

Together with the projects completed this year, Storehouse 9 reflects our long-term commitment to making the Dockyard more accessible, relevant and useful to local communities, and supporting the city’s wider cultural and economic regeneration.

8

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

OUR WORK IN ACTION: EDUCATE & ENJOY

Achieving and maintaining high standards in interpretation and education

Working with heritage and other partners to develop and manage a world class visitor destination, centred on Portsmouth Historic Dockyard; developing a thriving and happy community at Priddy’s Hard

ENHANCING OUR VISITOR DESTINATION

This year, we continued to invest in the visitor experience across our sites, improving facilities, opening up our historic spaces and places and creating more opportunities for people to participate, learn, and enjoy our heritage.

CARPENTERS’ YARD CREATIVE COMMUNITY

At Priddy’s Hard, the restoration of Carpenters’ Yard has brought a cluster of historic naval workshops back into active use as nine artists’ studios. Delivered with generous support from Arts Council England and the Foyle Foundation, the £1,000,000+ project supports local artists at the start of their creative journey while giving the buildings a sustainable long-term use.

The studios are now fully occupied by a mix of makers and artists, including a potter, jeweller, visual artists and other craftspeople. Together, they have brought new life and creative energy to the site, creating a vibrant working environment around a public courtyard and contributing to the wider regeneration of Priddy’s Hard.

BOATHOUSE 5

At the Dockyard, we opened new visitor toilets at the front of Boathouse 5, within sight of the Dockyard entrance. The new facilities are easier to find and access, and include accessible provision, baby change facilities and a separate nursing room. In partnership with Portsmouth Royal Dockyard Historical Trust, the walls also celebrate local history through archive photographs, stories and objects. Opened in May 2025, the toilet block was later awarded “Platinum” status at the 2025 Loo of the Year Awards.

We also brought a long-unused cinema in Boathouse 5 back into public use, transforming it into an accessible 60-seat theatre for performance, rehearsal and community activity. The new theatre complements the Boathouse’s flexible main space, creating a more versatile venue and giving audiences another reason to visit the Dockyard.

The space has enabled us to offer a new base to Portsmouth’s Groundlings Theatre Company following their displacement from their previous home. Groundlings Theatre Trust now delivers its community-focused drama school from Boathouse 5, engaging local young people in arts and culture, alongside a growing programme of public performances, including pantomime.

The project has successfully returned an underused historic space to active cultural life, strengthening the Dockyard’s public offer and supporting local creative organisations.

9

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

FREE-ENTRY EXHIBITIONS

Alongside our ongoing free-entry exhibitions SHE_SEES in Boathouse 4 and Dockyard Apprentice exhibition in Boathouse 7, which themselves attract over 100,000 visitors each year, we have also hosted temporary exhibitions and installations across our spaces and places.

These projects created new opportunities for people to engage with Portsmouth’s stories, explore historic buildings and experience contemporary creative work within the Dockyard.

SITE LINES & MOTIFS

Delivered as part of the national Heritage Open Days programme in partnership with the University of Portsmouth’s Architecture Department, this immersive exhibition took place in Storehouse 9 in September 2025. Titled Sight Lines and Motifs , the exhibition invited visitors to discover Portsmouth through memory, storytelling and space, using suspended fabric panels, maps and projections to reveal hidden stories of the city. In total, this free exhibition was attended by 412 visitors.

A SEA OF WORDS

A Sea of Words for Portsmouth was an immersive installation shaped by the voices of the city, presented in Boathouse 5 in October 2025, in partnership with 432 Nomads and Crying Out Loud. Featuring 100 single-word contributions displayed on paper boats alongside ten longer stories, the exhibition explored themes of sanctuary, belonging and identity. Developed with international artists from Hong Kong, the project was free to residents across PO postcodes, with a £5 charge to visitors to the city. Around 1,500 people attended A Sea of Words for Portsmouth .

I AM BORN EXHIBITION

I Am Born was a free visual arts exhibition in Storehouse 9, inspired by the opening chapter of Charles Dickens’ David Copperfield, delivered in spring 2026 as part of In Our Words, Portsmouth Creates’ year-long celebration of literature and storytelling.

Artists Ally Ashworth and Rachel Johnston worked with seniors from Braemar Care Home and young people from Motiv8 and The Brook Club, using archival images from Portsmouth History Centre, The News Portsmouth and The D-Day Story to spark conversation around identity, memory and lived experience.

The resulting banners and textile collages were exhibited in Storehouse 9 from late January 2026, attracting 555 visitors across 11 days.

STANDING WITH GIANTS: CELEBRATION OF FREEDOM

From January to May 2026, we hosted Standing With Giants: Celebration of Freedom , a free outdoor installation across the Dockyard.

Displayed in two locations, outside Storehouse 9 and in the Starboard Arena beside HMS Victory, the installation brought striking 10-foot figures into the Dockyard landscape, inviting visitors to reflect on service, sacrifice, remembrance and the freedoms we enjoy today.

10

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

FREE-ENTRY EVENTS

PONTOON OPEN WEEKENDS

From May to October 2025, on the last weekend of each month, the Boathouse 4 pontoon opened to the public, offering a unique opportunity to explore our operational historic craft. On Pontoon Open Days, visitors are invited to join guided tours led by knowledgeable volunteers, and to step aboard our vessels, including Second World War power boats MGB81 and HSL102.

In total, 4,193 people attended our Pontoon Open Weekends.

POSE PORTSMOUTH

In October 2025, we hosted part of POSE Portsmouth in Storehouse 9 and the Pay Office, as part of a city-wide open studios event celebrating Portsmouth’s creative community.

Delivered in partnership with City Arts Portsmouth, POSE brought artists and audiences together across multiple locations in the city. Storehouse 9 showcased work by four sculpture artists alongside photography by our own talented Jamie O’Neill.

The event gave local artists the opportunity to present their work within our historic spaces and brought new audiences into the Dockyard as part of a wider weekend of creative activity. Our POSE Portsmouth installations attracted 653 visitors.

VE DAY 80

In May 2025, we marked the 80th anniversary of VE Day with a free public programme across Portsmouth Historic Dockyard, including live music, lindy hop lessons, family entertainment, and boat trips from the Boathouse 4 pontoons.

Four Second World War veterans joined the day with their families, including a trip on MGB81 and a public Q&A in Boathouse 4. Their first-hand reflections created a rare opportunity for visitors to hear directly from those who lived through this history.

The event – which attracted around 1,700 visitors – brought the site to life, creating a strong sense of celebration, remembrance and connection across the Dockyard.

SHE_SEES PHOTOWALK

SHE_SEES Photowalk was a free community engagement event linked to the ongoing SHE_SEES exhibition in Boathouse 4. Delivered in partnership with Lloyd’s Register and Portsmouth Royal Dockyard Historical Trust, the guided photo walk invited participants to explore and photograph Portsmouth’s maritime environment through a new lens.

Held on 29 April 2025, the event was free to attend and open to photographers and members of the public, supporting wider storytelling around women, maritime heritage and the working Dockyard, and attracted eight participants.

11

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

BOATHOUSE 4 HOLIDAY ACTIVITIES

We continue to offer family-friendly activities throughout the year at Boathouse 4, giving younger visitors hands-on ways to engage with our heritage. Alongside the rowing activity and steamship playboat, school holiday activity sheets, prizes and practical activities including rope and badge making encouraged children to explore, play and learn. Approximately 5,000 children took part during the year.

HISTORIC VESSELS IN ACTION

EVENTS

Our operational vessels continue to bring our heritage to life on the water, supporting public access, events and wider engagement activity throughout the year.

Our Pride-wrapped Foxtrot 8 (F8) delivered a full programme of harbour tours, carrying nearly 2,000 passengers across the season. It also supported charter activity and provided a free shuttle service to Gunwharf Quays for a recent Fighting With Pride event.

The fleet was active beyond the Dockyard across the year. At Gosport Marine Festival, HSL 102 was open to the public and F8 ran tours throughout the day. All three vessels later attended the Southampton International Boat Show, where our teams found consistent demand from visitors seeking to come aboard.

At Cowes Classics, MGB 81 ran alongside a Spitfire display, passing the Royal Yacht Squadron together on the Solent. During SailGP, HSL 102 was chartered by private groups, running out to the Solent forts at speed before anchoring to watch the racing.

Commemorative activity remains an important part of our vessels’ role. As part of VE Day, MGB 81 took a Second World War veteran – who had supported these vessels during service but had never previously been aboard one – out on the Solent.

Filming and digital content continued across the year, including visits from external creators whose films have now reached over 600,000 views online.

F8 PRIDE PROJECT LEGACY

The F8 Pride Project was designed as a temporary intervention, but the conversation it opened up has continued.

Launched in 2025 in partnership with Fighting With Pride, the project marked 25 years since the ban on LGBTQ+ personnel serving openly in the UK Armed Forces was lifted. Through a bold Pride-inspired wrap designed by artist Angela Chick, Landing Craft F8 became a highly visible tribute to all who served, including those forced to serve in silence.

Beyond its visual impact, the project created new opportunities for public talks, tours and engagement, helping audiences connect F8’s Falklands history with wider stories of service, exclusion, recognition and belonging.

12

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

OUR VOLUNTEERS

Our volunteer teams are central to our ability to care for our heritage and welcome the public into our places and spaces. Across Boathouse 4, Visitor Welcome, Porter’s Garden, ships’ plaques and the Volunteer Library, our dedicated volunteers contribute practical skills, time, knowledge and enthusiasm to the daily life of our sites.

Their work supports boat restoration and maintenance, public tours, pontoon events, garden care, visitor orientation, interpretation and the wider presentation of our spaces. We now have 140 registered volunteers, reflecting long-standing commitment for many, as well as recent growth across a wider range of roles.

ROLES AND INDUCTIONS

This year, we have strengthened the structure around our volunteers’ contributions. Roles have been more clearly differentiated and defined, giving current and prospective volunteers a clearer understanding of duties, expectations, training and support.

Induction, health and safety briefings, role-specific supervision, uniforms, prompt cards, email updates and named points of contact all help volunteers feel confident, informed and connected.

RECRUITMENT

We have also taken a more outward-looking approach to recruitment, working with local partners including HIVE Portsmouth, the University of Portsmouth and Veterans Outreach Service to promote opportunities more widely. This has helped us reach new volunteers with different skills, backgrounds and motivations, including students from subjects such as Mechanical Engineering, Architecture, Astrophysics, Marine Biology and Palaeontology.

COMMUNITY

Our volunteer community is becoming broader and more intergenerational, with more younger volunteers, early retirees, women across a wider range of roles, and volunteers from a wider range of nationalities and ethnic backgrounds.

We have continued to invest in the social and practical infrastructure that supports this community. Monthly newsletters, social events, site tours, reciprocal activity with The Mary Rose and use of the Volunteer Mess help volunteers feel part of the wider Dockyard community.

13

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

OUR WORK IN ACTION: DEVELOP

Operating a sustainable charity with a long-term vision and sufficient reserves to intervene and make a difference

INVESTING IN OUR PEOPLE

We continue to invest in our staff, trustees and volunteers, building the capability, confidence and resilience needed to deliver our strategic aims and long-term vision.

From April 2025 to March 2026, our 32 members of staff undertook 584 hours of live training, including 19 courses and workshops delivered by external providers. Over the same period, staff completed 329 allocated e-learning modules, equating to a further 187 hours of learning time.

We have also strengthened the structure of our volunteer programme. As noted above, alongside our established Boathouse 4 workshop and Porter’s Garden teams, we have further defined and expanded volunteer activity to include Visitor Welcome volunteers and a small number of Library volunteers. This offers individuals more varied ways to contribute to PHQ’s work, from hands-on conservation and gardening to public welcome, interpretation and support for shared volunteer resources.

New volunteers receive a general PHQ induction, followed by role-specific induction and supervision. For workshop volunteers, training continues throughout the year to ensure health and safety knowledge remains current, with additional machine shop training provided for those operating woodworking machinery.

INVESTING IN OUR INFRASTRUCTURE

We continue to strengthen the systems, tools and shared spaces that underpin our work and support the effective management of a complex heritage estate.

During the year, we introduced a Marine Safety Management System, formalising the policies and procedures that support the safe operation of our fleet. We also implemented ReLease, a new property management system, improving the way we manage billing, maintenance scheduling and compliance works across our estate.

We have continued to embed the Better Impact volunteer management system. As the volunteer team grows, the system will support better record keeping, communication and coordination, helping us manage our volunteer programme with greater consistency and resilience.

We have also invested in the everyday infrastructure that supports our staff team. At the end of 2025, we opened a communal staff kitchen and break room, giving colleagues based in different buildings and areas of the site a shared space to prepare food and drinks, take a break, and connect with one another during the working day.

14

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

PARTNERSHIPS AND STAKEHOLDERS

We continue to work with all of our tenants to enhance their and the visiting public’s experience within Portsmouth Historic Dockyard and Priddy’s Hard.

We continue to support the Portsmouth Royal Dockyard Historical Trust, helping to preserve the industrial history of the former Royal Dockyard and maintain the Dockyard Apprentice Exhibition.

We work closely with a wide range of stakeholders and charities, including the Royal Navy, the Royal Navy and Royal Marines Charity, the National Lottery Heritage Fund, Arts Council England, Crying Out Loud, The Groundlings Theatre Trust, Lloyd’s of London, the Ministry of Defence, Historic England, the Royal Navy Museums (the new name of the National Museum of the Royal Navy)(RNMs), the Mary Rose Trust, Portsmouth City Council, Gosport Borough Council, the Coastal Forces Heritage Trust, National Historic Ships, the University of Portsmouth, Shaping Portsmouth, Portsmouth Creates, the Association of Sail Training Organisations, Sustainable Conservation Trust, and Veterans Outreach Support.

15

PHQ – TRUSTEES’ REPORT – OUR WORK IN ACTION

LOOKING AHEAD

In 2026/27 we will continue to care for our historic buildings, vessels and landscapes, with an emphasis on how these assets are used, understood and enjoyed by visitors, communities and partners.

A major priority for the year ahead will be the development of Storehouse 9 following our successful Development Round application to the National Lottery Heritage Fund. In June 2026, at first attempt, PHQ was awarded a £450,000 development grant and invited to progress towards a Delivery Round application for a further £4.35 million. This is a significant milestone for one of the Dockyard’s most important historic buildings. The development phase will shape the design, business planning, activity, interpretation and partnerships required to restore Storehouse 9 as a place for public access, learning, events, enterprise and storytelling

We will open a new dinosaur exhibition in Boathouse 5, creating a distinctive and family-friendly reason to visit in support of our ambition to welcome wider, new and regular audiences.

Across the Dockyard, we will continue to develop our visitor offer. We will deliver more events, performances and seasonal activity, with the aim of giving visitors more reasons to spend time with us and experience the Dockyard as both a heritage destination and a living cultural space. We will also continue to be closely involved in and supportive of the RNMs’ new Royal Marines Experience museum which is currently under construction in Boathouse 6. We have contributed significant time, expertise and experience over the past two years and will also be making a financial contribution of some £200,000 to RNMs to help enable the opening of such an important addition to the Dockyard experience.

Conservation and maintenance will remain core to our work. We will continue to deliver a planned programme of repairs and improvements across our estate, informed by condition surveys, operational need and long-term stewardship. Work on our historic vessels will also continue, supported by staff, volunteers and specialist contractors, ensuring that our craft remain cared for, interpreted and, where possible, operational for public benefit.

At Priddy’s Hard, we will continue to support the creative community at Carpenters’ Yard and develop the wider potential of the site as a place where heritage, making and community activity can sit alongside one another. This will form part of our longer-term work to ensure that Priddy’s Hard has a vibrant and sustainable future.

We will also continue to strengthen the systems and infrastructure that support the organisation. This includes continuing to embed our new property and marine safety systems and progressing sustainability work across the estate. These less visible improvements are essential to building a resilient charity with the capacity to manage complex heritage assets and deliver ambitious public programmes.

16

PHQ TRUSTEES’ REPORT – LOOKING AHEAD

FINANCIAL REVIEW

CURRENT UNDERLYING FINANCIAL PERFORMANCE

The Trustees continue to monitor the current operational financial performance of PHQ by focussing on its unrestricted surplus before depreciation, impairment, disposals, investment portfolio returns and tax – this is highlighted in the Statement of financial activities.

PHQ’s underlying financial performance has remained stable. In the year ended 31 March 2026 PHQ reported such a surplus of £258,000 (2025: £393,000) and on the same basis a surplus after taking account of restricted activities of £945,000 (2025: £378,000). The reason the overall financial performance is in excess of the unrestricted surplus is that £630,000 of grants were received during the year – these have been fully utilised as set out in the section below and as such were capitalised.

INVESTMENTS

During the year PHQ invested £1,519,000 in projects which renovate, refurbish and develop its historic buildings in addition to £2,415,000 on maintenance and routine repairs. Projects included £987,000 on the completion of the Carpenters’ Yard artist studio project at Priddy’s Hard which was part funded by Arts Council England and Foyle Trust.

PHQ also completed and opened much needed visitor toilet facilities in Boathouse 5, situated close to the site entrance, which benefit the public and our visitor attraction tenants.

PHQ renovated Porters’ Lodge, the oldest building in the heritage area and also refurbished a dilapidated auditorium in Boathouse 5 transforming it into a theatre which is now being used by the local performing arts charity The Groundlings Theatre Trust.

VALUATION OF FIXED ASSETS

As outlined in last year's financial statements PHQ had commissioned a condition survey of all of its buildings in the dockyard. The survey was completed in the year and highlighted several buildings which will require significant works in the next 10 years. This has resulted in a further impairment to tangible fixed assets of £775,000 at the year end. The total impairment provision was £5,525,000 at the year end.

PHQ reviewed the valuation of its investment properties at year end. This was to take account of the latest draft Bill in respect of ground rents on residential leasehold properties. The review resulted in a reduction in value of these investments of £582,000 in the year.

FINANCIAL RESULT

The unrestricted deficit for the year was £738,000 (2025: surplus £631,000). The deficit was due to the non-cash charges of depreciation, impairment and the reduction in value of the investment property portfolio. Once legacy project charges including increased depreciation

17

PHQ TRUSTEES’ REPORT – FINANCIAL REVIEW

and impairment charges are included PHQ reported a consolidated deficit of £1,595,000 (2025: deficit £5,227,000).

BALANCE SHEET

As noted in the preceding paragraphs there were further impairment charges during the year and also a reduction in the value of PHQ’s investment property portfolio. In 2022 the net assets of PHQ were reported at more than £26,000,000. Since then, as a result of the research, surveys and reviews performed the value of the net assets reported has reduced significantly to £15,737,000 (2025 : £17,332,000) which the Trustees believe is much more representative of their true value. This reduction of some £10,000,000 has had no impact on the cash position or overall financial strength of PHQ.

GOING CONCERN

The financial statements have been prepared on the going concern basis. The Trustees have considered the level of funds held and expected income and expenditure for at least 12 months from the date these financial statements were approved which show sufficient levels of funds for PHQ.

18

PHQ TRUSTEES’ REPORT – FINANCIAL REVIEW

STRUCTURE AND GOVERNANCE

GOVERNANCE

We are governed by our Articles and Memorandum of Association. The list below comprises the Trustees who served during the financial year, along with any changes up to the date of this report.

TRUSTEES AND DIRECTORS

David Butters (Chair to 31 March 2025, resigned 14 July 2025)

Thomas Coles (resigned 31 May 2026)

Rear Admiral Rex Cox CB CMMar (Vice Chair)

James Croser (appointed 1 January 2026)

Henry Flint (resigned 2 September 2025)

Benjamin French

Professor Virginia Gibson Mark Goulding (appointed 1 January 2026)

Helen Green (Chair from 8 August 2025)

Graham Morrison

Robert Palmer (resigned 3 September 2025)

Steve Pitt

Robert Robson (Chair from 1 April 2025 to 7 August 2025, resigned 7 August 2025)

Tarek Teba

Jonathan Trice (appointed 1 January 2026)

Simon Verdon

COMMITTEES

PHQ operates various committees, each focusing on specific areas in line with their respective terms of reference.

Approval of all annual budgets, budget revisions, and non-budgeted expenditure remains the responsibility of the Board. Operational matters within approved strategies and budgets are managed by the executive, with support, oversight and scrutiny provided by both the committees and the Board.

Each Committee meets quarterly and comprises at least three Trustees and is attended by the CEO, Finance Director and relevant members of staff. The remits, members and reporting lines of the new committees are outlined overleaf.

19

PHQ – TRUSTEES’ REPORT – STRUCTURE AND GOVERNANCE

PRESERVE

DEVELOP

To oversee the maintenance of our existing assets (buildings, infrastructure, boats) ensuring that PHQ’s funds are appropriately deployed, that the quality of the work is suitable, and effort is prioritised and timely.

Members are Simon Verdon (Chair), Rear Admiral Rex Cox, Ben French, Mark Goulding, Graham Morrison, Tarek Teba, Jonathan Trice.

To take a future looking perspective on the way in which PHQ is moving forward including the review of the core and supporting strategies, the identification and securing of funds, the development and management of major capital projects, and reviewing any potential acquisitions.

Members are Rear Admiral Rex Cox (Chair), James Croser, Graham Morrison, Jonathan Trice.

Reports to Board, also submitting relevant Reports to Board, also submitting relevant issues to Finance and Resources Committee issues to Finance and Resources Committee for review. for review.

EDUCATE AND ENJOY

FINANCE AND RESOURCES

To oversee PHQ’s external image and To provide effective financial governance of reputation, its relationships with the wide PHQ and its subsidiaries including its range of stakeholders, and supporting the financial reporting, budgeting, project cost attraction of a more diverse set of visitors. To reporting, the statutory annual report and oversee all aspects of the customer accounts and the charity’s auditors. To experience including interpretation and provide a risk assurance function to ensure wayfinding; the facilities, attractions and there is adequate and effective risk volunteering opportunities available; and all management. To oversee the strategy and events. ongoing implementation of key operational functions including health and safety, human resources and IT .

Members are Professor Virginia Gibson (Chair), Ben French, Mark Goulding, Steve Pitt, Tarek Teba.

Reports to Board, also submitting relevant issues to Finance and Resources Committee for review.

Members are James Croser (Chair), Rear Admiral Rex Cox, Professor Virginia Gibson, Simon Verdon.

Reports to Board.

TRUSTEE REMUNERATION AND APPOINTMENTS

During the year, we remunerated Trustees in line with our Memorandum of Association and with the Charity Commission’s approval.

We have clear procedures for selecting Trustees. Portsmouth City Council can nominate up to two Trustees, and Historic England may nominate three; we recruit and appoint others to ensure that our Board has the right mix of skills, experience and expertise to deliver our strategic aims.

20

PHQ – TRUSTEES’ REPORT – STRUCTURE AND GOVERNANCE

New Trustees receive an induction pack and guidance from the Chair and fellow Trustees, and we arrange formal training when needed, delivered by relevant specialists, including our solicitors. Trustee liability is limited by guarantee to £1 each.

MANAGEMENT

The day-to-day management of PHQ is led by the Chief Executive, supported by the Senior Management Team, under authority delegated to the executive by the Board of Trustees.

We remunerate our staff in line with established policies and procedures, which we review annually as part of a wider assessment of staff performance and market rates. Any recommended adjustments are proposed by the Senior Management Team and require approval from the Trustees via the Finance and Resources Committee and ultimately by the Board.

GROUP STRUCTURE AND SUBSIDIARIES

PHQ's subsidiary companies are all wholly owned, and all directors are Trustees of PHQ. None of the subsidiary companies employs any staff. Decisions of the Board of each company are taken within meetings of PHQ's Board and committees. Each has its own annual general meeting.

KEY LAND HOLDINGS AND HERITAGE ASSETS

PHQ was established in 1985 by the Ministry of Defence (MoD), English Heritage (now Historic England), and Portsmouth City Council (PCC) to take on surplus land and buildings of historic significance within His Majesty's Naval Base at Portsmouth.

Our properties support the charity’s objectives by preserving historic buildings, enabling public access, and generating income to fund our work.

HOLDING TENURE COMMENTS
Heritage Quarter of 99-year lease Most buildings have been renovated and brought
HM Naval Base granted in 1988 by into benefcial use. Sub-let premises include a
the MoD mixture of market rents, which support our
charitable purpose, and concessionary
agreements in support of other charities.
Admiralty Quarter Freehold acquired
in 1990		 A site redeveloped into apartments. PHQ retains
the freehold and derives income from ground
rents, retail lettings, and car park charges, all of
which support our charitable purpose.

21

PHQ – TRUSTEES’ REPORT – STRUCTURE AND GOVERNANCE

HOLDING TENURE COMMENTS
Priddy's Hard, Gosport
Freehold acquired		 A former naval ordnance depot comprising
in 2009 numerous historic buildings and ramparts,
designated as a scheduled ancient monument.
Sub-let premises are let on a mixture of market
rents supporting our charitable purpose.
Regeneration of this area continues.
Priddy's Hard – Open
Land		 125-year lease
granted in 2014		 Open land immediately to the northwest of the
freehold property, used as overfow car park and
as a bufer between the historic site and future
commercial development.
Number 2 Dock 999-year lease Berth for HMS Victory.
granted in 2012 by
the MoD
South Ofice Block,
Bay 1 of the Ropery,
Storehouse 12 and
HMS Victory
Starboard Arena		 Leases granted in
2018 by the MoD,
co-terminus with
the main HMS
Victory 1988 lease		 Currently let to the Royal Navy Museums as ofice
space.

Where possible, we aim to balance preservation with public access and responsible regeneration, ensuring that our properties continue to deliver benefit for the community.

PUBLIC BENEFIT STATEMENT

The Trustees have had regard to the Charity Commission's guidance on public benefit.

POLICIES AND DISCLOSURES

PRINCIPAL RISKS AND UNCERTAINTIES AND MANAGEMENT OF RISK

A comprehensive risk register identifies each risk and its likely impact on PHQ's affairs. PHQ reviews its principal risks and the risk register on a quarterly basis through its Finance and Resource Committee which advises the Board. The Trustees confirm that they have reviewed the major risks PHQ faces and that systems and procedures have been established to manage those risks where appropriate.

22

PHQ – TRUSTEES’ REPORT – STRUCTURE AND GOVERNANCE

The most significant risks identified for the forthcoming period relate to financial sustainability, and are summarised below.

Stakeholder management: PHQ is one of a number of organisations which reside and operate in HM Naval Base – these include the Royal Navy and major visitor attractions such as HMS Victory, HMS Warrior and the Mary Rose. All organisations are reliant on the trust and cooperation of each other. PHQ, especially in the current uncertain environment, is in constant dialogue with all its stakeholders to ensure that it can deliver on its objectives in a way which is positive to all.

Inflationary Pressures: The rising cost base, which cannot be fully passed on to visitors, presents a risk to financial stability. One third of PHQ income is derived from visitors. It monitors visitor numbers closely and makes appropriate adjustment to spend as required.

Rental voids: Whilst many of PHQ’s tenants are on long term leases a proportion are on shorter term leases and licences to occupy. There is a risk in the current economic environment that void rates could increase. PHQ mitigates this risk by reviewing outstanding rents closely and is in regular contact with all tenants.

FUNDS POLICY

At the year end PHQ had unrestricted funds available of £13,938,000. PHQ sets aside funds to provide both financial stability and the financial means by which it can deliver and develop its charitable activities. PHQ's activities from time to time include substantial investments in capital projects and restorative maintenance so the Trustees accept that the level of funds will significantly fluctuate year on year. Where funds are set aside for future charitable activities, whether capital or operational expenditure, PHQ classifies these as designated funds. The current designated funds represent funds set aside for budgeted projects during the current and next financial year. PHQ intends to maintain unrestricted designated funds representing at least six months of core costs. These funds have been classified as the Protected fund and is currently set at £900,000 which is as intended. Unrestricted funds surplus to this amount are available to either designate for future projects or spend in accordance with the annual budget.

INVESTMENT POWERS AND POLICY

PHQ delegates the day-to-day responsibility for its investment portfolio to its investment manager and has relied upon the experience and expertise of the investment manager to deliver a balanced and diversified portfolio that will create an appropriate annual income and generate capital growth to meet the investment objective. PHQ’s investment manager is Cazenove Capital, a member of the Schroders Group and investments have been made in its managed Sustainable Multi-Asset Fund.

PHQ has an investment policy approved by the board which sets out how PHQ balances requirements for cash reserves, liquidity and investment returns against risk. The financial objective for the investment portfolio is to at least maintain the overall real value of its assets whilst not taking undue risk. PHQ's ambition is to be at the forefront of responsible investment practice and believes that taking account of environmental, social and governance issues is an intrinsic part of being a good long-term investor, for both ethical and financial reasons.

23

PHQ – TRUSTEES’ REPORT – STRUCTURE AND GOVERNANCE

TRUSTEES' RESPONSIBILITIES STATEMENT

Company Law requires the Trustees, who are also the Directors, to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable Trust and of the Group, and of the incoming resources and application of those resources, including income and expenditure of the charitable group for that period. In preparing those financial statements, the Trustees are required to:

The Trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable Trust and Group, which enables them to ensure that the financial statements comply with the Companies' Act 2006.

They are also responsible for safeguarding the assets of the charitable Trust and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the maintenance and integrity of the corporate and financial information included on PHQ's website.

STATEMENT OF DISCLOSURE TO AUDITOR

The Trustees confirm that:

PHQ maintains professional indemnity insurance for the Trustees.

Approved by the Board of Trustees on 15 July 2026 and signed on its behalf by

Helen Green Chair

24

PHQ – TRUSTEES’ REPORT – STRUCTURE AND GOVERNANCE

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PORTSMOUTH HISTORIC QUARTER TRUST

OPINION

We have audited the financial statements of Portsmouth Historic Quarter Trust (the 'charity') and its subsidiaries (the 'group') for the year ended 31 March 2026 which comprise the consolidated statement of financial activities (including consolidated income and expenditure account), the consolidated balance sheet, the charity balance sheet, the consolidated statement of cash flows and the related notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

CONCLUSIONS RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

OTHER INFORMATION

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and 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.

25

PHQ – INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PORTSMOUTH HISTORIC QUARTER TRUST

OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

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

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees' report or the directors' report included within the trustees' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

RESPONSIBILITIES OF TRUSTEES

As explained more fully in the trustees’ responsibilities section within the trustees’ report, the trustees, who are also the directors of the charity for the purpose of company law, 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 trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity’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 trustees either intend to liquidate the charitable 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.

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.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

As a result of these procedures, we considered the opportunities and incentives that may exist within the charitable company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law and compliance with the UK Companies Act and Charities Act. In addition to the above, our procedures to respond to risks identified included the

26

PHQ – INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PORTSMOUTH HISTORIC QUARTER TRUST

following:

Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

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.

USE OF OUR REPORT

This report is made solely to the charity’s trustees, as a body, in accordance with part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditors' 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 charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

10 August 2026

Jordan Abbott BSc ACA (Senior Statutory Auditor) for and on behalf of Sumer Audit

Chartered Accountants Statutory Auditor Portsmouth

Sumer Audit is the trading name of Sumer Auditco Limited

27

PHQ – INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PORTSMOUTH HISTORIC QUARTER TRUST

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCLUDING AN INCOME AND EXPENDITURE ACCOUNT AND THE STATEMENT OF COMPREHENSIVE INCOME)

Unrestricted Restricted
2026		 Unrestricted Restricted 2025
funds funds funds funds
Total Total
£000s £000s £000s £000s £000s £000s
Income Note
Donations and legacies 4 34 687 721 9 - 9
Income from charitable activities 5 3,575 - 3,575 3,921 - 3,921
Investment income 6 255 - 255 324 - 324
Total income 3,864 687 4,551 4,254 - 4,254
Expenditure
Direct expenditure on objectives 7 (2,760) - (2,760) (3,003) (15) (3,018)
Charitable activities support 7 (701) - (701) (619) - (619)
Raising funds (64) - (64) (60) - (60)
Other expenditure 8 (81) - (81) (179) - (179)
(3,606) - (3,606) (3,861) (15) (3,876)
Net incoming/(outgoing)
resources before depreciation,
impairment and (losses)/gains		 258 687 945 393 (15) 378
on investments
Direct depreciation on objectives 11 (411) (823) (1,234) (52) (1,093) (1,145)
Impairment charge 11 (54) (721) (775) - (4,750) (4,750)
Net (outgoing)/incoming
resources before (losses)/gains (207) (857) (1,064) 341 (5,858) (5,517)
on investments
Net gains/(losses) on investments 16 51 - 51 (9) - (9)
Reduction in value of investment
properties 15 (582) - (582) - - -
Net (outgoing)/incoming
resources before taxation		 (738) (857) (1,595) 332 (5,858) (5,526)
Deferred taxation 21 - - - 299 - 299
Net (outgoing)/incoming
resources after taxation		 (738) (857) (1,595) 631 (5,858) (5,227)
Transfers between funds 22 - - - 1,042 (1,042) -
Net movement in funds (738) (857) (1,595) 1,673 (6,900) (5,227)
Reconciliation of funds
Total funds brought forward 22 14,676 2,656 17,332 13,003 9,556 22,559
Net movement in funds 22 (738) (857) (1,595) 1,673 (6,900) (5,227)
Total funds carried forward 13,938 1,799 15,737 14,676 2,656 17,332

The statement of financial activities includes all gains and losses in the year. All income and expenditure derive from continuing activities.

PHQ – FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

28

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

BALANCE SHEETS

Registered number: 01959490

Group
Trust
2026
2025
2026		 2025
Unrestricted
Restricted
Total
Total
Unrestricted
Restricted
Total		 Total
£000s
£000s
£000s
£000s
£000s
£000s
£000s		 £000s
Note
Property plant and
equipment
14
7,371
1,334
8,705
9,182
2,346
1,334
3,680
Investment
properties
15
3,037
-
3,037
3,619
557
-
557
Investments
16
858
-
858
1,563
7,704
-
7,704		 3,805
795
8,409
Fixed assets
11,266
1,334
12,600
14,364
10,607
1,334
11,941		 13,009
Current assets
Investments
16
2,271
48
2,319
2,244
2,271
48
2,319
Debtors
17
1,124
-
1,124
976
1,262
-
1,262
Cash at bank and
in hand
15
417
432
1,319
-
417
417		 2,244
1,014
1,176
Current assets
3,410
465
3,875
4,539
3,533
465
3,998		 4,434
Creditors: due
within one year
18
(738)
-
(738)
(1,571)
(3,133)
-
(3,133)		 (3,794)
Net current
assets
2,672
465
3,137
2,968
400
465
865		 640
Net assets
20
13,938
1,799
15,737
17,332
11,007
1,799
12,806		 13,649
Funds
Undesignated
22
10,776
-
10,776
10,932
8,757
-
8,757
Designated
22
2,250
-
2,250
2,250
2,250
-
2,250		 8,523
2,250
Total
13,026
-
13,026
13,182
11,007
-
11,007		 10,773
Non distributable
22
912
-
912
1,494
-
-
-		 220
Total unrestricted
13,938
-
13,938
14,676
11,007
-
11,007		 10,993
Restricted
Active projects
22
-
1,135
1,135
465
-
1,135
1,135
Legacy projects
22
-
664
664
2,191
-
664
664		 465
2,191
Total funds
13,938
1,799
15,737
17,332
11,007
1,799
12,806		 13,649

The financial statements on pages 28 to 39 were approved by the Board on 15 July 2026 and signed on its behalf by:

Helen Green Chair

PHQ – FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

29

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

CONSOLIDATED STATEMENT OF CASH FLOWS

2026
2025		 2026
2025
£000s
£000s
Reconciliation of net expenditure to net cash(absorbed)/provided by operating activities
Net expenditure for the year
(1,595)
(5,227)
Tax
-
(299)
Depreciation of fixed assets
1,234
1,145
Impairment of fixed assets
775
4,750
Investment income
(255)
(324)
(Gain)/loss on investments
(51)
9
Reduction in value of investment properties
582
-
Increase in debtors
(78)
(235)
(Decrease)/increase in creditors
(845)
711
Net cash (absorbed)/provided by operating activities
(233)
530
Investing activities
Interest received
66
196
Dividends received
-
12
Income from investment properties
120
116
Purchase of plant, property and equipment
(1,519)
(755)
Net cash released from deposit accounts
679
802
Net cash movement in investing activities
(654)
371
Net (decrease)/increase in cash at bank and in hand
(887)
901
Cash and cash equivalents at the beginning of the year
1,319
418
Cash and cash equivalents at the end of the year
432
1,319
Relating to
Cash at bank and in hand
432
1,319

PHQ – FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

30

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

1 Principal accounting policies

Corporate information

Portsmouth Historic Quarter Trust (PHQ) is a charitable Trust, limited by guarantee and has no share capital. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member. PHQ is incorporated in England and Wales. The registered office and principal place of business is 19 College Road, HM Naval Base, Portsmouth, PO1 3LJ. Basis of preparation

The financial statements have been prepared in accordance with: Financial Reporting Standard 102 (FRS102), as issued by the Financial Reporting Council; Statement of Recommended Practice (SORP) 2019 “Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standards applicable in the UK and Republic of Ireland”; the Companies Act 2006; the Charities Act 2011; and, UK Generally Accepted Accounting Practice. PHQ meets the definition of a public benefit entity under FRS102 and is the parent Trust. The financial statements are prepared: under the historical cost convention, modified to include investment properties at fair value; in sterling, the functional currency of PHQ; and, monetary amounts in these financial statements are rounded to the nearest £1,000 unless stated otherwise. The parent Trust is included in the consolidated financial statements and is considered to be a qualifying entity under FRS102 and as such has applied the following exemptions from disclosure for the parent Trust in Section 7 ‘Statement of cash flows’: Presentation of a statement of cash flow and related notes and disclosures. It has also applied the following exemptions in Section 11 ‘Basic financial instruments’ and Section 12 ‘Other financial instrument issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches; details of hedges; and, hedging fair value changes recognised in statement of financial activities and in other comprehensive income.

Basis of consolidation

The financial statements consolidate the results of PHQ and all its subsidiary companies (disclosed in note 16) on a line by line basis. A separate Trust statement of financial activities has not been prepared as permitted by Section 408 of Companies Act 2006. Going Concern

The financial statements have been prepared on the going concern basis. The Trustees have considered the level of funds held and expected income and expenditure for 12 months from the date these financial statements were approved which show sufficient levels of funds for PHQ to continue as a going concern.

Incoming resources

All incoming resources are recognised in the statement of financial activities when the conditions for receipt have been met and the amount can be quantified with reasonable accuracy. All incoming resources are stated net of Value Added Tax (VAT). Grants, legacies and donations receivable are recognised when received or when they become unconditional whichever is the sooner. Expenditure

Expenditure is recognised on an accruals basis stated net of recoverable VAT. Expenditure on raising funds includes all expenditure incurred by the trust to raise funds for its charitable purposes and includes costs of all fundraising activities events and noncharitable trading. Expenditure on charitable activities is incurred on directly undertaking the activities which further the trusts objectives, as well as any associated costs.

Leases

All leases whether as lessor or lessee and accounted for as operating leases and credited or charged to the Statement of financial activities evenly over the life of the lease.

Funds

Unrestricted funds represent funds which are expendable at the discretion of the Trustees in the furtherance of the objects of PHQ. From time to time the Trustees allocate funds for a particular purpose and these are classified as designated funds but are still at the full discretion of the Trustees. Restricted funds represent funds receivable for a specific purpose as defined by the donor. Non distributable funds relate to the revaluation of investment property held in the group less any associated deferred tax. Heritage assets

PHQ was established as the vehicle in which the historic land and buildings in and around His Majesty’s Naval Base would be held, renovated and maintained. This is the key reason it exists and as such considers all of the historical land and buildings which it has been gifted to be heritage assets. All other activities either within the buildings or across the site are incidental to that aim. No value is attributed to any of the heritage assets due to the conditionality which is attached to their tenure and in particular on the grounds of the expense of and lack of reliability of any valuation method adopted given the uniqueness of each individual asset.

31

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

Property plant and equipment

Property plant and equipment are stated at historic cost less accumulated depreciation and impairment. At the year end the Trustees reviewed the historic cost of each property plant equipment asset and performed impairment tests on each using the value in use methodology. Property plant and equipment is depreciated as set out below:

Investment Properties

Investment properties have been stated at fair value.

Financial instruments, assets and liabilities

Current assets and Creditors: amounts falling due within one year are classified respectively as financial assets and liabilities. All are recorded at amortised cost. Financial instruments are recognised in the statement of financial activities when PHQ becomes a party to the contractual provisions of the instrument. Financial instruments are initially measured at transaction price unless the arrangement constitutes a financing transaction which includes transaction costs for financial instruments not subsequently measured at fair value. Financial instruments are classified as either ‘basic’ or ‘other’ within FRS102. At the end of each reporting period, basic financial instruments are measured at amortised cost using the effective rate method. All financial instruments not classified as basic are measured at fair value at the end of the reporting period with the resulting changes recognised in income or expenditure. Where the fair value cannot be reliably measured, they are recognised at cost less impairment. Financial assets are derecognised when the contractual rights to the cash flows from assets expire, or when PHQ has transferred substantially all the risks and rewards of ownership. Financial liabilities are derecognised only once the liability has been extinguished through discharge, cancellation or expiry.

Investments

Parent Trust interests in subsidiaries are stated at cost less any amounts written off for diminution in value. Other investments are included on the balance sheet at fair value. Unrealised gains and losses reflect the effect of changes in market values of investments. Realised gains and losses on quoted investments are based on the difference between disposal proceeds and brought forward market value, or cost if acquired during the year.

Cash and cash equivalents and other current asset investments

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of one month or less. Current asset investments are basic financial assets and represent amounts held on deposit where the original maturity is greater than three months.

Tax

The tax currently payable is based on taxable profit of the Group for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Pensions

PHQ operates a defined contribution pension scheme on behalf of its employees. The assets of the scheme are held and administered separately from those of PHQ. Contributions are charged to the statement of financial activities as they become payable in accordance with the rules of the scheme.

2 Critical judgements and estimates

In the application of PHQ’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. The Trustees consider that the one significant risk from estimates and assumptions of causing a material adjustment to the carrying amount of assets and liabilities is fixed

32

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

assets. The Trustees review the valuation of fixed assets at the end of each year: some assets are valued by external third parties, whilst others are valued by Trustees based on their knowledge. If any of the valuations are inaccurate then the valuation of fixed assets in the financial statements might be misstated.

Unrestricted
Restricted		 Total Total
funds funds 2026 2025
£000s £000s £000s £000s
4
Donations and legacies
Legacies 20 - 20 -
Donations 14 687 701 9
34 687 721 9
During the year ended 31 March 2025 £Nil donations recorded were to restricted funds.
5
Income from charitable activities
Property 2,430 - 2,430 2,746
Visitors, access and education 1,145 - 1,145 1,175
3,575 - 3,575 3,921
During the year ended 31 March 2025 £Nil of the income recorded was to restricted funds.
6
Investment income
Interest on cash deposited with banks 135 - 135 195
Rental income from investment properties 120 - 120 117
Dividends from listed investments - - - 12
255 - 255 324
During the year ended 31 March 2025 £Nil of the income recorded was to restricted funds.
7
Expenditure on charitable activities
Preservation 2,415 - 2,415 2,584
Visitors, access and education 345 - 345 434
Direct expenditure on objectives 2,760 - 2,760 3,018
Salaries 507 - 507 484
Other staff 34 - 34 58
Communications 123 - 123 70
Other 37 - 37 7
Charitable activities support 701 - 701 619
During the year ended 31 March 2025 £15,000 of the expenditure on preservation activities was from restricted funds.
8
Other expenditure
Trustees (governance expenditure) 13 - 13 20
Legal and professional fees 32 - 32 97
Auditors’ fees (governance expenditure) 36 - 36 62
81 - 81 179

During the year ended 31 March 2025 £Nil expenditure was from restricted funds. Governance expenditure is specific and no other expenditure has been apportioned to it.

33

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

9
Trustees’ emoluments and expenses
2026 2025
£s £s
David Butters - 1,800
Thomas Coles 1,000 500
Rear Admiral Rex Cox - -
James Croser 250
Henry Flint 424 1,417
Ben French 1,000 1,000
Professor Virginia Gibson 1,000 -
Mark Goulding -
Helen Green 1,516 1,417
Graham Morrison - -
Robert Palmer - -
Steve Pitt 1,000 1,000
Robert Robson 460 417
Tarek Teba 1,000 1,000
Jonathan Trice 250 -
Simon Verdon 1,000 1,417
8,900 10,468

Trustee remuneration is in accordance with the governing documents of PHQ and has been approved by the Charities Commission. In 2026 six (2025: seven) of the above Trustees were reimbursed a total of £2,018 (2025: £3,934) of expenses in relation to travelling and administration costs incurred during the year. £2,144 (2025: £10,645) was paid directly to third parties. Five (2025: Six) Trustees donated £3,252 (2025: £5,250). Rear Admiral Rex Cox is a director of Coastal Forces Heritage Trust. During the year PHQ purchased a membership for £20 (2025: £60 for event tickets).

10 Employee costs and information

2026
2025
£000s
£000s
Wages and salaries
1,138
1,134
Social security costs
140
122
Pension costs
120
110
1,398
1,366
Employee earnings and benefits ranges (£s)
Number
Number
90,001 to 100,000
1
2
120,001 to 130,000
-
1
130,001 to 140,000
1
1

The cost of Trustees and key management personnel during the year was £301,243 (2025: £375,000) including pension and social security costs. The average monthly headcount of persons (excluding Trustees) employed by the Group during the year was:

2026 2025
Preservation 12 13
Visitors, access and education 11 9
Support 10 11
33 33

The amount of outstanding pension contributions at the year end was £Nil (2025: £9,000).

11 Net expenditure for the year

Net expenditure for the year is stated after charging:

2026 2025
£000s £000s
Depreciation (see note 14) 1,234 1,145
Impairment (see note 14) 775 4,750
Auditor’s remuneration for audit 31 25
Other fees payable to the auditor for:
Tax compliance 5 2

12 Trust net expenditure for the year

As permitted by Section 408 of the Companies Act 2006, PHQ’s statement of financial activities has not been included in these financial statements. PHQ’s movement in funds for the financial year is a deficit of £843,000 (2025 : deficit £5,190,000).

34

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

13 Heritage assets

PHQ’s objects focus on the preservation of buildings, structures, vessels, docks and berths associated with His Majesty’s Naval Base in and around Portsmouth. In total there are 34 buildings, 3 docks and a mast pond the majority of which are scheduled ancient monuments, Grade I, Grade II* or Grade II listed buildings and a fleet of historic military vessels details of which are available at www.portsmouthhq.org. The Trustees have taken the view that these buildings, structures, vessels, docks and berths together with their associated infrastructure are heritage assets. Wherever possible properties have been renovated and in previous years the costs of these renovations have been capitalised and included in the cost of heritage assets (see note 1). PHQ maintains a list of all of its heritage assets which have been acquired. The vast majority of the assets are on display on the site, although for rented buildings internal access is not always possible.

14 Property plant and equipment

Group Freehold Freehold Leasehold Fixtures Historic Assets in the
Total
property improvement
improvement		 and fttings
military		 course of
vessel construction
improvement
£000s £000s £000s £000s £000s £000s £000s
Cost
1 April 2025 1,300 2,072 19,766 3,150 2,002 750 29,040
Additions - 1,000 313 - - 219 1,532
Transfers - 100 461 - - (561) -
31 March 2026 1,300 3,172 20,540 3,150 2,002 408 30,572
Depreciation
1 April 2025 (442) (258) (9,888) (3,150) (1,370) - (15,108)
Charge for year (78) (120) (915) - (121) - (1,234)
31 March 2026 (520) (378) (10,803) (3,150) (1,491) - (16,342)
Impairment
1 April 2025 - (240) (3,974) - (536) - (4,750)
(Charge)/credit for the year - (73) (727) - 25 - (775)
31 March 2026 - (313) (4,701) - (511) - (5,525)
Net book value 1 April 2025 858 1,574 5,904 - 96 750 9,182
Net book value 31 March
2026 780 2,481 5,036 - - 408 8,705
Trust Freehold Leasehold Fixtures Historic Assets in the
Total
improvement
improvement		 and military vessel course of
fttings improvement construction
£000s £000s £000s £000s £000s £000s
Cost
1 April 2025 2,072 10,650 3,150 2,002 750 18,624
Additions 1,000 313 - - 219 1,532
Transfers 100 461 - - (561) -
31 March 2026 3,172 11,424 3,150 2,002 408 20,156
Depreciation
1 April 2025 (258) (5,291) (3,150) (1,370) - (10,069)
Charge for year (120) (641) - (121) - (882)
31 March 2026 (378) (5,932) (3,150) (1,491) - (10,951)
Impairment
1 April 2025 (240) (3,974) - (536) - (4,750)
(Charge)/credit for the year (73) (727) - 25 - (775)
31 March 2026 (313) (4,701) - (511) - (5,525)
Net book value 1 April 2025 1,574 1,385 - 96 750 3,805
Net book value 31 March 2026 2,481 791 - - 408 3,680

35

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

15 Investment properties

Group Trust
2026 2025 2026 2025
£000s £000s £000s £000s
At 31 March 3,037 3,619 557 795

The Trust and Group last had its investment properties valued professionally as follows: Queen Street retail at £1,064,000 in 2021; Queen Street residential at £1,760,000 in 2022; and, Priddy's Hard residential at £795,000 in 2023. Since those dates the Trustees have reviewed and considered the value of each asset at the end of each financial year finding that, up to the 31 March 2025, they remained appropriate.

The Trustees consider that the valuation of Queen Street retail units continues to be appropriate and were valued by Holloway Iliffe Mitchell in 2021 using the market value method and it remains valued at £1,064,000.

In respect of the Group's residential investment properties the Trustees believe an adjustment is required. The value of these investments is derived from ground rents from residential leaseholders. The previous valuations were derived from projecting the contracted future income streams and applying a yield upon those streams to reflect risks and uncertainties as well as current market sentiment. Over the past 12 months the proposed legislative changes to residential ground rents have started to take shape and the Commonhold and Leasehold Reform Bill (the Bill) has been published. If enacted this will potentially impact the future valuations of ground rent investments. The Trustees have therefore considered whether these properties' valuations are still appropriate. The Trustees concluded that adjustments to carrying values would be appropriate.

There is currently much uncertainty as to what the final legislation will contain and this has led to a lack of interest and liquidity in this market. As a result, professional valuers are currently not comfortable with providing valuations without including caveats which diminish the reliability of those valuations. The Trustees therefore decided that the most appropriate method to calculate an adjustment would be to use similar assumptions to those adopted by the previous valuations but based upon revised income forecasts which reflect the Bill. Inherent in this methodology is the assumption that once legislation has been passed then market conditions would return to normal - this is one risk to the valuations.

The resulting valuations show a diminution in value of £582,000 as at 31 March 2026 to £3,037,000 (2025: £3,619,000).

16
Investments
Group
Trust
2026
2025
2026
2025
£000s
£000s
£000s
£000s
Fixed asset investments
Investment portfolio (see below)
Interest in subsidiary undertakings
Fixed term deposits		 611
560
611
560
-
-
6,846
6,846
247
1,003
247
1,003
858
1,563
7,704
8,409
Investment portfolio reconciliation
Market value at 1 April
Net unrealized (losses)/ gains		 560
569
560
569
51
(9)
51
(9)
Market value at 31 March 611
560
611
560

Subsidiary undertakings (all with the same registered office as PHQ)

PHQ holds a 100% interest in the £1 ordinary share capital of the following companies all of which are incorporated in England and Wales. Portsmouth Naval Base Trading Co Limited

Registration number 08802879 Dormant

Portsmouth Naval Base Property Company Limited

Registration number 04207508 Principal activity: to hold the asset Boathouse 6 Turnover: £713,000 (2025: £915,000); Profit after taxation: £253,000 (2025: £267,000) Net assets: £6,830,000 (2025: £6,846,000)

Portsmouth Naval Base Property Company (Queen Street) Limited

Registration number 04969934

Principal activity: to hold the Queen Street car park and collect ground rents Turnover: £290,000 (2025: £238,000); Deficit after taxation: £190,000 (2025: Surplus after taxation £473,000) Net assets: £2,919,000 (2025: £3,582,000)

36

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

Portsmouth Naval Base Property (Priddy’s Hard) Limited

Registration number 06964416

Principal activity: to hold and develop part of the land at Priddy’s Hard

Turnover: £Nil (2025: £78,000); Deficit after taxation: £1,000 (2025: Surplus after taxation £75,000) Net assets: £28,000 (2025: £104,000)

Associated undertaking

PHQ holds a 25% interest in the £1 ordinary share capital of Portsmouth Harbour Renaissance Limited which is incorporated in England and Wales and the aggregate capital and reserves of which are not material to nor included in these consolidated accounts.

Group and Trust
2026
2025
£000s
£000s
Current asset investments
Fixed term deposits		 2,319
2,244
Group
Trust
2026
2025
2026
2025
£000s
£000s
£000s
£000s
17
Debtors
Trade
Amounts owed by subsidiary undertakings
Prepayments and accrued income
Other		 507
46
354
36
-
-
321
74
602
834
572
808
15
96
15
96
1,124
976
1,262
1,014
18
Creditors: amounts falling due within one year
Trade
PAYE
Amounts owed to subsidiary undertakings
Accruals and deferred income
Other		 177
947
168
927
33
33
33
33
-
-
2,457
2,302
437
540
429
502
91
51
46
30
738
1,571
3,133
3,794

Deferred income on 1 April 2024 was £Nil. On 1 April 2025 the balance was £127,000. During the year ended 31 March 2026 this balance was released and £203,000 was deferred.

19
Future minimum lease rentals under non-cancellable operating leases		 19
Future minimum lease rentals under non-cancellable operating leases
Lease payments to be made
Amounts due within one year 41 41 41 41
Amounts due between one and five years 44 84 44 84
Amounts due after five years 55 53 55 53
140 178 140 178
Lease receipts to be received
Amounts due within one year 1,389 1,285 667 622
Amounts due between one and five years 3,860 3,873 1,477 1,527
Amounts due after five years 39,431 40,122 5,319 5,475
44,680 45,280 7,463 7,624

20 Assets still subject to some form of covenant and comparative analysis of net assets between funds

Funds received often contain conditions on both initial use and over the assets once renovated. Funds received categorized as “legacy” have been spent as intended. The key assets and related restricted funds over which conditions continue to apply are:

37

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

Group Trust
2025 2025
Unrestricted Restricted Total Unrestricted Restricted Total
£000s £000s £000s £000s £000s £000s
Property plant and equipment 6,991 2,191 9,182 1,614 2,191 3,805
Investment properties 3,619 - 3,619 795 - 795
Investments 1,563 - 1,563 8,409 - 8,409
Fixed assets 12,173 2,191 14,364 10,818 2,191 13,009
Current asset investments 2,244 - 2,244 2,244 - 2,244
Debtors 976 - 976 1,014 - 1,014
Cash at bank and in hand 854 465 1,319 711 465 1,176
Current assets 4,074 465 4,539 3,969 465 4,434
Creditors: due within one year (1,571) - (1,571) (3,794) - (3,794)
Net current assets 2,503 465 2,968 175 465 640
Total assets less current
liabilities and net assets 14,676 2,656 17,332 10,993 2,656 13,649
21
Contingent liabilities and capital commitments

The Trustees currently have no plans to dispose of the Trust’s investment properties nor change its dividend policy, nor are they aware of any planned corporation tax changes. A contingent liability exists in that if either: the Trust were to change its dividend policy; or, corporate tax law were to change in respect of gift aiding dividends to charities, then a corporate tax liability might crystallize at some future date on the disposal of its investment properties. The Trustees believe the likelihood of a tax liability crystallizing is remote.

The Trust had contractual capital commitments of £Nil at 31 March 2026.

22 Funds

PHQ sets aside funds to provide both financial stability and the financial means by which it can deliver and develop its charitable activities.

Unrestricted funds

Distributable

Unrestricted funds are those to which no conditionality for use exists. Undesignated funds are those available to PHQ for future use in furtherance of PHQ’s objects. Where funds have been set aside for future charitable activities, whether capital or operational expenditure, PHQ classifies these as “Designated projects” funds. Currently these funds represent amounts set aside for budgeted projects during the current and next financial year. PHQ maintains unrestricted designated funds representing at least six months of core costs – this fund is classified as “Designated protected”.

Non distributable

Non distributable funds represent investment property valuations gains less any related deferred tax.

Restricted funds

Restricted funds have some form of conditionality for use. Where the conditionality is in respect of capital projects this results in an accounting anomaly in that the full amount of the donation or grant is recognised as income at the point at which it is awarded rather than applied to reducing the capital cost of the asset. Depreciation is then charged as an expense over many years. This has resulted in many historical donations and grants still being reported as restricted funds when the related projects have been completed in accordance with the terms of the related donation or grant agreement. The Trustees have reviewed this and decided to clarify: which funds are still active (where cash is still to be spent); and, which funds relate to completed projects to which the only expense still to be charged is depreciation (no future cash impact). The classifications below are respectively “Active projects” and “Legacy projects”. The Trust’s material legacy projects which still have restricted funds associated with them are set out in note 20. These funds are all held within the Trust.

38

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026

22 Funds continued

Group 2026 Start of year Income Depreciation Impairment Other Transfers End of year
£000s £000s £000s £000s £000s £000s £000s
Unrestricted
Distributable
Undesignated general 10,932 3,864 (411) (54) (3,555) - 10,776
Designated projects 1,350 - - - - - 1,350
Designated protected 900 - - - - - 900
Total distributable 13,182 3,864 (411) (54) (3,555) - 13,026
Non distributable 1,494 - - - (582) - 912
Total unrestricted 14,676 3,864 (411) (54) (4,137) - 13,938
Restricted
Active projects
Project Source
Ramparts HE 100 - - - - - 100
Carpenters' Yard ACE/Foyle
-		 630 (17) - - - 613
Green Parrot Various - 57 - - - - 57
Various MOD 365 - - - - - 365
465 687 (17) - - - 1,135
Legacy projects 2,191 - (806) (721) - - 664
Total restricted 2,656 687 (823) (721) - - 1,799
Total funds 17,332 4,551 (1,234) (775) (4,137) - 15,737
Group 2025 Start of year Income Depreciation Disposal Other Transfers End of year
£000s £000s £000s £000s £000s £000s £000s
Undesignated general 9,558 4,254 (52) - (3,870) 1,042 10,932
Designated projects 1,350 - - - - - 1,350
Designated protected 900 - - - - - 900
Total distributable 11,808 4,254 (52) - (3,870) 1,042 13,182
Non distributable 1,195 - - - 299 - 1,494
Total unrestricted 13,003 4,254 (52) - (3,571) 1,042 14,676
Restricted active 480 - - - (15) - 465
Restricted legacy 9,076 - (1,093) (4,750) - (1,042) 2,191
Total funds 22,559 4,254 (1,145) (4,750) (3,586) - 17,332
Trust 2026 Start of year Income Depreciation Impairment Other Transfers End of year
£000s £000s £000s £000s £000s £000s £000s
Unrestricted
Distributable
Undesignated general 8,523 3,787 (59) (54) (3,422) (18) 8,757
Designated projects 1,350 - - - - - 1,350
Designated protected 900 - - - - 900
Total distributable 10,773 3,787 (59) (54) (3,422) (18) 11,007
Non distributable 220 - - - (238) 18 -
Total unrestricted 10,993 3,787 (59) (54) (3,660) - 11,007
Restricted
Active projects
Project Source
Ramparts HE 100 - - - - - 100
Carpenters' Yard ACE/Foyle
-		 630 (17) - - - 613
Green Parrot Various - 57 - - - - 57
Various MOD 365 - - - - - 365
465 687 (17) - - - 1,135
Legacy projects 2,191 - (806) (721) 664
Total restricted 2,656 687 (823) (721) - - 1,799
Total funds 13,649 4,474 (882) (775) (3,660) - 12,806
Trust 2025 Start of year Income Depreciation Disposal Other Transfers End of year
£000s £000s £000s £000s £000s £000s £000s
Undesignated general 6,813 3,844 - - (3,176) 1,042 8,523
Designated projects 1,350 - - - - - 1,350
Designated protected 900 - - - - - 900
Total distributable 9,063 3,844 - - (3,176) 1,042 10,773
Non distributable 220 - - - - - 220
Total unrestricted 9,283 3,844 - - (3,176) 1,042 10,993
Restricted active 480 - - - (15) - 465
Restricted legacy 9,076 - (855) (4,750) (238) (1,042) 2,191
Total funds 18,839 3,844 (855) (4,750) (3,429) - 13,649

39

PHQ – NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026