Agenda item

Report of the Director of Finance and Resources

The Scrutiny Co-ordination Committee considered a report of the Director of Finance and Resources, that provided an update on the business planning for the 2026/27 financial year for Coventry Municipal Holdings Limited.

A corresponding private report detailing confidential financial matters was also submitted for consideration (Minute 71 below refers).

The Committee noted that the report would also be considered by the Coventry Shareholder Committee at its meeting scheduled for 17^th March 2026.

Coventry Municipal Holdings Limited (CMH) was incorporated in November 2021 as an intermediary parent company within the Council’s group structure.  CMH is required by the Group Governance Arrangement to present the group business plan for approval by the Coventry Shareholder Committee.  The Business Plan covers the following companies:

·  Coombe Abbey Park Limited (CAPL), the company that operates Coombe Abbey Hotel via a long lease from the Council, and subsidiaries:

o  No Ordinary Hospitality Management (NOHM) undertakes management contracts for third parties and provides the trading name for operations within the hospitality and leisure sector.

o  Coombe Abbey Park Limited (LACo) a Teckal Company set up to enable contracts to be directly awarded by the Council.

·  Coventry Technical Resources (CTR) provides resourcing solutions to the Council via contractual arrangements.

·  Coventry Regeneration Limited (CR), set up during the construction of Coventry Arena and continues trading with minimal transactions to preserve historic tax assets which may be usable in the future.

·  No Ordinary Hotels Ltd (effectively a dormant company) continues operation to preserve the brand name.

·  Tom White Waste Limited (TWW), a commercial company that was previously one of the Council’s largest local competitors prior to acquisition, and subsidiaries:

o  A&M Metals and Waste supports the waste Management and recycling activities of the parent company.  The company has ceased trading and management plan is to liquidate the company is the foreseeable future.

o  Tom White Waste (LACo), a Teckal company set up to enable contracts to be directly awarded by the Council.

The vision for CAPL is for Coombe Abbey Hotel to be a destination of choice for families, business, and events both regionally and on the national stage, creating outstanding memorable experiences whilst delivering sustainable financial returns to its shareholders. This is supported by four strategic priorities for the 26/27 financial year detailed within the report.

Further improvements in profitability will be required to ensure the company’s sustainability over the medium term. CAPL has been in a negative net assets position since March 2024, and despite improvements this will remain negative for the near future.

The 26/27 budget includes income due to the Council of £1.3m, including £0.85m from the hotel and other property leases, interest payable on commercial loans of £0.45m and a profit share from catering concessions of £0.03m.

The Business Plan details several capital investments required to stimulate revenue growth and protect the fabric of the hotel building. This represents the most significant capital investment by the company in recent years. CAPL are proposing to use company resources repair the hotel building flat roof, replace the goods lift and replace the heating in the Park Priory bedroom block. CAPL are seeking debt financing to deliver the further capital investments detailed in the Private report. The proposed loan terms for these projects have been modelled over a 10-year term at a commercial rate of interest, with repayments due to commence once the assets are operational. The detailed terms of the finance are subject to approval.

The vision of TWW is to be a conscious brand with a mission to make a positive environmental and social impact whilst creating shareholder value for distribution into the local community. The strategic priorities for the 26/27 financial year were detailed within the report:

TWW have seen a significant temporary increase in revenues due to contracts with Birmingham City Council. This is being managed on an exceptional basis with performance separated out from core business when management monitors performance.

Following the Council’s acquisition of TWW’s main operational site in January 2025 and an initial payment free period, the Council received £0.15m in annual lease income during 25/26 and £0.6m will be received during 26/27.

The investment in new recycling plant for the MRF is due to be commissioned in May 2026, providing additional processing capacity and producing a high quality recyclate output.

CTR provides resource solutions to the Council either via direct employment or via contract as required.  The commercial posts in CTR have supported a range of projects including the Children’s Services Transformation Programe, the Care Facility Project and City Services.  The CTR budget assumes no additional posts will be added and inflationary costs will be up to 5% per annum.  The forecast cost base, including a 10% profit margin, is £0.245m for 2026/27.  This is budgeted to be recovered via revenue from contracts within the Council.

The Committee noted that when the Council disposed of its shares in Arena Coventry Limited (ACL) for “2.7m in 2014, the funds from the transaction were received by CTR.  This cash remains on the company balance sheet and can be paid to the Council as a dividend when required.

RESOLVED that, the Scrutiny Co-ordination Committee:-

1.  Notes the Business Plans for the CMH Group for the financial year 2026/27.

2.  Confirm that there are no additional recommendations for the Coventry Shareholder Committee.