Keele Residential Funding plc
ANNUAL REPORT AND CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 JULY 2025
Registration Number: 03840096 (England & Wales)
Keele Residential Funding plc
CONTENTS
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page/(s)
COMPANY INFORMATION
1
STRATEGIC REPORT
2-4
DIRECTORS’ REPORT
5-7
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
8-9
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE
RESIDENTIAL FUNDING PLC
10-18
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
19
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
20
COMPANY STATEMENT OF FINANCIAL POSITION
21-22
CONSOLIDATED STATEMENT OF CASH FLOWS
23
COMPANY STATEMENT OF CASH FLOWS
24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
25
COMPANY STATEMENT OF CHANGES IN EQUITY
26
NOTES TO THE FINANCIAL STATEMENTS
27-50
Keele Residential Funding plc
COMPANY INFORMATION
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
1
DIRECTORS
Wilmington Trust SP Services (London) Limited
Daniel Wynne
Christopher Duffy
REGISTERED OFFICE
Keele Residential Funding Plc c/o
Wilmington Trust SP Services (London) Limited
Third Floor
1 King’s Arms Yard
London,
EC2R 7AF
BANKERS
HSBC Bank Plc
Crown Bank
Hanley
Stoke-On-Trent
Staffordshire
ST1 1DA
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
UNITED KINGDOM
SECRETARY
Wilmington Trust SP Services (London) Limited
Keele Residential Funding plc
STRATEGIC
REPORT
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
2
The Directors present the strategic report for Keele Residential Funding Plc (the “Company”) for the year
ended 31
July 2025. The group (the “Group”) consists of Keele Residential Funding Plc (the “Company”)
and its subsidiary KRF Management Limited (the “Subsidiary”). Keele Residential Funding plc is a wholly
owned subsidiary of KRF Holdings Limited (the “Parent”).
PRINCIPAL ACTIVITIES
debt to refurbish and operate student accommodation on the campus of University of Keele (the
"University") in Staffordshire, England (the "Transaction"). The Company has 100% control over the
As part of the Transaction, the Company entered into a series of legal transaction documents (the
"Transaction Documents") explained in detail in the prospectus dated 11 July 2007 (the "Prospectus”) under
which the Company issued £137.5 million index-linked guaranteed secured bonds due July 2047 on 13 July
2007 (the "Bonds" or the "Guaranteed Index Linked Secured Bonds"). The payment of the scheduled interest
and principal of the Bonds are unconditionally and irrevocably guaranteed by Assured Guaranty (Europe)
Ltd and are admitted to trading on the official list of the London Stock Exchange.
The Company used the proceeds of the Bonds as (i) consideration for the payment of premium to enter into
lease agreements with the University (the "Lease") under which it acquired a lease of student accommodation
and car parking spaces from the University and (ii) to invest in guaranteed investment contracts ("GICs").
Under the terms of a letting services agreement (the "Letting Services Agreement" or "LSA") the Company
granted licenses to the University to occupy the student accommodation, other than the units designated
annually under the LSA and use the car parking spaces for inflation linked license fees (the "License Fees").
As further explained in the Significant Accounting Policies in Note 2 to the Financial Statements, the rights
and obligations under the Lease and the LSA have been recognised as a Financial Asset (the "Financial
Asset") under IFRS 9 in the financial statements measured at fair value through profit and loss.
REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS
The Group’s loss before tax for the year amounted to £3,391,908 (2024: profit £2,299,992). The gain on the
revaluation of the Financial Asset is £7,747,765 compared with a gain of £16,352,893 in the previous year.
The decrease in the Financial Asset fair value gain compared to the previous year is due to changes in
forecasted inflation and market discount rate. There was a decrease of £2.9m in finance costs to £11.1 million
(2024: £14.0 million), this is mainly due to a reduction in bond accretion as per Note 6. Due to Retail Price
Index (“RPI”) for cash outflows increasing at a faster rate than the equivalent RPI for cash inflows in prior
years, deferred payments to the University as at 31 July 2025 of £4.3 million (2024: £3.7 million) are
included within trade payables as per Note 13. As at 31 July 2025 the Group had net assets of £21,083,154
(2024: £24,475,061).
The Directors understand that the accommodation units related to the Company’s Financial Asset will
continue to attract student tenants at realistic rental rates throughout 2025/26. Demand levels for the
University accommodation are good and rental flows to KRF through 2025/26 are expected to be
uninterrupted. Occupancy rates as of October 2025 are 98.98% (2024: 92.25%). It is also anticipated that
occupancy levels will be at similar levels for the remainder of the 2025/26 period– refer to the going concern
section below for further details. Average occupancy of total accommodation units on which the Company
receives its income during the year 2025 was marginally lower than expected covering the occupancy period
from August 2024 to July 2025. This did not affect the Company’s rental income for the year to 31 July 2025
as the University continued to pay the contractual obligations under the financial arrangements with the
Company. We expect stability in the future occupancy rates and in turn the University’s ability to pay rental
income in line with the transaction documents.
PRINCIPAL RISKS AND UNCERTAINTIES
Keele Residential Funding plc
STRATEGIC
REPORT
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
3
Low
occupancy rates may affect the University’s ability to make payments to the Company though this risk
is deemed to be low as the University is expected to have sufficient funds to manage any shortfall in rental
income due to low occupancy rates, as per the Lease. The University has continued to pay all amounts since
inception of the agreements and the income from the University is supported by the occupancy levels that
are not expected to be materially affected in the coming year as the University reports good levels of
recruitment and accommodation occupation for the 2025/26 student year.
The key business risks affecting the Group and Company come from:
•
The University not having sufficient funds to meet its obligations as a result of low occupancy
rates and/or any other factors that could result in the University not having the funds to make
payment;
•
Failure to achieve anticipated income from the Financial Asset; and
•
RPI for cash outflows increasing at a faster rate than the equivalent RPI increase for cash inflows
causing deferred payments to the University.
The Directors judge the performance of the business by reference to the overall income achieved from its
Financial Asset.
Finance costs are calculated by reference to the terms of the Bonds which form the
underlying funding of the business.
KEY PERFORMANCE INDICATORS
Given the nature of the Group and Company’s activities, the Directors consider the key performance
indicators of the Group and Company to be the performance of the Financial Asset and the rating of the
Bonds. The payment of the scheduled interest and principal of the Bonds are unconditionally and irrevocably
guaranteed by Assured Guaranty (Europe) Ltd and are admitted to trading on the official list of the London
Stock Exchange. As at 31 July 2025, the Financial Asset was valued at £195,560,321 (2024: £198,333,522),
the decrease being as a result of inflation. The rental income for the financial year ended 31 July 2025 was
£15,241,815 (2024: £14,302,967), rental payment was £6,347,382 (2024: £6,126,547) and licence fee
income was £1,626,533 as per Note 8 (2024: £1,544,501). The Guaranteed secured bond held by Citibank
N.A has a long term credit rating of Aa3 (Moody’s), (2024: Aa3). In the current year, the bond payments
were made in line with the contractual agreement (2024: bond payments made in line with the contractual
agreement).
SECTION 172(1) STATEMENT
As a special purpose vehicle, the governance structure of the Company and Group is such that the key
policies have been predetermined at the time of issuance. The Directors have had regards to the matters set
out in section 172(1) of the Companies Act 2006 as follows:
•
With reference to subsection (a) concerning the likely consequences of any decision in the long
term: the Transaction Documents have been formulated to achieve the Company’s purpose and
business objectives, safeguard the assets and promote the success of the Company with a long term
view and in accordance with relevant securitisation legislation the Company is only permitted to
retain minimal profit.
•
The matters set out in subsections (b)–(f) of s172 have limited relevance in the year given the nature
of the Company as a vehicle for holding listed debt. The Directors of the Company have not been
required to make any decision in the year other than routine or administrative decisions.
•
Key stakeholders include Wilmington Trust (provision of Directorship and governance services),
The University (primary source of income) and Assured Guaranty (“Assured Guaranty”) (insurance
guarantor). The Company engages with the key stakeholder on an as required basis to comply with
operational and financial requirements.
Keele Residential Funding plc
STRATEGIC
REPORT
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
4
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s and Company’s activities expose it to three key principal financial risks, inflation risk, market
rate risk and liquidity risk. More details are provided in Note 17 in respect of the fair value, market risk and
interest rate risk.
Inflation risk
The Group’s and Company’s Guaranteed Index Linked Secured Bond provides for contractual payments
that vary in line with RPI. Increases in the RPI will lead to increased payments by the Group. This risk is
mitigated by the fact that revenue from the Group’s Financial Asset is also linked to RPI such that increases
in contractual payments will be met by an increase in the Group’s revenue. Rental income uses a different
RPI compared to the rental payment and the time lag between the two could affect the Group’s position as a
going concern.
Liquidity risk
The Group’s and Company’s main liquidity risk is that it may not be able to discharge its debt service
liabilities when due as a result of insufficient rental income. The Directors manage this risk by careful
forecasting and transferring any anticipated cash requirements into a debt service reserve account twice a
year. As at 31 July 2025, this has resulted in an agreement with the University to defer approximately £0.47
million of rental payments owed to the University (2024: £0.7 million). The cumulative rental payment
deferral as at 31 July 2025 is £4.3 million (2024: £3.7 million). Refer to the going concern section in the
Directors Report for further details. There is also guaranteed payments of interest from Assured Guaranty
and principal on the Bonds.
Market risk
Market risk arises from the Group’s and Company’s use of interest-bearing financial instruments. It is the
risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
interest rates due to the Guaranteed Index Linked Secured Bonds being RPI indexed, or inflation risk.
This report was approved by the board of directors and signed on its behalf by:
Thompson Fisher
Authorised Signatory on behalf of
Wilmington Trust SP Services (London) Limited,
Director
2
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July 2026
Keele Residential Funding plc
DIRECTORS’ REPORT
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
5
The Directors present their report and the audited consolidated financial statements for Keele Residential
Funding Plc for the year ended 31 July 2025. The Company is incorporated as a public limited Company
domiciled in the United Kingdom. Keele Residential Funding plc is a wholly owned subsidiary of KRF
Holdings Limited and KRF Management Limited is a subsidiary of the Company.
DIRECTORS
The Directors of the Company during the year, and up to the date of signing the financial statements were:
Wilmington Trust SP Services (London) Limited
Daniel Wynne
Christopher Duffy
At the time this report is approved, and during the financial year, the Group has put in place indemnity
insurance for all of the Directors.
GENERAL INFORMATION
The Group is incorporated in the United Kingdom, the address of the registered office is Wilmington Trust
SP Services (London) Limited, Third Floor, 1 King's Arms Yard, London, EC2R 7AF.
The Group has no employees (2024: Nil)
FINANCIAL INSTRUMENTS
The Group’s financial instruments comprise of Financial Asset held at fair value, Cash and cash equivalents,
Bonds and various receivables and payables that arise directly from its operations. These financial
instruments are classified in accordance with the principles of IFRS 9, Financial Instruments as described
Note 17.
RESULTS AND DIVIDENDS
The trading results for the year and the Company’s and Group’s financial position at the end of the year are
shown in the financial statements. No dividends were paid (2024: Nil).
CORPORATE GOVERNANCE
The Directors are responsible for internal control at the Company and Group and for reviewing the
effectiveness of the controls in place.
Procedures have been designed for safeguarding assets against unauthorised use or disposition; for
maintaining proper accounting records; and for the reliability and usefulness of financial information used
within the business or for publication. Such procedures are designed to manage rather than eliminate the risk
of failure to achieve business objectives and can only provide reasonable and not absolute assurance against
material misstatement, errors, losses or fraud. The procedures enable the Company to comply with the
regulatory obligations. For further details, refer to Notes to the financial statements particularly note 17.2 on
financial risk management.
Keele Residential Funding plc
DIRECTORS' REPORT
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
6
FUTURE DEVELOPMENTS
The Directors do not anticipate any significant future development in the foreseeable future.
GOING CONCERN
In order to form a view as to the most appropriate basis of preparation of these financial statements, the
Directors have assessed the likelihood of whether the Group and the Company will be able to continue
trading for at least 12 months from the date of approval of the financial statements versus the likelihood of
either intending to or being forced to either cease trading or place the Group and the Company into
liquidation.
The ability of the Group and the Company to meet their obligations on the Bonds and to meet its operating
and administrative expenses is dependent, principally, on the performance of the Financial Asset. The Bonds
are secured over the Group's assets and cash flows under the Financial Asset. The Group's and the
Company’s ability to pay amounts due on the Bonds are, in substance, limited to the application of the
receipts from the University under the terms of the transaction documents as defined in the Strategic Report
.
The annual financial statements of the Group and the Company have been prepared on a going concern basis,
which contemplates the realisation of assets and satisfaction of liabilities in the normal course of business.
The Directors of the Group and the Company believe that the Group and the Company will continue to be
in operational existence for the foreseeable future by meeting its liabilities as they fall due for payment.
The University has advised the Directors that demand levels for the University accommodation are good and
rental flows to KRF through the 2025/26 academic year are expected to be uninterrupted. Occupancy rates
as of October 2025 are 98.98% (2024: 92.25%). It is also anticipated that occupancy rates will be at similar
levels for the 2026/27 period and beyond.
The Directors have prepared cashflow forecasts that cover at least twelve months from the authorisation of
these financial statements.
The Directors have not identified a material uncertainty that may give rise to
significant concern over the ability of the Group and the Company to continue as a going concern. Student
recruitment has been strong for the 2025/26 intake leading to increased assurance on income streams. Student
recruitment also remains in line with expectations for the 2026/27 year. The University has committed to
ensuring that rental payments to the Group will be maintained as per the terms of the Letting Services
Agreement. Rental Income from the University is expected to continue as anticipated in line with their
contractual obligations.
Due to the past inflationary environment, the RPI for cash outflows has increased at a faster rate than the
equivalent RPI increase for cash inflows. This mismatch would have resulted in the Group not having
sufficient cash inflows to meet its obligations and the Group would have been in breach of the required Debt
Service Cover Ratio (DSCR) as per the Transaction Documents. The Group agreed with the University not
to pay the entire contractual rental payment for the year ended 31 July 2025 with approximately £0.47 million
being withheld from The University. This is in addition to a contractual agreement between Keele
Residential Funding Plc and The University to defer the settlement of £1.31 million, £1.76 million and £0.74
million relating to the July 2022 and July 2023 and July 2024 payments respectively. Total deferred
settlement as at 31 July 2025 is £4.3m (2024: £3.7m). As at the report signing date, the Directors do not
expect further rental payment deferrals.
The University has signed a letter to agree that these amounts will not be called before the bond holder
payments expected in July 2027, which is 12 months from the date of approval of the financial statements,
although these deferrals remain contractually owed. The Directors expect that as Inflation stabilises, the
rental income will grow at a faster rate than the rental payment before they both start to grow at the same
rate, this will result in a cash surplus.
The Group and the Company has agreed with the University that in a
cash surplus scenario, the University will only call the deferred rental payment to an extent that the Group
and the Company remains a going concern.
Keele Residential Funding plc
DIRECTORS' REPORT
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
7
In a severe, but plausible, downward scenario where the Group and the Company does not receive the
expected rental income in 2026, due to the University not being able to meet its obligation under the terms
of the transaction documents, the directors of the Group and the Company believe that it has sufficient cash
on hand to settle its liabilities as they fall due which can be supported by rental payment deferrals from the
University. The directors do not expect the Guaranteed bonds liability to be called during the going concern
period.
As a result of these agreements and the forecasts, the Group and Company therefore are expected to have
sufficient cash to settle its financial obligations over the going concern period of at least 12 months from the
date of approval of these financial statements.
The Directors note that there has been no change in the principal activities of the business nor has there been
any change in the contractual relationship between the Company and Keele University, apart from the
deferral of rental payment referred to above. The Directors expect business activities to remain unchanged
for the remaining life of the contract.
No dividend was proposed or paid (2024: Nil)
Further information regarding the Group’s financial instruments, related policies and a consideration of its
liquidity and other financing risks can be found in note 17.
STREAMLINED ENERGY AND CARBON REPORTING
The Company is out of the scope of the Streamlined Energy and Carbon Reporting (SECR), as it does not
meet the numerical thresholds in relation to turnover and number of employees.
EVENTS AFTER THE REPORTING PERIOD
There were no subsequent events requiring amendment to these financial statements.
INDEPENDENT AUDITORS
The auditors, PricewaterhouseCoopers LLP, were appointed as auditors of the Company and the Group
during the year under review and are to remain in office until the conclusion of the Company's Annual
General Meeting to approve the Financial Statements. Having indicated their willingness to continue in
office, a resolution that they be re-appointed will be proposed at the annual general meeting.
This report was approved by the board and signed on its behalf by:
Thompson Fisher
Authorised Signatory on behalf of
Wilmington Trust SP Services (London) Limited,
Director
2
9
July 2026
Keele Residential Funding plc
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
8
Statement of Directors’ responsibilities in respect of the Financial Statements
The directors are responsible for preparing the Annual Report and the consolidated financial statements in
accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law
the directors have prepared the Group and the Company financial statements in accordance with UK-adopted
international accounting standards.
Under company law, directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the
Group for that period. In preparing the financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
•
state whether applicable UK-adopted international accounting standards have been followed,
subject to any material departures disclosed and explained in the financial statements;
•
make judgements and accounting estimates that are reasonable and prudent; and
•
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and Company will continue in business.
The directors are responsible for safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the
financial position of the Group and Company and enable them to ensure that the financial statements comply
with the Companies Act 2006.
The directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the
United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
Each of the directors, whose names and functions are listed in Directors report confirm that, to the best of
their knowledge:
•
the Group and Company financial statements, which have been prepared in accordance with
UK-adopted international accounting standards, give a true and fair view of the assets, liabilities
and financial position of the Group and Company, and of the profit of the Group; and
•
the Strategic report includes a fair review of the development and performance of the business
and the position of the Group and Company, together with a description of the principal risks
and uncertainties that it faces.
In the case of each director in office at the date the directors’ report is approved:
•
so far as the director is aware, there is no relevant audit information of which the Group’s and
Company’s auditors are unaware; and
Keele Residential Funding plc
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
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•
they have taken all the steps that they ought to have taken as a director in order to make
themselves aware of any relevant audit information and to establish that the Group’s and
Company’s auditors are aware of that information.
On behalf of the Board
Thompson Fisher
Authorised Signatory on behalf of
Wilmington Trust SP Services (London) Limited,
Director
2
9
July 2026
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
10
Independent auditors’ report to the members of Keele Residential Funding
plc
Report on the audit of the financial statements
Opinion
In our opinion, Keele Residential Funding plc’s Group financial statements and Company financial statements
(the “financial statements”):
●
give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 July 2025 and of
the Group’s loss and the Group’s and Company’s cash flows for the year then ended;
●
have been properly prepared in accordance with UK-adopted international accounting standards as applied
in accordance with the provisions of the Companies Act 2006; and
●
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Consolidated Financial
Statements for the year ended 31 July 2025 (the “Annual Report”), which comprise:
●
the Consolidated statement of financial position as at 31 July 2025;
●
the Company statement of financial position as at 31 July 2025;
●
the Consolidated statement of comprehensive income for the year
then
ended;
●
the Company statement of cash flows for the year then ended;
●
the Consolidated statement of cash flows for the year then ended;
●
the Company statement of changes in equity for the year then ended;
●
the Consolidated statement of changes in equity for the year then ended; and
●
the notes to the financial statements, comprising material accounting policy information and
other
explanatory information.
Our opinion is consistent with our reporting to the Directors.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
11
audit of the financial statements section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
We have provided no non-audit services to the Company or its controlled undertakings in the period under audit.
Our audit approach
Context
The Company is a special purpose entity ('SPE') that forms part of a funding structure established as part of an
initiative to issue guaranteed index-linked secured bonds to refurbish and operate student accommodation on the
campus of the University of Keele (the 'University') (the 'Transaction'). The activities of the Company are
conducted primarily by reference to a series of legal and transaction documents (the 'Transaction Documents').
Overview
Audit scope
●
The scope of our audit and the nature, timing and extent of audit procedures performed were determined by
our risk assessment and other qualitative factors.
●
We tailored the scope of our audit to ensure that we performed sufficient work to enable us to opine on the
financial statements.
●
We identified all material classes of transactions, account balances and disclosures including those that were
considered qualitatively material
,
and conducted our work over those accordingly.
Key audit matters
●
Valuation of the Financial Asset (Group and Company)
Materiality
●
Overall Group materiality: £2,080,818 (2024: £2,104,084) based on 1% of Total Assets.
●
Overall Company materiality: £2,079,888 (2024: £2,102,729) based on 1% of Total Assets.
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
12
●
Performance materiality: £1,560,613 (2024: £1,052,042) (Group) and £1,559,916 (2024: £1,051,365)
(Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in
the audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by the auditors, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters, and any comments we make on the results of our procedures thereon, were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation of the Financial Asset (Group and Company)
The Financial Asset held at fair value represents the
entitlement to the net of the cash flows received from and
paid to the University as per the Transaction Documents
over the life of the transaction and is measured at fair value
through profit and loss. The fair value as at the year-end is
calculated using a discounted cash flow model applied to the
cash flows under the contractual agreements underlying the
Financial Asset. There are two key assumptions used in the
cash flow model being the future retail price index (“RPI”)
which is used to forecast future cash flows and the market
discount rate. Given the estimation uncertainty associated
with the discount rate used in the valuation of the Financial
Assets, we have determined this to be a key audit matter.
Refer to the following related disclosures in the Financial
Statements: Note 8: Financial asset.
In response to this key audit matter, we have:
•
Obtained an understanding of the valuation
methodology used to determine the fair value of
the Financial Asset and assess their
appropriateness including key inputs and
assumptions;
•
Tested the management’s valuation as at year end
including cash flows inputs to assess if they are
consistent with the Legal terms transaction
documents.
•
In order to challenge management’s valuation, we
involved our valuation specialists to develop an
independent expectation of the Financial Asset
valuation as at year end based on the underlying
contractual terms of the Financial asset and
independently sourced discount rate assumptions;
and
•
Assessed the appropriateness of the disclosures
made in relation to the Financial Asset.
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
13
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the Group and the Company, the accounting
processes and controls, and the industry in which they operate.
The Group operates solely in the United Kingdom and operates the management of the Financial Asset through
one single segment. Our audit was completed on the Group as a single component. The Group audit team
performed all the work necessary to issue the audit opinion on the Group financial statements and Company
financial statements.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of
climate risk on the Group’s and Company’s financial statements, and we remained alert when performing our
audit procedures for any indicators of the impact of climate risk. Our procedures did not identify any material
impact as a result of climate risk on the Group’s and Company’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures
and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a
whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements - Group
Financial statements - Company
Overall
materiality
£2,080,818 (2024: £2,104,084).
£2,079,888 (2024: £2,102,729).
How we
determined it
1% of Total Assets
1% of Total Assets
Rationale for
benchmark
applied
The Group is an SPE, whose main priority is to
remit the cash received in respect of its assets so
as to repay its liabilities.
The Company is an SPE, whose main priority is to
remit the cash received in respect of its assets so
as to repay its liabilities.
In respect of Keele Residential Funding plc, which was the sole reporting component in the scope of our Group
audit, we allocated a materiality of £2,079,888, which is less than our overall Group materiality.
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
14
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance
materiality in determining the scope of our audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was
75% (2024: 50%) of overall materiality, amounting to £1,560,613 (2024: £1,052,042) for the
Group financial
statements and £1,559,916 (2024: £1,051,365) for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end
of our normal range was appropriate.
We agreed with the Directors that we would report to them misstatements identified during our audit above
£104,041 (Group audit) (2024: £105,204) and £103,994 (Company audit) (2024: £105,136) as well as
misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group's and the Company’s ability to continue to adopt the
going concern basis of accounting included:
●
Obtaining and assessing management's going concern assessment, and the underlying cash flow forecasts
(the "Financial Model"), and in particular how it supports management's assertion that the Group and the
Company are expected to have sufficient cash to settle its liabilities over the going concern period of at least
12 months from the date of the Financial Statements;
●
Agreeing key inputs of the Financial Model to the underlying Transaction Documents;
●
Testing the consistency of the inputs and assumptions in the Financial Model with those used in the valuation
of the Financial Asset. Details of the work performed over the Valuation of the Financial Asset can be found
in the key audit matter;
●
Evaluating the appropriateness of the assumptions used in the Financial Model forecasting the cash flows
from operating activities, specifically in respect of the assumption of future the level of income and inflation
under the Transaction Documents and on the rental income, licence fee income, and rental payments and
Bonds and the impact on the Group and Company's liquidity position;
●
Testing the accuracy of the formulae within management's Financial Model;
●
Obtaining and reviewing the signed letter from the University agreeing to further defer part of the operating
payments that were due as at 31 July 2025 as well as the expected operating payment shortfalls within 12
months from the date of the Financial Statements, as disclosed in the going concern section; considering the
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
15
nature of the agreement and whether the amounts deferred are sufficient to cover any identified cash flow
shortfall based on the Group and Company’s forecast cash flow; and
●
Assessing the appropriateness of the disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group's and the Company’s ability
to continue as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
Group's and the Company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements
and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or,
except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent
material inconsistency or material misstatement, we are required to perform procedures to conclude whether there
is a material misstatement of the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by
the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
16
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic
report and Directors' Report for the year ended 31 July 2025 is consistent with the financial statements and has
been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the
course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the Financial Statements, the
directors are responsible for the preparation of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair view. The directors are also responsible for such
internal control as they 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 directors are responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ 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.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance
with laws and regulations related to breaches of the listing requirements of the London Stock Exchange, and we
considered the extent to which non-compliance might have a material effect on the financial statements. We also
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
17
considered those laws and regulations that have a direct impact on the financial statements such as the Companies
Act. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks were related to
accounting estimates and posting of inappropriate journal entries. Audit procedures performed by the engagement
team included:
●
Making inquiries to the Directors in relation to known or suspected instances of non-compliance with laws
and regulation and fraud;
●
Audit procedures performed to address the risk of management override of controls, including through testing
of journal entries and accounting estimates (because of the risk of management bias);
●
Audit procedures performed over the valuation of the financial assets held at fair value through profit and
loss can be found in the Key audit matters section above; and
●
Reviewing minutes of the meetings of the board of directors that occurred during the period and made
enquiries of management.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using
data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than
testing complete populations. We will often seek to target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Keele Residential Funding plc
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KEELE RESIDENTIAL FUNDING
PLC
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
18
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
●
we have not obtained all the information and explanations we require for our audit; or
●
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not
been received from branches not visited by us; or
●
certain disclosures of directors’ remuneration specified by law are not made; or
●
the Company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were first appointed by the Company for the financial year ended 31 July 2023. Our uninterrupted engagement
covers 3 financial years.
Other matter
The Company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to
include these financial statements in an annual financial report prepared under the structured digital format
required by DTR 4.1.15R - 4.1.18R and filed on the National Storage Mechanism of the Financial Conduct
Authority. This auditors’ report provides no assurance over whether the structured digital format annual
financial report has been prepared in accordance with those requirements.
Jessica Miller (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
2
9
July 2026
Keele Residential Funding plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
19
Note
2025
2024
Group
Group
£
£
CONTINUING OPERATIONS
Administrative expenses
4
(579,011 )
(517,572 )
Fair value gain on Financial Asset
8
PROFIT FROM OPERATIONS
Finance costs
5
(11,057,862 )
(14,015,125 )
Finance income
6
(LOSS) / PROFIT BEFORE TAX
(3,391,908 )
Income tax expense
7
(LOSS) / PROFIT FOR THE YEAR
(3,391,908 )
TOTAL COMPREHENSIVE (EXPENSE) / INCOME
(3,391,908 )
ATTRIBUTABLE TO:
EQUITY HOLDERS OF THE GROUP
(3,391,908 )
Keele Residential Funding plc
Registration Number: 03840096
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As At 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
20
Note
2025
2024
Group
Group
ASSETS
£
£
NON-CURRENT ASSETS
Financial Asset held at fair value through profit or
loss
8
Guaranteed investment certificate
10
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
Financial Asset held at fair value through profit or
loss
8
Trade and other receivables
11
Cash and cash equivalents
12
TOTAL CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
13
(4,426,491 )
(4,244,844 )
Financial liabilities
14
(6,629,163 )
(6,146,233 )
TOTAL CURRENT LIABILITIES
(11,055,654 )
(10,391,077 )
NON-CURRENT LIABILITIES
Financial liabilities
14
(173,637,065 )
(173,338,471 )
Deferred premium liability
15
(2,305,911 )
(2,203,837 )
TOTAL NON-CURRENT LIABILITIES
(175,942,976 )
(175,542,308 )
TOTAL LIABILITIES
(186,998,630 )
(185,933,385 )
EQUITY
Share Capital
19
Retained earnings
20
ISSUED CAPITAL AND RESERVES
ATTRIBUTABLE TO EQUITY HOLDERS
TOTAL EQUITY
Keele Residential Funding plc
Registration Number: 03840096
COMPANY STATEMENT OF FINANCIAL POSITION
At 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
21
Note
2025
2024
Company
Company
ASSETS
£
£
NON-CURRENT ASSETS
Financial Asset held at fair value through profit or
loss
8
184,883,072
187,881,535
Investment in Subsidiary
9
2
2
Guaranteed investment certificate
10
6,382,021
6,072,072
TOTAL NON-CURRENT ASSETS
191,265,095
193,953,609
CURRENT ASSETS
Financial Asset held at fair value through profit or
loss
8
10,677,249
10,451,987
Trade and other receivables
11
41,167
48,456
Cash and cash equivalents
12
6,005,318
5,818,857
TOTAL CURRENT ASSETS
16,723,734
16,319,300
TOTAL ASSETS
207,988,829
210,272,909
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
13
(4,402,859)
(4,172,722)
Financial liabilities
14
(6,629,163)
(6,146,233)
TOTAL CURRENT LIABILITIES
(11,032,022)
(10,318,955)
NON-CURRENT LIABILITIES
Financial liabilities
14
(173,637,065)
(173,338,471)
Deferred premium liability
15
(2,305,911)
(2,203,837)
TOTAL NON-CURRENT LIABILITIES
(175,942,976)
(175,542,308)
TOTAL LIABILITIES
(186,974,998)
(185,861,263)
EQUITY
Share Capital
19
50,000
50,000
Retained earnings
20
20,963,831
24,361,646
ISSUED CAPITAL AND RESERVES
ATTRIBUTABLE TO EQUITY HOLDERS
21,013,831
24,411,646
TOTAL EQUITY
21,013,831
24,411,646
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
22
Keele Residential Funding plc
Registration Number: 03840096
COMPANY STATEMENT OF FINANCIAL POSITION
At 31 July 2025
As permitted by section 408 of the Companies Act 2006, the Company’s income statement has not been
included in these financial statements
.
The Company’s loss for the year was £3,397,815 (2024: profit
£2,294,364).
The financial statements on pages 20 to 50 were approved by the board of Directors and authorised for issue
on
29 July
2026 and were signed on its behalf by:
Thompson Fisher
Authorised Signatory on behalf of
Wilmington Trust SP Services (London) Limited,
Director
2
9
July 2026
Keele Residential Funding plc
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
23
Note
2025
2024
Group
Group
CASH FLOWS FROM OPERATING ACTIVITIES
£
£
(Loss) / Profit for the year
(3,391,908 )
Adjustments for:
Finance costs
Finance income
(497,200 )
(479,796 )
Fair value gain on Financial Asset
(7,747,765 )
(16,352,893 )
Rental income
Licence fee income
Rental payment
(6,347,382 )
(6,126,547 )
Decrease / (Increase) in trade and other receivables
Increase / (Decrease) in trade and other payables
(3,164,648 )
NET CASH GENERATED FROM OPERATIONS
NET CASH FLOW FROM OPERATING
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Finance income
NET CASH FLOW FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Payment made on bonds - principal
18
(6,196,073 )
(5,806,414 )
Payment made on bonds - interest
18
(3,978,191 )
(3,972,899 )
NET CASH USED IN FINANCING ACTIVITIES
(10,174,264 )
(9,779,313 )
NET INCREASE / (DECREASE) IN CASH AND
CASH EQUIVALENTS
(2,257,326 )
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE YEAR
12
CASH AND CASH EQUIVALENTS
AT END OF THE YEAR
12
Keele Residential Funding plc
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
24
Note
2025
2024
Company
Company
CASH FLOWS FROM OPERATING ACTIVITIES
£
£
(Loss) / Profit for the year
(3,397,815)
2,294,364
Adjustments for:
Finance costs
11,057,862
14,015,125
Finance income
(497,200)
(479,796)
Fair value gain on Financial Asset
(7,747,765)
(16,352,893)
Rental income
15,241,815
14,302,967
Licence fee income
1,626,533
1,544,501
Rental payment
(6,347,382)
(6,126,547)
9,936,048
9,197,721
Decrease / (Increase) in trade and other receivables
7,289
1,338,665
Increase / (Decrease) in trade and other payables
230,137
(3,218,078)
NET CASH GENERATED FROM OPERATIONS
10,173,474
7,318,308
NET CASH FLOW FROM OPERATING
ACTIVITIES
10,173,474
7,318,308
CASH FLOWS FROM INVESTING ACTIVITIES
Finance income
187,251
184,123
NET CASH FLOW FROM INVESTING ACTIVITIES
187,251
184,123
CASH FLOWS FROM FINANCING ACTIVITIES
Payment made on bonds – principal
18
(6,196,073)
(5,806,414)
Payment made on bonds - interest
18
(3,978,191)
(3,972,899)
NET CASH USED IN FINANCING ACTIVITIES
(10,174,264)
(9,779,313)
NET INCREASE / (DECREASE) IN CASH AND
CASH EQUIVALENTS
186,461
(2,276,882)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE YEAR
12
5,818,857
8,095,739
CASH AND CASH EQUIVALENTS
AT END OF THE YEAR
12
6,005,318
5,818,857
Keele Residential Funding plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
25
GROUP
Note
Share
Capital
Retained
Earnings
Total
£
£
£
Balance as at 1 August 2023
Total comprehensive income for the year
Balance as at 31 July 2024
Total comprehensive expense for the year
(3,391,908 )
(3,391,908 )
Balance as at 31 July 2025
19
Keele Residential Funding plc
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
26
COMPANY
Note
Share
Capital
Retained
Earnings
Total
£
£
£
Balance as at 1 August 2023
50,000
22,067,282
22,117,282
Total comprehensive income for the year
-
2,294,364
2,294,364
Balance as at 31 July 2024
50,000
24,361,646
24,411,646
Total comprehensive expense for the year
-
(3,397,815)
(3,397,815)
Balance as at 31 July 2025
19
50,000
20,963,831
21,013,831
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
27
GENERAL INFORMATION
incorporated and domiciled in England and Wales
The Company is a public company limited by
Transaction, the Company entered into a series of legal transaction documents (the "Transaction
Documents" (explained in detail in the prospectus dated 11 July 2007 (the "Prospectus”) under which
the Company issued £137.5 million index-linked guaranteed secured bonds due July 2047 on 13 July
2007 (the "Bonds" or the "Guaranteed Index Linked Secured Bonds"). The payment of the scheduled
interest and principal of the Bonds are unconditionally and irrevocably guaranteed by Assured Guaranty
(Europe) Ltd and are admitted to trading on the official list of the London Stock Exchange.
The Company used the proceeds of the Bonds as (i) consideration for the payment of premium to enter
into lease agreements with the University (the "Lease") under which it acquired a lease of student
accommodation and car parking spaces from the University and (ii) to invest in guaranteed investment
contracts ("GICs"). Under the terms of a letting services agreement (the "Letting Services Agreement"
or "LSA") KRF granted licenses to the University to occupy the student accommodation, other than the
units designated annually under the LSA and use the car parking spaces for inflation linked license fees
(the "License Fees"). As further explained in the Significant Accounting Policies in Note 2 to the
Financial Statements, the rights and obligations under the Lease and the LSA have been recognised as
a Financial Asset (the "Financial Asset") under IFRS 9 in the financial statements measured at fair value
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements
are set out below. These polices have been consistently applied to all the years presented, unless
otherwise stated.
The financial statements have been prepared and approved by the Directors in accordance with
UK - adopted International Accounting Standards ('IFRS') and with the requirements of the
The financial statements are prepared on the historical cost basis except that the Financial Asset is
carried at fair value.
GOING CONCERN
In order to form a view as to the most appropriate basis of preparation of these financial statements,
the Directors have assessed the likelihood of whether the Group and the Company will be able to
continue trading for at least 12 months from the date of approval of the financial statements versus
the likelihood of either intending to or being forced to either cease trading or place the Group and
the Company into liquidation.
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
28
The ability of the Group and the Company to meet their obligations on the Bonds and to meet its
operating and administrative expenses is dependent, principally, on the performance of the Financial
Asset. The Bonds are secured over the Group's assets and cash flows under the Financial Asset. The
Group's and the Company’s ability to pay amounts due on the Bonds are, in substance, limited to
the application of the receipts from the University under the terms of the transaction documents as
defined in the Strategic Report
.
The annual financial statements of the Group and the Company have been prepared on a going
concern basis, which contemplates the realisation of assets and satisfaction of liabilities in the
normal course of business. The Directors of the Group and the Company believe that the Group and
the Company will continue to be in operational existence for the foreseeable future by meeting its
liabilities as they fall due for payment.
The University has advised the Directors that demand levels for the University accommodation are
good and rental flows to KRF through the 2025/26 academic year are expected to be uninterrupted.
Occupancy rates as of October 2025 are 98.98% (2024: 92.25%). It is also anticipated that
occupancy rates will be at similar levels for the 2026/27 period and beyond.
The Directors have prepared cashflow forecasts that cover at least twelve months from the
authorisation of these financial statements.
that may give rise to significant concern over the ability of the Group and the Company to continue
assurance on income streams. Student recruitment also remains in line with expectations for the
2026/27 year. The University has committed to ensuring that rental payments to the Group will be
maintained as per the terms of the Letting Services Agreement. Rental Income from the University
is expected to continue as anticipated in line with their contractual obligations.
Due to the past inflationary environment, the RPI for cash outflows has increased at a faster rate
than the equivalent RPI increase for cash inflows. This mismatch would have resulted in the Group
not having sufficient cash inflows to meet its obligations and the Group would have been in breach
of the required Debt Service Cover Ratio (DSCR) as per the Transaction Documents. The Group
agreed with the University not to pay the entire contractual rental payment for the year ended 31
July 2025 with approximately £0.47 million being withheld from The University. This is in addition
to a contractual agreement between Keele Residential Funding Plc and The University to defer the
settlement of £1.31 million, £1.76 million and £0.74 million relating to the July 2022 and July 2023
and July 2024 payments respectively. Total deferred settlement as at 31 July 2025 is £4.3m (2024:
£3.7m). As at the report signing date, the Directors do not expect further rental payment deferrals.
The University has signed a letter to agree that these amounts will not be called before the bond
holder payments expected in July 2027, which is 12 months from the date of approval of the
financial statements, although these deferrals remain contractually owed. The Directors expect that
as Inflation stabilises, the rental income will grow at a faster rate than the rental payment before
they both start to grow at the same rate, this will result in a cash surplus.
The Group and the
Company has agreed with the University that in a cash surplus scenario, the University will only
call the deferred rental payment to an extent that the Group and the Company remains a going
concern.
In a severe, but plausible, downward scenario where the Group and the Company does not receive
the expected rental income in 2026, due to the University not being able to meet its obligation under
the terms of the transaction documents, the directors of the Group and the Company believe that it
has sufficient cash on hand to settle its liabilities as they fall due which can be supported by rental
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
29
payment deferrals from the University. The directors do not expect the Guaranteed bonds liability
to be called during the going concern period.
As a result of these agreements and the forecasts, the Group and Company therefore are expected
to have sufficient cash to settle its financial obligations over the going concern period of at least 12
months from the date of approval of these financial statements.
The Directors note that there has been no change in the principal activities of the business nor has
there been any change in the contractual relationship between the Company and Keele University,
apart from the deferral of rental payment referred to above. The Directors expect business activities
to remain unchanged for the remaining life of the contract.
Further information regarding the Group’s financial instruments, related policies and a
The consolidated financial statements incorporate the financial statements of the Company (Keele
Residential Funding Plc) and entities controlled by the Company (KRF Management Limited).
An
investor controls an investee when it is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over
the investee.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated
income statement from the effective date of acquisition or up to the effective date of disposal, as
appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with those used by other members of the Group.
All intra-Group transactions, balances, income and expenses are eliminated in full on
Financing income comprises of interest on positive cash balances and is recognised on an accruals
The Group and the Company operate in only one business segment as defined by IFRS 8 which is
the management of a Financial Asset.
As the income source for the Financial Asset is located
ADMINISTRATION COSTS
The Group and the Company recognises administration costs on an accruals basis.
Finance costs are recognised on an accruals basis calculated by reference to the outstanding
balance, applicable interest rate and term of each relevant to each debt. Finance costs comprise
finance charges on Guaranteed bonds liability using the effective interest method and Deferred
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
30
Current taxation
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit
as reported in the consolidated income statement 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 balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax base used in the computation of taxable profit
and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences, and deferred tax assets are generally recognised
for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the balance sheet date.
Tax charge for the period
Current and deferred tax are recognised as an expense or income, except when they relate to
items credited or debited directly to other comprehensive income, in which case the tax is also
The Group classifies its Financial Assets into one of two categories, fair value through profit and
loss or at amortised cost.
The Group’s Financial Asset representing net student rent receivable from The University is
carried in the balance sheet at fair value with changes in fair value recognised and presented
separately as fair value gain on financial asset in the consolidated statement of comprehensive
income. Financial Asset representing student rent receivable from the University is carried in
the balance sheet at fair value through profit and loss because the mismatch between the RPI re-
set dates of the incoming and outgoing cash flows on the net financial asset. Other than this
Financial Asset the Group does not have any assets carried at fair value through the profit and
Amortised cost
The Group's Financial Assets measured at amortised cost comprise trade and other receivables, a
Guaranteed investment certificate deposit and cash and cash equivalents in the balance sheet.
Cash and cash equivalents include deposits held at call with banks.
These assets arise principally from trading activities and are carried at amortised cost less any
provision for impairment.
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
31
Impairment provisions for Financial Assets are recognised based on the simplified approach
within IFRS 9 using a provision matrix in the determination of the lifetime expected credit
losses. During this process the probability of the non-payment of the Financial Asset is assessed.
This probability is then multiplied by the amount of the expected loss arising from default to
determine the lifetime expected credit loss for the Financial Asset. For trade receivables, which
are reported net, such provisions are recorded in a separate provision account with the loss being
recognised within cost of sales in the consolidated statement of comprehensive income. On
confirmation that the trade receivable will not be collectable, the gross carrying value of the
The Group classifies its financial liabilities into one of two categories, depending on the purpose
for which the liability was acquired.
The Group and the Company do not have any financial liabilities measured at fair value through
Amortised Cost
Financial liabilities at amortised costs include the following items: the Guaranteed Index Linked
Secured Bond, bond insurance premiums payable to Assured Guaranty, deferred premium
liability and trade payables net of any transaction costs directly attributable to the issue of the
instrument.
The Guaranteed Index Linked Secured Bond is subsequently measured at amortised costs with a
fixed interest rate of 2.108% and Interest and principal payments RPI indexed
Bond insurance premiums payable to Assured Guaranty and trade payables are subsequently
measured at amortised cost using the effective interest rate method which ensures that any
interest expense over the period to repayment is at a constant rate on the balance of the liability
carried in the balance sheet. For the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as well as any interest or
SHARE CAPITAL
Financial instruments
issued by the Group are classified as equity only to the extent that they do
PROVISIONS POLICY
A provision is recognised in the balance sheet when the Company has a present legal or
constructive obligation as a result of a past event, that can be reliably measured, and it is
probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks
IMPAIRMENT POLICY
Impairment provisions for the Group’s financial assets are determined in accordance with the
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
32
RELATED PARTIES
Contracts between Keele Residential Funding Plc, its subsidiary company KRF Management
Limited, Wilmington Trust SP Services (London) Limited and the University of Keele are arm’s
length transactions. Details of any outstanding balances between the parties are disclosed in
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
Except for the estimation of the fair value of the Financial Asset, Directors do not believe that they
have had to make any significant estimates in relation to accounting policies in preparing these
financial statements.
A number of assets included in the Group’s financial statements require measurement at, and /or
disclosure of, fair value.
utilises market observable inputs and data as far as possible. Inputs used in determining fair value
measurements are categorised into different levels based on how observable the inputs used in the
valuation technique utilised are (the ‘fair value hierarchy) -
-
Level 1
: Quoted prices in active markets for identical items (unadjusted)
-
Level 2
: Observable direct or indirect inputs other than Level 1 inputs
-
Level 3
: Unobservable inputs (i.e. not derived from market data)
The classification of an item into the above levels is based on the lowest level of the inputs used that
has a significant effect on the fair value measurement of the item. Transfers of items between levels
On inception, the Directors assessed the terms of the Bonds and determined that the inflation-linking
mechanism was a closely related embedded derivative that did not need to be recognised and
measured separately under IFRS 9. As a result, the Directors considered two possible approaches to
account for changes in estimated future cash flows for the Loan and the Bonds:
1) Applying the guidance in paragraph B5.4.5 of IFRS9, under which the bond is treated as a floating-
rate debt instrument with the inflation link being part of the floating-rate mechanism; or
2) Applying the guidance in paragraph B5.4.6 of IFRS9, under which the effective interest rate
("EIR") is determined at inception in the same way as above.
The Directors concluded that it best reflected the substance of the Transaction to apply the guidance
in B.5.4.5 which views the EIR as a ‘floating inflation adjusted rate’, similar to SONIA. In this
method, the finance cost recognised in profit or loss is the actual inflation adjusted interest paid during
the year plus the actual increase in principle as adjusted for inflation during the year. As a result, at
the end of each year, the carrying amount is equal to the inflation adjusted amount.
3.1 Valuation of the Financial Asset
The Group will determine annual fair value valuations for its Financial Asset on the basis of the
present value of expected future cash flows. These future cash flows are subject to inflation and
therefore fluctuation over time. The estimate of long term inflation used at 31 July 2025 is based on
the prevailing Office for Budget Responsibility RPI forecast available at the balance sheet date and
the Directors do not believe this to have estimated uncertainty. These cash flows are used to derive a
fair value of the Financial Asset using a discount factor which is estimated with reference to financial
instruments of similar characteristics as well as other factors to take into account; the credit risk,
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
33
market risk and liquidity risk associated with the Financial Asset and the Directors believe this has
estimation uncertainty. For further details on the discount rate sensitivity analysis please refer to note
ADMINISTRATIVE EXPENSES
2025 |
2024 |
|
Group |
Group |
|
£ |
£ |
|
Management charges |
148,480 |
97,196 |
Property agency - L&P |
12,396 |
9,500 |
Insurance |
17,760 |
9,184 |
Legal and professional |
25,147 |
40,657 |
Trustee fees |
6,000 |
6,000 |
Audit fees |
129,250 |
124,500 |
Tax fees |
16,526 |
3,247 |
Accounting fees |
87,645 |
106,050 |
Bank charges |
3,262 |
3,124 |
Rating Agencies |
92,657 |
89,113 |
Wilmington Sec Charges |
39,888 |
29,001 |
579,011 |
517,572 |
Audit fees (excluding VAT) for the year ended 31 July 2025 were £99,750 (2024: £95,000) for Keele
Residential Funding Plc, £13,125 (2024: £12,500) for KRF Management Limited, and £13,125 (2024:
during the year ended 31 July 2025 (2024: nil)
FINANCE COSTS
| Group |
2025 |
2024 |
£ |
£ |
|
Interest on Bonds |
3,978,191 |
3,972,898 |
Accretion on Bonds (RPI only) |
6,624,022 |
9,578,563 |
Amortisation of bond transaction costs |
297,846 |
297,846 |
Interest on Assured Guaranty Limited (“AGL”) liability |
55,729 |
63,744 |
Interest on deferred premium liability |
102,074 |
102,074 |
11,057,862 |
14,015,125 |
FINANCE INCOME
| Group |
2025 |
2024 |
£ |
£ |
|
Interest on short and long term cash balances |
497,200 |
479,796 |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
34
INCOME TAX EXPENSE
Group |
2025 |
2024 |
£ |
£ |
|
Recognised in the income statement: |
||
Current tax |
- |
- |
Deferred tax: . |
||
Origination and reversal of temporary |
||
differences |
- |
- |
Effect of tax rate change on opening balance |
- |
- |
Total deferred tax |
- |
- |
Total tax (expense)/credit in income statement |
- |
- |
Reconciliation of effective tax rate
2025 |
2024 |
|
£ |
£ |
|
Group (loss) / profit before tax |
(3,391,908) |
2,299,992 |
Tax using the UK corporation tax rate of 25.00% (2024:25.00%) |
847,977 |
(574,998) |
EFFECT OF: |
||
Unprovided bought forward losses |
- |
- |
Annual allowance on lease premiums paid |
- |
- |
Other timing differences |
(141,448) |
(102,499) |
Group relief |
- |
(789) |
Other permanent differences |
(706,529) |
678,286 |
Total current tax charge/credit and effective rate of tax |
- |
- |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
35
The Group is not recognising in the accounts gross deferred tax assets arising on brought forward non-
trade loan relationship and excess management expenses of £48,678,617 (2024: £48,120,979).
The Group is not recognising the deferred tax asset in the balance sheet as there is insufficient evidence
FINANCIAL ASSET
| Group & Company | 2025 | 2024 |
£ | £ | |
Fair value | ||
At beginning of year | 198,333,522 | 191,701,550 |
Rental income | (15,241,815) | (14,302,967) |
Rental Payment | 6,347,382 | 6,126,547 |
Licence Fee income | (1,626,533) | (1,544,501) |
Fair value gain on Financial Asset | 7,747,765 | 16,352,893 |
At end of year | 195,560,321 | 198,333,522 |
Financial asset fair value- current portion | 10,677,249 | 10,451,987 |
Financial asset fair value- non- current portion | 184,883,072 | 187,881,535 |
Total Financial Asset Value | 195,560,321 | 198,333,522 |
The Financial Asset is measured at fair value at the balance sheet date. Gains or losses arising from
changes in the fair value of Financial Asset are included in (loss)/profit for the year in which they arise.
The fair value of the Group’s Financial Asset at 31 July 2025 and 2024 has been arrived at on the basis
of a valuation based on the net rental income from the asset including licence income, and the value of
the liability to the University which operates and maintains the student accommodation. The cashflows
underlying the Financial Asset valuation also considers the impact of inflation on these expected
cashflows. The discount rate used in the valuation is considered in more detail in note 3.1 as a key input
in the estimate of the fair value of the Financial Asset.
If the discount rate increases by 0.1%, the fair value of the financial asset will decrease by £1,971,899.
INVESTMENT IN SUBSIDIARY
Company
Detail of the parent company’s subsidiary at 31 July 2025 is as follows:
Name of the company | Principal | Place of | Proportion | Proportion | Cost of |
activity | incorporation | of shares | of voting | acquisition | |
acquired | rights |
£
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
36
KRF Management Limited |
Management |
England & |
100% |
100% |
587,500 |
Services |
Wales |
||||
At 31 July 2024 |
|||||
Name of the company |
Principal |
Place of |
Proportion |
Proportion |
Cost of |
activity |
incorporation |
of shares |
of voting |
acquisition |
|
acquired |
rights |
||||
£ |
|||||
KRF Management Limited |
Management |
England & |
100% |
100% |
587,500 |
Services |
Wales |
The registered office of KRF Management Limited is Third Floor, 1 King’s Arms Yard, London, EC2R
7AF.
The acquisition cost was fully impaired in the financial statements to 31 July 2007. The nominal value of
the acquired shared capital of £2 is included as a non-current asset in the Company balance sheet. This is
GUARANTEED INVESTMENT CERTIFICATE
On the Issue Date, part of the monies from the proceeds of the Bonds will be invested in guaranteed
investment contracts ("GICs") which is intended to generate an amount required to pay the deferred premium
liability disclosed in note 15 and the deferred lease premium taken into account in the fair value of the
financial asset.
Group & Company |
2025 |
2024 |
£ |
£ |
|
Guaranteed investment certificate |
6,382,021 |
6,072,072 |
The Company has a Guaranteed investment certificate, which will mature in 2029. This investment will be
used to pay the deferred premium liability (disclosed in Note 15). Under the terms of the lease agreement
with the University, a portion of the premium due under the lease agreement is deferred to be paid in 2029.
The long term cash investment is a guaranteed investment contract which should return the required amount
TRADE AND OTHER RECEIVABLES
Group |
||
2025 |
2024 |
|
£ |
£ |
|
Amounts falling due within one year: |
||
Prepayments and accrued income |
45,067 |
87,959 |
45,067 |
87,959 |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
37
Company |
||
2025 |
2024 |
|
£ |
£ |
|
Amounts falling due within one year: |
||
Prepayments and accrued income |
41,167 |
48,456 |
41,167 |
48,456 |
CASH AND CASH EQUIVALENTS
Group |
2025 |
2024 |
£ |
£ |
|
Cash at bank and in hand |
6,094,375 |
5,914,893 |
Company |
2025 |
2024 |
£ |
£ |
|
Cash at bank and in hand |
6,005,318 |
5,818,857 |
and cash equivalents, but their use is restricted as set out in the Transaction Documents. As the cash can only
be used to meet certain specific liabilities and is not available to be used with discretion, it is viewed as
TRADE AND OTHER PAYABLES
2025 |
2024 |
|
Group |
£ |
£ |
Trade payables |
4,258,564 |
3,985,401 |
Accruals and deferred income |
167,927 |
259,443 |
4,426,491 |
4,244,844 |
Company |
2025 |
2024 |
£ |
£ |
|
Trade payables |
4,254,115 |
3,942,234 |
Accruals and deferred income |
148,744 |
230,488 |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
38
4,402,859 |
4,172,722 |
Included in trade payables is £4.3 million of deferred rental payments (2024: £3.7 million). Refer to note 2.3
FINANCIAL LIABILITIES
Group & Company
This note provides information about the contractual terms of the Company’s interest-bearing loans and
borrowings.
For more information about the Company’s exposure to interest rate and other risks see
note 17.
Current |
Non-Current |
|||
2025 |
2024 |
2025 |
2024 |
|
£ |
£ |
£ |
£ |
|
Guaranteed secured bond (see note 14.1) |
6,561,029 |
6,082,375 |
172,407,916 |
172,044,722 |
Assured Guaranty Liability (see note |
||||
14.2) |
68,134 |
63,858 |
1,229,149 |
1,293,749 |
6,629,163 |
6,146,233 |
173,637,065 |
173,338,471 |
|
The guaranteed secure bond is shown net of unamortised loan transaction costs of £6,403,710 (2024:
£6,701,557).
14.1.
GUARANTEED INDEX LINKED SECURED BOND
During July 2007 the Company recalled the previous fixed rate bonds and issued new 2.108%
guaranteed index linked secured bonds. Interest and principal payments are made half yearly with
increases in bond payments linked to RPI. The principal is repayable by instalments, which
commenced in January 2008, in accordance with the amortisation schedule set out in the Transaction
Documents. The final maturity date and final repayments are due in 2047.
The interest and capital
repayments have been spread over the repayment period.
At 31 July 2025 the principal outstanding
on the bonds, on a cash-paid basis, was £95,366,934 (2024: £98,514,539).
The above liability is secured by a charge created between Keele Residential Funding plc and
Citibank, N.A., as trustee for the beneficiaries. This is to secure all obligations which the Group
may have at any time with the security trustee, on its own account or as trustee to the beneficiaries,
or any other beneficiaries, including obligations under the terms of the debenture loan detailed
above.
A second charge was also created between the Company, Citibank, N.A. and Assured Guaranty
(UK) Ltd (AGL), the amount secured being all obligations which the Company may at any time
have to Citibank (whether on its own account or as trustee for the beneficiaries) or any other
beneficiaries under or pursuant to finance documents including those relating to the issue of the
above bonds, which shall include without limitation any obligations of the Company to AGL which
may from time to time arise by way of subrogation.
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
39
As a financial liability other than at fair value through profit or loss, the Group’s Guaranteed Index
Linked Secured Bond liability is measured at amortised cost with the transaction costs amortised on
a straight line basis because the financial liability is a floating rate instrument linked to inflation.
14.2.
ASSURED GUARANTEE LIABILITY
A financial guarantee fee is payable in instalments to Assured Guaranty Limited (“AGL”) with
regards to the new issued 2.108% guaranteed index linked secured bonds. Payments are made half
yearly. The amount is repayable by instalments, which commenced in August 2007 and the final
amounts to be repaid in 2047.
The above amount in note 14 has been derived at 31 July 2025 using
GROUP/COMPANY DEFERRED PREMIUM LIABILITY
In line with current accounting practise, a provision should be recognised on the balance sheet relating
to the stamp duty land tax liability due on the lease to the University as a deferred transaction cost.
£ |
|
Balance 31 July 2024 |
(2,203,837) |
Interest on deferred premium |
(102,074) |
Balance as at 31 July 2025 |
(2,305,911) |
The Company has a Guaranteed investment certificate in place dating from 2007 which matures in
December 2029 (Note 10). The lease agreement between the University and the Company stipulates that
part of lease premium will be deferred to be paid in December 2029. This resulted in the deferred
CAPITAL RISK MANAGEMENT
Neither Group nor Company are subject to externally imposed capital requirements.
Capital is considered to comprise share capital and retained earnings; balances and movements in
which are reported in the Statement of Changes in Equity.
The Group’s assets and liabilities are constructed such that cash inflows and outflows are equalised
over the life of the contracts related mainly to the Financial Asset and 2.108% Guaranteed Index
Linked Secured Bonds. Any balance on retained earnings is timing differences resulting from
differing accounting treatments applied to the assets and liabilities. No active management of capital
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
40
FINANCIAL INSTRUMENTS
17.1.
CATEGORIES OF FINANCIAL INSTRUMENTS
FINANCIAL ASSETS
The Company’s total financial assets of £207,988,827 shown above is £2 lower than total assets
of £207,988,829 reported on the Company Statement of Financial Position; the £2 difference
represents the Company’s investment in its subsidiary, which is excluded from this note as it
is not a financial instrument.
GROUP |
2025 |
||
Fair Value |
At |
Total |
|
through Profit |
Amortised |
||
or Loss |
Cost |
||
£ |
£ |
£ |
|
Financial Asset held at fair value |
195,560,321 |
- |
195,560,321 |
through profit and loss |
|||
Cash and cash equivalents |
- |
6,094,375 |
6,094,375 |
Trade and other receivables |
- |
45,067 |
45,067 |
Guaranteed investment certificate |
- |
6,382,021 |
6,382,021 |
195,560,321 |
12,521,463 |
208,081,784 |
|
| 2024 |
|||
Fair value |
At |
Total |
|
through profit |
Amortised |
||
or loss |
Cost |
||
£ |
£ |
£ |
|
Financial Asset held at fair value |
198,333,522 |
- |
198,333,522 |
through profit and loss |
|||
Cash and cash equivalents |
- |
5,914,893 |
5,914,893 |
Trade and other receivables |
- |
87,959 |
87,959 |
Guaranteed investment certificate |
- |
6,072,072 |
6,072,072 |
198,333,522 |
12,074,924 |
210,408,446 |
|
| 2025 |
|||
COMPANY |
|||
Fair value |
At |
Total |
|
through profit |
Amortised |
||
or loss |
Cost |
||
£ |
£ |
£ |
|
Financial Asset held at fair value |
195,560,321 |
- |
195,560,321 |
through profit and loss |
|||
Cash and cash equivalents |
- |
6,005,318 |
6,005,318 |
Trade and other receivables |
- |
41,167 |
41,167 |
Guaranteed investment certificate |
- |
6,382,021 |
6,382,021 |
195,560,321 |
12,428,506 |
207,988,827 |
|
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
41
| 2024 | |||
Fair value | At | Total | |
through profit | Amortised | ||
or loss | Cost | ||
£ | £ | £ | |
Financial Asset held at fair value | 198,333,522 | - | 198,333,522 |
through profit and loss | |||
Cash and cash equivalents | - | 5,818,857 | 5,818,857 |
Trade and other receivables | - | 48,456 | 48,456 |
Guaranteed investment certificate | - | 6,072,072 | 6,072,072 |
198,333,522 | 11,939,385 | 210,272,907 | |
FINANCIAL LIABILITIES
GROUP | 2025 | ||
Fair Value | Other | ||
through | Financial | Total | |
Profit & Loss | Liabilities | ||
£ | £ | £ | |
Trade and other payables | - | (4,426,491) | (4,426,491) |
Guaranteed Index Linked Secured Bond | - | (178,968,945) | (178,968,945) |
Deferred premium liability | - | (2,305,911) | (2,305,911) |
Assured Guaranty Liability | - | (1,297,283) | (1,297,283) |
- | (186,998,630) | (186,998,630) | |
| 2024 | |||
Fair value | Other | ||
through profit | Financial | Total | |
or loss | Liabilities | ||
£ | £ | £ | |
Trade and other payables | - | (4,244,844) | (4,244,844) |
Guaranteed Index Linked Secured Bond | - | (178,127,097) | (178,127,097) |
Deferred premium liability | - | (2,203,837) | (2,203,837) |
Assured Guaranty Liability | - | (1,357,607) | (1,357,607) |
- | (185,933,385) | (185,933,385) | |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
42
FINANCIAL LIABILITIES
COMPANY |
2025 |
||
Fair Value |
Other |
||
through |
Financial |
Total |
|
Profit & Loss |
Liabilities |
||
£ |
£ |
£ |
|
Trade and other payables |
- |
(4,402,859) |
(4,402,859) |
Guaranteed Index Linked Secured Bond |
- |
(178,968,945) |
(178,968,945) |
Deferred premium liability |
- |
(2,305,911) |
(2,305,911) |
Assured Guaranty Liability |
- |
(1,297,283) |
(1,297,283) |
- |
(186,974,998) |
(186,974,998) |
|
| 2024 |
|||
Fair value |
Other |
||
through |
Financial |
Total |
|
profit or loss |
Liabilities |
||
£ |
|||
£ |
£ |
||
Trade and other payables |
- |
(4,172,722) |
(4,172,722) |
Guaranteed Index Linked Secured Bond |
- |
(178,127,097) |
(178,127,097) |
Deferred premium liability |
- |
(2,203,837) |
(2,203,837) |
Assured Guaranty Liability |
- |
(1,357,607) |
(1,357,607) |
- |
(185,861,263) |
(185,861,263) |
|
FINANCIAL RISK MANAGEMENT
The Group’s debt exposes it to liquidity, interest rate and market risk.
The Group’s investments
expose it to credit risk. The policies and strategies for managing these risks are summarised as
follows:
Market risk
Market risk arises from the Group’s and Company’s use of interest-bearing financial
instruments. It is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in interest rates due to the Guaranteed Index Linked
Secured Bonds being RPI
indexed, foreign exchange rates or inflation risk.
17.2.2.
Financial risk
Inflation risk
The Group’s and Company’s Guaranteed Index Linked Secured Bond provides for
contractual payments that vary in line with the Retail Prices Index (RPI). Increases in the
RPI will lead to increased payments by the Group. This risk is mitigated by the fact that
revenue from the Group’s Financial Asset is also linked to RPI such that increases in
contractual payments will be met by an increase in the Group’s revenue.
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
43
All of the Group’s and Company’s assets and liabilities are denominated in Sterling (“£”),
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations.
The Group’s and Company’s significant Financial Asset is the Financial Asset, held at fair
value in the accounts at £195,560,321. The credit risk on these funds relates to the
University’s obligation to collect and transfer rent to the Company. The maximum exposure
to credit risk on the Financial Asset is £195,560,321 (2024: £198,333,522). The risk is
mitigated by the fact that the University is obliged to pay any shortfalls in the collection of
students rent. Other credit risk applies to the Group’s bank balance and Guaranteed
investment certificate. The maximum exposure to credit risk is the bank and Guaranteed
investment certificate of £6,094,375 (2024: £5,914,893) and £6,382,021 (2024:
£6,072,072) respectively. No collateral is held. There is no expected credit loss expectation
Liquidity risk
Liquidity risk arises from the Group’s and Company’s management of working capital and
the finance charges and principal repayments on its debt instruments. It is the risk that the
Group will encounter difficulty in meeting its financial obligations as they fall due. The
Directors manage this risk by careful forecasting and transferring any anticipated cash
requirements into a Debt service reserve account twice a year.
This has resulted in an
agreement to defer approximately £0.47 million of rental payments owed to the University.
Refer to the going concern section for further details.
The Group’s debt and other liabilities commit it to future cash outflows. The funds to meet
these commitments will be provided by cash inflows from the Group’s Financial Asset.
The security of the cash inflows from the Financial Asset is addressed in the credit risk note
17.2.3.
The following table sets out the contractual maturities (representing undiscounted contractual
cashflows) of financial liabilities.
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
44
Group | ||||||
Financial | ||||||
Liabilities | ||||||
At 31 July | Total Carrying | |||||
| 2025 | Up to 1 Year | 1-2 Years | 3 – 5 Years | Over 5 Years | Total | Value |
£ | £ | £ | £ | £ | £ | |
Trade and | ||||||
other | 4,426,491 | - | - | - | 4,426,491 | 4,426,491 |
payables | ||||||
Guaranteed | ||||||
Index Linked | 6,080,020 | 6,561,029 | 22,153,039 | 228,443,623 | 263,237,711 | 178,968,945 |
Secured Bond | ||||||
Deferred | ||||||
Premium | - | - | - | 2,305,911 | 2,305,911 | 2,305,911 |
Liability | ||||||
Assured | ||||||
Guaranty | 116,054 | 116,993 | 341,550 | 1,193,754 | 1,768,351 | 1,297,283 |
Liability | ||||||
10,622,565 | 6,678,022 | 22,494,589 | 231,943,288 | 271,738,464 | 186,998,630 |
Group | ||||||
Financial | ||||||
Liabilities | ||||||
At 31 July | ||||||
| 2024 | Up to 1 Year | 1-2 Years | 3 – 5 Years | Over 5 Years | Total | Total Carrying |
Value | ||||||
£ | £ | £ | £ | £ | £ | |
Trade and | ||||||
other | 4,244,844 | - | - | - | 4,244,844 | 4,244,844 |
payables | ||||||
Guaranteed | ||||||
Index Linked | 6,082,375 | 6,450,626 | 21,780,268 | 224,599,587 | 258,912,856 | 178,127,097 |
Secured Bond | ||||||
Deferred | ||||||
Premium | - | - | - | 2,203,837 | 2,203,837 | 2,203,837 |
Liability | ||||||
Assured | ||||||
Guaranty | 116,103 | 115,024 | 335,803 | 1,173,667 | 1,740,597 | 1,357,607 |
Liability |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
45
10,443,322 |
6,565,650 |
22,116,071 |
227,977,091 |
267,102,134 |
185,933,385 |
Company |
||||||
Financial |
||||||
Liabilities |
||||||
At 31 July |
Total Carrying |
|||||
| 2025 |
Up to 1 Year |
1-2 Years |
3 – 5 Years |
Over 5 Years |
Total |
Value |
£ |
£ |
£ |
£ |
£ |
£ |
|
Trade and |
||||||
other |
4,402,859 |
- |
- |
- |
4,402,859 |
4,402,859 |
payables |
||||||
Guaranteed |
||||||
Index Linked |
6,080,020 |
6,561,029 |
22,153,039 |
228,443,623 |
263,237,711 |
178,968,945 |
Secured Bond |
||||||
Deferred |
||||||
Premium |
- |
- |
- |
2,305,911 |
2,305,911 |
2,305,911 |
Liability |
||||||
Assured |
||||||
Guaranty |
116,054 |
116,993 |
341,550 |
1,193,754 |
1,768,351 |
1,297,283 |
Liability |
||||||
10,598,933 |
6,678,022 |
22,494,589 |
231,943,288 |
271,714,832 |
186,974,998 |
Company |
||||||
Financial |
||||||
Liabilities |
||||||
At 31 July |
||||||
| 2024 |
Up to 1 Year |
1-2 Years |
3 – 5 Years |
Over 5 Years |
Total Liability |
Total Carrying |
Value |
||||||
£ |
£ |
£ |
£ |
£ |
£ |
|
Trade and |
||||||
other |
4,172,722 |
- |
- |
- |
4,172,722 |
4,172,722 |
payables |
||||||
Guaranteed |
||||||
Index Linked |
6,082,375 |
6,450,626 |
21,780,268 |
224,599,587 |
258,912,856 |
178,127,097 |
Secured Bond |
||||||
Deferred |
||||||
Premium |
- |
- |
- |
2,203,837 |
2,203,837 |
2,203,837 |
Liability |
||||||
Assured |
||||||
Guaranty |
116,103 |
115,024 |
335,803 |
1,173,667 |
1,740,597 |
1,357,607 |
Liability |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
46
10,371,200 |
6,565,650 |
22,116,071 |
227,977,091 |
267,030,012 |
185,861,263 |
UNDRAWN COMMITTED BORROWING FACILITIES
FAIR VALUE OF FINANCIAL INSTRUMENTS
GROUP
The comparison of book and fair values of all the Group’s Financial Assets and liabilities at the
year-end is set out below:
2025 |
2024 |
|||
Carrying |
Fair |
Carrying |
||
| Amount |
value |
amount |
Fair Value |
|
£ |
£ |
£ |
£ |
|
Financial Asset held at fair value |
||||
| through profit or loss |
195,560,321 |
195,560,321 |
198,333,522 |
198,333,522 |
Cash at bank and in hand |
6,094,375 |
6,094,375 |
5,914,893 |
5,914,893 |
Guaranteed investment certificate |
6,382,021 |
6,382,021 |
6,072,072 |
6,072,072 |
Trade and other receivables |
45,067 |
45,067 |
87,959 |
87,959 |
Trade and other payables |
(4,426,491) |
(4,426,491) |
(4,244,844) |
(4,244,844) |
Guaranteed Index Linked Secured |
||||
| Bond |
(178,968,945) |
(172,137,316) |
(178,127,097) |
(190,301,710) |
Deferred premium liability |
(2,305,911) |
(2,305,911) |
(2,203,837) |
(2,203,837) |
Assured Guaranty Liability |
(1,297,283) |
(1,297,283) |
(1,357,607) |
(1,357,607) |
21,083,154 |
27,914,783 |
24,475,061 |
12,300,448 |
|
COMPANY
The comparison of book and fair values of all the Company’s Financial Assets and liabilities at the
year-end is set out below:
2025 |
2024 |
|||
Carrying |
Fair |
Carrying |
||
| Amount |
value |
amount |
Fair Value |
|
£ |
£ |
£ |
£ |
|
Financial Asset held at fair value |
||||
| through profit or loss |
195,560,321 |
195,560,321 |
198,333,522 |
198,333,522 |
Cash at bank and in hand |
6,005,318 |
6,005,318 |
5,818,857 |
5,818,857 |
Guaranteed investment certificate |
6,382,021 |
6,382,021 |
6,072,072 |
6,072,072 |
Trade and other receivables |
41,167 |
41,167 |
48,456 |
48,456 |
Trade and other payables |
(4,402,859) |
(4,402,859) |
(4,172,722) |
(4,172,722) |
Guaranteed Index Linked Secured |
||||
| Bond |
(178,968,945) |
(172,137,316) |
(178,127,097) |
(190,301,710) |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
47
Deferred premium liability | (2,305,911) | (2,305,911) | (2,203,837) | (2,203,837) |
Assured Guaranty Liability | (1,297,283) | (1,297,283) | (1,357,607) | (1,357,607) |
21,013,829 | 27,845,458 | 24,411,644 | 12,237,031 |
The following methods and assumptions were used in estimating fair values for financial instruments:
Short-term borrowings, cash and deposits approximate to book value due to their short maturities.
For bank
and other loans, carrying fixed rates of interest, included within long term borrowings, the repayments which
the Company is committed to make have been discounted at the relevant interest rates applicable at 31 July
2025 and 31 July 2024.
Guaranteed Index Linked Secured Bonds, included at fair value have been valued using published RPI at 31
July 2025 and 31 July 2024.
Level 3 | ||
Group and | ||
Company | 2025 | 2024 |
£ | £ | |
Financial Assets | ||
held at fair value | - | - |
Financial Asset | ||
held at fair value | ||
through profit or | ||
loss | 195,560,321 | 198,333,522 |
The valuation technique and significant unobservable inputs used in determining the fair value
measurement of level 2 & 3 financial instruments, as well as inter-relationship between key unobservable
inputs and fair value, are set out in the table below:
Financial Instrument | Valuation techniques | Significant | Inter-relationship |
used | unobservable inputs | between key | |
(level 3 only) | unobservable inputs | ||
and fair value | |||
Financial Asset | The net of revenues | Rental income from | The present value of |
generated by the asset | the University | these inputs is used to | |
less associated costs | Licence income from | drive the fair value | |
are used to derive a | the University | calculation. | |
fair value using a | Rental payment to the | ||
discount factor. | University | ||
Cash and deposits | The carrying amount | Not applicable | |
of cash & deposits | |||
approximates its fair | |||
value |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
48
Trade and other | The carrying amount | Not applicable |
receivables & | of short term trade | |
payables | receivable and | |
payables | ||
approximates its fair | ||
values. | ||
Guaranteed Index | Guaranteed Index | Not applicable |
Linked Secured Bond | Linked Secured | |
Bonds, included at | ||
fair value have been | ||
valued using market | ||
price in the London | ||
stock exchange at 31 | ||
July 2025. |
NOTE SUPPORTING CASH FLOW STATEMENT
Group & Company
Non-cash transactions from bond financing activities are shown in the reconciliation of liabilities
from financing transactions set out below.
Guaranteed Index Linked Secured Bonds
Note 14
2025 | 2024 | |
£ | £ | |
Opening balance | 179,484,704 | 175,350,966 |
Cash flows | (10,174,264) | (9,779,313) |
Non-cash flows: | ||
Interest on Bonds | 3,978,191 | 3,972,898 |
Accretion on Bonds | 6,624,022 | 9,578,563 |
Costs Amortisation | 353,575 | 361,589 |
Closing balance | 180,266,228 | 179,484,703 |
GROUP AND COMPANY SHARE CAPITAL
GROUP | Allotted and called up share |
capital of £1 each | |
Number | |
At beginning and end of year | 50,000 |
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
49
COMPANY | Allotted and called up share |
capital of £1 each | |
Number | |
At beginning and end of year | 50,000 |
Each of the ordinary shares carries one vote per share and is entitled to dividends at the discretion
RETAINED EARNINGS
CAPITAL COMMITMENTS
RELATED PARTY TRANSACTIONS
All fees include VAT. During the year £112,196 (2024: £111,625) was charged by Wilmington Trust
SP Services (London) Limited for corporate services provided to Keele Residential Funding Plc and
£13,211 (2024: £13,151) was charged by Wilmington Trust SP Services (London) Limited for corporate
services provided to KRF Management Limited. The University charged Keele Residential Funding
Plc £67,136 (2024: £64,800) and KRF Management Limited £8,951 (2024: £8,640) for accounting and
administration services. Both Mr C Duffy and Mr D Wynne, directors of the Company, are also an
employee of Wilmington Trust SP Services (London) Limited. Mr D Wynne is also a director of
Wilmington Trust SP Services (London) Limited.
At the year-end a balance of Nil (2024: £65,154) was due to Wilmington Trust SP Services (London)
Limited, Nil (2024: £39,503) was due by Keele Residential Funding Plc to KRF Management Limited,
Nil (2024: £27,546) was due by KRF Management Limited to Keele Residential Funding Plc and
£4,254,115 (2024: £3,859,708) was due by Keele Residential Funding Plc to The University.
Wilmington Trust SP Services (London) Limited is a Director of Keele Residential Funding plc and Mr
D Wynne
CONTINGENT LIABILITIES
ULTIMATE CONTROLLING PARTY
Keele Residential Funding plc’s Parent company is KRF Holdings Limited,
Services (London) Limited, Third Floor, 1 King’s Arms Yard, London, EC2R 7AF . Copies of the KRF
Holdings Limited consolidated accounts can be obtained from Companies House Cardiff.
KRF Holdings Limited, the immediate parent of the Company, holds the shares of Keele Residential
Funding Plc.
Keele Residential Funding plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 July 2025
Registration Number: 03840096
Annual Report and Consolidated Financial Statements for the year ended 31 July 2025
Page
50
For accounting purposes, the Company's controlling party is considered to be the University of Keele,
Keele, Staffordshire, ST5 5BG, on the basis that this entity holds the majority of the exposure to
EVENTS AFTER THE REPORTING PERIOD