Quintessentially, Ben Elliot’s upmarket concierge company, has been forced to warn over its business as a going concern, having had to rely on a loan provided by a US shareholder to help trade through the pandemic.
Delayed financial statements for 2020 filed this week showed the recently resigned Conservative party co-chair’s business was in a precarious position during the pandemic.
In April 2020, Quintessentially had just £173,000 in the bank, the accounts said, following extensive impairments to its subsidiaries and a costly restructuring of its sprawling empire of businesses from art consulting to an estate agency.
Quintessentially has attracted scrutiny in part because of the high profile of Elliot, its founder, who is a close ally of Boris Johnson and the nephew of the new Queen Consort.
The concierge firm had in the past won a government contract to introduce Whitehall officials to wealthy individuals. It has been hit with allegations over its working culture, the Financial Times previously reported, which it denied.
In accounts in the year to April 2020, which were filed more than a year late, Quintessentially UK said that revenues fell to £44.7mn, from £50.4mn. It reported a reduced loss after tax of £3.1mn, from £4.4mn in 2019, with both blamed on the costs of the restructuring.
Group net liabilities were reported at £18mn, from £8.7mn in 2019, with £2.1mn of bad debts written off. The group reported an impairment charge of £16mn from subsidiaries that were either no longer trading, trading at reduced levels or sold, wiping out half the value of its investments.
Quintessentially said that it could trade within its existing facilities and meet its liabilities as they fall due under current cash flow forecasts.
But it added that “given the level of uncertainty” following the pandemic, “there is a risk that the pace and level at which business returned could be materially less than forecast, requiring . . . external funding which may be forthcoming and therefore create a material uncertainty that may ultimately cast doubt about [its] ability to continue as a going concern”.
However, the directors added that should this need arise, they believed “they could obtain the necessary funding and hence have prepared the financial statements on a going concern basis”.
The group secured additional financing from its largest shareholder, the US fuel supplier World Fuel Services, in both August 2020 and 2021, which allowed it to consolidate borrowings into one facility and enabled the company to trade through the pandemic.
Quintessentially owes a total of £12mn to World Fuel Services through a fully drawn facility, with some of this partly used to buy out the minority interest in the Quintessentially Media subsidiary for £6mn. The sale of the stake was also related to a legal claim that the company said was “fully resolved”.
Quintessentially blamed the filing delays to both its 2019 and 2020 accounts on the restructuring that consolidated a sprawling global network of more than 30 companies including an art dealership, florist, an estate agency and a chauffeur service.
The group said it has seen a “significant increase in the membership base” since the start of its 2022 financial year, and that it had traded profitably in the year ending April 2022.
Quintessentially’s accounts for the financial year to April 2021 have been overdue since January this year. It said its financial performance had improved as a result of its restructuring, and promised to complete its 2021 audit “as soon as practicable”.
The group is searching for a new auditor after a breakdown in relations with BDO amid concerns over the company’s governance and a lack of resources in its finance team.
In its financial report for the 2019 financial year, Quintessentially revealed accounting errors of more than £7mn and said that it had paid £1.4mn of unlawful dividends to its shareholders.
Quintessentially said in its accounts that it would propose BDO, which has signed off the last two sets of accounts, for reappointment at its annual general meeting. But a person familiar with the matter said this was “just a mechanism that gives . . . more time” to find a new auditor.
